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As filed with the Securities and Exchange Commission on January 2, 2014

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

IMS HEALTH HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   7374   28-1335689
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer Identification Number)

83 Wooster Heights Road

Danbury, CT 06810

(203) 448-4600

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Ari Bousbib

Chairman, Chief Executive Officer and President

83 Wooster Heights Road

Danbury, CT 06810

(203) 448-4600

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Patrick O’Brien

Louis T. Somma

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, MA 02199

(617) 951-7000

 

Harvey A. Ashman

Senior Vice President, General Counsel,

External Affairs and Corporate Secretary

83 Wooster Heights Road

Danbury, CT 06810

(203) 448-4600

 

David Lopez

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, New York 10006

(212) 225-2000

 

 

Approximate date of commencement of proposed sale to public: As soon as practicable after this Registration Statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.   ¨

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(c) 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.   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   ¨   Accelerated filer   ¨  

Non-accelerated filer   x

(Do not check if a
smaller reporting company)

  Smaller reporting company   ¨

CALCULATION OF REGISTRATION FEE

 

 

Title of each class of

securities to be registered

 

Proposed maximum
aggregate

offering price(1)(2)

 

Amount of

registration fee

Common stock, $0.001 par value

  $100,000,000   $12,880

 

 

 

(1)   Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933, amended.

 

(2)   Includes shares that may be sold upon exercise of the underwriters’ option to purchase additional shares to cover over-allotments. See “Underwriting.”

 

 

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 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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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This 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 January 2, 2014

Preliminary prospectus

             shares

 

LOGO

IMS Health Holdings, Inc.

Common stock

$         per share

This is the initial public offering of our common stock. We are selling              shares of our common stock. The selling stockholders identified in this prospectus are offering an additional              shares. We will not receive any of the proceeds from the sale of the shares being sold by the selling stockholders. We currently expect the initial public offering price to be between $         and $         per share of common stock.

We have granted the underwriters an option to purchase up to              additional shares of common stock to cover over-allotments.

After the completion of this offering, investment funds affiliated with our Sponsors (as defined herein) will continue to own a majority of the voting power of our outstanding shares of common stock. As a result, we expect to be a “controlled company” within the meaning of the corporate governance standards of the New York Stock Exchange. See “Principal and selling stockholders.”

We intend to apply for listing of our common stock on the New York Stock Exchange under the symbol “IMS.”

 

         Per share        Total  

Initial public offering price

     $                      $                

Underwriting discounts and commissions

     $           $     

Proceeds to us before expenses

     $           $     

Proceeds to selling stockholders before expenses

     $           $     

Investing in our common stock involves risk. See “ Risk factors ” beginning on page 19.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of common stock to investors on or about                     , 2014.

 

J.P. Morgan   Goldman, Sachs & Co.   Morgan Stanley

 

BofA Merrill Lynch   Barclays   Deutsche Bank Securities   Wells Fargo Securities

Prospectus dated                     , 2014


Table of Contents

Table of contents

 

     Page  

Prospectus summary

     1   

The offering

     13   

Summary and pro forma consolidated financial data

     15   

Risk factors

     19   

Use of proceeds

     40   

Dividend policy

     41   

Capitalization

     42   

Dilution

     44   

Selected and pro forma consolidated financial data

     46   

Management’s discussion and analysis of financial condition and results of operations

     50   

Business

     82   

Management

     98   

Executive compensation

     108   

Certain relationships and related party transactions

     139   

Principal and selling stockholders

     142   

Description of indebtedness

     145   

Description of capital stock

     154   

Shares eligible for future sale

     156   

Material United States federal income tax considerations for Non-U.S. Holders

     158   

Underwriting

     163   

Legal matters

     169   

Experts

     169   

Where you can find more information

     169   

Index to consolidated financial statements

     F-1   

We are responsible for the information contained in this prospectus and in any free writing prospectus we prepare or authorize. Neither we nor the underwriters have authorized anyone to provide you with different information, and neither we nor the underwriters take responsibility for any other information others may give you. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than its date.

Through and including                     , 2014 (25 days after the commencement of this offering), all dealers that effect transactions in shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

 

 

Unless the context requires otherwise, references in this prospectus to the “Company,” “Issuer,” “IMS,” “we,” “us” and “our” refer to IMS Health Holdings, Inc. and its consolidated subsidiaries. “IMS Health” refers to IMS Health Incorporated, our wholly owned indirect subsidiary.

 

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Industry and market data

This prospectus includes market data and forecasts with respect to the healthcare industry. Although we are responsible for all of the disclosure contained in this prospectus, in some cases we rely on and refer to market data and certain industry forecasts that were obtained from third party surveys, market research, consultant surveys, publicly available information and industry publications and surveys that we believe to be reliable. Other industry and market data included in this prospectus are from IMS analyses and have been identified accordingly. We are a leading global information provider for the healthcare industry and we maintain databases, produce market analyses and deliver information to clients in the ordinary course of our business. Our information is widely referenced in the industry and used by governments, payers, academia, the life sciences industry, the financial community and others. Most of this information is available on a subscription basis. Other reports and information are available publicly through our IMS Institute for Healthcare Informatics (the “IMS Institute”). In some cases, the information has been developed by us for purposes of this offering based on our existing data and is believed by us to have been prepared in a reasonable manner. All such information is based upon our own market research, internal databases and published reports and has not been verified by any independent sources.

Trademarks and service marks

We own or have rights to trademarks and service marks that we use in connection with the operation of our business, including IMS Health, IMS, the IMS logo, IMS One, MIDAS, Xponent, DDD, AppScript, AppNucleus, MD360 Provider Performance Management and Evidence360. All other trademarks or service marks appearing in this prospectus that are not identified as marks owned by us are the property of their respective owners.

Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus are listed without the ® , (sm) and (TM) symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names.

 

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Prospectus summary

This summary highlights information contained in other parts of this prospectus. Because it is only a summary, it does not contain all of the information that you should consider before investing in shares of our common stock and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus. You should read the entire prospectus carefully, especially “Risk factors” and our financial statements and the related notes, before deciding to buy shares of our common stock.

Our Company

We are a leading global information and technology services company providing clients in the healthcare industry with comprehensive solutions to measure and improve their performance. We have one of the largest and most comprehensive collections of healthcare information in the world, spanning sales, prescription and promotional data, medical claims, electronic medical records and social media. Our scaled and growing data set, containing over 10 petabytes of unique data, includes over 85% of the world’s prescriptions by sales revenue and approximately 400 million comprehensive, longitudinal, anonymous patient records. We standardize, organize, structure and integrate this data by applying our sophisticated analytics and leveraging our global technology infrastructure to help our clients run their organizations more efficiently and make better decisions to improve their operational and financial performance. We have a presence in over 100 countries, including high growth emerging markets, and we generated 64% of our $2.44 billion of 2012 revenue from outside the United States.

We serve key healthcare organizations and decision makers around the world, spanning the breadth of life science companies, including pharmaceutical, biotechnology, consumer health and medical device manufacturers, as well as distributors, providers, payers, government agencies, policymakers, researchers and the financial community. The breadth of the intelligent, actionable information we provide is not comprehensively available from any other source and would be difficult and costly for another party to replicate. Our information and technology services offerings, which we have developed with significant investment over our 60-year history, are deeply integrated into our clients’ workflow. We maintain long-standing relationships and high renewal rates with our clients due to the value of the services and solutions we provide. The average length of our relationships with our top 25 clients is over 25 years and our retention rate for our top 1,000 clients from 2011 to 2012 was approximately 99%. We have significant visibility into our financial performance, as historically about 70% of our revenue has recurred annually, principally because our information and technology services offerings are critical to our clients’ daily decision-making and are sold primarily through subscription and service contracts.

We leverage our proprietary information assets to develop technology and services capabilities with a talented healthcare-focused workforce that enables us to grow our relationships with healthcare stakeholders. This set of capabilities includes:

 

 

A leading healthcare-specific global information technology (“IT”) infrastructure, which we use to process data from over 45 billion healthcare transactions annually and to collect data from over 780,000 fragmented feeds globally, which we organize in a consistent and highly structured fashion using proprietary methodologies;

 

 

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A staff of approximately 9,300 professionals across the globe, including over 1,200 experts in areas such as biostatistics, data science, bioinformatics, healthcare economics, outcomes research, epidemiology, pharmacology and key therapeutic areas;

 

 

Our intelligent cloud, IMS One, which opens our sophisticated global IT infrastructure to our clients and provides the ability to perform business analytics in the cloud with large amounts of complex data. Our cloud is unique in the healthcare industry because it pre-integrates applications with IMS data, eliminating the cost traditionally associated with integrating information, and provides interoperability across both IMS and third party applications, reducing the complexity traditionally associated with siloed data; and

 

 

A growing set of proprietary applications, which include: commercial applications supporting sales operations, sales management, multi-channel marketing and performance management; real-world evidence solutions helping manufacturers and payers evaluate the value of treatments in terms of cost, quality and outcomes; payer-provider solutions helping these constituents optimize contracting and performance management; and clinical solutions helping manufacturers and Clinical Research Organizations (“CROs”) better design, plan, execute and track clinical trials.

At a time when the healthcare industry is experiencing transformational change driven by global expansion and the growth of new categories of medicines, intense cost pressures, a changing regulatory environment, and new payment and delivery models, we enable our clients to gain and apply insights designed to substantially improve operating performance. Our solutions, which are designed to provide our clients access to our deep healthcare-specific subject matter expertise, take various forms, including information, tailored analytics, subscription software and expert services.

We believe our mission-critical relationships with our life science clients are reflected in the role we play within four important areas of decision-making related to their product portfolios: Research and Development, Pre-Launch, Launch and In-Market. Over the last three years, we have introduced software and services applications that have further deepened our level of client integration by enabling our clients to enhance and automate many of these key decision-making processes.

 

LOGO

 

• Market opportunity assessment

 

• Clinical trial feasibility/planning

 

• Site selection

 

• Patient recruitment

 

• Trial monitoring

 

• Performance management

 

• Drug pricing optimization

 

• Launch readiness

 

• Commercial planning

 

• Brand positioning

 

• Message testing

 

• Influence networks

 

• Territory design

 

• Market access

 

• Health technology assessment

 

• Commercial readiness

 

• Forecasting

 

• Resource allocation

 

• Call planning

 

• Stakeholder engagement

 

• Commercial operations

 

• Sales force effectiveness

 

• Sales force alignment

 

• Multi-channel marketing

 

• Client relationship management

 

• Lifecycle management

 

 

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We believe that a powerful component of our value proposition is the breadth and depth of intelligence we provide to help our clients address fundamental operational questions.

 

User    Illustrative Questions
Sales    Which providers generate highest return on rep visit?   Does my sales rep drive appropriate prescribing?   How much should I pay my sales rep next month?
 
Marketing    What share of patients is appropriately treated?   Which underserved patient populations will benefit most from my new drug?   Is my brand gaining market share quickly enough to hit revenue forecasts?
 
Research & Development    Are there enough patients for my clinical trial?   Which study centers have the target patients?   How long will trial enrollment take to hit target patient volumes?
 
Real World Evidence (“RWE”)/Pharmacovigilance    What is the likely impact of new therapies on costs and outcomes?   Are new therapies performing better against existing standards of care in real world settings?   Does real world data indicate adverse events not detected in clinical trials?

We generate revenue through local sales teams that manage client relationships in each region and go to market locally with our full suite of information and technology services offerings. Total global revenue from our information offerings, including national and sub-national information services, represented 62% of our 2012 revenue. Total global revenue from our technology services offerings, which include hosted and cloud-based applications, implementation services, subscription software, analytic services and consulting, represented 38% of our 2012 revenue. We believe the data from our information offerings, when combined with our technology services offerings, can provide valuable insights to our clients and can increase the speed and effectiveness of decision making while also simplifying processes and reducing complexity and costs. Increasing demand from our clients for broader and more integrated offerings has been an important driver of our growth in technology services revenue, which grew at a compound annual growth rate (“CAGR”) of 13% between 2010 and the third quarter of 2013.

Ari Bousbib was appointed as our Chief Executive Officer on August 16, 2010 following the purchase of our Company by our Sponsors in February 2010, which we refer to as the Merger. Over the past three years, Mr. Bousbib and the management team have made substantial investments in human capital, technology and services infrastructure to expand the breadth of our platform and the number of constituents we serve within the healthcare value chain. Examples of our strategic investments and operational changes include:

 

 

improving our operating efficiency by streamlining our organization, deploying lean methodologies throughout our global operations, and standardizing and automating processes;

 

 

in-sourcing development activities and capabilities, with approximately 70% of our development resources in-house as of 2013 year end, compared to approximately 30% in 2010;

 

 

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increasing our offshore delivery resources to over 2,000 people as of 2013 year end, compared to 250 in 2010, which has driven substantial productivity improvement;

 

 

shifting our employee mix, with over 50% now client-facing as of 2013 year end, compared to approximately 33% in 2010; and

 

 

expanding our offerings and capabilities by investing over $900 million in 22 complementary acquisitions, internal development projects and capital expenditures since the beginning of 2011 through 2013 year end.

These strategic investments and operational changes have transformed our organization into a more customer-centric, service oriented, high-performance culture. Since the Merger, we added approximately 7,200 employees to the organization and oversaw the departure of approximately 5,100 employees from the organization, reflecting the various strategic and operational changes described above. We estimate that about 60% of our approximately 9,300 current employees have joined us since the Merger.

We believe our investments in people, technology and services have enabled us to significantly expand our addressable market and capture an additional portion of our clients’ spend by providing more powerful technology solutions and new insight-driven services. The following financial performance metrics have improved significantly between the year ended December 31, 2010 and the twelve month period ended September 30, 2013:

 

 

revenue increased to $2.51 billion, generating a CAGR of 5.6% on an as reported basis and 5.9% on a constant dollar basis;

 

 

Adjusted EBITDA increased to $819 million, generating a CAGR of 10.7% on an as reported basis and 11.0% on a constant dollar basis; and

 

 

Adjusted EBITDA as a percentage of revenue increased to 32.6% from 28.6%.

We incurred a net loss of $53 million for the twelve month period ended September 30, 2013, and a net loss of $203 million for the combined 2010 year-end period. Amounts expressed in constant dollar terms exclude the effect of changes in foreign currency exchange rates on the translation of foreign currency results into U.S. dollars. For additional information regarding these financial measures, including a reconciliation of our non-GAAP measures to the most directly comparable measure presented in accordance with United States generally accepted accounting principles (“GAAP”), see “Summary and pro forma consolidated financial data” included elsewhere in this prospectus. For additional information regarding foreign currency translation, see “Management’s discussion and analysis of financial condition and results of operations—Results excluding the effect of foreign currency translation and certain charges” included elsewhere in this prospectus.

Our market opportunity

We compete in the global information, technology and services market for the life sciences and the broader healthcare industry. Historically, we concentrated our efforts in a $5 billion market for information and consulting services primarily supporting the commercial functions of life sciences organizations. In response to the needs of a broader set of life sciences clients for more specialized information, such as longitudinal anonymous patient data and clinical trial analytics,

 

 

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we have expanded our offerings to serve a total $18 billion market for information and services. In addition, in response to our life sciences clients’ need to streamline operations, we offer an expanded range of technology services that include data warehousing, IT outsourcing, software applications and other services in the broader market for IT services, which, together, represent an additional $28 billion market among our life sciences clients. As a result, we now operate across a life sciences marketplace for information and technology services that is approaching $50 billion. We also have newer offerings in the $25 billion market for information and technology services for payers and providers and view this rapidly expanding market as an opportunity for further growth.

We believe there are five key trends affecting our end markets that will create increasing demand for our information and technology services solutions:

Growth and innovation in the life sciences industry.     The life sciences industry is a large and critical part of the global healthcare system, generating approximately $1 trillion in annual revenue. According to our research, revenue growth in the life sciences industry globally is expected to accelerate from 2.5% in 2013 to approximately 6% in 2017. The IMS Institute estimates that an average of 35 new molecular entities (“NMEs”) are expected to be approved each year from 2013 to 2017, up from 25 NMEs in 2010 and a return to mid-2000s levels. The reacceleration of industry growth is also the result of dramatically lower expected patent expirations on prescription medications versus the recent past.

Growth in access to healthcare in emerging markets.     We believe there will be significant growth in healthcare spending in emerging markets, driven predominantly by a rapidly growing middle class in countries such as China and India. According to the IMS Institute, it is estimated that spending on pharmaceuticals in emerging markets will expand at a 10 to 13% CAGR through 2017. The rapid growth of emerging markets is making these geographies strategically important to life sciences organizations and we expect these organizations to apply a high degree of sophistication to their commercial operations in these countries. This requires highly localized information assets and analytics for both multinational and local market companies.

Financial pressures driving the need for increased efficiency.     Despite the expected accelerating growth in the global life sciences market, we believe our clients will face operating margin pressure due to their changing product mix, pricing and reimbursement challenges, and rising costs of compliance. Based on our research, we believe large pharmaceutical companies must collectively reduce costs by approximately $35 billion from 2012 to 2017 to maintain historic operating margins. As a result, our clients are looking for new ways to simplify processes and drive operational efficiencies, including by using automation, consolidating vendors and adopting new technology options such as hosted and cloud-based applications.

Evolving need to integrate and structure expanding sources of data.     Over the past decade, many health systems around the world have focused on digitizing medical records. While such records theoretically enhance access to data, relevant information is often unintegrated, unstructured, siloed in disparate software systems or entered inconsistently.

In order to derive valuable insights from existing and expanding sources of information, clients need access to statistically significant data sets organized into databases that can be queried and analyzed. For example, longitudinal studies require analysis of anonymous patient diagnoses, treatments, procedures and laboratory test results to identify types of patients that will likely

 

 

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best respond to particular therapies. We believe the opportunity to more broadly apply healthcare data can only be realized through structuring, organizing and integrating new and existing forms of data in conjunction with sophisticated analytics.

Need for demonstrated value in healthcare.     Participants in the healthcare industry are focused on improving quality and reducing costs, both of which require assessment of quality and value of therapies and providers. As a result, there is increasing pressure on life sciences companies to support and justify the value of their therapies. Many new drugs that are being approved are more expensive than existing therapies, and will likely receive heightened scrutiny by payers to determine whether the existing treatment options would be sufficient. Additionally, many new specialty drugs are molecular-based therapies and require a more detailed understanding of clinical factors and influencers that demonstrate therapeutic value. As a result, leading life sciences companies are utilizing more sophisticated analytics for insight driven decisions.

We believe we are well positioned to take advantage of these global trends in healthcare. Beyond our proprietary information assets, we have developed key capabilities to assess opportunities to develop and commercialize therapies, support and defend the value of medicines and help our clients operate more efficiently through the application of insight-driven decision-making and cost-efficient technology solutions.

Our strengths

Comprehensive information assets and collection network.     The scale of our information assets, breadth and depth of our data supplier network, and our global reach are distinct advantages as clients value quality, consistency and continuity across geographies to accurately measure trends and their performance. With over 10 petabytes of proprietary data sourced from over 100,000 data suppliers covering over 780,000 data feeds globally, we have one of the largest and most comprehensive collections of healthcare information in the world, which includes 85% of the world’s prescriptions by sales revenue and approximately 400 million comprehensive, longitudinal anonymous patient records. We have proprietary healthcare data management and projection methodologies developed over a long history, which enable us to extrapolate more precise insights from large-scale databases to provide greater granularity and segmentation for our clients. We continue to invest in new technology to source data that is valued by our clients, including social media analytics and mobile health solutions, to continuously add records to our data sets, and refine our information and analytic methods. Use of our proprietary encryption technologies allows anonymous information to be linked across different care settings and across data sets, resulting in more complete healthcare information about anonymous patients and a deeper understanding of real world treatment, cost and outcomes.

Scaled healthcare specific technology infrastructure.     To manage our proprietary, global information base, we have built what we believe is one of the largest and most sophisticated information technology infrastructures in healthcare. By processing data from over 45 billion healthcare transactions annually, our infrastructure connects complex healthcare data while applying a wide range of privacy, security, operational, legal and contractual protections for data in response to local law, supplier requirements and industry leading practices. We have four Centers of Excellence and five operation hubs around the world, and approximately 9,300 associates, including over 1,200 experts in areas such as biostatistics, data science, bioinformatics, healthcare economics, outcomes research, epidemiology, pharmacology and key therapeutic

 

 

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areas. We believe the scale, global footprint and connectivity our infrastructure provides is unique within the healthcare vertical and will be of increasing value to our clients in a period where cost pressures will grow.

Highly differentiated technology services fully integrated with IMS information.     Our ability to integrate technology services with our data creates mission-critical, actionable intelligence that improves our overall value proposition to our clients. Our expanding set of sophisticated human capital resources and technology services offerings combined with our deep understanding of our scaled information assets provides what we believe to be a competitive advantage in an environment where clients require better performance. For example, in 2012, we introduced our healthcare-specific intelligent cloud, IMS One, which helps our clients fully recognize the benefits of our infrastructure. Our cloud is unique in the healthcare industry because it pre-integrates applications with IMS data and provides interoperability across both IMS and third party applications. We envision that over time IMS One will become an industry standard around which applications are hosted and information shared on an interoperable basis.

Long standing client relationships that are expanding.     The breadth of the intelligent, actionable information we provide is not comprehensively available from any other source and would be difficult and costly for another party to replicate. We believe our information and technology services are deeply integrated into our clients’ workflow. We maintain long-standing relationships and high renewal rates with clients due to the value of the services and solutions we provide, as well as support the need for globally consistent information to enable comprehensive trend analysis at the local, regional, national and multi-country levels. The average length of our relationships with our top 25 clients is over 25 years and our retention rate for our top 1,000 clients in 2012 was approximately 99%. Serving over 5,000 clients creates significant opportunity to expand the breadth of services we provide to our clients.

Unique and scalable operating model.     We believe we have an attractive operating model due to the scalability of our solutions, the recurring nature of our revenue and the low capital intensity/high free cash flow conversion of our business. Given our global infrastructure and the fixed-cost nature of our data, we are able to scale our healthcare information, technology and service solutions rapidly and efficiently to generate high margins on incremental revenue. Our flexible technology platform has been built to accommodate highly complex analytics and significant data volumes. We believe our recurring revenue provides significant visibility to our financial performance, and when combined with our leading offerings, will contribute to our long-term growth, strong operating margins and flexibility in allocating capital.

Our growth strategy

We believe we are well positioned for continued growth across the markets we serve. Our strategy for achieving growth includes:

Build upon our extensive client relationships .     We have a diversified base of over 5,000 clients in over 100 countries, and have expanded our client value proposition since the Merger to now address a broader market for information and technology services approaching $50 billion. We are in the early stages of penetrating this expanding market within our global life sciences client base. Key elements of this strategy include:

 

 

further integrating our existing services to provide clients with interoperable solutions;

 

 

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increasing the number of clients that leverage our technology services offerings, including IMS One;

 

 

using our global presence and efficient operating model to scale new applications and solutions rapidly and efficiently across clients, markets and geographies; and

 

 

expanding the number of clients that choose to drive efficiencies by consolidating their vendor needs with us.

Capitalize on our presence in emerging markets .     We believe China, India, Brazil and Russia, together with many of the 50-plus other emerging markets in which we operate, will accelerate their healthcare spending over the next five years. We have an established presence in these markets, generating $425 million of revenue for the last twelve months ended September 30, 2013 (approximately 17% of our revenue) and growing at an 11% constant dollar CAGR since 2010. We serve both multinational companies and local clients. Key elements of this strategy include:

 

 

partnering with existing life sciences clients as they expand their businesses into emerging markets;

 

 

continuing to grow our existing services in emerging markets while simultaneously introducing new services drawn from our global portfolio; and

 

 

building relationships with local companies that are expanding beyond their home markets by capitalizing on the global credibility and consistency of our platform.

Continue to innovate.     We believe a significant opportunity exists to continue to enhance our information and analytics offerings and expand our technology services offerings to capitalize on the evolving healthcare environment. Our recent investments in human capital, technology and services capabilities position us to continue to pursue rapid innovation within the life sciences sector and the broader healthcare marketplace. Examples of recent innovations include:

 

 

development of applications in the mobile health space including AppScript, an enterprise solution for providers and payers to establish a curated formulary of mobile applications that can be prescribed securely and reconciled by prescribers just like drug prescriptions, and AppNucleus, which allows developers to build mobile applications with secure containers for patient information on devices and secure communication channels to physicians and other applications; and

 

 

development of Evidence360, a collection of specialized technologies for RWE, including tailor-made data warehouses integrating our data sets with patient registries and a cohort builder tool facilitating efficient definitions and tracking of narrow cohorts to determine outcomes in small patient populations.

Expand portfolio through strategic acquisitions.     We have and expect to continue to acquire assets and businesses that strengthen our value proposition to clients. We have developed an internal capability to source, evaluate and integrate acquisitions that have created value for stockholders. Since the beginning of 2011, we have invested approximately $587 million of capital in 22 acquisitions. As the global healthcare landscape evolves, we expect that there will be a growing number of acquisition opportunities across the life sciences, payer and provider sectors.

 

 

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Expand the penetration of our offerings to the broader healthcare marketplace.     We believe that substantial opportunities exist to expand penetration of our addressable market and further integrate our offerings in a broader cross-section of the healthcare marketplace. Key elements of this strategy include:

 

 

continuing to sell innovative solutions to life sciences clients in areas we have recently entered, such as clinical trial analytics;

 

 

leveraging our comprehensive collection of healthcare information to provide critical insights to payers and providers, enabling advanced patient analytics and population health management; and

 

 

utilizing our proprietary information and analytics to address the evolving needs of the broader healthcare marketplace.

Our offerings

We offer hundreds of distinct services, applications and solutions to help our clients make critical decisions and perform better. While historically our offerings focused mainly in information and analytics, we now routinely integrate information with technology services to ensure our clients receive the most value from our information to enable them to incorporate insights into their workflow. These offerings complement each other and can provide enhanced value to our clients when delivered together in an integrated fashion, with each driving demand for the other.

Our principal offerings include:

 

 

National information offerings.     Our national offerings comprise unique services in more than 70 countries that provide consistent country level performance metrics related to sales of pharmaceutical products, prescribing trends, medical treatment and promotional activity across multiple channels including retail, hospital and mail order.

 

 

Sub-national information offerings.     Our sub-national offerings comprise unique services in more than 50 countries that provide a consistent measurement of sales or prescribing activity at the regional, zip code and individual prescriber level (depending on regulation in country).

 

 

Commercial services.     We provide a broad set of strategic, analytic and support services to help the commercial operations of life sciences companies successfully transform their commercial models, engage more effectively with the marketplace and reduce their operating costs.

 

 

Real-World Evidence (RWE) solutions.     We integrate information from medical claims, prescriptions, electronic medical records, biomarkers and government statistics into anonymous, longitudinal patient journeys that provide detailed views of treatment patterns, disease progression, therapeutic switching and concomitant diseases and treatments.

 

 

Commercial technology solutions.     We provide an extensive range of hosted and cloud-based applications and associated implementation services. The applications, hosted on IMS One, support a wide range of commercial processes including multi-channel marketing, customer relationship management (“CRM”), performance management, incentive compensation, territory alignment, roster management and call planning.

 

 

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Clinical solutions.     By bringing together our information with advanced predictive modeling technology, we help life sciences companies and CROs better design and execute clinical trials; and for payers and providers, we enable risk-sharing, pay-for-performance and population health management.

Risk related to our business

An investment in our common stock involves a high degree of risk. Among these important risks are the following:

 

 

our data suppliers might restrict our use of or refuse to license data, which could lead to our inability to provide certain products or services;

 

 

failure to meet productivity objectives under our internal business transformation initiatives could adversely impact our competitiveness and our ability to meet our growth objectives;

 

 

we may be unsuccessful at investing in growth opportunities;

 

 

data protection and privacy laws may restrict our current and future activities;

 

 

breaches or misuse of our or our outsourcing partners’ security or communication systems could expose us, our clients, our data suppliers or others to risk of loss;

 

 

hardware and software failures, delays in the operation of our computer and communications systems or the failure to implement system enhancements may adversely impact us;

 

 

consolidation in the industries in which our clients operate may reduce the volume of products and services purchased by consolidated clients following an acquisition or merger; and

 

 

our ability to protect our intellectual property rights and our susceptibility to claims by others that we are infringing their intellectual property rights.

For additional information about the risks we face, please see the section of this prospectus captioned “Risk factors.”

Our Sponsors

On February 26, 2010, IMS was acquired by affiliates of TPG Global, LLC (together with its affiliates, “TPG”), CPP Investment Board Private Holdings, Inc. (“CPPIB-PHI”), a wholly owned subsidiary of the Canada Pension Plan Investment Board (together with its affiliates, “CPPIB”) and Leonard Green & Partners, L.P. (“LGP” and collectively with TPG and CPPIB, the “Sponsors”) in an all-cash transaction. The acquisition was accomplished through the merger (the “Merger”) of the parent of IMS Health with and into Healthcare Technology Acquisition, Inc., an indirect wholly owned subsidiary of IMS Health Holdings, Inc., the Issuer, which is owned by investment entities controlled by the Sponsors and management.

TPG .    TPG is a leading global private investment firm founded in 1992 with $55.7 billion of assets under management as of September 30, 2013 and offices in San Francisco, Fort Worth, Austin, Beijing, Chongqing, Hong Kong, London, Luxembourg, Melbourne, Moscow, Mumbai, New York, Paris, São Paulo, Shanghai, Singapore and Tokyo. TPG has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, spinouts, growth

 

 

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investments, joint ventures and restructurings. The firm’s investments span a variety of industries, including healthcare, financial services, travel and entertainment, technology, energy, industrials, retail, consumer, real estate and media and communications.

CPPIB .    CPPIB is one of the largest and fastest growing institutional investors in the world. It invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 18 million Canadian contributors and beneficiaries. Headquartered in Toronto, with offices in London and Hong Kong, CPPIB is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At September 30, 2013, the Fund’s assets totaled C$193 billion, of which approximately C$48 billion is invested through the Private Investments group. A team of 135 dedicated Private Investment professionals manages investment activities in Direct Private Equity, Private Debt, Infrastructure, and Funds, Secondaries & Co-Investments. Direct Private Equity manages an approximately C$10 billion portfolio of investments and focuses on majority or shared control investments, typically alongside an existing fund partner, across multiple industry sectors worldwide. Current and previous healthcare and technology investments include Kinetic Concepts, Alliance Boots, Diaverum, LHP Hospital Group, United Surgical Partners, Skype, NEWAsurion and Aricent, among others.

LGP .    LGP is a leading private equity firm with over $15 billion of private equity capital raised since inception. Founded in 1989, LGP has invested in 69 companies with aggregate value of $74 billion. Located in Los Angeles, California, LGP invests in established companies that are leaders in their markets. Significant investments include The Container Store, J. Crew Group, CHG Healthcare, CCC Information Services and Topshop/Topman.

Following the completion of this offering, the Sponsors will own approximately     % of our common stock, or     % if the underwriters’ option to purchase additional shares of our common stock is fully exercised. As a result, we expect to be a “controlled company” within the meaning of the corporate governance standards of the New York Stock Exchange (the “NYSE”) on which we intend to apply for our shares to be listed. See “Risk factors—Risks relating to our common stock and this offering.”

 

 

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Corporate information and structure

IMS Health Holdings, Inc. is a Delaware corporation that was formed in 2009 under the name Healthcare Technology Holdings, Inc. On December 20, 2013, the Company changed its name to IMS Health Holdings, Inc. Its only material assets are the shares of the equity of Healthcare Technology Intermediate, Inc., which is the holder of 100% of the equity of Healthcare Technology Intermediate Holdings, Inc., which is the holder of 100% of the shares of the equity of IMS Health Incorporated, which we refer to in this prospectus as IMS Health. IMS Health Holdings, Inc. does not conduct any operations other than with respect to its direct and indirect ownership of its subsidiaries and conducts all of its business through IMS Health and its subsidiaries. Our principal executive offices are located at 83 Wooster Heights Road, Danbury, Connecticut 06810. Our telephone number at that address is (203) 448-4600. Our website address is www.imshealth.com. Our website and the information contained on our website do not constitute a part of this prospectus.

The following chart shows our simplified organizational structure immediately following the consummation of this offering:

 

LOGO

 

 

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The offering

 

Common stock offered by us

             shares

 

Common stock offered by the selling stockholders

             shares

 

Common stock to be outstanding after this offering

             shares (or                      shares if the underwriters exercise their overallotment option in full)

 

Option to purchase additional shares

The underwriters have an option for a period of 30 days to purchase up to              additional shares of our common stock to cover overallotments.

 

Use of proceeds

We estimate that the net proceeds from this offering will be approximately $         million, or approximately $         million if the underwriters exercise their option to purchase additional shares in full, at an assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We intend to refinance a portion of our existing long-term debt concurrent with the closing of this offering (the “Proposed Debt Refinancing”). We intend to use the net proceeds of this offering (i) to fund a portion of the Proposed Debt Refinancing, including any related fees and expenses; (ii) to pay an estimated amount of $         million in the aggregate to holders of outstanding phantom options, which constitute cash-settled stock appreciation rights granted under our 2010 Equity Incentive Plan; and (iii) to pay a one-time fee to terminate our management services agreement with the Sponsors of $         million. We intend to use the remainder of the net proceeds, if any, for general corporate purposes, including supporting our strategic growth opportunities in the future. We will not receive any of the proceeds from the sale of shares by the selling stockholders. See “Use of proceeds.”

 

Dividend policy

Our board of directors does not currently intend to pay dividends on our common stock. However, we expect to reevaluate our dividend policy on a regular basis following the offering and may, subject to compliance with the covenants contained in our credit facilities and other considerations, determine to pay dividends in the future. The declaration, amount and payment of any future dividends on shares of our common stock will be at the sole discretion of our board of

 

 

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directors, which may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, the implications of the payment of dividends by us to our stockholders or by our subsidiaries to us, and any other factors that our board of directors may deem relevant. See “Description of indebtedness” and “Dividend policy.”

 

Risk factors

You should read the “Risk factors” section of this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.

 

Proposed NYSE symbol

“IMS”

The number of shares of common stock to be outstanding after this offering is based on              shares of common stock outstanding as of                     , 2014 and excludes the following:

 

 

             shares of common stock issuable upon exercise of stock options outstanding as of                     , 2014 at a weighted average exercise price of $         per share; and

 

 

             shares of common stock reserved for future issuance under our equity incentive plans as of                     , 2014.

Unless otherwise indicated, this prospectus reflects and assumes the following:

 

 

the adoption of our amended and restated certificate of incorporation and our amended and restated bylaws, to be effective upon the closing of this offering; and

 

 

no exercise by the underwriters of their option to purchase up to              additional shares of our common stock in this offering.

 

 

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Summary and pro forma consolidated financial data

The following table sets forth summary historical and pro forma consolidated financial data for the periods presented and at the dates indicated below. The acquisition of IMS Health through the Merger resulted in a new basis of accounting. The term “Predecessor” refers to all periods related to the IMS Health business prior to and including the date of the closing of the Merger on February 26, 2010. We have derived the statement of comprehensive income (loss) and cash flow data for the period from January 1, 2010 to February 26, 2010 from our Predecessor’s audited consolidated financial statements included elsewhere in this prospectus. The term “Successor” refers to all periods from inception of IMS Health Holdings, Inc. (from October 23, 2009), which includes all periods of IMS Health after the closing of the Merger on February 26, 2010. We have derived the balance sheet data as of December 31, 2012 and December 31, 2011 and the statement of comprehensive income (loss) and cash flow data for each of the three years in the period ended December 31, 2012 from our Successor’s audited consolidated financial statements included elsewhere in this prospectus. We have derived the balance sheet data as of September 30, 2013 and the statement of comprehensive income (loss) and cash flow data for the nine month period ended September 30, 2013 and September 30, 2012 from our unaudited interim condensed consolidated financial statements as of September 30, 2013, included elsewhere in this prospectus.

Historical results are not necessarily indicative of the results to be expected for future periods and operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2013. The following information should be read in conjunction with the section entitled “Management’s discussion and analysis of financial condition and results of operations” and our consolidated financial statements and the notes thereto contained elsewhere in this prospectus.

 

       Successor           Predecessor  
     Nine months
ended
September 30,
    Years ended
December 31,
         

January 1,

2010
through

February 26,
2010

 
(dollars in millions)    2013     2012     2012     2011     2010          

Financial Data :

                
 

Revenue

   $ 1,870      $ 1,798      $ 2,443      $ 2,364      $ 1,869          $ 293   

Information

     1,138        1,134        1,521        1,532        1,234            214   

Technology Services

     732        664        922        832        635            79   

Operating costs of information

     480        504        675        698        543            126   

Direct and incremental costs of technology services

     377        341        476        396        322            63   

Selling and administrative expenses

     433        431        579        604        507            149   

Depreciation and amortization(1)

     303        317        424        393        310            21   

Severance, impairment and other charges

     1        30        48        31        54            (13

Merger costs

            2        2        23        65            45   
  

 

 

       

 

 

 

Operating income (loss)

     276        173        239        219        68            (98
  

 

 

       

 

 

 

Interest income

     3        2        4        3        1              

Interest expense

     (241     (196     (275     (277     (237         (5

Other income (loss), net

     (44     6        (29     (7     (35         (9
  

 

 

       

 

 

 

Non-operating loss, net

     (282     (188     (300     (281     (271         (14
  

 

 

       

 

 

 

Income (loss) before benefit from income taxes

     (6     (15     (61     (62     (203         (112

Benefit from income taxes

     6        26        19        173        85            28   
  

 

 

       

 

 

 

Net income (loss)

   $      $ 11      $ (42   $ 111      $ (118       $ (84

 

 

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       Successor           Predecessor  
     Nine months
ended
September 30,
    Years ended
December 31,
         

January 1,

2010
through

February 26,
2010

 
(dollars in millions)    2013     2012     2012     2011     2010          

Earnings (loss) per common share attributable to common stockholders:

                

Basic earnings (loss) per share

   $ 0.00      $ 0.00      $ (0.02   $ 0.04      $ (0.05       $ (0.46

Diluted earnings (loss) per share

     0.00        0.00        (0.02     0.04        (0.05         (0.46

Weighted average common shares outstanding:

                

Basic

     2,800        2,794        2,795        2,788        2,348            183   

Diluted

     2,800        2,875        2,795        2,854        2,348            183   
 

Unaudited pro forma data(2):

                

Basic income per common share

                

Diluted income per common share

                

Weighted average common shares outstanding:

                

Basic

                

Diluted

                
 

Unaudited as adjusted pro forma data:

                

Net income

                

Basic income per common share

                

Diluted income per common share

                

Weighted average common shares outstanding:

                

Basic

                

Diluted

                
 

Balance sheet data (at end of period):

                

Cash and cash equivalents

   $ 663        $ 580      $ 453           

Short-term marketable securities

     83          61                  

Accounts receivables, net of allowances

     291          308        310           

Total current assets

     1,268          1,237        1,069           

Total assets

     7,990          8,215        8,358           

Total current liabilities

     830          843        793           

Total debt

     4,941          4,177        2,961           

Total liabilities

     7,184          6,532        5,387           

Total shareholders’ equity

     806          1,683        2,971           
 

Statement of cash flow data:

                

Net cash provided by (used in)

                

Operating Activities

   $ 322      $ 256      $ 399      $ 334      $ 204          $ (54
  

 

 

       

 

 

 

Investing Activities

     (173     (158     (209     (485     (4,256         (18
  

 

 

       

 

 

 

Financing Activities

     (48     (73     (63     106        4,358            (124
  

 

 

       

 

 

 
 

Other financial data:

                

Capital expenditures

   $ 25      $ 30      $ 44      $ 30      $ 32          $ 3   

Additions to computer software

     53        48        64        74        59            10   

Adjusted EBITDA(3)

     618        562        764        721                       

 

(1)   Includes charges related to acquired intangible assets.

 

(2)   Pro forma earnings per share

 

       We declared and paid dividends to our stockholders of $753 million during 2013. Under certain interpretations of the Securities and Exchange Commission (“SEC”), dividends declared in the year preceding an initial public offering are deemed to be in contemplation of the offering with the intention of repayment out of offering proceeds to the extent that the dividends exceeded earnings during such period. As such, unaudited pro forma earnings per share for 2013 gives effect to the scale of the number of shares whose proceeds are deemed to be necessary to pay the dividend amount that is in excess of 2013 earnings, up to the amount of shares assumed to be issued in the offering.

 

 

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       The following presents the computation of pro forma basic and diluted earnings per share:

 

      Nine months
ended
September 30,
2013
 

 

 

Numerator:

 

Weighted average common shares used in computing basis income per common share outstanding

  $                

Denominator:

 

Weighted average common shares used in computing basic income per common share outstanding

 

Adjustment for common stock issued whose proceeds will be used to fund the Recapitalization(a)

 

Pro forma weighted average common shares used in computing basic income per common share outstanding

 
 

 

 

 

Pro forma basic earnings per share

  $     
 

 

 

 

Weighted average common shares used in computing diluted income per common share outstanding

 

Adjustment for common stock issued whose proceeds will be used to fund the Recapitalization

 

Pro forma weighted average common shares used in computing diluted income per common share outstanding

 
 

 

 

 

Pro forma diluted earnings per share

  $     
 

 

 

 

(a)   Dividends declared in the past twelve months

  $     

Net income attributable to IMS Health Holdings, Inc. in the past 12 months

 
 

 

 

 

Dividends paid in excess of earnings

  $     
 

 

 

 

Offering price per common share

  $     
 

 

 

 

Common shares assumed issued in this offering necessary to pay dividends in excess of earnings

 

 

 

As adjusted pro forma earnings per share

In addition to the effect of the pro forma earnings per share for dividends noted above, as adjusted pro forma earnings per share gives effect to the number of common shares whose proceeds will be used to repay $         million of outstanding indebtedness.

The following presents the computation of as adjusted pro forma basic and diluted earnings per share:

 

       Nine months
ended
September 30,
2013
 

 

 

Numerator:

  

Net income as reported

   $                

Net income pro forma adjustments:

  

Interest expense, net of tax(b)

  

Amortization of debt issuance costs and discount, net of tax(b)

  
  

 

 

 

As adjusted pro forma net income

   $     
  

 

 

 

Denominator:

  

Weighted average common shares used in computing basic income per common share outstanding

  

Adjustment for common shares used to repay outstanding indebtedness(c)

  

Pro forma weighted average common shares used in computing basic income per common share outstanding

  
  

 

 

 

Pro forma basic earnings per share

   $     
  

 

 

 

Weighted average common shares used in computing diluted income per common share outstanding

  

Adjustment for common stock issued whose proceeds will be used to fund the Recapitalization

  

Pro forma weighted average common shares used in computing diluted income per common share outstanding

  
  

 

 

 

Pro forma as adjusted diluted earnings per share

   $     
  

 

 

 

(b)   These adjustments reflect the elimination of the historical interest expense and amortization of debt issuance costs and discount after reflecting the pro forma effect of the Proposed Debt Refinancing.

  

(c)    Indebtedness to be repaid with proceeds from this offering

   $     
  

 

 

 

        Offering price per common share

   $     
  

 

 

 

        Common shares assumed issued in this offering to repay indebtedness

  

 

 

 

 

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(3)   Adjusted EBITDA is a financial measure that is not defined under U.S. GAAP and is presented in this prospectus because our management considers it an important supplemental measure of our performance and our ability to service our debt and believes that it provides greater transparency into our results of operation and is frequently used by investors in the evaluation of companies in the industry. In addition, our management believes that Adjusted EBITDA is a useful financial metric to assess our operating performance from period to period by excluding certain material non-cash items, unusual or non-recurring items that we do not expect to continue in the future and certain other adjustments we believe are not reflective of our ongoing operations and our performance. Adjusted EBITDA is not a measure of net income, operating income or any other performance measure derived in accordance with U.S. GAAP, and is subject to important limitations.

 

       Adjusted EBITDA, as we use it, is net income before interest, income taxes, depreciation, amortization, non-cash compensation expenses, expenses related to the early extinguishment of debt, transaction fees and the other items described below.

 

       We understand that although Adjusted EBITDA is frequently used by securities analysts, investors and others in their evaluation of companies, it has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

 

   

it does not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments;

 

   

it does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;

 

   

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements or improvements;

 

   

it is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;

 

   

it does not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations;

 

   

it does not reflect limitations on our costs related to transferring earnings from our subsidiaries to us; and

 

   

other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.

 

       Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. We compensate for these limitations by using Adjusted EBITDA along with other comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of operating performance. These U.S. GAAP measurements include operating income (loss), net income (loss), cash flows from operations and cash flow data. We have significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, taxes and other non-recurring charges, which are not reflected in Adjusted EBITDA. Adjusted EBITDA is not intended as alternatives to net income (loss) as indicators of our operating performance, as alternatives to any other measure of performance in conformity with U.S. GAAP or as alternatives to cash flow provided by operating activities as measures of liquidity. You should therefore not place undue reliance on Adjusted EBITDA or ratios calculated using those measures. Our U.S. GAAP-based measures can be found in our consolidated financial statements and related notes included elsewhere in this prospectus.

 

       Nine months
ended
September 30,
    Years ended
December 31,
 
(dollars in millions)    2013     2012     2012     2011     Combined
2010
 

 

 

Net income (loss)

   $      $ 11      $ (42   $ 111      $ (202

Deferred revenue purchase accounting adjustments

     2        5        7        7        60   

Non-cash stock-based compensation charges

     18        16        19        18        85   

Severance, impairment and other charges

     1        30        48        31        41   

Acquisition-related charges

     6        8        11        13        6   

Transaction and other charges(a)

     6        5        6        8        10   

Sponsor monitoring fee

     6        6        8        9        7   

Depreciation and amortization

     303        317        424        393        331   

Merger costs

            2        2        23        110   

Interest income

     (3     (2     (4     (3     (1

Interest expense

     241        196        275        277        242   

Other loss (income), net

     44        (6     29        7        44   

Benefit from income taxes

     (6     (26     (19     (173     (113
  

 

 

 

Adjusted EBITDA

   $ 618      $ 562      $ 764      $ 721      $ 620   

 

 

 

(a)   Transaction and other charges consist of employee and third-party charges related to dual running costs for knowledge transfer activities.

 

 

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Risk factors

This offering and investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below together with all of the other information contained in this prospectus, including our consolidated financial statements and the related notes appearing at the end of this prospectus, before deciding to invest in our common stock. If any of the following risks actually occurs, our business, prospects, operating results and financial condition could suffer materially, the trading price of our common stock could decline and you could lose all or part of your investment. The risks and uncertainties described below are not the only ones we face.

Risks related to our business

We rely on third parties to provide certain data. Our data suppliers might restrict our use of or refuse to license data, which could lead to our inability to provide certain services and, as a result, materially and adversely affect our operating results and financial condition.

Each of our information services is derived from data we collect from third parties. These suppliers of data may increase restrictions on our use of such data, fail to adhere to our quality-control standards, increase the price they charge us for data or refuse altogether to license the data to us. If the suppliers of a significant amount of data that we use for one or more of our services were to impose additional contractual restrictions on our use of or access to data, fail to adhere to our quality-control standards, or refuse to provide data, now or in the future, our ability to provide those services to our clients could be materially adversely impacted, which may harm our operating results and financial condition.

Failure to meet productivity objectives under our internal business transformation initiatives could adversely impact our competitiveness and harm our operating results.

We are pursuing business transformation initiatives to update technology, increase innovation and obtain operating efficiencies. As part of these initiatives, we seek to improve our productivity, flexibility, quality, functionality and cost savings by investing in the development and implementation of global platforms and integration of our business processes and functions to achieve economies of scale. For example, we hired and trained more than 500 people to form a COE in Manila, The Philippines for standardizing and cleaning data received from data suppliers, developed updated tools for standardizing and cleaning data, are moving local standardizing and cleaning from countries around the world to the Manila COE, and retired local standardizing and cleaning systems. These various initiatives may not yield their intended gains, which may impact our competitiveness and our ability to meet our growth objectives and, as a result, materially and adversely affect our business, results of operation and financial condition.

If we are unsuccessful at investing in growth opportunities, our business could be materially and adversely affected.

We continue to invest significantly in growth opportunities, including the development and acquisition of new data, technologies and services to meet our clients’ needs. For example, we are expanding our services and technology offerings, such as the development of a cloud-based platform with a growing number of applications to support commercial operations for life sciences companies (e.g., multi-channel marketing, marketing campaign management, CRM, incentive compensation management, targeting and segmentation, performance management

 

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and other applications). We also continue to invest significantly in growth opportunities in emerging markets, such as the development, launch and enhancement of services in China, India, Russia, Turkey and other countries. However, there is no assurance that our investment plans will be successful or will produce a sufficient or any return on our investments. Further, if we are unable to develop new technologies and services, clients do not purchase our new technologies and services, our new technologies and services do not work as intended or there are delays in the availability or adoption of our new technologies and services, then we may not be able to grow our business or growth may occur slower than anticipated. Any of the foregoing could have a material and adverse effect on our operating results and financial condition.

Data protection, privacy and similar laws restrict access, use and disclosure of information, and failure to comply with or adapt to changes in these laws could materially and adversely harm our business.

Patient health information is among the most sensitive of personal information and it is critical that information about an individual’s healthcare is properly protected from inappropriate access, use and disclosure. Laws restricting access, use and disclosure of such information include the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), the European Union’s Data Protection Directive, Canada’s Personal Information Protection and Electronic Documents Act and other data protection, privacy and similar national, state/provincial and local laws. We have established frameworks, models, processes and technologies to manage privacy for many data types, from a variety of sources, and under myriad privacy and data protection laws worldwide. In addition, we rely on our data suppliers to deliver information to us in a form and in a manner that complies with applicable privacy and data protection laws. These laws are complex and there is no assurance that the safeguards and controls employed by us or our data suppliers will be sufficient to prevent a breach of these laws. Failure to comply with such laws may result in, among other things, civil and criminal liability, negative publicity, damage to our reputation, data being blocked from use and liability under contractual provisions.

Laws and expectations relating to privacy continue to evolve, and we continue to adapt to changing needs. Nevertheless, changes in these laws (including newly released interpretations of these laws by courts and regulatory bodies) may limit our data access, use and disclosure, and may require increased expenditures by us or may dictate that we not offer certain types of services. Any of the foregoing may have a material adverse impact on our ability to provide services to our clients or maintain our profitability.

There is ongoing concern from privacy advocates, regulators and others regarding data protection and privacy issues, and the number of jurisdictions with data protection and privacy laws has been increasing. Also, there are ongoing public policy discussions regarding whether the standards for de-identified, anonymous or pseudonomized health information are sufficient, and the risk of re-identification sufficiently small, to adequately protect patient privacy. These discussions may lead to further restrictions on the use of such information. There can be no assurance that these initiatives or future initiatives will not adversely affect our ability to access and use data or to develop or market current or future services.

Data protection, privacy and similar laws protect more than patient information, and although they vary by jurisdiction, these laws can extend to employee information, business contact information, provider information and other information relating to identifiable individuals. Failure to comply with these laws may result in, among other things, civil and criminal liability,

 

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negative publicity, damage to our reputation and liability under contractual provisions. In addition, compliance with such laws may require increased costs to us or may dictate that we not offer certain types of services.

The occurrence of any of the foregoing could impact our ability to provide the same level of service to our clients, force us to modify our offerings or increase our costs, which could materially and adversely affect our operating results and financial condition.

Security breaches and unauthorized use of our IT systems and information, or the IT systems or information in the possession of our vendors, could expose us, our clients, our data suppliers or others to risk of loss.

We rely upon the security of our computer and communications systems infrastructure to protect us from cyber attacks and unauthorized access. Cyber attacks can include malware, computer viruses, hacking or other significant disruption of our computer, communications and related systems. Although we take steps to manage and avoid these risks and to prevent their recurrence, our preventive and remedial actions may not be successful. Such attacks, whether successful or unsuccessful, could result in our incurring costs related to, for example, rebuilding internal systems, defending against litigation, responding to regulatory inquiries or actions, paying damages or fines, or taking other remedial steps with respect to third parties. Publicity about vulnerabilities and attempted or successful incursions could damage our reputation with clients and data suppliers and reduce demand for our services.

We also store proprietary and sensitive information in connection with our business, which could be compromised by a cyber attack. To the extent that any disruption or security breach results in a loss or damage to our data, an inappropriate disclosure of proprietary or sensitive information, an inability to access data sources, or an inability to process data or provide our offerings to our clients, it could cause significant damage to our reputation, affect our relationships with our data suppliers and clients (including loss of suppliers and clients), lead to claims against us and ultimately harm our business. We may be required to incur significant costs to alleviate, remedy or protect against damage caused by these disruptions or security breaches in the future. We may also face inquiry or increased scrutiny from government agencies as a result of any such disruption or breach. While we have insurance coverage for certain instances of a cyber security breach, our coverage may not be sufficient if we suffer a significant attack or multiple attacks. Any such breach or disruption could have a material adverse effect on our operating results and our reputation as a provider of mission-critical services.

Some of our vendors have significant responsibility for the security of our global data center and certain computer-based platforms. Also, our data suppliers have responsibility for security of their own computer and communications environments. These third parties face risks relating to cyber security similar to ours, which could disrupt their businesses and therefore materially impact ours. Accordingly, we are subject to any flaw in or breaches to their computer and communications systems or those that they operate for us, which could result in a material adverse effect on our business, operations and financial results.

Hardware and software failures, delays in the operation of our computer and communications systems or the failure to implement system enhancements may adversely impact us.

Our success depends on the efficient and uninterrupted operation of our computer and communications systems. A failure of our network or data-gathering procedures could impede

 

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the processing of data, delivery of databases and services, client orders and day-to-day management of our business and could result in the corruption or loss of data.

While many of our operations have disaster recovery plans in place, we currently do not have excess or standby computer processing or network capacity everywhere in the world to avoid disruption in the receipt, processing and delivery of data in the event of a system failure. Despite any precautions we may take, damage from fire, floods, hurricanes, power loss, telecommunications failures, computer viruses, break-ins, sabotage, breaches of security, epidemics and similar events at our various computer facilities could result in interruptions in the flow of data to our servers and from our servers to our clients. In addition, any failure by our computer environment to provide sufficient processing or network capacity to transfer data could result in interruptions in our service. In the event of a delay in the delivery of data, we could be required to transfer our data collection operations to an alternative provider of server hosting services. Such a transfer could result in significant delays in our ability to deliver services to our clients, and increase our costs. Additionally, significant delays in the planned delivery of system enhancements, improvements and inadequate performance of the systems once they are completed could damage our reputation and harm our business. Finally, long-term disruptions in the infrastructure caused by events such as natural disasters, the outbreak of war, the escalation of hostilities, epidemics and acts of terrorism (particularly involving cities in which we have offices) could result in a material adverse affect.

Although we carry property and business interruption insurance, our coverage may not be adequate to compensate us for all losses that may occur. Any such failure, disruption or delay could have a material adverse effect on our operating results and our reputation.

Consolidation in the industries in which our clients operate may reduce the volume of services purchased by consolidated clients following an acquisition or merger, which could harm our operating results and financial condition.

Mergers or consolidations among our clients have in the past and could in the future reduce the number of our clients and potential clients. When companies consolidate, overlapping services previously purchased separately are usually purchased only once by the combined entity, leading to loss of revenue. Other services that were previously purchased by one of the merged or consolidated entities may be deemed unnecessary or cancelled. If our clients merge with or are acquired by other entities that are not our clients, or that use fewer of our services, they may discontinue or reduce their use of our services. There can be no assurance as to the degree to which we may be able to address the revenue impact of such consolidation. Any of these developments could harm our operating results and financial condition.

Laws restricting pharmaceutical sales and marketing practices may adversely impact demand for our services.

There have been a significant number of laws, legislative initiatives and regulatory actions over the years that seek to limit pharmaceutical sales and marketing practices. For example, three states in 2006 and 2007 passed laws restricting the use of prescriber identifiable information for the purpose of promoting branded prescription medicines. Although these laws were subsequently declared to be unconstitutional based on a decision of the U.S. Supreme Court in Sorrell v. IMS Health in 2011, we are unable to predict whether, and in what form, other initiatives may be introduced or actions taken at the state or Federal levels to limit pharmaceutical sales and marketing practices. In addition, while we will continue to seek to

 

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adapt our services to comply with the requirements of these laws (to the extent applicable to our services), if enacted, there can be no assurance that our efforts to adapt our offerings will be successful and provide the same financial contribution to us. There can also be no assurance that future legislative initiatives will not adversely affect our ability to develop or market current or future offerings, or that any future laws will not diminish the demand for our services, all of which could, over time, result in a material adverse impact on our operating results and financial condition.

Our business is subject to increasing competition.

Our future growth and success will depend on our ability to successfully compete with other companies that provide similar services in the same markets, some of which may have financial, marketing, technical and other advantages. We also expect that competition will continue to increase as a result of consolidation in both the information technology and healthcare industries. If one or more of our competitors or potential competitors were to merge or partner with another of our competitors, the change in the competitive landscape could adversely affect our ability to compete effectively. We compete on the basis of various factors, including breadth and depth of services, reputation, reliability, quality, innovation, security, price and industry expertise and experience. In addition, our ability to compete successfully may be impacted by the growing availability of health information from social media, government health information systems and other free or low-cost sources. For example, the United Kingdom’s National Health Service started releasing large volumes of data beginning in December 2011 at little or no charge, reducing the demand for our information services derived from similar data. In addition, consolidation or integration of wholesalers, retail pharmacies, health networks, payers or other healthcare stakeholders may lead any of them to provide information services directly to clients or indirectly through a designated service provider, resulting in increased competition from firms that may have lower costs to market (e.g., no data supply costs). Any of the above may result in lower demand for our services, which could result in a material adverse impact on our operating results and financial condition.

Tax matters could adversely affect our operating results and financial condition.

We operate in more than 100 countries worldwide and our earnings are subject to taxation in many differing jurisdictions and at differing rates. We seek to organize our affairs in a tax-efficient manner, taking account of the jurisdictions in which we operate. Our provision for income taxes and cash tax liability in the future could be adversely affected by numerous factors, including income before taxes being lower than anticipated in countries with lower statutory tax rates and higher than anticipated in countries with higher statutory tax rates, changes in the valuation of deferred tax assets and liabilities, and changes in tax laws, regulations, accounting principles or interpretations thereof, which could harm our financial results in future periods. In addition, we are subject to continuous examination of our income tax returns by the U.S. Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. There can be no assurance that the outcomes from these continuous examinations will not have an adverse effect on our provision for income taxes and tax liability.

Litigation or regulatory proceedings could have a material adverse effect on our operating results and financial condition.

In the normal course of our business, we are involved in lawsuits, claims, audits and investigations, such as those described in “Business—Legal proceedings.” The outcome of these

 

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matters could have a material adverse effect on our business, operating results or financial condition. In addition, we may become subject to future lawsuits, claims, audits and investigations that could result in substantial costs and divert our attention and resources. Litigation is inherently uncertain, and adverse rulings could occur, including monetary damages, or an injunction stopping us from producing, publishing or selling services, engaging in business practices or requiring other remedies such as divestitures.

Our business may be adversely impacted by factors affecting the pharmaceutical and healthcare industries.

The vast majority of our revenue is generated from sales to the pharmaceutical and healthcare industries. The clients we serve in these industries are commonly subject to financial pressures, including, but not limited to, increased costs, reduced demand for their products, reductions in pricing and reimbursement for products and services, formulary approval and placement, government approval to market their products and limits on the manner by which they market their products, loss of patent exclusivity (whether due to patent expiration or as a result of a successful legal challenge) and the proliferation of or changes to regulations applicable to these industries. To the extent our clients face such pressures, the demand for our services, or the prices our clients are willing to pay for those services, may decline. Any such decline could have a material adverse effect on our business.

Our success depends on our ability to protect our intellectual property rights.

Our ability to obtain, protect and enforce our intellectual property rights is subject to general litigation or third-party opposition risks, as well as the uncertainty as to the scope of protection, registrability, patentability, validity and enforceability of our intellectual property rights in each applicable country. Governments may adopt regulations, and government agencies or courts may render decisions, requiring compulsory licensing of intellectual property rights. When we seek to enforce our intellectual property rights we may be subject to claims that the intellectual property rights are invalid or unenforceable. Litigation may be necessary in the future to enforce our intellectual property rights and to protect our trade secrets. Litigation brought to protect and enforce our intellectual property rights could be costly, time consuming and distracting to management and could result in the impairment or loss of portions of our intellectual property rights. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could delay further sales or the implementation of our solutions, impair the functionality of our solutions, delay introductions of new solutions, result in our substituting inferior or more costly technologies into our solutions, or injure our reputation and harm our operating results and financial condition.

The theft or unauthorized use or publication of our trade secrets and other confidential business information could reduce the differentiation of our services and harm our business; the value of our investment in development or business acquisitions could be reduced; and third parties might make claims against us related to losses of their confidential or proprietary information. These incidents and claims could harm our business, reduce revenue, increase expenses and harm our reputation.

 

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We may be subject to claims by others that we are infringing on their intellectual property rights, which could harm our business and negatively impact our results of operations.

Third parties may assert claims that we or our clients infringe their intellectual property rights and these claims, with or without merit, could be expensive to litigate, cause us to incur substantial costs and divert management resources and attention in defending the claim. In some jurisdictions, plaintiffs can also seek injunctive relief that may limit the operation of our business or prevent the marketing and selling of our products or services that infringe on the plaintiff’s intellectual property rights. To resolve these claims, we may enter into licensing agreements with restrictive terms or significant fees, stop selling or redesign affected products or services, or pay damages to satisfy contractual obligations to others. If we do not resolve these claims in advance of a trial, there is no guarantee that we will be successful in court. These outcomes may have a material adverse impact on our operating results and financial condition.

In addition, certain contracts with our suppliers or clients contain provisions whereby we indemnify, subject to certain limitations, the counterparty for damages suffered as a result of claims related to intellectual property infringement and the use of our data. Claims made under these provisions could be expensive to litigate and could result in significant payments.

We rely on licenses from third parties to certain technology and intellectual property rights for some of our products and the licenses we currently have could terminate or expire.

Some of our products or services rely on technology or intellectual property rights owned and controlled by others. Our licenses to this technology or these intellectual property rights could be terminated or could expire. We may be unable to replace these licenses in a timely manner. Failure to renew these licenses, or renewals of these licenses on less advantageous terms, could harm our operating results and financial condition.

We may not be able to attract, retain and motivate talented personnel.

Our business is based on successfully attracting and retaining talented employees. The market for highly skilled workers and leaders in our industry and in the locations in which we operate is very competitive. If we are not successful in our recruiting efforts, or if we are unable to retain key employees, our ability to develop and deliver successful services may be adversely affected. Effective succession planning is also important to our long-term success. Failure to ensure effective transfer of knowledge and smooth transitions involving key employees could hinder our strategic planning and execution.

We regularly seek to grow our business through acquisitions of or investments in new or complementary businesses, services or technologies, or through strategic alliances, and the failure to manage such acquisitions, investments or alliances could have a material adverse effect on us.

In executing our business strategy, we routinely conduct discussions, evaluate opportunities and enter into agreements for possible investments, acquisitions and other transactions such as strategic alliances, and we actively pursue these types of transactions in the regular course of business. Pursuing growth by way of these types of transactions involves significant challenges and risks, including the inability to successfully identify acquisition candidates on terms acceptable to us, advance our business strategy, realize a satisfactory return on investment, successfully integrate business activities or resources, or retain key personnel. If we are unable to manage acquisitions or investments, or integrate any acquired businesses, services or

 

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technologies effectively, we may not realize the expected benefits from the transaction relative to the consideration paid, and our business, results of operations and financial condition may be materially and adversely affected.

Further, we may be unsuccessful in identifying and evaluating business, legal or financial risks as part of the due diligence process associated with a particular transaction. In addition, some investments may result in the incurrence of debt or may have contingent consideration components that may require us to pay additional amounts in the future in relation to future performance results of the subject business. If we do enter into agreements with respect to these transactions, we may fail to complete them due to factors such as failure to obtain regulatory or other approvals. We may be unable to realize the full benefits from these transactions, such as increased revenue or enhanced efficiencies, within the timeframes that we expect or at all. These events could divert attention from our other businesses and harm our business, financial condition and operating results.

We may experience challenges with the acquisition, development, enhancement or deployment of technology necessary for our business.

We operate in businesses that require sophisticated computer systems and software for data collection, data processing, cloud-based platforms, analytics, cryptography, statistical projections and forecasting, mobile computing, social media analytics and other applications and technologies. We seek to address our technology risks by increasing our reliance on the use of innovations by cross-industry technology leaders and adapt these for our pharmaceutical and healthcare industry clients. Some of these technologies supporting the industries we serve are changing rapidly and we must continue to adapt to these changes in a timely and effective manner at an acceptable cost. We also must continue to deliver data to our clients in forms that are easy to use while simultaneously providing clear answers to complex questions. There can be no guarantee that we will be able to develop, acquire or integrate new technologies, that these new technologies will meet our clients’ needs or achieve expected investment goals, or that we will be able to do so as quickly or cost-effectively as our competitors. Significant technological change could render our services obsolete. Moreover, the introduction of new services embodying new technologies could render existing services obsolete. Our continued success will depend on our ability to adapt to changing technologies, manage and process ever-increasing amounts of data and information and improve the performance, features and reliability of our services in response to changing client and industry demands. We may experience difficulties that could delay or prevent the successful design, development, testing, introduction or marketing of our services. New services, or enhancements to existing services, may not adequately meet the requirements of current and prospective clients or achieve any degree of significant market acceptance. Any of these failures could have a material adverse effect on our operating results and financial condition.

Our business is subject to international economic, political and other risks that could negatively affect our results of operations and financial condition.

We have business activities in over 100 countries, and for the year ended December 31, 2012, we generated 64% of our $2.44 billion of 2012 revenue from outside the United States. Further, some of our business activities are concentrated into global or regional hubs in one or more geographic areas. For example, to support our businesses in many other countries, we handle standardizing and cleaning of data in Manila, The Philippines, advanced statistics in Beijing,

 

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China, analytical support for delivery in Bangalore, India, and reference data management in Santiago, Chile. As a result, we are subject to heightened risks inherent in conducting business internationally, including, for example:

 

 

required compliance with a variety of local laws and regulations which may be materially different than those to which we are subject in the United States or which may change unexpectedly;

 

 

local, economic, political and social conditions, including potential hyperinflationary conditions, political instability, and potential nationalization, repatriation, expropriation, price controls or other restrictive government actions;

 

 

hiring, retaining and overseeing qualified management personnel for managing operations in multiple countries;

 

 

differing employment practices and labor issues;

 

 

tax-related risks, including the imposition of taxes and the lack of beneficial treaties, that result in a higher effective tax rate for us;

 

 

difficulties in enforcing agreements through certain foreign local systems;

 

 

limitations on ownership and on repatriation of earnings;

 

 

possible liabilities under applicable anti-corruption laws, export controls, anti-boycott and economic sanctions laws;

 

 

longer sales and payment cycles;

 

 

reduced protection for intellectual property rights in some countries; and

 

 

security concerns, including crime, political instability and international response thereto.

To the extent we are unable to effectively manage our international operations and these risks, our data acquisition activities and sales for certain countries may be adversely affected, we may be subject to additional and unanticipated costs, and we may be subject to litigation or regulatory action. As a consequence, our business, financial condition and results of operations could be seriously harmed.

Further, we have substantial assets, liabilities, revenue and expenses denominated in currencies other than the U.S. dollar, and although we hedge a portion of our international currency exposure, we are subject to currency translation exposure on the profits and financial position of our operations, in addition to economic exposure, as a result of devaluations and fluctuations in currency exchange rates or the imposition of limitations on conversion of foreign currencies into dollars.

We may be exposed to liabilities under applicable anti-corruption laws and any determination that we violated these laws could have a material adverse effect on our business.

We are subject to various anti-corruption laws that prohibit improper payments or offers of payments to foreign governments their officials and others for the purpose of obtaining or retaining business. We have business in countries and regions which are less developed and are generally recognized as potentially more corrupt business environments. Our activities in these countries create the risk of unauthorized payments or offers of payments by one of our

 

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employees or agents that could be in violation of various anti-corruption laws including the Foreign Corrupt Practices Act (“FCPA”) the U.K. Bribery Act and other local laws. We have implemented safeguards and policies to discourage these practices by our employees and agents. However, our existing safeguards and any future improvements may prove to be less than effective and our employees or agents may engage in conduct for which we might be held responsible. In addition, our significant recent growth globally over the last few years and our anticipated future growth, both organically and through acquisitions, may exacerbate these risks and strain our ability to effectively manage the increased breadth and scope of our activities to avoid these risks. If employees violate our policies or we fail to maintain adequate record-keeping and internal accounting practices to accurately record our transactions, we may be subject to regulatory sanctions. Violations of the FCPA or other anti-corruption laws may result in severe criminal or civil sanctions and penalties, including disgorgement of profits, injunctions and debarment from government contracts, and we may be subject to other liabilities which could have a material adverse effect on our business, results of operations and financial condition.

Catastrophic events or geo-political conditions may disrupt our business.

A disruption or failure of our systems or operations because of a major earthquake, weather event, cyber-attack, terrorist attack, pandemic or other catastrophic event could cause delays in completing sales, providing services, collecting data or performing other mission-critical functions in affected areas. A catastrophic event that results in the destruction or disruption of any of our critical business or information technology systems could harm our ability to conduct normal business operations. Our move toward providing our clients with more services and solutions in the cloud puts a premium on the resilience of our systems and strength of our business continuity management plans, and magnifies the potential impact of prolonged service outages on our operating results. Abrupt political change, terrorist activity and armed conflict pose a risk of general economic disruption in affected countries, which may increase our operating costs or reduce our revenue.

We face risks related to sales to government entities.

We derive a portion of our revenue from sales to government entities. Government demand and payment for our services may be affected by public-sector budgetary cycles and funding authorizations. Government contracts are subject to oversight, including special rules on accounting, expenses, reviews and security. Failure to comply with these rules could result in civil and criminal penalties and sanctions, including termination of contracts, fines and suspensions, or debarment from future government business. As a result, failure to comply with these rules could have a material adverse effect on our operating results and financial condition.

Our use of accounting estimates involves judgment and could adversely impact our financial results, and ineffective internal controls could adversely impact our business and operating results.

The methods, estimates and judgments that we use in applying accounting policies have a significant impact on our results of operations. For more information, see Note 2 to our consolidated financial statements included elsewhere in this prospectus. These methods, estimates and judgments are subject to significant risks, uncertainties and assumptions, and changes could affect our results of operations. In addition, our internal control over financial reporting may not prevent or detect misstatements because of the inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Even

 

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effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed and we could fail to meet our reporting obligations.

Risks relating to our common stock and this offering

Our Sponsors will continue to have significant influence over us after this offering, including control over decisions that require the approval of stockholders, which could limit your ability to influence the outcome of matters submitted to stockholders for a vote.

We are currently controlled, and after this offering is completed will continue to be controlled, by the Sponsors. Upon completion of this offering, investment funds affiliated with the Sponsors will beneficially own     % of our outstanding common stock (or     % if the underwriters exercise in full their option to purchase additional shares from us and the selling stockholders). As long as the Sponsors own or control at least a majority of our outstanding voting power, they will have the ability to exercise substantial control over all corporate actions requiring stockholder approval, irrespective of how our other stockholders may vote, including the election and removal of directors and the size of our board, any amendment of our certificate of incorporation or bylaws, or the approval of any merger or other significant corporate transaction, including a sale of substantially all of our assets. Even if their ownership falls below 50%, the Sponsors will continue to be able to strongly influence or effectively control our decisions.

Additionally, the Sponsors interests may not align with the interests of our other stockholders. The Sponsors are in the business of making investments in companies and may acquire and hold interests in businesses that compete directly or indirectly with us. The Sponsors may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.

Upon the listing of our shares, we will be a “controlled company” within the meaning of the rules of the NYSE and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements; you will not have the same protections afforded to stockholders of companies that are subject to such requirements.

Because the Sponsors will continue to control a majority of the voting power of our outstanding common stock after completion of this offering, we will be a “controlled company” within the meaning of the corporate governance standards of the NYSE. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements that, within one year of the date of the listing of our common stock:

 

 

we have a board that is composed of a majority of “independent directors,” as defined under the rules of the NYSE;

 

 

we have a compensation committee that is composed entirely of independent directors; and

 

 

we have a nominating and corporate governance committee that is composed entirely of independent directors.

 

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Following this offering, we intend to utilize some or all of these exemptions. Accordingly, in the event the interests of our Sponsors differ from those of other stockholders, and, for so long as we are a “controlled company,” you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE. Our status as a controlled company could make our common stock less attractive to some investors or otherwise harm our stock price.

Provisions of our corporate governance documents could make an acquisition of our company more difficult and may prevent attempts by our stockholders to replace or remove our current management, even if beneficial to our stockholders.

In addition to the Sponsors’ beneficial ownership of a controlling percentage of our common stock, our certificate of incorporation and bylaws and the Delaware General Corporation Law (the “DGCL”) contain provisions that could make it more difficult for a third party to acquire us, even if doing so might be beneficial to our stockholders. Our board of directors has the right to issue preferred stock without stockholder approval that could be used to dilute a potential hostile acquiror. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board. Because our board is responsible for appointing the members of our management team, these provisions could in turn affect any attempt to replace current members of our management team. As a result, you may lose your ability to sell your stock for a price in excess of the prevailing market price due to these protective measures, and efforts by stockholders to change the direction or management of the Company may be unsuccessful. See “Description of capital stock.”

If you purchase shares of common stock in this offering, you will suffer immediate and substantial dilution of your investment.

The initial public offering price of our common stock is substantially higher than the net tangible book deficit per share of our common stock. Therefore, if you purchase shares of our common stock in this offering, you will pay a price per share that substantially exceeds our net tangible book deficit per share after this offering. Based on the initial public offering price of $         per share, you will experience immediate dilution of $         per share, representing the difference between our pro forma net tangible book deficit per share after giving effect to this offering and the initial public offering price. In addition, purchasers of common stock in this offering will have contributed     % of the aggregate price paid by all purchasers of our stock but will own only approximately     % of our common stock outstanding after this offering. We also have a large number of outstanding stock options to purchase common stock with exercise prices that are below the estimated initial public offering price of our common stock. To the extent that these options are exercised, you will experience further dilution. See “Dilution” for more detail.

An active, liquid trading market for our common stock may not develop, which may limit your ability to sell your shares.

Prior to this offering, there was no public market for our common stock. Although we intend to apply to list our common stock on the NYSE under the symbol “IMS,” an active trading market for our shares may never develop or be sustained following this offering. The initial public offering price will be determined by negotiations between us and the underwriters and may not be indicative of market prices of our common stock that will prevail in the open market after the offering. A public trading market having the desirable characteristics of depth, liquidity and

 

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orderliness depends upon the existence of willing buyers and sellers at any given time, such existence being dependent upon the individual decisions of buyers and sellers over which neither we nor any market maker has control. The failure of an active and liquid trading market to develop and continue would likely have a material adverse effect on the value of our common stock. The market price of our common stock may decline below the initial public offering price, and you may not be able to sell your shares of our common stock at or above the price you paid in this offering, or at all. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

As a public company, we will become subject to additional laws, regulations and stock exchange listing standards, which will impose additional costs on us and may strain our resources and divert our management’s attention.

We have operated our business as a private company since February 2010, following the Merger. After this offering, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Sarbanes-Oxley Act of 2002, as amended, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), the listing requirements of the NYSE, and other applicable securities laws and regulations. Compliance with these laws and regulations will increase our legal and financial compliance costs and make some activities more difficult, time-consuming or costly. For example, the Exchange Act will require us, among other things, to file annual, quarterly and current reports with respect to our business and operating results. We also expect that being a public company and being subject to new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. We estimate that we will incur between $         million and $         million annually in expenses related to incremental insurance costs and other expenses associated with being a public company, including listing, printer and XBRL fees and investor relations costs. However, the incremental costs that we incur as a result of becoming a public company could exceed our estimate. These factors may therefore strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

Our operating results and share price may be volatile, and the market price of our common stock after this offering may drop below the price you pay.

Our quarterly operating results are likely to fluctuate in the future as a publicly traded company. In addition, securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could subject the market price of our shares to wide price fluctuations regardless of our operating performance. We and the underwriters will negotiate to determine the initial public offering price. You may not be able to resell your shares at or above the initial public offering price or at all. Our operating results and the trading price of our shares may fluctuate in response to various factors, including:

 

 

market conditions in the broader stock market;

 

 

actual or anticipated fluctuations in our quarterly financial and operating results;

 

 

introduction of new products or services by us or our competitors;

 

 

issuance of new or changed securities analysts’ reports or recommendations;

 

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results of operations that vary from expectations of securities analysis and investors;

 

 

guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;

 

 

strategic actions by us or our competitors;

 

 

announcement by us, our competitors or our vendors of significant contracts or acquisitions;

 

 

sales, or anticipated sales, of large blocks of our stock;

 

 

additions or departures of key personnel;

 

 

regulatory, legal or political developments;

 

 

public response to press releases or other public announcements by us or third parties, including our filings with the SEC;

 

 

litigation and governmental investigations;

 

 

changing economic conditions;

 

 

changes in accounting principles;

 

 

default under agreements governing our indebtedness;

 

 

exchange rate fluctuations; and

 

 

other events or factors, including those from natural disasters, war, actors of terrorism or responses to these events.

These and other factors, many of which are beyond our control, may cause our operating results and the market price and demand for our shares to fluctuate substantially. While we believe that operating results for any particular quarter are not necessarily a meaningful indication of future results, fluctuations in our quarterly operating results could limit or prevent investors from readily selling their shares and may otherwise negatively affect the market price and liquidity of our shares. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management from our business, which could significantly harm our profitability and reputation.

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. After this offering, we will have outstanding             shares of common stock based on the number of shares outstanding as of                     , 2014. This includes             shares that we are selling in this offering, as well as the             shares that the selling stockholders are selling, which may be resold in the public market immediately, and assumes no exercises of outstanding options. Substantially all of

 

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the shares that are not being sold in this offering will be subject to a 180-day lock-up period provided under agreements executed in connection with this offering. These shares will, however, be able to be resold after the expiration of the lock-up agreement as described in the “Shares eligible for future sale” section of this prospectus. We also intend to file a Form S-8 under the Securities Act of 1933, as amended (“Securities Act”) to register all shares of common stock that we may issue under our equity compensation plans. Once we register these shares, they can be freely sold in the public market upon issuance, subject to the lock-up agreements described in the “Underwriting” section of this prospectus. As restrictions on resale end, the market price of our stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

Since we have no current plans to pay regular cash dividends on our common stock following this offering, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.

Although we have previously declared dividends to our stockholders, we do not anticipate paying any regular cash dividends on our common stock following this offering. Any decision to declare and pay dividends in the future will be made at the discretion of our Board and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our board may deem relevant. In addition, our ability to pay dividends is, and may be, limited by covenants of existing and any future outstanding indebtedness we or our subsidiaries incur, including under IMS Health’s second amended and restated credit agreement and related security and other documents for a senior secured term loan facility and a senior secured revolving facility with a syndicate of institutional lenders and financial institutions (collectively, the “Senior Secured Credit Facilities”). Therefore, any return on investment in our common stock is solely dependent upon the appreciation of the price of our common stock on the open market, which may not occur. See “Dividend policy” for more detail.

We are a holding company with nominal net worth and will depend on dividends and distributions from our subsidiaries to pay any dividends.

IMS Health Holdings, Inc. is a holding company with nominal net worth. We do not have any material assets or conduct any business operations other than our investments in our subsidiaries. Our business operations are conducted primarily out of our indirect operating subsidiary, IMS Health and its subsidiaries. As a result, notwithstanding any restrictions on payment of dividends under our existing indebtedness, our ability to pay dividends, if any, will be dependent upon cash dividends and distributions or other transfers from our subsidiaries, including from IMS Health. Payments to us by our subsidiaries will be contingent upon their respective earnings and subject to any limitations on the ability of such entities to make payments or other distributions to us.

If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our shares or if our results of operations do not meet their expectations, our share price and trading volume could decline.

The trading market for our shares will be influenced by the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline. Moreover, if one or more of the analysts who cover us downgrade our stock, or if our results of operations do not meet their expectations, our share price could decline.

 

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Risks related to our indebtedness

Our substantial level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting obligations on our indebtedness.

We have a substantial amount of indebtedness. As of September 30, 2013, before giving effect to the Proposed Debt Refinancing and the application of the proceeds from this offering, our total indebtedness was $5,012 million (excluding capital lease obligations). Certain of our subsidiaries have an additional $375 million of borrowing capacity (less outstanding letters of credit, if any) available under the Senior Secured Credit Facilities, and the right to request additional commitments for new term loans and to increase the size of the existing revolving credit facility in an aggregate principal amount up to the greater of (i) $300.0 million and (ii) the amount of new term loans and increased revolving credit commitments such that the senior secured net leverage ratio shall be no greater than 3.50 to 1.00 after giving pro forma effect to such increases (assuming such revolving credit commitments are fully borrowed). Our level of indebtedness as of September 30, 2013 consisted of $2,762 billion outstanding under our Senior Secured Credit Facilities, $375 million of unused commitments outstanding under the revolving portion of the Senior Secured Credit Facilities (excluding outstanding letters of credit, if any), $750.0 million of 7.375%/8.125% Senior PIK Notes due 2018 (the “Senior PIK Notes”), $999.6 million of 12.5% Senior Unsecured Exchange Notes due 2018 (the “New 12.5% Senior Notes”), $0.4 million of 12.5% Senior Notes due 2018 (the “Old 12.5% Senior Notes,” and, together with the New 12.5% Senior Notes due 2018, the “12.5% Senior Notes”) and $500.0 million of 6% Senior Notes due 2020 (the “6% Senior Notes”). See “Description of indebtedness.”

Our substantial level of indebtedness could adversely affect our financial condition and increase the possibility that we may be unable to generate cash sufficient to pay, when due, the principal of, interest on or other amounts due in respect of our indebtedness. Our substantial indebtedness, combined with our other existing and any future financial obligations and contractual commitments, could have important consequences. For example, it could:

 

 

make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations under any of our debt instruments, including restrictive covenants, could result in an event of default under the agreements governing such indebtedness;

 

 

require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing funds available for working capital, capital expenditures, acquisitions, selling and marketing efforts, research and development and other purposes;

 

 

increase our vulnerability to adverse economic and industry conditions, which could place us at a competitive disadvantage compared to our competitors that have relatively less indebtedness;

 

 

cause us to incur substantial fees from time to time in connection with debt amendments or refinancings;

 

 

increase our exposure to rising interest rates because a portion of our borrowings is at variable interest rates;

 

 

place us at a disadvantage compared to our competitors that have less debt;

 

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limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate; and

 

 

limit our ability to borrow additional funds, or to dispose of assets to raise funds, if needed, for working capital, capital expenditures, acquisitions, selling and marketing efforts, research and development and other corporate purposes.

Despite our level of indebtedness, we are able to incur more debt and undertake additional obligations. Incurring such debt or undertaking such additional obligations could further exacerbate the risks our indebtedness poses to our financial condition.

We, including our subsidiaries, may be able to incur significant additional indebtedness in the future. Although the credit agreement governing the Senior Secured Credit Facilities and the indentures governing our outstanding notes contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and any indebtedness incurred in compliance with these restrictions could be substantial. These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness, may be waived by certain votes of debt holders and, if we refinance existing indebtedness, such refinancing indebtedness may contain fewer restrictions on our activities. To the extent new indebtedness is added to our and our subsidiaries’ currently anticipated indebtedness levels, the related risks that we and our subsidiaries face could intensify.

While the credit agreement governing the Senior Secured Credit Facilities and the indentures governing our outstanding notes also contain restrictions on making certain loans and investments, these restrictions are subject to a number of qualifications and exceptions, and the investments incurred in compliance with these restrictions could be substantial.

Restrictions imposed in the Senior Secured Credit Facilities and our other outstanding indebtedness, including the indentures governing our outstanding notes, may limit our ability to operate our business and to finance our future operations or capital needs or to engage in other business activities.

The terms of the Senior Secured Credit Facilities restrict us from engaging in specified types of transactions. These covenants restrict our ability, among other things, to:

 

 

incur liens and engage in sale-leaseback transactions;

 

 

make investments and loans;

 

 

make capital expenditures;

 

 

incur indebtedness or guarantees;

 

 

engage in mergers, acquisitions and asset sales;

 

 

declare dividends, make payments or redeem or repurchase equity interests;

 

 

alter the business IMS Health and its restricted subsidiaries conduct;

 

 

enter into agreements limiting restricted subsidiary distributions;

 

 

prepay, redeem or purchase certain indebtedness; and

 

 

engage in certain transactions with affiliates.

 

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In addition, the credit agreement governing the Senior Secured Credit Facility requires us to comply with a quarterly maximum leverage ratio test, which financial covenant becomes more restrictive over time, and limits our ability to make capital expenditures. Our ability to comply with this financial covenant can be affected by events beyond our control, and we may not be able to satisfy it. Additionally, the restrictions contained in the indentures governing our outstanding notes could also limit our ability to plan for or react to market conditions, meet capital needs or make acquisitions or otherwise restrict our activities or business plans. See “Description of indebtedness.”

A breach of any of these covenants could result in a default under the Senior Secured Credit Facilities or the indentures governing our outstanding notes, which could trigger acceleration of our indebtedness and may result in the acceleration of or default under any other debt to which a cross-acceleration or cross-default provision applies, which could have a material adverse effect on our business, operations and financial results. In the event of any default under the Senior Secured Credit Facilities, the applicable lenders could elect to terminate borrowing commitments and declare all borrowings and loans outstanding, together with accrued and unpaid interest and any fees and other obligations, to be due and payable. In addition, or in the alternative, the applicable lenders could exercise their rights under the security documents entered into in connection with the Senior Secured Credit Facilities. We have pledged a significant portion of our assets as collateral under the Senior Secured Credit Facilities.

If we were unable to repay or otherwise refinance these borrowings and loans when due, the applicable lenders could proceed against the collateral granted to them to secure that indebtedness, which could force us into bankruptcy or liquidation. In the event the applicable lenders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. Any acceleration of amounts due under the credit agreement governing the Senior Secured Credit Facilities or the exercise by the applicable lenders of their rights under the security documents would likely have a material adverse effect on us.

We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments on or to refinance our debt obligations and to fund our planned capital expenditures, acquisitions and other ongoing liquidity needs depends on our financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. There can be no assurance that we will maintain a level of cash flows from operating activities or that future borrowings will be available to us under the Senior Secured Credit Facilities or otherwise in an amount sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness and fund our planned capital expenditures, acquisitions and other ongoing liquidity needs.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments may restrict us from adopting some

 

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of these alternatives. In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. The Senior Secured Credit Facilities and the indentures governing our outstanding notes restrict our ability to dispose of assets and use the proceeds from any such disposition. We may not be able to consummate those dispositions or to obtain the proceeds that we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due. These alternative measures may not be successful and may not permit us to meet our debt service obligations.

A ratings downgrade or other negative action by a ratings organization could adversely affect the trading price of the shares of our common stock.

Credit rating agencies continually revise their ratings for companies they follow. The condition of the financial and credit markets and prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future. In addition, developments in our business and operations could lead to a ratings downgrade for us or our subsidiaries. Any such fluctuation in the rating of us or our subsidiaries may impact our ability to access debt markets in the future or increase our cost of future debt which could have a material adverse effect on our operations and financial condition, which in return may adversely affect the trading price of shares of our common stock.

 

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Cautionary note regarding forward-looking statements

This prospectus contains forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, and other future conditions. Forward-looking statements can be identified by words such as “anticipate,” “believe,” “envision,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” “contemplate” and other similar expressions, although not all forward-looking statements contain these identifying words. Examples of forward-looking statements include, among others, statements we make regarding:

 

 

plans for future growth and other business development activities;

 

 

plans for capital expenditures;

 

 

expectations for market and industry growth;

 

 

financing sources;

 

 

dividends;

 

 

the effects of regulation and competition;

 

 

foreign currency conversion; and

 

 

all other statements regarding our intent, plans, beliefs or expectations or those of our directors or officers.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place significant reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Important factors that could cause actual results and events to differ materially from those indicated in the forward-looking statements include, among others, the following:

 

 

our data suppliers might restrict our use of or refuse to license data, which could lead to our inability to provide certain products or services;

 

 

failure to meet productivity objectives under our internal business transformation initiatives could adversely impact our competitiveness and our ability to meet our growth objectives;

 

 

we may be unsuccessful at investing in growth opportunities;

 

 

data protection and privacy laws may restrict our current and future activities;

 

 

breaches or misuse of our or our outsourcing partners’ security or communication systems could expose us, our clients, our data suppliers or others to risk of loss;

 

 

hardware and software failures, delays in the operation of our computer and communications systems or the failure to implement system enhancements may adversely impact us;

 

 

consolidation in the industries in which our clients operate may reduce the volume of products and services purchased by consolidated clients following an acquisition or merger; and

 

 

our ability to protect our intellectual property rights and our susceptibility to claims by others that we are infringing on their intellectual property rights.

 

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The forward-looking statements in this prospectus represent our views as of the date of this prospectus. We undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future developments or otherwise.

 

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Use of proceeds

We estimate that the net proceeds to us from our issuance and sale of             shares of common stock in this offering will be approximately $         million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us (or approximately $         million if the underwriters exercise their option to purchase additional shares of common stock in full). This estimate assumes an initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus.

We intend to use the net proceeds of this offering (i) to fund a portion of the Proposed Debt Refinancing, including any related fees and expenses; (ii) to pay an estimated amount of $         million in the aggregate to holders of outstanding phantom options, which constitute cash-settled stock appreciation rights granted under our 2010 Equity Incentive Plan and (iii) to pay a one-time fee to terminate our management services agreement with the Sponsors of $         million. We intend to use the remainder of the net proceeds, if any, for general corporate purposes, including supporting our strategic growth opportunities in the future.

We will not receive any proceeds from the sale of shares by the selling stockholders, including if the underwriters exercise their option to purchase additional shares. After deducting the underwriting discounts, the selling stockholders will receive approximately $         million of proceeds from this offering.

A $1.00 increase (decrease) in the assumed public offering price of $            , based upon the midpoint of the estimated price range set forth on the cover of this prospectus, would increase (decrease) the net proceeds to us from this offering by $         million (or approximately $         million if the underwriters exercise their option to purchase additional shares of common stock in full), assuming the number of shares we offer, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. A              share increase (decrease) in the number of shares offered by us would increase (decrease) the net proceeds to us from this offering by $         million (or approximately $         million if the underwriters exercise their option to purchase additional shares of common stock in full), assuming the aggregate offering price set forth on the cover page of this prospectus remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

Under certain interpretations of the SEC, dividends declared in the year preceding an initial public offering are deemed to be in contemplation of the offering with the intention of repayment out of the offering proceeds to the extent that dividends exceeded earnings during such period. Accordingly, we have provided pro forma earnings per share information for 2012 that gives pro forma effect to the assumed issuance of a number of shares whose proceeds are deemed to be necessary to pay previous year’s dividends in excess of 2012 earnings ($         million). See “Selected and pro forma consolidated financial data” found elsewhere in this prospectus for pro forma earnings per share information.

For additional information regarding our liquidity and outstanding indebtedness, see “Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources.”

 

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Dividend policy

Following completion of the offering, our board of directors does not currently intend to pay dividends on our common stock. However, we expect to reevaluate our dividend policy on a regular basis following the offering and may, subject to compliance with the covenants contained in our credit facilities and other considerations, determine to pay dividends in the future. The declaration, amount and payment of any future dividends on shares of our common stock will be at the sole discretion of our board of directors, which may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, the implications of the payment of dividends by us to our stockholders or by our subsidiaries to us, and any other factors that our board of directors may deem relevant. See “Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources,” “Description of indebtedness” and Note 11 to our audited consolidated financial statements included elsewhere in this prospectus for restrictions on our ability to pay dividends.

In August 2013, our board of directors declared a cash dividend of $0.26 per share (or $753 million in the aggregate) to stockholders of record as of August 6, 2013.

 

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Capitalization

The following table sets forth our cash and cash equivalents and capitalization at September 30, 2013:

 

 

on an actual basis;

 

 

on an as adjusted basis to give effect to (1) the issuance of shares of common stock by us in this offering and the receipt of approximately $         million in net proceeds from the sale of such shares, assuming an initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses, (2) the Proposed Debt Refinancing and (3) the application of the estimated net proceeds from the offering as described in “Use of proceeds.”

You should read this table in conjunction with the information contained in “Use of proceeds,” “Selected pro forma and consolidated financial data” and “Management’s discussion and analysis of financial condition and results of operations,” as well as our consolidated financial statements and the related notes included elsewhere in this prospectus.

 

       As of September 30,
2013
 
(dollars in millions)    Actual     As adjusted
(4)(5)
 

 

 

Cash and cash equivalents

   $ 663      $                
  

 

 

 

Long-term debt, including current portions(1):

    

Senior secured credit facilities:

    

Term loan facility(2)

     2,762     

Revolving credit facility

         

12.5% Senior Notes

     1,000     

Senior PIK Notes

     750     

6% Senior Notes

     500     
  

 

 

 

Total debt

     5,012     
  

 

 

 

Stockholders’ equity:

    

Common stock, par value $0.001 per share; 3,075,000,000 shares authorized and 2,804,978,493 shares issued and outstanding on an actual basis,             shares authorized and             shares issued and outstanding on an as adjusted basis(3)

     3     

Additional paid-in capital

     909     

Accumulated deficit

     (102  

Treasury stock

     (6  

Accumulated other comprehensive loss

     2     
  

 

 

 

Total stockholder’s equity

     806     
  

 

 

 

Total capitalization

   $ 5,818      $     

 

 

 

(1)   Concurrent with the closing of this offering, we expect to effect the Proposed Debt Refinancing. See “Use of proceeds.”

 

(2)   As presented on the face of our consolidated balance sheet, which is net of unamortized discounts of $71.2 million.

 

(3)   Does not include 191 million shares of common stock issuable upon exercise of stock options outstanding as of September 30, 2013 at a weighted average exercise price of $0.74 per share, or 31 million shares of common stock reserved for future issuance under our equity incentive plans as of                     , 2014.

 

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(4)   As adjusted reflects the application of the estimated proceeds of the offering as described in “Use of proceeds.”

 

(5)   A $1.00 increase (decrease) in the assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover of this prospectus, would increase (decrease) the as adjusted amount of each of cash and cash equivalents and total stockholders’ equity by approximately $         million after deducting underwriting discounts and commissions and estimated offering expenses payable by us. A             share increase in the number of shares offered by us would increase the as-adjusted amount of each of cash and cash equivalents and total stockholders’ equity by approximately $         million after deducting underwriting discounts and commissions and any estimated offering expenses payable by us. Conversely a decrease in the number of shares offered by us would decrease the as-adjusted amount of each of cash and cash equivalents and total stockholders’ equity by approximately $         million after deducting underwriting discounts and commissions and any estimated offering expenses payable by us.

 

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Dilution

If you invest in our common stock in this offering, your interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock in this offering and the pro forma as adjusted net tangible book value per share of our common stock after this offering. Dilution results from the fact that the initial public offering price per share of common stock is substantially in excess of the net tangible book deficit per share of our common stock attributable to the existing stockholders for our presently outstanding shares of common stock. Our net tangible book deficit per share represents the amount of our total tangible assets (total assets less intangible assets) less total liabilities, divided by the number of shares of common stock issued and outstanding.

As of September 30, 2013, we had a historical net tangible book deficit of $         million, or $         per share of common stock, based on             shares of our common stock outstanding as of                     , 2014. Dilution is calculated by subtracting net tangible book deficit per share of our common stock from the assumed initial public offering price per share of our common stock.

Investors participating in this offering will incur immediate and substantial dilution. Without taking into account any other changes in such net tangible book deficit after September 30, 2013, after giving effect to the sale of shares of our common stock in this offering assuming an initial public offering price of $         per share (the midpoint of the offering range shown on the cover of this prospectus), less the underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma net tangible book deficit as of September 30, 2013 would have been approximately $         million, or $         per share of common stock. This amount represents an immediate decrease in net tangible book deficit of $         per share of our common stock to the existing stockholders and immediate dilution in net tangible book deficit of $         per share of our common stock to investors purchasing shares of our common stock in this offering. The following table illustrates this dilution on a per share basis:

 

 

 

Assumed initial public offering price per share

      $               

Net tangible book deficit per share as of September 30, 2013, before giving effect to this offering

   $                  

Decrease in net tangible book deficit per share attributable to investors purchasing shares in this offering

     
  

 

 

    

Pro forma net tangible book value per share, after giving effect to this offering

     
     

 

 

 

Dilution in as adjusted net tangible book deficit per share to investors in this offering

      $    

 

 

If the underwriters exercise their option in full to purchase additional shares, the pro forma as adjusted net tangible book deficit per share of our common stock after giving effect to this offering would be $         per share of our common stock. This represents an increase in pro forma as adjusted net tangible book deficit of $         per share of our common stock to existing stockholders and dilution in pro forma as adjusted net tangible book deficit of $         per share of our common stock to new investors.

Each $1.00 increase (decrease) in the assumed initial public offering price of $         per share would increase (decrease) the pro forma as adjusted net tangible book deficit per share of our common stock after giving effect to this offering by $        , or by $         per share of our common

 

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stock, assuming no change to the number of shares of our common stock offered by us as set forth on the front cover page of this prospectus and after deducting the estimated underwriting discounts and expenses payable by us. A              share increase (decrease) in the number of shares offered by us would increase (decrease) the net proceeds to us from this offering by $             million (or approximately $             million if the underwriters exercise their option to purchase additional shares of common stock in full), assuming the aggregate offering price set forth on the cover page of this prospectus remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

The following table summarizes, as of September 30, 2013, on the pro forma basis described above, the total number of shares of our common stock purchased from us, the total consideration paid to us, and the average price per share of our common stock paid by purchasers of such shares and by new investors purchasing shares of our common stock in this offering.

 

       Shares purchased      Total consideration      Average price
per share
 
     Number    Percent          Amount      Percent     

 

 

Existing stockholders

            %       $                          %       $                

New investors

              
  

 

 

Total

        100%       $                      100%       $                

 

 

The number of shares of common stock to be outstanding after this offering is based on              shares of common stock outstanding as of                     , 2014 and excludes the following:

 

 

             shares of common stock issuable upon exercise of stock options outstanding as of                     , 2014 at a weighted average exercise price of $         per share; and

 

 

             shares of common stock reserved for future issuance under our equity incentive plans as of                     , 2014.

 

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Selected and pro forma consolidated financial data

You should read the following selected and pro forma consolidated financial data together with our financial statements and the related notes appearing at the end of this prospectus. The acquisition of IMS Health through the Merger resulted in a new basis of accounting. The term “Predecessor” refers to all periods related to the IMS Health business prior to and including the date of the closing of the Merger on February 26, 2010. We have derived the statement of comprehensive income (loss) and cash flow data for the period from January 1, 2010 to February 26, 2010 from our Predecessor’s audited consolidated financial statements included elsewhere in this prospectus. The balance sheet data as of December 31, 2009 and December 31, 2008 and the comprehensive income (loss) and cash flow data for the periods ending December 31, 2009 and December 31, 2008 have been derived from our Predecessor’s audited consolidated financial statements not included in this prospectus. The term “Successor” refers to all periods from inception of IMS Health Holdings, Inc. (from October 23, 2009), which includes all periods of IMS Health after the closing of the Merger on February 26, 2010. We have derived the balance sheet data as of December 31, 2012 and December 31, 2011 and the statement of comprehensive income (loss) and cash flow data for each of the three years in the period ended December 31, 2012 from our Successor’s audited consolidated financial statements included elsewhere in this prospectus. We have derived the balance sheet data as of December 31, 2010 from our Successor’s audited consolidated financial statements not included in this prospectus. We have derived the balance sheet data as of September 30, 2012 and December 31, 2009 and the statement of comprehensive income (loss) and cash flow data for the period from October 23, 2009 to December 31, 2009 from our Successor’s unaudited condensed consolidated financial statements not included in this prospectus. We have derived the balance sheet data as of September 30, 2013 and the statement of comprehensive income (loss) and cash flow data for the nine month period ended September 30, 2013 and September 30, 2012 from our unaudited interim condensed consolidated financial statements as of September 30, 2013, included elsewhere in this prospectus.

Historical results are not necessarily indicative of the results to be expected for future periods and operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2013. The following information should be read in conjunction with the sections entitled “Management’s discussion and analysis of financial condition and results of operations” and our financial statements and the notes thereto contained elsewhere in this prospectus.

 

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(dollars in millions)

  Successor     Predecessor  
  Nine months
ended
September 30,
    Years ended
December 31,
     October 23,
2009 through
December 31,
2009
    January 1,
2010
through
February 26,
2010
    Years ended
December 31,
 
  2013     2012     2012     2011     2010          2009     2008  

 

 

Results of operations:

                    

Revenue

  $ 1,870      $ 1,798      $ 2,443      $ 2,364      $ 1,869       $      $ 293      $ 2,190      $ 2,330   

Information

    1,138        1,134        1,521        1,532        1,234             214        1,465        1,653   

Technology services

    732        664        922        832        635             79        725        677   

Costs and expenses(1)

    1,594        1,625        2,204        2,145        1,801         53        391        1,919        1,832   
 

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

    276        173        239        219        68         (53     (98     271        498   
 

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

         $ 11      $ (42   $ 111      $ (118    $ (53   $ (84   $ 261      $ 317   
 

 

 

   

 

 

   

 

 

   

 

 

 
 

As a % of revenue:

                    

Operating income

    14.8%        9.6%        9.8%        9.3%        3.6%             (33.4%     12.4%        21.4%   

Net income (loss)

           0.6%        (1.7%     4.7%        (6.3%          (28.7%     11.9%        13.6%   
 

Earnings (loss) per common share attributable to common shareholders:

                    

Basic earnings (loss) per share

  $ 0.00      $ 0.00      $ (0.02   $ 0.04      $ (0.05           $ (0.46   $ 1.42      $ 1.70   

Diluted earnings (loss) per share

    0.00        0.00        (0.02     0.04        (0.05             (0.46     1.42        1.70   

Weighted average common shares outstanding:

                    

Basic

    2,800        2,794        2,795        2,788        2,348                183        182        183   

Diluted

    2,800        2,875        2,795        2,854        2,348                183        183        184   
 

Unaudited pro forma data(2):

                    

Basic income per common share

                    

Diluted income per common share

                    

Weighted average common shares outstanding:

                    

Basic

                    

Diluted

                    
 

Unaudited as adjusted pro forma data(2):

                    

Net income (loss)

         $ 11      $ (42   $ 111      $ (118    $ (53   $ (84     261        317   

Basic income per common share

                    

Diluted income per common share

                    

Weighted average common shares outstanding:

                    

Basic

                    

Diluted

                    
 

Balance sheet data:

                    

Shareholders’ equity (deficit)

  $ 806      $ 2,978      $ 1,683      $ 2,971      $ 2,813       $ (53   $ 33      $ 72      $ (255

Total assets

    7,990        8,224        8,215        8,358        8,220                2,018        2,223        2,087   

Postretirement and postemployment benefits

    110        98        116        106        117                107       112        110   

Long-term debt, deferred tax liability and other long-term liabilities

    6,244        4,415        5,573        4,488        4,555       $        1,283       1,393        1,590   

 

 

 

(1)  

Nine months ended September 30, 2013 and 2012 and years ended 2012, 2011 and 2010 (Successor) and January 1, 2010 through February 26, 2010 (Predecessor) and years ended 2009 and 2008 includes severance, impairment and other charges of $1, $30, $48, $31, $54, ($13), $144 and $9, respectively. Nine months ended September 30, 2013 and 2012 and years ended

 

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2012, 2011 and 2010 (Successor) and January 1, 2010 through February 26, 2010 (Predecessor) and year ended 2009 include merger costs of $—, $2, $2, $23, $65, $45 and $11, respectively, related to the Merger. Refer to the notes to the consolidated financial statements for the year ended December 31, 2012, which are included elsewhere in this prospectus, for additional information regarding significant items impacting the consolidated statements of income during the three years ended December 31, 2012.

 

(2)   Pro forma earnings per share

 

       We declared and paid dividends to our stockholders of $753 million during 2013. Under certain interpretations of the SEC, dividends declared in the year preceding an initial public offering are deemed to be in contemplation of the offering with the intention of repayment out of offering proceeds to the extent that the dividends exceeded earnings during such period. As such, unaudited pro forma earnings per share for 2013 gives effect to the number of shares whose proceeds are deemed to be necessary to pay the dividend amount that is in excess of 2013 earnings, up to the amount of shares assumed to be issued in the offering.

 

       The following presents the computation of pro forma basic and diluted earnings per share:

 

      Nine months
ended
September 30,
2013
 

 

 

Numerator:

 

Net income as reported

  $                    

Denominator :

 

Weighted average common shares used in computing basic income per common share outstanding

 

Adjustment for common stock issued whose proceeds will be used to fund the Recapitalization(a)

 

Pro forma weighted average common shares used in computing basic income per common share outstanding

 
 

 

 

 

Pro forma basic earnings per share

  $     
 

 

 

 

Weighted average common shares used in computing diluted income per common share outstanding

 

Adjustment for common stock issued whose proceeds will be used to fund the Recapitalization

 

Pro forma weighted average common shares used in computing diluted income per common share outstanding

 
 

 

 

 

Pro forma diluted earnings per share

  $     
 

 

 

 

(a)   Dividends declared in the past twelve months

  $                

Net income attributable to IMS Health Holdings, Inc. in the past 12 months

 
 

 

 

 

Dividends paid in excess of earnings

  $     
 

 

 

 

Offering price per common share

  $     
 

 

 

 

Common shares assumed issued in this offering necessary to pay dividends in excess of earnings

 

 

 

 

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As adjusted pro forma earnings per share

In addition to the effect of the pro forma earnings per share for dividends noted above, as adjusted pro forma earnings per share gives effect to the number of common shares whose proceeds will be used to repay $         million of outstanding indebtedness.

The following presents the computation of as adjusted pro forma basic and diluted earnings per share:

 

       Nine months
ended
September 30,
2013
 

 

 

Numerator:

  

Net income as reported

   $                

Net income pro forma adjustments:

  

Interest expense, net of tax(b)

  

Amortization of debt issuance costs and discount, net of tax(b)

  
  

 

 

 

As adjusted pro forma net income

   $     
  

 

 

 

Denominator :

  

Weighted average common shares used in computing basic income per common share outstanding

  

Adjustment for common shares used to repay outstanding indebtedness(c)

  

Pro forma weighted average common shares used in computing basic income per common share outstanding

  
  

 

 

 

Pro forma basic earnings per share

   $     
  

 

 

 

Weighted average common shares used in computing diluted income per common share outstanding

  

Adjustment for common stock issued whose proceeds will be used to fund the Recapitalization

  

Pro forma weighted average common shares used in computing diluted income per common share outstanding

  
  

 

 

 

Pro forma as adjusted diluted earnings per share

   $     
  

 

 

 

(b)   These adjustments reflect the elimination of the historical interest expense and amortization of debt issuance costs and discount after reflecting the effect of the Proposed Debt Refinancing.

  

(c)    Indebtedness to be repaid with proceeds from this offering

   $                
  

 

 

 

        Offering price per common share

   $     
  

 

 

 

        Common shares assumed issued in this offering to repay indebtedness

  

 

 

 

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Management’s discussion and analysis of financial condition and results of operations

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion and analysis includes forward-looking statements that involve risks and uncertainties. You should read the “Cautionary note regarding forward-looking statements” and “Risk factors” sections of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. The terms “Company,” “IMS,” “we,” “our” or “us,” as used herein, refer to IMS Health Holdings, Inc. and its consolidated subsidiaries unless otherwise stated or indicated by context. Amounts presented may not add due to rounding.

Background

We are a leading global information and technology services company providing clients in the healthcare industry with comprehensive solutions to measure and improve their performance. We have one of the largest and most comprehensive collections of healthcare information in the world, spanning sales, prescription and promotional data, medical claims, electronic medical records and social media. We standardize, organize, structure and integrate this data by applying our sophisticated analytics and leveraging our global technology infrastructure to help our clients run their organizations more efficiently and make better decisions to improve their operational and financial performance. We have a presence in over 100 countries and we generated 64% of our 2012 revenue from outside the United States.

We serve key healthcare organizations and decision makers around the world, spanning the breadth of life science companies, including pharmaceutical, biotechnology, consumer health and medical device manufacturers, as well as distributors, providers, payers, government agencies, policymakers, researchers and the financial community. Our information and technology services offerings, which we have developed with significant investment over our 60-year history, are deeply integrated into our clients’ workflow.

On October 23, 2009, we were formed by investment entities affiliated with our Sponsors. On February 26, 2010, we acquired 100% of the outstanding shares of IMS Health through our wholly owned subsidiary Healthcare Technology Acquisition, Inc., which we refer to as the Merger. We were formed for the purpose of consummating the Merger of IMS Health and had no operations from inception other than our investment in IMS Health and costs incurred associated with our formation and the Merger. The acquisition of IMS Health resulted in a new accounting basis. The consolidated financial statements included elsewhere in this prospectus and the following Management’s discussion and analysis of financial condition and results of operations are presented for the predecessor and successor periods, which relate to the periods preceding (January 1, 2010 through February 26, 2010) and succeeding (January 1, 2010 through December 31, 2010) the Merger, respectively. These separate periods reflect the new accounting basis established for us as of the Merger date and are separated by a vertical line. For comparative purposes, we based the following results of operations discussion on the mathematical sum of the amounts reported for the successor and predecessor periods as compared to the year ended December 31, 2011. This is a mathematical combination and does

 

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not comply with U.S. GAAP, but is presented in this manner as we believe it enables a meaningful comparison. This financial information may not reflect the actual financial results we would have achieved absent the Merger and may not be predictive of future financial results.

On December 20, 2013, we changed our name from Healthcare Technology Holdings, Inc. to IMS Health Holdings, Inc.

Outlook

The primary factors we expect to impact our results of operations in the near future are set forth below.

 

 

We believe that we have opportunities to continue to grow revenue from our information offerings and technology services offerings. In particular, we expect that the revenue from our technology services offerings will grow at a faster rate than those of our information offerings. Although margins are lower on our technology services offerings, we expect our overall operating margins to expand as we continue to benefit from our ability to control costs. We believe the integration of our information offerings and our technology services enable a differentiated value proposition for a client base in need of better solutions. We are in the early stages of penetration into the expanding opportunity we see within our global client base for our technology service offerings.

 

 

We also expect to benefit from growth in emerging markets, which we believe will continue to grow their healthcare spending over the next five years. Emerging markets currently represent 17% of our total revenue and have grown at an 11% constant dollar CAGR since 2010. We expect that revenue from these markets will grow at a faster rate than those in our mature markets.

 

 

We will also seek to grow through selective acquisitions in both existing markets and new markets that exhibit positive long-term fundamentals. Since the beginning of 2011, we have invested approximately $587 million of capital in 22 acquisitions. As the global healthcare landscape evolves, we expect that there will be a growing number of acquisition opportunities across the life sciences, payer and provider sectors. We will continue to invest in strategic acquisitions to grow our platform and enhance our ability to provide more products and services to our clients and expect to seek opportunities primarily in the areas of technological platforms, data suppliers and consulting services providers.

Acquisitions

We completed several acquisitions during the nine months ended September 30, 2013 and during the year ended 2012 to enhance our capabilities and offerings in certain areas, including technology services. During the nine months ended September 30, 2013 we acquired, at a total cost of approximately $105 million, Vedere Group Limited, Appature, Inc., Semantelli, LLC, 360 Vantage, LLC, Incential Software, Inc., Diversinet Corp., and the consumer health business of Nielsen Holdings N.V. in certain European markets. During 2012, we acquired, at a total cost of approximately $77 million, PharmARC Analytical Solutions Private Limited, Pharmadata s.r.o., Suomen Lääkedata Oy, DecisionView, Inc., Pharma Ventures Limited, Tar Heel Trading Company, LLC, Life Science Partners Pty Limited, Pharmexpert Group and Marina Consulting, LLC. See Note 4 to our consolidated financial statements found elsewhere in this prospectus for additional

 

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information with respect to these acquisitions. The results of operations of acquired businesses have been included since the date of acquisition and were not significant to our consolidated results of operations.

Sources of revenue

Revenue is generated in each region through our local sales teams that manage client relationships within each region, reporting locally to country managers and up to regional managers. These sales teams go to market locally with our full suite of information and technology services offerings. Total global 2012 revenue from our information offerings represented 62% of our total revenue and primarily included revenue we earned from various information offerings developed to meet our clients’ needs by using data secured from a worldwide network of suppliers. Over 80% of our information revenue comes from subscription based contracts and, as a result, historically this revenue has been recurring and predictable. Total global 2012 revenue from our technology services offerings represented 38% of our total revenue. Revenue from technology services consists of a mix of projects, large-scale engagements, multi-year outsourcing contracts and multi-year software licenses with about 40% being recurring in nature. Our information and technology services offerings complement each other and can provide enhanced value to our clients when delivered in an integrated fashion, with each driving demand for the other.

Costs and expenses

Our costs and expenses are comprised primarily of direct costs of revenue and selling and administrative expenses.

Our costs of revenue consist of operating costs of information and direct and incremental costs of technology services. Operating costs of our information offerings include costs of acquiring data, data processing and compensation attributable to personnel involved in production, data management and delivery of our information offerings. Our direct and incremental costs of our technology services offerings are comprised of compensation for staff directly involved with delivering technology-related services offerings and engagements, related accommodations and the costs of data purchased specifically for technology services engagements. Direct and incremental costs of technology services do not include an allocation of direct costs of data that are included in operating costs of information as we do not have a meaningful way to allocate direct costs of data between information and technology services revenue. As a result, direct and incremental costs of technology services do not reflect the total costs incurred to deliver our technology services offerings.

Selling and administrative expenses consist primarily of expenses attributable to sales, marketing, and administration, including human resources, legal, finance and general management.

Results excluding the effects of foreign currency translation and certain charges

We report results in U.S. dollars, but we do business on a global basis. Exchange rate fluctuations affect the rate at which we translate foreign revenue and expenses into U.S. dollars and may have a significant effect on our results. The discussion of our business in this report sometimes describes the magnitude of changes in constant dollar terms. We believe this information facilitates comparison of results over time. In the first nine months of each of 2013 and 2012, the

 

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U.S. dollar was generally stronger against the other currencies in which we transact business as compared to the first nine months of each of 2012 and 2011, respectively. The revenue growth at actual currency rates was lower than the growth at constant dollar exchange rates. See “—How exchange rates affect our results” and “—Qualitative and quantitative disclosures about market risk” below for a more complete discussion regarding the impact of foreign currency translation on our business.

We also discuss below our revenue, operating income (loss), operating costs of information offerings, direct and incremental costs of technology services offerings, selling and administrative expenses and operating margins excluding severance, impairment and other charges, merger costs, deferred revenue purchase accounting adjustments, non-cash stock-based compensation charges, acquisition-related charges, sponsor monitoring fees and transaction and other charges. We believe providing these non-GAAP measures is useful as it facilitates comparisons across the periods presented and more clearly indicates trends. Management uses these non-GAAP measures in its global decision making, including developing budgets and managing expenditures.

Results of operations

Summary operating results for the nine months ended September 30, 2013 and September 30, 2012

 

       Nine months  ended
September 30,
 
(dollars in millions)          2013           2012  

 

 

Revenue

   $ 1,870      $ 1,798   
  

 

 

   

 

 

 

Information

     1,138        1,134   

Technology services

     732        664   
  

 

 

   

 

 

 

Operating costs of information, exclusive of depreciation and amortization

     480        504   

Direct & incremental costs of technology services, exclusive of depreciation and amortization

     377        341   

Selling & administrative expenses, exclusive of depreciation and amortization

     433        431   

Depreciation & amortization

     303        317   

Severance, impairment & other charges

     1        30   

Merger costs

            2   
  

 

 

   

 

 

 

Operating income

     276        173   
  

 

 

   

 

 

 

Interest income

     3        2   

Interest expense

     (241     (196

Other (loss) income, net

     (44     6   
  

 

 

   

 

 

 

Non-operating loss, net

     (282     (188
  

 

 

   

 

 

 

Loss before benefit from income taxes

     (6     (15

Benefit from income taxes

     6        26   
  

 

 

   

 

 

 

Net income

   $      $ 11   
  

 

 

   

 

 

 

 

 

 

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Summary operating results for the years ended December 31, 2012, 2011 and 2010 (Successor) and the period January 1, 2010 through February 26, 2010 (Predecessor)

 

       Successor    

Combined
2010

    Successor           Predecessor  
(dollars in millions)    Year ended
December 31,
      Year ended
December 31,
2010
         

January 1,
2010 through

February 26,
2010

 
   2012     2011          

 

 

Revenue

   $ 2,443      $ 2,364      $ 2,162      $ 1,869          $ 293   
  

 

 

       

 

 

 

Information

     1,521        1,532        1,448        1,234            214   

Technology services

     922        832        714        635            79   
  

 

 

       

 

 

 

Operating costs of information, exclusive of depreciation and amortization

     675        698        669        543            126   

Direct & incremental costs of technology services, exclusive of depreciation and amortization

     476        396        385        322            63   

Selling & administrative expenses, exclusive of depreciation and amortization

     579        604        656        507            149   

Depreciation & amortization

     424        393        331        310            21   

Severance, impairment & other charges

     48        31        41        54            (13

Merger costs

     2        23        110        65            45   
  

 

 

       

 

 

 

Operating income (loss)

     239        219        (30     68            (98
  

 

 

       

 

 

 

Interest income

     4        3        1        1              

Interest expense

     (275     (277     (242     (237         (5

Other loss, net

     (29     (7     (44     (35         (9
  

 

 

       

 

 

 

Non-operating loss, net

     (300     (281     (285     (271         (14
  

 

 

       

 

 

 

Loss before benefit from income taxes

     (61     (62     (315     (203         (112

Benefit from income taxes

     19        173        113        85            28   
  

 

 

       

 

 

 

Net (loss) income

   $ (42   $ 111      $ (202   $ (118       $ (84

 

 

Net income to Adjusted EBITDA reconciliation

We have included a presentation of Adjusted EBITDA because we believe it provides additional information to measure our performance and evaluate our ability to service our debt. In addition, management believes that Adjusted EBITDA is a useful financial metric to assess our operating performance from period to period by excluding certain material non-cash items, unusual or non-recurring items that we do not expect to continue in the future and certain other adjustments we believe are not reflective of our ongoing operations and our performance. Adjusted EBITDA is not a presentation made in accordance with U.S. GAAP, and our computation of Adjusted EBITDA may vary from others in our industry. Adjusted EBITDA should not be considered to be an alternative to net income, a measure of operating performance or cash flow or a measure of liquidity. Adjusted EBITDA has limitations as an analytical tool, and it should not be considered in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP.

 

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       Nine months  ended
September 30,
    Year ended
December 31,
    Combined  
(dollars in millions)            2013             2012       2012       2011     2010  

 

 

Net income (loss)

   $      $ 11      $ (42   $ 111      $ (202

Deferred revenue purchase accounting adjustments

     2        5        7        7        60   

Non-cash stock-based compensation charges

     18        16        19        18        85   

Severance, impairment and other charges

     1        30        48        31        41   

Acquisition-related charges

     6        8        11        13        6   

Transaction & other charges(1)

     6        5        6        8        10   

Sponsor monitoring fees

     6        6        8        9        7   

Depreciation & amortization

     303        317        424        393        331   

Merger costs

            2        2        23        110   

Interest income

     (3     (2     (4     (3     (1

Interest expense

     241        196        275        277        242   

Other loss (income), net

     44        (6     29        7        44   

Benefit from income taxes

     (6     (26     (19     (173     (113
  

 

 

 

Adjusted EBITDA

   $ 618      $ 562      $ 764      $ 721      $ 620   

 

 

 

(1)   Transaction and other charges consist of employee and third-party charges related to dual running costs for knowledge transfer activities.

Revenue

Total revenue for the first nine months of 2013 grew 4.0% to $1,870 million compared to $1,798 million in the first nine months of 2012, or 5.9% on a constant dollar basis. Revenue from our information offerings remained relatively flat in the first nine months of 2013 and grew 3% on a constant dollar basis over the same period. Revenue from our technology services offerings grew 10.2% in the first nine months of 2013 and grew at 11.4% on a constant dollar basis. Growth in the Americas and Asia Pacific regions contributed approximately three-fourths of our total revenue growth during the first nine months of 2013 compared to the same period of 2012.

Total revenue grew 3.3% to $2,443 million in 2012 compared to $2,364 million in 2011. Revenue from information offerings declined 0.7%, and grew 2.7% on a constant dollar basis in 2012. Revenue from our technology service offerings grew 10.8% and grew 13.3% on a constant dollar basis in 2012. Excluding the impacts of foreign currency translation of $7 million and $52 million in 2012 and 2011, respectively, and deferred revenue purchase accounting adjustments of $7 million in both 2012 and 2011, total revenue grew 5.9% on a constant dollar basis for 2012. The growth in total revenue in 2012 was largely attributable to the increase in revenue from technology services. Additionally, the majority of the 2012 growth in our technology services offerings was driven by our acquisition of a healthcare market insights and analytics firm based in the U.S., which was completed in the fourth quarter of 2011 (the “SDI acquisition”).

Total revenue grew 9.3% to $2,364 million in 2011 compared to $2,162 million in 2010. Revenue from our information offerings grew 5.8% and grew 1.0% on a constant dollar basis in 2011. Revenue from technology services offerings grew 16.5% and grew 13.5% on a constant dollar basis in 2011. Excluding the impact of foreign currency translation of $52 million and $36 million in 2011 and 2010, respectively, and deferred revenue purchase accounting adjustments of $7 million in 2011 and $60 million in 2010, total revenue grew 2.7% on a constant dollar basis in 2011. The growth in total revenue in 2011 was largely attributable to the increase in revenue from technology services.

 

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Operating costs of information, exclusive of depreciation and amortization

Operating costs of information offerings include costs of acquiring data, data processing and costs attributable to personnel involved in production, data management and delivery of our information offerings.

Operating costs of information offerings declined $24 million, or 4.7%, in the first nine months of 2013 compared to the first nine months of 2012. Excluding the effect of foreign currency translation of negative $8 million, non-cash stock-based compensation charges and transaction and other charges, operating costs of information decreased 3.5%. The constant dollar decline in operating costs of information was primarily due reductions in compensation costs of $9 million and in third-party professional services costs of $9 million resulting from our continuing restructuring efforts and the shift to our low cost production hubs, lower occupancy costs of $8 million, partially offset by increases in headcount and normal annual merit salary increases.

Operating costs of information offerings declined $23 million, or 3.3%, in 2012 compared to 2011. Excluding the effect of foreign currency translation of negative $19 million, non-cash stock-based compensation charges and transaction and other charges, operating costs of information decreased 1.4% in 2012 compared to 2011. The constant dollar decline in operating costs of information was primarily due to reductions in compensation costs and in third-party professional services costs of $13 million resulting from our restructuring efforts and the continuing shift to our low cost production hubs, partially offset by increases in headcount and normal annual merit salary increases.

Operating costs of information offerings grew $29 million, or 4.3%, in 2011 compared to 2010. Excluding the positive effect of foreign currency translation of $22 million, non-cash stock-based compensation charges and transaction and other charges, operating costs of information increased 3.5% in 2011 compared to 2010. The constant dollar increase in operating costs of information was the result of higher third-party professional services costs somewhat offset by lower compensation due to savings realized from restructuring actions designed to streamline our management structure following the Merger.

Direct and incremental costs of technology services, exclusive of depreciation and amortization

Direct and incremental costs of technology services offerings include costs of staff directly involved with delivering those offerings and engagements, related accommodations, and the costs of data purchased specifically for technology services engagements. Direct and incremental costs of technology services do not include an allocation of direct costs of data that are included in operating costs of information.

Direct and incremental costs of technology services offerings grew $36 million, or 10.4%, in the first nine months of 2013 compared to the first nine months of 2012. Excluding the effect of foreign currency translation of negative $4 million, direct and incremental costs of technology services grew 11.3% in the first nine months of 2013 compared to the first nine months of 2012. The constant dollar increase in direct and incremental costs of technology services was driven primarily by increased compensation costs of $44 million to support the growth in our technology services revenue.

Direct and incremental costs of technology services offerings grew $80 million, or 20.2%, in 2012 compared to 2011. Excluding the effect of foreign currency translation of negative $9 million,

 

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direct and incremental costs of technology services grew 22.8% in 2012 compared to 2011. The constant dollar increase in direct and incremental costs of technology services was due to higher compensation and data costs of $63 million and $16 million, respectively, primarily resulting from the SDI acquisition completed in the fourth quarter of 2011.

Direct and incremental costs of technology services offerings grew $11 million, or 2.7%, in 2011 compared to 2010. Excluding the effect of foreign currency translation of positive $13 million, direct and incremental costs of technology services decreased 0.3% in 2011 compared to 2010. The constant dollar decrease in direct and incremental costs of technology services was due to lower third-party professional service expenses.

Selling and administrative expenses, exclusive of depreciation and amortization

Selling and administrative expenses consist primarily of expenses attributable to sales, marketing, and administration, including human resources, legal, finance, and general management.

Selling and administrative expenses grew $2 million, or 0.6%, for the first nine months of 2013 compared to the first nine months of 2012. Excluding the effect of foreign currency translation of negative $7 million, non-cash stock-based compensation charges and acquisition-related charges, selling and administrative expenses grew 2.7% in the first nine months of 2013 compared to the first nine months of 2012. The constant dollar increase in selling and administrative expenses was due to increases in compensation of $19 million resulting from normal annual merit salary increases, higher selling and administrative headcount from recently completed acquisitions and increased sales staff to drive revenue, partially off-set by reductions in third-party professional service expenses.

Selling and administrative expenses decreased $25 million, or 4.1%, in 2012 compared to 2011. Excluding the effect of foreign currency translation of negative $12 million, non-cash stock-based compensation charges, acquisition-related charges and sponsor monitoring fees, selling and administrative expenses decreased 0.7% in 2012 compared to 2011. The constant dollar decrease in selling and administrative expenses was due to reductions in third-party professional service expenses, partially offset by increases in compensation resulting from normal annual merit increases and the SDI acquisition completed in the fourth quarter of 2011.

Selling and administrative expenses decreased $52 million, or 8.0% in 2011 compared to 2010. Excluding the effect of foreign currency translation of positive $20 million, non-cash stock-based compensation charges, acquisition-related charges and sponsor monitoring fees, selling and administrative expenses decreased 5.1% in 2011 compared to 2010. The constant dollar decrease in selling and administrative expenses was due to compensation savings realized from restructuring actions designed to streamline our management structure following the Merger.

Depreciation and amortization

Depreciation and amortization charges decreased $14 million, or 4.4%, in the first nine months of 2013 compared to the first nine months of 2012 due to the absence of depreciation in 2013 for assets related to an impaired property lease recorded at the end of the third quarter of 2012.

Depreciation and amortization charges increased $31 million, or 7.9%, in 2012 compared to 2011. The 2012 increase was due to higher intangible assets from completed acquisitions.

 

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Depreciation and amortization charges increased $62 million, or 18.7%, in 2011 compared to 2010. The 2011 increase was due primarily to higher intangible assets resulting from the Merger (see Notes 4 and 5 to our consolidated financial statements for the year ended December 31, 2012 included elsewhere in this prospectus).

Severance, impairment and other charges

During the first nine months of 2013, we recorded severance, impairment and other charges of $7 million related to impaired leases for properties in the U.S. and contract-related charges for which we will not realize any future economic benefits, partially offset by the reversal of approximately $6 million of severance accruals for our 2012 Plan (see Note 11 to our condensed consolidated financial statements) due to the favorable settlement of required termination benefits and strategic business changes. During the first nine months of 2012, we incurred $30 million of severance, impairment and other charges related to the write-down of certain assets to their net realizable values, contract-related charges for which we did not realize any future economic benefits and the exit of leased facilities in the U.S. and Europe (see Note 6 to our consolidated financial statements).

Severance, impairment and other charges increased $17 million, or 54.8%, in 2012 compared to 2011, and decreased $10 million, or 24.4%, in 2011 compared to 2010. These charges were related to employee termination benefits, impairments of leased facilities, write-downs of certain assets to their net realizable values and contract-related charges for which we will not realize any future economic benefits (see Note 6 to our consolidated financial statements for the year ended December 31, 2012 included elsewhere in this prospectus).

Merger costs

We incurred $2 million, $23 million and $110 million in 2012, 2011 and 2010, respectively, for investment bank, legal, accounting, employment contract and other expenses related to the Merger (excluding debt extinguishment costs included in other loss, net). See Note 4 to our consolidated financial statements for the year ended December 31, 2012 included elsewhere in this prospectus.

Operating income (loss)

Operating income grew $103 million, or 59.5%, in the first nine months of 2013 compared to the first nine months of 2012. This was due to the revenue growth discussed above and decreases in operating costs of information offerings of $24 million, depreciation and amortization of $14 million and severance, impairment and other charges of $29 million, partially offset by increases in direct and incremental costs of technology services offerings of $36 million. Operating income for the first nine months of 2013 increased $117 million in constant dollar terms. Absent severance, impairment and other charges, deferred revenue purchase accounting adjustments and acquisition-related charges, operating income for the first nine months of 2013 grew 21.8% at reported foreign currency rates and 26.4% on a constant dollar basis.

Operating income grew $20 million, or 9.1%, in 2012 compared to 2011. This was due to the revenue growth discussed above and decreases in operating costs of information offerings of $23 million, selling and administrative expenses of $25 million and merger costs of $21 million, partially offset by increases in direct and incremental costs of technology services offerings of $80

 

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million, depreciation and amortization of $31 million and severance, impairment and other charges of $17 million. Operating income for 2012 increased 19.2% in constant dollar terms. Absent the impact of severance, impairment and other charges and merger costs, operating income for 2012 declined 7.5% at reported rates and 2.7% on a constant dollar basis.

Operating income grew $249 million to $219 million in 2011 compared to an operating loss of $30 million in 2010. This was due to revenue growth and decreases in merger costs of $87 million and selling and administrative expenses of $52 million, partially offset by increases in operating costs of information offerings of $29 million, direct and incremental costs of technology services offerings of $11 million and depreciation and amortization of $62 million. Operating income for 2011 increased $235 million in constant dollar terms. Absent merger costs, deferred revenue purchase accounting adjustments and non-cash stock-based compensation charges, operating income for 2011 grew 23.1% at reported rates and 16.5% on a constant dollar basis.

Trends in our operating margins

Operating margins were 14.8% and 9.6% in the first nine months of 2013 and 2012, respectively. Operating margins were negatively impacted by severance, impairment and other charges, deferred revenue purchase accounting adjustments, non-cash stock-based compensation charges, acquisition-related charges, sponsor monitoring fees and transaction and other charges. Excluding these charges, operating margins were 26.2% and 22.4% in the first nine months of 2013 and 2012, respectively.

Operating margins were 9.8%, 9.3% and (1.4%) in 2012, 2011 and 2010, respectively. Margins were negatively impacted by severance, impairment and other charges, merger costs, deferred revenue purchase accounting adjustments, non-cash stock-based compensation charges, acquisition-related charges, sponsor monitoring fees and transaction and other charges. Excluding these charges, operating margin was 21.8%, 24.4% and 21.2% in 2012, 2011 and 2010, respectively.

Non-operating loss, net

Non-operating losses increased $94 million, or 50.0%, in the first nine months of 2013 compared to the first nine months of 2012. The increase was due to higher net interest expense of $44 million resulting from higher debt balances in 2013, higher net foreign exchange losses of $23 million, a $14 million loss from the devaluation of the Venezuelan Bolívar (“Bolívars”), and $12 million of debt extinguishment expenses and third-party fees related to the amendment of our term loan in February 2013.

Non-operating losses increased 6.8% in 2012 compared to 2011. The $19 million increase in non-operating losses in 2012 was driven by higher net foreign exchange losses of $20 million in 2012 compared to 2011.

Non-operating losses decreased 1.4% in 2011 compared to 2010. The $4 million decrease in 2011 was the result of the absence of a $70 million of debt extinguishment expense incurred in 2010 related to the Merger, partially offset by a $33 million gain on the sale of a building located in our EMEA region and higher net interest expense of $33 million in 2011 due to the full-year effect of higher borrowing costs in 2011 from the change in ownership and capital structure related to the Merger .

 

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Taxes

We operate in more than 100 countries around the world and our earnings are taxed at the applicable income tax rate in each of these countries. As required, we compute interim taxes based on an estimated annual effective tax rate.

For the nine months ended September 30, 2013, we recorded deferred income tax expense related to non-U.S. earnings and the associated tax credits. During this period, we also recorded a tax reduction of $10 million as a result of the conclusion of U.S. audits. In connection with one of the audits, we received a $47 million refund for which a receivable had been previously established. Additionally, we recorded tax reductions of $3 million as a result of the expiration of various statutes of limitation, and $2 million for the reversal of a valuation allowance due to a change in enacted state tax law changes. We recorded $4 million of tax expense related to unrecognized tax benefits that if recognized would favorably affect the effective tax rate. Included in this amount is $2 million of interest and penalties.

For the nine months ended September 30, 2012, our effective tax rate was impacted by deferred income tax expense related to non-U.S. earnings and associated tax credits. Also during this period, we recorded a tax reduction of $4 million as a result of the expiration of certain statutes of limitation. We recorded $5 million of tax expense related to unrecognized tax benefits that if recognized would favorably affect the effective tax rate. Included in this amount is $2 million of interest and penalties.

In 2012, our effective tax rate was favorably impacted by a reduction of $7 million to deferred tax liability and a tax reduction of $5 million as a result of the expiration of certain statutes of limitation. We recorded a tax charge of $3 million for interest and penalties related to unrecognized tax benefits. As of December 31, 2012, we had $39 million of unrecognized tax benefits that if recognized would favorably affect the effective tax rate and $10 million of interest and penalties associated with unrecognized tax benefits.

In 2011, our effective tax rate was favorably impacted by a reduction to deferred taxes on non-U.S. operations of $170 million due to a restructuring and a tax reduction of $10 million as a result of the expiration of certain statutes of limitation. We recorded a tax charge of $6 million associated with the impact of the merger and a tax charge of $3 million for interest and penalties related to unrecognized tax benefits. As of December 31, 2011, we had $41 million of unrecognized tax benefits that if recognized would favorably affect the effective tax rate and $9 million of interest and penalties associated with unrecognized tax benefits.

For the 2010 successor period, our effective tax rate was impacted by a tax reduction of $28 million as a result of the expiration of various statutes of limitation and a net tax benefit of $5 million as a result of merger costs, including a valuation allowance release of 2009 merger costs of $12 million. Also during this period, we recorded $3 million of interest and penalties related to unrecognized tax benefits. For the predecessor period (January 1, 2010 through February 26, 2010), our effective tax rate was impacted by a tax reduction of $2 million as a result of the expiration of a statute of limitation. Also during this period, we recorded $5 million of tax expense as a result of non-deductible merger costs and $1 million of interest and penalties related to unrecognized tax benefits. As of December 31, 2010, we had $48 million of unrecognized tax benefits that if recognized would favorably affect the effective tax rate and $9 million of interest and penalties associated with unrecognized tax benefits.

 

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We file numerous consolidated and separate income tax returns in U.S. (federal and state) and non-U.S. jurisdictions. We are no longer subject to U.S. federal income tax examination by tax authorities for years before 2010. With few exceptions, we are no longer subject to tax examination in state and local jurisdictions for years prior to 2009 and in its material non-U.S. jurisdictions prior to 2007. It is reasonably possible that within the next twelve months we could realize $8 million of unrecognized tax benefits as a result of the expiration of certain statutes of limitation.

For all periods presented, our effective tax rate was reduced as a result of global tax planning initiatives. While we intend to continue to seek global tax planning initiatives, there can be no assurance that we will be able to successfully identify and implement such initiatives to reduce or maintain our overall tax rate.

Operating results by geographic region

The following represents selected geographic information for the regions in which we operate for the periods and dates indicated below.

 

(dollars in millions)   Americas(1)      EMEA(2)     

Asia

Pacific(3)

    

Corporate

& Other

    Total IMS  

 

 

Nine months ended September 30, 2013:

            

Revenue(4)

  $ 851       $ 682       $ 337       $      $ 1,870   

Operating income (loss)(5)

  $ 224       $ 176       $ 117       $ (241   $ 276   

Nine months ended September 30, 2012:

            

Revenue(4)

  $ 803       $ 656       $ 339       $      $ 1,798   

Operating income (loss)(5)

  $ 204       $ 158       $ 123       $ (312   $ 173   

Year ended December 31, 2012:

            

Revenue(4)

  $ 1,098       $ 889       $ 456       $      $ 2,443   

Operating income (loss)(5)

    294         230         170         (455     239   

Total assets at December 31, 2012

    3,933         2,263         1,634         385        8,215   

Year ended December 31, 2011:

            

Revenue(4)

  $ 1,013       $ 915       $ 436       $      $ 2,364   

Operating income (loss)(5)

    289         262         152         (484     219   

Total assets at December 31, 2011

    4,106         2,203         1,763         286        8,358   

Combined—Year ended December 31, 2010:

            

Revenue(4)

  $ 974       $ 865       $ 383       $ (60   $ 2,162   

Operating income (loss)(5)

    238         122         127         (517     (30

Total assets at December 31, 2010

    3,753         2,138         1,716         613        8,220   
 

 

 

 

Successor— Year ended December 31, 2010:

            

Revenue(4)

  $ 848       $ 758       $ 322       $ (60   $ 1,869   

Operating income (loss)(5)

    224         139         106         (401     68   

 

 

Predecessor—Jan. 1—Feb. 26, 2010:

            

Revenue(4)

  $ 125       $ 107       $ 61       $      $ 293   

Operating income (loss)(5)

    14         (17      21         (116     (98

 

 

 

(1)  

Our Americas region includes the United States, Canada and Latin America. Revenue in the U.S. was $682 million and $646 million for the first nine months of 2013 and 2012, respectively. Revenue in the U.S. was $885 million, $808 million, $791 million, $686 million and $105 million for the years ended December 31, 2012, 2011, 2010 (combined) and the successor and

 

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predecessor periods of 2010, respectively. Total U.S. assets were $3,900 million, $3,880 million and $3,543 million at December 31, 2012, 2011 and 2010, respectively.

 

(2)   Our EMEA region includes countries in Europe, the Middle East and Africa.

 

(3)   Our Asia Pacific region includes Japan, Australia and other countries in the Asia Pacific region. Revenue in Japan was $200 million and $214 million for the first nine months of 2013 and 2012, respectively. Revenue in Japan was $286 million, $277 million, $246 million, $185 million and $61 million for the years ended December 31, 2012, 2011, 2010 (combined) and the successor and predecessor periods of 2010, respectively.

 

(4)   Revenue relates to external clients and is primarily based on the location of the client. Revenue for the geographic regions includes the impact of foreign exchange in translating results into U.S. dollars.

 

(5)   Operating Income for the three geographic regions does not reflect the allocation of certain expenses that are maintained in Corporate and Other and as such, is not a true measure of the respective regions’ profitability. The Operating Income amounts for the geographic segments include the impact of foreign exchange in translating results into U.S. dollars. For the first nine months of 2013, depreciation and amortization related to purchase accounting adjustments of $94 million, $65 million and $32 million for the Americas, EMEA and Asia Pacific regions, respectively, are presented in Corporate & Other. For the first nine months of 2012, depreciation and amortization related to purchase accounting adjustments of $94 million, $63 million and $39 million for the Americas, EMEA and Asia Pacific regions, respectively, are presented in Corporate & Other. For 2012, depreciation and amortization related to purchase accounting adjustments of $126 million, $84 million and $51 million for the Americas, EMEA and Asia Pacific regions, respectively, are presented in Corporate & Other. For 2011, depreciation and amortization related to purchase accounting adjustments of $126 million, $91 million and $52 million for the Americas, EMEA and Asia Pacific regions, respectively, are presented in Corporate & Other. For the successor period of 2010, depreciation and amortization related to purchase accounting adjustments of $86 million, $66 million and $39 million for the Americas, EMEA and Asia Pacific regions, respectively, are presented in Corporate & Other.

Americas region

Revenue in the Americas region grew 6.0% in the first nine months of 2013 compared to the first nine months of 2012. On a constant dollar basis, revenue grew 6.9% in the first nine months of 2013 compared to the first nine months of 2012. The constant dollar increase in the Americas was the driven primarily by continued strong revenue growth in technology services offerings, which accounted for approximately $40 million of the increase.

Operating income in the Americas region grew 9.8% in the first nine months of 2013 compared to the first nine months of 2012. On a constant dollar basis, operating income grew 11.2% in the first nine months of 2013 compared to the first nine months of 2012. The operating income growth in the first nine months of 2013 was a result of revenue growth in the region, partially offset by increases in operating expenses of $28 million required to support the revenue growth.

Revenue in the Americas region grew 8.4% in 2012 compared to 2011. On a constant dollar basis, revenue grew 9.1% in 2012 compared to 2011. The growth in 2012 was primarily due to the impact of the technology services offerings from the SDI acquisition completed in the fourth quarter of 2011. Americas revenue grew 4.0% in 2011 compared to 2010 and grew 3.3% on a constant dollar basis. The constant dollar growth was driven by strong technology services growth throughout the region, helped by information growth in Canada and Latin America.

Operating income in the Americas region grew 1.7% in 2012 compared to 2011. On a constant dollar basis, operating income grew 5.1% in 2012 compared to 2011. The constant dollar operating income growth in 2012 was a result of revenue growth in technology services offerings, partially offset by increases in operating expenses of $80 million, both primarily due to the SDI acquisition. Operating income in the Americas grew 21.6% in 2011 compared to 2010, and grew 20.7% in 2011 compared to 2010 on a constant dollar basis. The constant dollar growth in operating income was driven by revenue growth and operating cost reductions resulting from restructuring actions designed to streamline our management structure following the Merger.

 

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EMEA region

Revenue in the EMEA region grew 3.8% in the first nine months of 2013 compared to the first nine months of 2012. On a constant dollar basis, revenue grew 2.7% in the first nine months of 2013 compared to the first nine months of 2012. The constant dollar increase in revenue in EMEA was the result of strong overall growth in Eastern Europe as well as growth in our technology services offerings in Southern Europe.

Operating income in the EMEA region grew 11.1% in the first nine months of 2013 compared to the first nine months of 2012. On a constant dollar basis, operating income grew 8.5% in the first nine months of 2013 compared to the first nine months of 2012. The constant dollar operating income growth in the first nine months of 2013 was a result of revenue growth in the region, partially offset by increases in operating expenses of $8 million.

Revenue in the EMEA region declined by 2.9% in 2012 compared to 2011. On a constant dollar basis, revenue grew 4.0% in 2012 compared to 2011. The constant dollar increase in revenue in EMEA was driven by 4.7% revenue growth in North Europe. Revenue in the EMEA region grew 5.8% in 2011 compared to 2010. On a constant dollar basis, revenue was flat in 2011 compared to 2010.

Operating income in the EMEA region declined 12.3% in 2012 compared to 2011. On a constant dollar basis, operating income declined 0.3% in 2012 compared to 2011. The operating income decline in 2012 was a result of the revenue decrease noted above and increases in operating expenses of $6 million. Operating income in the EMEA region grew 114% in 2011 compared to 2010. On a constant dollar basis, operating income grew 93.0% in 2011 compared to 2010. The growth in operating income was driven by revenue increases noted above as well as reductions in operating expenses of $90 million resulting from restructuring actions designed to streamline our management structure following the Merger.

Asia Pacific region

Revenue in the Asia Pacific region declined 0.3% in the first nine months of 2013 compared to the first nine months of 2012. On a constant dollar basis, revenue grew 10.9% in the first nine months of 2013 compared to the first nine months of 2012. The constant dollar increase in revenue was driven by overall growth in Japan and China.

Operating income in the Asia Pacific region declined 4.9% in the first nine months of 2013 compared to first nine months of 2012. On a constant dollar basis, operating income grew 14.7% in the first nine months of 2013 compared to the first nine months of 2012. The constant dollar operating income decline in the first nine months of 2013 was a result of revenue declines in the region and increases in operating expenses of $5 million due to continued investments in the region to drive growth.

Revenue in the Asia Pacific region grew 4.5% in 2012 compared to 2011. On a constant dollar basis, revenue grew 4.9% in 2012 compared 2011. Revenue in the Asia Pacific region grew 13.8% in 2011 compared to 2010. On a constant dollar basis, revenue grew 5.3% in 2011 compared to 2010. The constant dollar increases in revenue in 2012 and 2011 were driven by gains in Japan and strong overall growth in China.

Operating income in the Asia Pacific region grew 12.2% in 2012 compared 2011. On a constant dollar basis, operating income grew 12.6% in 2012, due principally to revenue growth in the

 

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region, while operating expenses were flat in 2012 compared to 2011. Operating income grew 19.9% in 2011 compared to 2010. On a constant dollar basis, operating income grew 11.3% in 2011 compared to 2010 as a result of revenue growth, partially offset by an increase in operating expenses from investments to grow the business in the region.

How exchange rates affect our results

We operate globally, deriving a significant portion of our operating income from non-U.S. operations. As a result, fluctuations in the value of foreign currencies in which we transact business relative to the U.S. dollar may increase the volatility of U.S. dollar operating results. We enter into foreign currency forward contracts to partially offset the effect of currency fluctuations and the impact of these forward contracts is reflected in other loss, net on the consolidated statements of comprehensive income. In the first nine months of 2013, foreign currency translation decreased our U.S. dollar revenue and operating income growth by approximately 2.1 and 8.5 percentage points, respectively. In 2012, foreign currency translation decreased the U.S. dollar revenue and operating income growth by approximately 3.0 and 10.1 percentage points, respectively.

Non-U.S. monetary assets are maintained in currencies other than the U.S. dollar, principally the Euro and the Japanese Yen. Where monetary assets are held in the functional currency of the local entity, changes in the value of these currencies relative to the U.S. dollar are reflected in accumulated other comprehensive income in the consolidated statements of financial position. The effect of exchange rate changes during the nine months ended September 30, 2013 decreased the U.S. dollar amount of cash and cash equivalents by $18 million. The effect of exchange rate changes increased the U.S. dollar amount of cash and cash equivalents by $0.4 million, $2 million and $6 million during 2012, 2011 and 2010, respectively.

Liquidity and capital resources

Cash and cash equivalents increased $83 million to $663 million at September 30, 2013 compared to $580 million at December 31, 2012. The increase reflects cash provided by operating activities of $322 million, partially offset by cash used in investing and financing activities of $173 million and $48 million, respectively, and a decrease of $18 million due to the effect of exchange rate changes.

Cash and cash equivalents increased $127 million to $580 million at December 31, 2012 compared to $453 million at December 31, 2011. The increase reflects cash provided by operating activities of $399 million, partially offset by cash used in investing activities and financing activities of $209 million and $63 million, respectively.

At September 30, 2013, short-term investments totaled $83 million, which consisted of time deposits and government bond funds acquired during 2013 with maturities greater than 90 days, but less than one year.

Over the next twelve months we currently expect that we will use our cash and cash equivalents primarily to fund:

 

 

principal and interest payments of approximately $343 million;

 

 

development of software to be used in our new products and capital expenditures of $165 million to $175 million to expand and upgrade our information technology capabilities and to

 

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build or acquire facilities to house our business—this includes approximately $60 million of one-time capital expenditures related to the planned purchase of an office building in India;

 

 

payments of approximately $13 million related to our employee severance plans;

 

 

pension and other postretirement benefit plan contributions of approximately $45 million; and

 

 

acquisitions.

Cash flows

Net cash provided by operating activities amounted to $322 million for the nine months ended September 30, 2013, an increase in cash provided of $66 million compared to the nine months ended September 30, 2012. The increase relates to improved accounts receivable collections, lower funding of prepaid expenses and higher deferred revenue balances, partially offset by higher funding of accounts payable and accrued liabilities. Net cash provided by operating activities was $399 million for the year ended December 31, 2012, an increase of $65 million compared to the year ended December 31, 2011. The increase relates to lower funding of prepaid expenses and other current assets, lower restructuring payments and lower pension funding.

Net cash used in investing activities amounted to $173 million for the nine months ended September 30, 2013, an increase in cash used of $15 million compared to the nine months ended September 30, 2012. The increase relates to higher payments for acquisitions during the nine months ended September 30, 2013 and proceeds from the sale of assets received during the nine months ended September 30, 2012, partially offset by lower short-term investments during the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012. Net cash used in investing activities was $209 million for the year ended December 31, 2012, a decrease of $276 million compared to the year ended December 31, 2011. The decrease relates to lower payments for acquisitions during 2012 largely due to the SDI acquisition in the fourth quarter of 2011, higher proceeds from the sale of assets in 2012, and a decrease in computer software additions during 2012, partially offset by increases in short-term investments and facility-related capital expenditures during 2012.

Net cash used in financing activities amounted to $48 million for the nine months ended September 30, 2013, a decrease in cash used of $25 million compared to the nine months ended September 30, 2012. The decrease relates to proceeds from our August 2013 debt offering and lower repayments of debt during the nine months ended September 30, 2013, partially offset by dividends paid to stockholders during the third quarter of 2013. Net cash used in financing activities was $63 million for the year ended December 31, 2012, an increase of $169 million compared to cash provided during the year ended December 31, 2011. The increase relates to the dividend paid to stockholders during the fourth quarter of 2012, higher repayments of our revolving credit facility and term loans during 2012, and higher debt issuance costs during 2012, partially offset by higher proceeds from new borrowings during 2012. The dividend and higher borrowings and debt issuance costs relate to our recapitalization transaction which was completed during the fourth quarter of 2012. See Note 7 to our consolidated financial statements for the year ended December 31, 2012 included elsewhere in this prospectus.

 

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Liquidity in the capital and credit markets

Overview

We fund our liquidity needs for capital investment, working capital, and other financial commitments through cash flow from continuing operations and our credit facility ($375 million in aggregate commitments, all of which was available as of September 30, 2013). We believe that we have the financial resources to meet business requirements for the next twelve months and for our long-term needs.

Credit concentrations

We continually monitor our positions with, and the credit quality of, the financial institutions that are counterparties to our financial instruments and do not anticipate non-performance by the counterparties. We would not have realized a material loss during the nine months ended September 30, 2013 or the year ended December 31, 2012 in the event of non-performance by any one counterparty. We attempt to limit the amount of credit exposure with any one institution. Management continues to monitor the status of these counterparties and will take action, as appropriate, to manage any counterparty credit risk.

We maintain accounts receivable balances ($291 million, $308 million and $310 million, net of allowances, at September 30, 2013, December 31, 2012 and December 31, 2011, respectively), principally from clients in the pharmaceutical industry. Our trade receivables do not represent significant concentrations of credit risk at September 30, 2013 due to the credit worthiness of our clients and their dispersion across many geographic areas.

Debt

At September 30, 2013, our principal amount of debt totaled $5,012 million. Management does not believe that this level of debt poses a material risk to us due to the following factors:

 

 

in each of the last two calendar years, we have generated strong net cash provided by operating activities in excess of $334 million;

 

 

at September 30, 2013, we had $746 million in worldwide cash and cash equivalents and short-term investments; and

 

 

at September 30, 2013, we had $375 million of unused debt capacity under our existing Senior Secured Credit Facilities.

 

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The following table summarizes our debt at the dates indicated:

 

(dollars in millions)   

September 30,

2013

   

December 31,

2012

 

 

 

Senior Secured Term Loan due 2017—USD LIBOR at average floating rates of 3.75%

   $ 1,750      $ 1,766   

Senior Secured Term Loan due 2017—EUR LIBOR at average floating rates of 4.25%

     1,012        999   

12.50% Senior Notes due 2018

     1,000        1,000   

7.375%/8.125% Senior PIK Toggle Notes due 2018

     750          

Revolving Credit Facility due 2017—USD LIBOR at average floating rates of 3.44%

              

6.00% Senior Notes due 2020

     500        500   
  

 

 

 

Principal Amount of Debt

     5,012        4,265   

Less: Unamortized Discounts

     (71     (88
  

 

 

 

Total Debt per Consolidated Statements of Financial Position

   $ 4,941      $ 4,177   

 

 

In August 2013, we issued $750 million of 7.375% cash interest and 8.125% Senior PIK Notes. The Senior PIK Notes are unsecured obligations and mature on September 1, 2018. Interest is paid semi-annually in March and September of each year, commencing March 1, 2014. Subject to certain restrictions, we may elect to pay a portion of the interest due on the outstanding principal amount of the Senior PIK Notes by issuing PIK Notes in a principal amount equal to the interest due. The proceeds, along with cash provided by us, were used to pay an approximate $753 million dividend to our shareholders and for the payment of fees and expenses of the transaction of approximately $17 million.

In February 2013, we entered into an amendment of our existing Senior Secured Term

Loans due 2017 (“Term Loan Amendment”) to reduce our interest rate. We reduced the borrowing margins and LIBOR floors by 50 basis points and 25 basis points, respectively, for both the USD and EUR tranches of debt. As a result of the Term Loan Amendment, we recorded $9 million of debt extinguishment losses and $3 million of third party fees in Other (loss) income, net during the nine months ended September 30, 2013.

On October 24, 2012, we completed a recapitalization (the “Recapitalization”). The Recapitalization included an amendment (the “Amendment”) to the Amended and Restated Credit and Guaranty Agreement (“New Term Loan Agreement”) for additional term loans in the aggregate U.S. dollar equivalent of approximately $760 million, which included 200 million Euros. Among other modifications, the Amendment: (a) extended the maturity date of the Revolving Credit Facility to August 2017; and (b) increased the maximum leverage ratio.

The Recapitalization also included a new offering of $500 million aggregate principal amount of the 6% Senior Notes. The 6% Senior Notes are guaranteed on a senior unsecured basis by the Company’s wholly-owned domestic subsidiaries. The 6% Senior Notes have terms substantially similar to the existing $1,000 million 12.5% Senior Notes, except that, most notably, the 6% Senior Notes have a three-year no call redemption period.

In order to effect the Recapitalization, we conducted an exchange offer and consent solicitation to exchange the Old 12.5% Senior Notes for the New 12.5% Senior Notes, and to solicit consents

 

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to proposed amendments to the indenture governing the Existing 2018 Notes to permit the recapitalization. The requisite consents were obtained and 99.96% of the holders of the Old 12.5% Senior Notes agreed to participate in the exchange and received New 12.5% Senior Notes in an equal principal amount.

In March 2011, we entered into a New Term Loan Agreement replacing our Credit and Guaranty Agreement dated February 2010. Under the New Term Loan Agreement, we increased our borrowings by $52 million and EUR 21 million. The terms of the New Term Loan Agreement extended the maturity date of the term loan and revolver by eighteen months to August 2017 and one year to February 2016, respectively, reduced the borrowing margins and LIBOR floor, expanded the revolver borrowing capacity by $100 million, and eliminated the interest coverage ratio covenant.

The proceeds from the Recapitalization were used to pay a $1,202 million dividend to our stockholders and for payment of fees and expenses of the transaction of approximately $48 million, which were capitalized.

At September 30, 2013, short-term and long-term debt was $25 million and $4,916 million, respectively, in the condensed consolidated statements of financial position. Our Senior Secured Credit Facilities are secured by a security interest in substantially all of our tangible and intangible assets, including the stock and the assets of certain of our current and certain future wholly-owned U.S. subsidiaries (and the stock held by our immediate direct parent holding company) and a portion of the stock of certain of our non-U.S. subsidiaries. In addition, certain of the assets of our Swiss subsidiaries have been pledged to secure any borrowings under the Senior Term Loan by IMS AG.

Costs 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. As of September 30, 2013, the unamortized balance of original issue discount reflected as a reduction to long term debt and fees and expenses related to the issuance of debt included in Other assets was $71 million and $78 million, respectively. During the nine months ended September 30, 2013, we recorded interest expense of $27 million related to the amortization of these balances.

Our financing arrangements provide for certain covenants and events of default customary for similar instruments, including in the case of our New Term Loan Agreement (as amended), a covenant to maintain a specific ratio of consolidated total indebtedness to Credit Agreement Adjusted EBITDA. If an event of default occurs under any of our financing arrangements, the creditors under such financing arrangements will be entitled to take various actions, including the acceleration of amounts due under such arrangements, and in the case of the lenders under our New Term Loan Agreement (as amended), other actions permitted to be taken by a secured creditor. At September 30, 2013 and December 31, 2012, we were in compliance with the financial covenants under our New Term Loan Agreement (as amended).

In May 2010, we purchased interest rate caps and entered into interest rate swap agreements for purposes of managing our risk in interest rate fluctuations. We purchased U.S. dollar and Euro denominated interest rate caps for a total nominal value of approximately $1,675 million at strike rates ranging from 3% to 4%. These caps covered different periods between May 2010 and January 2015. The total premiums paid were $5 million. Most of these caps have expired and the nominal value of caps currently outstanding is approximately $355 million.

 

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We also entered into interest rate swap agreements to hedge notional amounts of $375 million of our borrowings. All were effective January 2012, and expire at various times from January 2014 through January 2016. On these agreements, we pay a fixed rate ranging from 2.6% to 3.3% and receive a variable rate of interest equal to the three-month London Interbank Offered Rate (“LIBOR”).

The fair value of the interest rate caps and swaps is the estimated amount that we would receive or pay to terminate such agreements, taking into account market interest rates and the remaining time to maturities. As of September 30, 2013 and December 31, 2012, based upon mark-to-market valuation, we recorded in the Condensed Consolidated Statements of Financial Position a long-term liability of $14 million and $21 million, respectively.

Severance, impairment and other charges

During the first nine months of 2013, we recorded severance, impairment and other charges of $7 million related to impaired leases for properties in the U.S. and contract-related charges for which we will not realize any future economic benefits, partially offset by the reversal of approximately $6 million of severance accruals for our 2012 Plan (see Note 6 to our consolidated financial statements) due to the favorable settlement of required termination benefits and strategic business changes. During the first nine months of 2012, we incurred $30 million of severance, impairment and other charges related to the write-down of certain assets to their net realizable values, contract-related charges for which we did not realize any future economic benefits and the cease-use of leased facilities in the U.S. and Europe.

In December 2012, as a result of ongoing cost reduction efforts, we implemented a restructuring plan (the “2012 Plan”) and recorded a pre-tax severance charge of $23 million as a component of operating income consisting of global workforce reductions to streamline our organization. The severance benefits under the 2012 Plan were calculated pursuant to the terms of established employee protection plans, in accordance with local statutory minimum requirements or individual employee contracts, as applicable. We expect that cash outlays related to severance benefits for the 2012 Plan will be substantially complete by the end of the second quarter of 2014.

 

(dollars in millions)   

Severance

related

reserves

 

 

 

Balance at December 31, 2012

   $ 23   

2013 utilization

     (8

Q3 2013 reversal

     (6
  

 

 

 

Balance at September 30, 2013

   $ 9   

 

 

During the fourth quarter of 2012, we recorded impairment charges of $2 million related to the write-down of certain assets to their net realizable values, $3 million for contract-related charges for which we will not realize any future economic benefits and $1 million related to a lease impairment for property in the U.S.

In December 2010, we implemented a multi-year restructuring plan and recorded a pre-tax severance, impairment and other charge totaling $50 million related to ongoing cost reduction efforts, including workforce reductions to streamline our organization, the elimination of certain regional headquarter functions and asset impairments (the “2010 Plan”). In connection with the overall 2010 Plan, we eliminated positions in all areas of the business, with a majority of the

 

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actions in our Global Operations function. The severance benefits under the 2010 Plan were calculated pursuant to the terms of established employee protection plans, in accordance with local statutory minimum requirements or individual employee contracts, as applicable. During December 2011, we recorded an incremental charge of $19 million, bringing the total charge under the 2010 Plan to $69 million. During the fourth quarter of 2012, we reversed approximately $10 million of severance accruals for the 2010 Plan due to the favorable settlement of required termination benefits and strategic business changes. During the second quarter of 2011, we also reversed the facility exit portion of the 2010 Plan as we were able to successfully assign the related lease to a third party. The cash outlays related to severance benefits for the 2010 Plan have been substantially completed.

 

(dollars in millions)   

Severance

related

reserves

   

Facility

exit

charges

   

Currency

translation

adjustments

         Total  

 

 

Balance at December 31, 2010

   $ 48      $ 1      $       $ 49   

2011 utilization

     (26                    (26

Q2 2011 reversal

            (1             (1

Q4 2011 charge

     19                       19   

Currency translation adjustments

                   1         1   
  

 

 

 

Balance at December 31, 2011

     41               1         42   

2012 utilization

     (26                    (26

Q4 2012 reversal

     (10                    (10
  

 

 

 

Balance at December 31, 2012

     5               1         6   

2013 utilization

     (4                    (4
  

 

 

 

Balance at September 30, 2013

   $ 1             $ 1       $ 2   

 

 

In the fourth quarter of 2011, as a result of classifying a building in the U.S. as held for sale, we recorded an impairment charge of $2 million.

During the second quarter of 2011, we recorded $10 million in contract-related charges as a component of operating income related to a cash payment made to a vendor for which the Company did not realize any future economic benefit.

In connection with the acquisition of Brogan, we recorded a charge of $3 million during the third quarter of 2010 related to employee termination benefits to be paid. The severance charge related to the streamlining of certain functions as a result of the acquisition. We recorded the charge under existing employee protection plans. During the fourth quarter of 2012, we reversed $1 million of the charge as a result of the favorable settlement of termination benefits.

Contingencies

We are exposed to certain known contingencies that are material to our investors. The facts and circumstances surrounding these contingencies and a discussion of their effect on us are included in Note 12 to our consolidated financial statements for the year ended December 31, 2012 and Note 6 to our consolidated financial statements for the nine months ended September 30, 2013.

These contingencies may have a material effect on our liquidity, capital resources or results of operations. In addition, even where our reserves are adequate, the incurrence of any of these liabilities may have a material effect on our liquidity and the amount of cash available to us for other purposes.

 

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Management believes that we have made appropriate arrangements in respect of the future effect on us of these known contingencies. Management also believes that the amount of cash available to us from our operations, together with cash from financing, will be sufficient for us to pay any known contingencies as they become due without materially affecting our ability to conduct our operations and invest in the growth of our business.

Contractual obligations

Our contractual obligations include facility leases, agreements to purchase data and telecommunications services, leases of certain computer and other equipment, and projected pension and other postretirement benefit plan contributions. At December 31, 2012, the minimum annual payment under these agreements and other contracts that have initial or remaining non-cancelable terms in excess of one year are as listed in the following table:

 

       Year  
(dollars in millions)     2013      2014      2015      2016      2017      Thereafter      Total  

 

 

Operating leases(1)

   $ 47       $ 45       $ 37       $ 36       $ 34       $ 76       $ 275   

Data acquisition and telecommunication services(2)

     147         65         40         23         3         12         290   

Computer and other equipment leases(3)

     25         17         8         6         6         15         77   

Projected pension and other postretirement benefit plan contributions(4)

     14                                                 14   

Long-term debt(5)

     323         318         310         306         2,896         1,591         5,744   

Other liabilities(6)

     48         17         18         18         19         118         238   
  

 

 

 

Total

   $ 604       $ 462       $ 413       $ 389       $ 2,958       $ 1,812       $ 6,638   

 

 

 

(1)   Rental expense under real estate operating leases for the years ended 2012, 2011 and 2010 were $21 million, $34 million and $32 million, respectively.

 

(2)   Expense under data and telecommunications contracts for the years ended 2012, 2011 and 2010 were $191 million, $212 million and $225 million, respectively.

 

(3)   Rental expense under computer and other equipment leases for the years ended 2012, 2011 and 2010 were $26 million, $24 million and $26 million, respectively. These leases are frequently renegotiated or otherwise changed as advancements in computer technology produce opportunities to lower costs and improve performance.

 

(4)   Our contributions to pension and other postretirement benefit plans for the years ended 2012, 2011 and 2010 were $15 million, $16 million and $13 million, respectively. The estimated contribution amount shown for 2012 relates to required contributions to funded plans as well as benefit payments from unfunded plans. The expected contribution shown for 2013 is required.

 

(5)   Amounts represent the principal balance plus estimated interest expense based on current interest rates under our long-term debt (see Note 7 to our consolidated financial statements for the year ended December 31, 2012 included elsewhere in this prospectus).

 

(6)   Includes estimated future funding requirements related to pension and postretirement benefits (see Note 8 to our consolidated financial statements for the year ended December 31, 2012 included elsewhere in this prospectus) and severance, impairment and other charges (see Note 6 to our consolidated financial statements for the year ended December 31, 2012 included elsewhere in this prospectus). As the timing of future cash outflows is uncertain, the following long-term liabilities (and related balances) are excluded from the above table: deferred taxes ($1,317) million and uncertain tax benefits reserve ($47) million.

Under the terms of certain acquisition-related purchase agreements, we may be required to pay additional amounts as contingent consideration based primarily on the achievement of certain financial performance related metrics. At September 30, 2013, we have recorded estimated accruals of approximately $69 million, which could become due through 2017, with respect to these additional payments relating to nine acquisitions.

 

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In August 2013, Healthcare Technology Intermediate, Inc. issued $750 million of 7.375% cash interest and the Senior PIK Notes. The Senior PIK Notes are unsecured obligations of Healthcare Technology Intermediate, Inc. and mature on September 1, 2018. Interest is paid semi-annually in March and September of each year, commencing March 1, 2014. Future mandatory debt principal payments associated with these Notes are zero for 2013 through 2017, and $750 million thereafter. Additionally, in February 2013, the Company entered into an amendment of its existing Senior Secured Term Loans due 2017 (“Term Loan Amendment”) to reduce the interest rate paid by the Company. The Company reduced the borrowing margins and LIBOR floors by 50 basis points and 25 basis points, respectively, for both the USD and EUR tranches of debt. As a result of these debt transactions, interest payments on our outstanding debt increased by approximately $35 million for 2014, $35 million for 2015, $34 million for 2016, $41 million for 2017 and $37 million thereafter. Interest payments did not change materially for 2013.

Off-balance sheet obligations

As of September 30, 2013, we have no off-balance sheet arrangements that currently have or are reasonably likely to have a material effect on our consolidated financial condition, changes in financial condition, results of operations, liquidity, capital expenditures or capital resources.

Critical accounting estimates

Note 2 to the consolidated financial statements for the year ended December 31, 2012 included elsewhere in this prospectus includes a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements. Following is a brief discussion of the more significant accounting policies and methods used by us.

The most significant estimates relate to allowances, depreciation of fixed assets including salvage values, carrying value of goodwill and intangible assets, provision for income taxes and tax assets and liabilities, reserves for employee benefits, stock-based compensation, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The accounting estimates used in the preparation of our consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. Actual results could vary from the estimates and assumptions used in the preparation of the consolidated financial statements for the year ended December 31, 2012.

We believe the following critical policies involve significant judgments and estimates used in the preparation of our consolidated financial statements for the year ended December 31, 2012.

Revenue recognition.     We recognize revenue when the following criteria have been met: 1) persuasive evidence of an arrangement exists; 2) delivery has occurred or services have been rendered; 3) the seller’s price to the buyer is fixed or determinable; and 4) collectability is reasonably assured.

We offer various information offerings developed to meet our clients’ needs by using data secured from a worldwide network of suppliers. Our revenue arrangements may include multiple elements. A typical information offerings arrangement (primarily under fixed-price contracts) may include an ongoing subscription-based deliverable for which revenue is recognized ratably

 

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as earned over the contract period and/or a one-time delivery of data offerings for which revenue is recognized upon delivery, assuming all other criteria are met. These deliverables qualify as separate units of accounting as each has value on a standalone basis to the client, objective and reliable evidence of fair value for any undelivered item(s) exists, and where the arrangement includes a general right of return relative to the delivered item(s), delivery of the undelivered item(s) is probable and within our control. We allocate revenue to each element within our arrangements based upon their respective relative selling price. Fair values for these elements are based upon the normal pricing practices for these offerings when sold separately. We defer revenue for any undelivered elements, and recognize revenue when the product is delivered or over the term of the agreement, in accordance with our revenue recognition policy for such element as noted above.

We also offer technology services offerings that enable our clients to make informed business decisions. Revenue for certain of these arrangements is recognized on a straight-line basis over the term of the arrangement. Revenue for time and material contracts is recognized as the services are provided. Revenue for fixed price contracts is recognized either over the contract term based on the ratio of the number of hours incurred for services provided during the period compared to the total estimated hours to be incurred over the entire arrangement (efforts based), or upon delivery.

Operating costs of information.     Operating costs of information include costs of acquiring data, data processing and costs attributable to personnel involved in production, data management and delivery of our information offerings.

One of our major expenditures is the cost for the data we receive from suppliers. After receipt of the raw data and prior to the data being available for use in any part of our business, we are required to transform the raw data into useful information through a series of comprehensive processes. These processes involve significant employee costs and data processing costs.

Costs associated with our purchases are deferred within work-in-process inventory and recognized as expense as the corresponding data product revenue is recognized by us, generally over a 30 to 60 day period.

Direct and incremental costs of technology services.     Direct and incremental costs of technology services include costs of staff directly involved with delivering technology-related, consulting and services generating offerings and engagements, related accommodations and the costs of data purchased specifically for technology services engagements. Direct and incremental costs of technology services do not include an allocation of direct costs of data that are included in operating costs of information. Although our data, the costs of which are included in Operating Costs of Information, is used in multiple client solutions across different offerings within both information and technology services, we do not have a meaningful way to allocate the direct cost of the data between information and technology services. As such, the direct and incremental costs of technology services do not reflect the total costs incurred to deliver our technology services engagements.

Stock-based compensation.     We maintain a stock incentive plan, which provides for the grant of stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, and/or performance awards to key employees and directors, consultants, and advisors to us as determined by the plan administrator. We recognize as stock-based compensation expense for all share-based payments to employees over the requisite service period (generally the vesting period) in the consolidated statements of comprehensive income based on the fair values of the number of

 

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awards that are ultimately expected to vest. As a result, for most awards, recognized stock-based compensation expense is reduced for estimated forfeitures prior to vesting primarily based on historical annual forfeiture rates. Estimated forfeitures will be reassessed in subsequent periods and may change based on new facts and circumstances. We satisfy exercises and issuances of vested equity awards with issuances of common stock. We recorded $18 million and $16 million of stock compensation expense in the first nine months of 2013 and 2012, respectively. We recorded $19 million, $18 million, $25 million and $68 million in the years ended December 31, 2012, 2011 and 2010 (successor) and January 1, 2010 through February 26, 2010 (predecessor), respectively.

Fair value measurement and valuation methodologies

Stock-based compensation expense is primarily based on the estimated grant date fair value using the Black-Scholes option pricing model. Considerable judgment is required in determining the fair value of stock-based grants, including factors such as estimating the expected term of the grant, expected volatility of our stock and the expected forfeiture rate. In addition, for stock option grants where vesting is dependent on achieving certain operating performance targets, we estimate the likelihood of achieving those performance targets. The following table summarizes the weighted average assumptions used to compute the weighted average fair value of stock option grants:

 

       2012      2011      2010  

 

 

Dividend Yield

     0.0%         0.0%         0.0%   

Weighted Average Volatility

     27.00%         25.2%         34.1%   

Risk Free Interest Rate

     0.92%         1.56%         2.32%   

Expected Term

     5.50 years         5.50 years         5.36 years   

Weighted Average Fair Value of Options Granted

   $ 0.33       $ 0.30       $ 0.35   

Weighted Average Grant Price

   $ 1.24       $ 1.12       $ 1.03   

 

 

 

 

The dividend yield of 0.0% is used because no recurring dividends have been authorized. An increase in the dividend yield will decrease stock compensation expense.

 

 

The weighted average volatility was developed using the historical volatility of several peer companies to IMS Health Holdings, Inc. for periods equal to the expected life of the options. An increase in the weighted average volatility assumption will increase stock compensation expense.

 

 

The risk-free interest rate was developed using the U.S. Treasury yield curve for periods equal to the expected life of the options on the grant date. An increase in the risk-free interest rate will increase stock compensation expense.

 

 

The expected term was estimated for the 2012 grant of stock options as the vesting term plus 6 months. Participants are unlikely to exercise before a liquidity event because there is no market to sell the shares. The current estimated liquidity date for IMS Health Holdings, Inc. is shortly after the vesting date of the last tranche for 2012 awards. An increase in the expected holding period will increase stock compensation expense.

 

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The following table summarizes the stock option grants for the first nine months of 2013 and for the year ended December 31, 2012:

 

(in thousands except per share
data)

 

Stock option grant period

(three months ended)

  

Number of

options
granted(1)

    

Weighted
average

exercise price

   

Weighted
average per share
estimated fair value
of common stock 

    

Weighted

average

fair value
of options granted

 

 

 

March 31, 2012

     3,350         $1.19 (2)(4)      $1.19         $0.31   

June 30, 2012

     4,040         $1.40 (2)(4)      $1.40         $0.38   

September 30, 2012

     450         $1.40 (2)(4)      $1.40         $0.37   

December 31, 2012

     1,950         $0.98 (3)(4)      $0.98         $0.26   

March 31, 2013

     1,830         $1.35 (4)      $1.35         $0.37   

June 30, 2013

     5,985         $1.35 (4)      $1.35         $0.36   

September 30, 2013

     3,985         $1.35 (4)      $1.35         $0.38   

 

 

 

(1)   Does not include 2,070 and 4,945 shares, respectively, of phantom SARs granted in 2012 and 2013, respectively, for which no expense was recognized.
(2)   The weighted average exercise price does not reflect the reduction in the exercise price of unvested awards resulting from the $0.42 per share dividend paid in October 2012 (See Note 9 to our consolidated financial statements).
(3)   The decrease in the exercise price from prior grants is the result of the $0.42 per share dividend we paid in October 2012.
(4)   The weighted average exercise price does not reflect the reduction in the exercise price of unvested awards resulting from the $0.26 per share dividend paid in August 2013 (See “Executive compensation–Elements of compensation–Payments and adjustments in connection with cash dividends”).

The exercise price of stock options set by our board of directors is not less than the estimated fair market value of our common stock on the date of grant. Our board of directors have taken into account a number of objective and substantive factors in determining the fair market value of our common stock. Factors considered, but not limited to, include a) valuations using the methodologies described below and b) our overall operating and financial performance.

Our stock is not currently publicly traded, and as such, we conduct stock valuations on an annual basis as of December 31 for each year. We consider a number of objective and subjective factors in determining the value of our common stock at each valuation date in accordance with the guidance in the American Institute of Certified Public Accountants Practice Aid Valuation of Privately-Held-Company Equity Securities Issued as Compensation , or Practice Aid. These objective and subjective factors included, but were not limited to:

 

 

arm’s-length sales of our common stock in privately negotiated transactions;

 

valuations of our common stock;

 

our stage of development and financial position; and

 

our future financial projections.

Our common stock valuations performed from the Merger through the date of this prospectus were determined by taking a weighted-average value calculated under two different valuation approaches, the income approach and market approach.

The Income Approach quantifies the future cash flows that management expects to achieve consistent with our annual operating plan process. These future cash flows are discounted to their net present values using a rate corresponding to an estimated weighted-average cost of capital. The discount rate reflects the risks inherent in the cash flows and the market rates of return available from alternative investments of similar type and quality as of the valuation date. Our weighted average cost of capital (“WACC”) is calculated by weighting the required returns on interest-bearing debt and common equity capital in proportion to their estimated percentages in our capital structure as well as the capital structure of comparable publicly-traded

 

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companies. Our WACC assumptions utilized in the valuations performed during the period from December 31, 2011 through December 31, 2012 ranged from 10.5% to 11.0%.

The Market Approach considers the fair value of an asset based on the price at which comparable assets have been purchased under similar circumstances. The transactions are usually based on recent sale prices of similar assets based on an arm’s length transaction. Most commonly, the market approach relies on published transactions, based on a multiple of earnings before interest, taxes, depreciation and amortization (“EBITDA”), which is consistent with the primary profitability metric underlying our annual operating plan process. The EBITDA multiples were determined based on acquisition and/or trading multiples of a peer group of companies that are periodically reviewed by management for consistency with our business strategy, the businesses and markets in which we operate and our competitive landscape. The EBITDA multiples ranged from 8.5x to 10.5x in the valuations performed during the period from December 31, 2011 through December 31, 2012.

While we believe both of these two approaches provide reliable estimates of fair value, we apply a heavier weighting to the income approach as we believe this valuation method provides a more reasonable estimate of fair value given the market approach may reflect greater volatility based on the trading multiples of a peer group in an unstable or illiquid market. We have applied a discount factor to the resulting fair values obtained by averaging the values calculated under the income approach and the market approach to reflect the lack of marketability of the common stock for being a private company.

During the periods discussed above, we performed valuations of our common stock in January 2012 and 2013. As a standard part of its approval process for each of these valuations, our board of directors reviewed our current and projected financial performance, including the consideration of various scenarios of such performance and their corresponding impact on our common stock valuation. As part of its assessment of our operating performance, our board considered general economic conditions, the peer group of companies and their performance relative to our business strategy, and the volatility in the equity markets generally. Additional information on stock-based compensation is contained in Note 9 to the consolidated financial statements.

Pensions and other post retirement benefits.     We provide a number of retirement benefits to our employees, including defined benefit pension plans and postretirement medical 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 plan assets, cash balance crediting rate, lump sum conversion rate and the assumed rate of compensation increases. In addition, retiree medical care cost trend rates are a key assumption used exclusively in determining costs for our postretirement health care and life insurance benefit plans. Management reviews these critical assumptions at least annually. Other assumptions involve demographic factors such as the turnover, retirement and mortality rates. Management reviews these assumptions periodically and updates them when its experience deems it appropriate to do so.

The discount rate is the rate at which the benefit obligations could be effectively settled and is determined annually by management. For U.S. plans, the discount rate is based on results of a modeling process in which the plans’ expected cash flow (determined on a projected benefit obligation basis) is matched with spot rates developed from a yield curve comprised of high-grade (Moody’s Aa and above, or Standard and Poor’s AA and above) non-callable corporate

 

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bonds to develop the present value of the expected cash flow, and then determining the single rate (discount rate) which when applied to the expected cash flow derives that same present value. In the U.K. specifically, the discount rate is set based on the yields on a universe of approximately 150 high quality (Aa rated) corporate bonds denominated in UK Sterling, appropriate to the duration of Plan liabilities. For the other non-U.S. plans, the discount rate is based on the current yield of an index of high quality corporate bonds. At December 31, 2012, the discount rate was decreased to 3.8% from 4.6% at December 31, 2011 for its U.S. pension plans and postretirement benefit plan. Similarly, the discount rate for its U.K. pension plan was decreased to 4.7% from 5.3% at December 31, 2011. The U.S. and U.K. plans represent 98% of the consolidated benefit obligation as of December 31, 2012. The discount rate in other non-U.S. countries decreased, where the range of applicable discount rates at December 31, 2012 was 1.4% – 6.53%. As a sensitivity measure, a 25 basis point increase in the discount rate for our U.S. plan, absent any offsetting changes in other assumptions, would result in a decrease in pension expense of approximately $1 million within the consolidated statements of comprehensive income. For our U.K. plan, a 25 basis point increase in the discount rate, absent any offsetting changes in other assumptions, would result in a small decrease in pension expense within the consolidated statements of comprehensive income.

Under the U.S. qualified retirement plan, participants have a notional retirement account that increases with pay and investment credits. The rate used to determine the investment credit (cash balance crediting rate) varies monthly and is equal to 1/12th of the yield on 30-year U.S. Government Treasury Bonds, with a minimum of 0.25%. At retirement, the account is converted to a monthly retirement benefit.

In selecting an expected return on plan asset assumption, we consider the returns being earned by each plan investment category in the fund, the rates of return expected to be available for reinvestment and long-term economic forecasts for the type of investments held by the plan. The expected return on plan assets for the U.S. pension plans was 8.0% at January 1, 2013 and January 1, 2012. Outside the U.S. the range of applicable expected rates of return was 1.0% to 6.5% as of January 1, 2013 and 1.0% to 7.0% at January 1, 2012. 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 plan assets. As such, there can be no assurance that our actual return on plan assets will approximate the long-term expected forecasts. The expected return on assets (“EROA”) was $27 million and $26 million and the actual return on assets was $44 million and $3 million for the years ended December 31, 2012 and 2011, respectively. As a sensitivity measure, a 25 basis point change in the EROA assumption for our U.S. plan, absent any offsetting changes in other assumptions, would result in an approximately $1 million increase or decrease in pension expense within the Consolidated Statements of Comprehensive Income. For our U.K. plan, a 25 basis point change in the EROA assumption, absent any offsetting changes in other assumptions, would result in a de minimis increase or decrease in pension expense within the consolidated statements of comprehensive income. While we believe that the assumptions used are reasonable, differences in actual experience or changes in assumptions may materially affect its pension and postretirement obligations and future expense.

We utilize a corridor approach to amortizing unrecognized gains and losses in the pension and postretirement plans. Amortization occurs when the accumulated unrecognized net gain or loss balance exceeds the criterion of 10% of the larger of the beginning balances of the projected benefit obligation or the market-related value of the plan assets. The excess unrecognized gain

 

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or loss balance is then amortized using the straight-line method over the average remaining service-life of active employees expected to receive benefits. At December 31, 2012, the weighted-average remaining service-life of active employees was 19.28 years.

At December 31, 2012, the projected benefit obligation exceeded the fair value of assets in our pension plans by $63 million.

Additional information on pension and other postretirement benefit plans is contained in Note 8 to the consolidated financial statements.

Goodwill.     Goodwill represents the excess purchase price over the fair value of identifiable net assets of businesses acquired, and is not amortized. We review the recoverability of goodwill annually (or based on any triggering event) by comparing the estimated fair values (based on discounted cash flow analysis) of reporting units with their respective net book values. If the carrying amount of the reporting unit exceeds its fair value, the goodwill impairment loss is measured as the excess of the carrying value of goodwill over its fair value. We completed our annual impairment tests in 2012, 2011 and 2010 and no goodwill impairment charges were recorded.

Other long-lived assets.     We review the recoverability of our long-lived assets and finite-lived identifiable intangibles held and used whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In general, the assessment of possible impairment is based on our ability to recover the carrying value of the asset from the undiscounted expected future cash flows of the asset. If the future cash flows are less than the carrying value of such asset, an impairment charge is recognized for the difference between the estimated fair value and the carrying value. In addition, we also review our indefinite-lived intangible assets on an annual basis.

Income taxes.     We operate in more than 100 countries around the world and our earnings are taxed at the applicable income tax rate in each of those countries. We provide for income taxes utilizing the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each balance sheet date, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. If it is determined that it is more likely than not that future tax benefits associated with a deferred tax asset will not be realized, a valuation allowance is provided. In the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of our net recorded amount, an adjustment to the deferred tax asset would increase income in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made. The effect on deferred tax assets and liabilities of a change in the tax rates is recognized in income in the period that includes the enactment date. We recognize interest and penalties related to unrecognized tax benefits in income tax expense.

Foreign currency.     We have significant investments in non-U.S. countries. Therefore, changes in the value of foreign currencies affect our consolidated financial statements when translated into U.S. dollars. For all operations outside the United States where we have designated the local currency as the functional currency, assets and liabilities are translated using end-of-period

 

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exchange rates; revenue, expenses and cash flows are translated using average rates of exchange prevailing during the period the transactions occurred. Translation gains and losses are included as an adjustment to the accumulated other comprehensive income (loss) component of shareholders’ equity. In addition, gains and losses from foreign currency transactions, such as those resulting from the settlement and revaluation of third-party and intercompany foreign receivables and payables, are included in the determination of net (loss) income. We recorded net transaction (losses) gains of $(13) million, $16 million, $(36) million and $(6) million for the years ended December 31, 2012, 2011 and 2010 (Successor) and period ending February 26, 2010 (Predecessor) respectively, related to foreign currency transactions. These amounts are included in Other loss, net in the consolidated statement of comprehensive (loss) income.

For operations in countries that are considered to be highly inflationary or where the U.S. dollar is designated as the functional currency, monetary assets and liabilities are remeasured using end-of-period exchange rates, whereas non-monetary accounts are remeasured using historical exchange rates, and all remeasurement and transaction adjustments are recognized in Other loss, net.

Recently issued accounting standards

In July 2012, the Financial Accounting Standards Board (“FASB”) amended its guidance related to indefinite-lived intangibles by providing entities an option to use a qualitative approach to test these assets for impairment. An entity will be able to first perform a qualitative assessment to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired. If it is concluded that this is the case, then the entity must perform a quantitative impairment test. This amendment was effective for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of this guidance did not have a material impact on our financial results.

In February 2013, the FASB amended existing guidance by requiring companies to present information about reclassification adjustments from accumulated other comprehensive income in their financial statements in a single note or on the face of the financial statements. The amendments are effective prospectively for reporting periods beginning after December 15, 2012, with early adoption permitted. As these amendments required only additional disclosure, adoption did not have a material impact on our financial results.

In March 2013, the FASB issued amendments to address the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The amendments are effective prospectively for fiscal years beginning after December 15, 2013, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on our financial results.

In June 2013, the FASB determined that an unrecognized tax benefit should be presented as a reduction of a deferred tax asset for a net operating loss (“NOL”) carryforward or other tax credit carryforward when settlement in this manner is available under applicable tax law. This guidance is effective for interim and annual periods beginning January 1, 2014. We do not believe the adoption of this guidance will have a material impact on our financial results.

Quantitative and qualitative disclosures about market risk

Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange rates, interest rates, and other relevant market rate or price changes.

 

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In the ordinary course of business, we are exposed to various market risks, including changes in foreign currency exchange rates, interest rates and equity price changes, and we regularly evaluate our exposure to such changes. Our overall risk management strategy seeks to balance the magnitude of the exposure and the cost and availability of appropriate financial instruments. From time to time, we have utilized forward exchange contracts to manage our foreign currency exchange rate risk.

Foreign exchange risk

Our primary market risks are the impact of foreign exchange fluctuations on non-U.S. dollar denominated revenue and the impact of interest rate fluctuations on interest expense.

We transact business in more than 100 countries and are subject to risks associated with changing foreign exchange rates. Our objective is to reduce earnings and cash flow volatility associated with foreign exchange rate changes. Accordingly, we enter into foreign currency forward contracts to minimize the impact of foreign exchange movements on EBITDA, and to hedge non-U.S. dollar anticipated royalties.

It is our policy to enter into foreign currency transactions only to the extent necessary to meet our objectives as stated above. We do not enter into foreign currency transactions for investment or speculative purposes. The principal currencies hedged are the Euro, the Japanese Yen, the British Pound, the Swiss Franc and the Canadian Dollar. See Note 7 to our consolidated financial statements for the year ended December 31, 2012 included elsewhere in this prospectus.

The contractual value of our foreign exchange hedging instruments was approximately $540 million at December 31, 2012. The fair value of these hedging instruments is subject to change as a result of potential changes in foreign exchange rates. We assess our market risk based on changes in foreign exchange rates utilizing a sensitivity analysis. The sensitivity analysis measures the potential loss in fair values based on a hypothetical 10% change in currency rates. The potential loss in fair value for foreign exchange rate-sensitive instruments, all of which were foreign currency forward contracts, based on a hypothetical 10% decrease in the value of the U.S. dollar or, in the case of non-dollar-related instruments, the currency being purchased, was $35 million at December 31, 2012. However, the change in the fair value of foreign exchange rate-sensitive instruments would likely be offset by a change in the fair value of the future income or royalty being hedged. The estimated fair values of the foreign exchange risk management contracts were determined based on quoted market prices.

We also borrow funds and since the interest rate associated with those borrowings changes over time, we are subject to interest rate risk. We have not hedged all of this exposure. We assess our market risk based on changes in interest rates utilizing a sensitivity analysis. The sensitivity analysis measures the increase in annual interest expense based on a hypothetical 1% increase in interest rates. This would have amounted to approximately $22 million at December 31, 2012.

In February 2013, the Venezuelan government announced the devaluation of its currency and the official exchange rate was adjusted from 4.30 Bolívars to each U.S. dollar to 6.30. Our Swiss operating subsidiary, IMS AG, maintains certain account balances in Bolívars (mainly Cash and cash equivalents). As these balances are held in a non-functional currency of IMS AG, it is required that we mark-to-market these balances at each reporting date and reflect these movements as gains or losses in income. Additionally, Venezuela is currently designated as hyper-inflationary, and as such, all foreign currency fluctuations are recorded in income for certain

 

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account balances at our local Venezuelan operating subsidiary. We record a pre-tax charge of approximately $14 million to other (loss) income, net in the first quarter of 2013 related to the remeasurement of the IMS AG Venezuelan Bolívar account balances and the remeasurement of certain local Venezuelan account balances. It is not possible for us to predict the extent to which we may be affected by additional future changes in exchange rates and exchange controls imposed by the Venezuelan government.

 

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Business

Our Company

We are a leading global information and technology services company providing clients in the healthcare industry with comprehensive solutions to measure and improve their performance. We have one of the largest and most comprehensive collections of healthcare information in the world, spanning sales, prescription and promotional data, medical claims, electronic medical records and social media. Our scaled and growing data set, containing over 10 petabytes of unique data, includes over 85% of the world’s prescriptions by sales revenue and approximately 400 million comprehensive, longitudinal, anonymous patient records. We standardize, organize, structure and integrate this data by applying our sophisticated analytics and leveraging our global technology infrastructure to help our clients run their organizations more efficiently and make better decisions to improve their operational and financial performance. We have a presence in over 100 countries, including high growth emerging markets, and we generated 64% of our $2.44 billion of 2012 revenue from outside the United States.

We serve key healthcare organizations and decision makers around the world, spanning the breadth of life science companies, including pharmaceutical, biotechnology, consumer health and medical device manufacturers, as well as distributors, providers, payers, government agencies, policymakers, researchers and the financial community. The breadth of the intelligent, actionable information we provide is not comprehensively available from any other source and our scope of offerings would be difficult and costly for another party to replicate. As a result, our information and technology services offerings, which we have developed with significant investment over our 60-year history, are deeply integrated into our clients’ workflow. We maintain long-standing relationships and high renewal rates with our clients due to the value of the services and solutions we provide. The average length of our relationships with our top 25 clients is over 25 years and our retention rate for our top 1,000 clients from 2011 to 2012 was approximately 99%. We have significant visibility into our financial performance, as historically about 70% of our revenue has recurred annually, principally because our information and technology services offerings are critical to our clients’ daily decision-making and are sold primarily through subscription and service contracts.

We leverage our proprietary information assets to develop technology and services capabilities with a talented healthcare-focused workforce that enables us to grow our relationships with healthcare stakeholders. This set of capabilities includes:

 

 

A leading healthcare-specific global IT infrastructure , which we use to process data from over 45 billion healthcare transactions annually and to collect data from over 780,000 fragmented feeds globally which we organize in a consistent and highly structured fashion using proprietary methodologies;

 

 

A staff of approximately 9,300 professionals across the globe, including over 1,200 experts in areas such as biostatistics, data science, bioinformatics, healthcare economics, outcomes research, epidemiology, pharmacology and key therapeutic areas;

 

 

Our intelligent cloud, IMS One , which opens our sophisticated global IT infrastructure to our clients and provides the ability to perform business analytics in the cloud with large amounts of complex data. Our cloud is unique in the healthcare industry because it pre-integrates applications with IMS data, eliminating the cost traditionally associated with integrating

 

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information, and provides interoperability across both IMS and third party applications, reducing the complexity traditionally associated with siloed data; and

 

 

A growing set of proprietary applications, which includes: commercial applications supporting sales operations, sales management, multi-channel marketing and performance management; real-world evidence solutions helping manufacturers and payers evaluate the value of treatments in terms of cost, quality and outcomes; payer-provider solutions helping these constituents to optimize contracting and performance management; and clinical solutions helping manufacturers and CROs better design, plan, execute and track clinical trials.

At a time when the healthcare industry is experiencing transformational change driven by global expansion and the growth of new categories of medicines, intense cost pressures, a changing regulatory environment, and new payment and delivery models, we enable our clients to gain and apply insights designed to substantially improve operating performance. Our solutions, which are designed to provide our clients access to our deep healthcare specific subject matter expertise, take various forms, including information, tailored analytics, subscription software and expert services.

We believe our mission-critical relationships with our life science clients are reflected in the role we play within four important areas of decision-making related to their product portfolios: Research and Development, Pre-Launch, Launch and In-Market. Over the last three years, we have introduced software and services applications that have further deepened our level of client integration by enabling our clients to enhance and automate many of these key decision-making processes.

 

LOGO

 

• Market opportunity assessment

 

• Clinical trial feasibility/planning

 

• Site selection

 

• Patient recruitment

 

• Trial monitoring

 

• Performance management

 

• Drug pricing optimization

 

• Launch readiness

 

• Commercial planning

 

• Brand positioning

 

• Message testing

 

• Influence networks

 

• Territory design

 

• Market access

 

• Health technology assessment

 

• Commercial readiness

 

• Forecasting

 

• Resource allocation

 

• Call planning

 

• Stakeholder engagement

 

• Commercial operations

 

• Sales force effectiveness

 

• Sales force alignment

 

• Multi-channel marketing

 

• Client relationship management

 

• Lifecycle management

 

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We believe that a powerful component of our value proposition is the breadth and depth of intelligence we provide to help our clients address fundamental operational questions.

 

User          Illustrative questions      
Sales    Which providers generate highest return on rep visit?   Does my sales rep drive appropriate prescribing?   How much should I pay my sales rep next month?
 
Marketing    What share of patients is appropriately treated?   Which underserved patient populations will benefit most from my new drug?   Is my brand gaining market share quickly enough to hit revenue forecasts?
 
Research & Development    Are there enough patients for my clinical trial?   Which study centers have the target patients?   How long will trial enrollment take to hit target patient volumes?
 
Real World Evidence (“RWE”)/Pharmacovigilance    What is the likely impact of new therapies on costs and outcomes?   Are new therapies performing better against existing standards of care in real world settings?   Does real world data indicate adverse events not detected in clinical trials?

We generate revenue through local sales teams that manage client relationships in each region and go to market locally with our full suite of information and technology services offerings. Total global revenue from our information offerings, including national and sub-national information services represented 62% of our 2012 revenue. Total global revenue from our technology services offerings, which include hosted and cloud-based applications, implementation services, subscription software, analytic services and consulting, represented 38% of our 2012 revenue. We believe the data from our information offerings, when combined with our technology services offerings, can provide valuable insights to our clients and can increase the speed and effectiveness of decision making while also simplifying processes and reducing complexity and costs. Increasing demand from our clients for broader and more integrated offerings has been an important driver of our growth in technology services revenue, which grew at a CAGR of 13% between 2010 and the third quarter of 2013.

Ari Bousbib was appointed as our Chief Executive Officer on August 16, 2010 following the purchase of our Company by our Sponsors in February 2010, which we refer to as the Merger. Over the past three years, Mr. Bousbib and the management team have made substantial investments in human capital, technology and services infrastructure to expand the breadth of our platform and the number of constituents we serve within the healthcare value chain. Examples of our strategic investments and operational changes include:

 

 

improving our operating efficiency by streamlining our organization, deploying lean methodologies throughout our global operations, and standardizing and automating processes;

 

 

in-sourcing development activities and capabilities, with approximately 70% of our development resources in-house as of 2013 year end, compared to approximately 30% in 2010;

 

 

increasing our offshore delivery resources to over 2,000 people as of 2013 year end, compared to 250 in 2010, which has driven substantial productivity improvement;

 

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shifting our employee mix, with over 50% now client-facing as of 2013 year end, compared to approximately 33% in 2010; and

 

 

expanding our offerings and capabilities by investing over $900 million in 22 complementary acquisitions, internal development projects and capital expenditures since the beginning of 2011 through 2013 year end.

These strategic investments and operational changes have transformed our organization into a more client-centric, service oriented, high-performance culture. Since the Merger we added approximately 7,200 employees to the organization and oversaw the departure of approximately 5,100 employees from the organization, reflecting the various strategic and operational changes described above. We estimate that about 60% of our approximately 9,300 current employees have joined us since the Merger.

We believe our investments in people, technology and services have enabled us to significantly expand our addressable market and capture an additional portion of our clients’ spend by providing more powerful technology solutions and new insight-driven services. The following financial performance metrics have improved significantly between the year ended December 31, 2010 and the twelve month period ended September 30, 2013:

 

 

revenue increased to $2.51 billion, generating a CAGR of 5.6% on an as reported basis and 5.9% on a constant dollar basis;

 

 

Adjusted EBITDA increased to $819 million, generating a CAGR of 10.7% on an as reported basis and 11.0% on a constant dollar basis; and

 

 

Adjusted EBITDA as a percentage of revenue increased to 32.6% from 28.6%.

We incurred a net loss of $53 million for the twelve month period ended September 30, 2013, and a net loss of $203 million for the combined 2010 year-end period. Amounts expressed in constant dollar terms exclude the effect of changes in foreign currency exchange rates on the translation of foreign currency results into U.S. dollars. For additional information regarding these financial measures, including a reconciliation of our non-GAAP measures to the most directly comparable measure presented in accordance with United States GAAP, see “Summary and pro forma consolidated financial data” included elsewhere in this prospectus. For additional information regarding foreign currency translation, see “Management’s discussion and analysis of financial condition and results of operations—Results excluding the effect of foreign currency translation and certain charges” included elsewhere in this prospectus.

Our market opportunity

We compete in the global information, technology and services market for the life sciences and the broader healthcare industry. Historically, we concentrated our efforts in a $5 billion market for information and consulting services primarily supporting the commercial functions of life sciences organizations. In response to the needs of a broader set of life sciences clients for more specialized information, such as longitudinal anonymous patient data and clinical trial analytics, we have expanded our offerings to serve a total $18 billion market for information and services. In addition, in response to our life sciences clients’ need to streamline operations, we offer an expanded range of technology services that include data warehousing, IT outsourcing, software applications and other services in the broader market for IT services, which, together, represent an additional $28 billion market among our life sciences clients. As a result, we now operate across a life sciences

 

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marketplace for information and technology services that is approaching $50 billion. We also have newer offerings in the $25 billion market for information and technology services for payers and providers and view this rapidly expanding market as an opportunity for further growth.

We believe there are five key trends affecting our end markets that will create increasing demand for our information and technology services solutions:

Growth and innovation in the life sciences industry.     The life sciences industry is a large and critical part of the global healthcare system, generating approximately $1 trillion in annual revenue. According to our research, revenue growth in the life sciences industry globally is expected to accelerate from 2.5% in 2013 to approximately 6% in 2017. The IMS Institute estimates that an average of 35 NMEs, are expected to be approved each year from 2013 to 2017, up from 25 NMEs in 2010 and a return to mid-2000s levels. The reacceleration of industry growth is also the result of dramatically lower expected patent expirations on prescription medications versus the recent past. Sales losses from drug patent expirations peaked at approximately $44 billion in 2012, significantly reducing commercialization initiatives among life sciences companies. By comparison, over the next five years, we expect sales losses from patent expirations to decline to under $16 billion by 2017, just over one-third of the 2012 peak.

Growth in access to healthcare in emerging markets.     We believe there will be significant growth in healthcare spending in emerging markets, driven predominantly by a rapidly growing middle class in countries such as China and India. According to the IMS Institute, it is estimated that spending on pharmaceuticals in emerging markets will expand at a 10 to 13% CAGR through 2017. The rapid growth of emerging markets is making these geographies strategically important to life sciences organizations and, consistent with their approach in the mature markets, we expect these organizations to apply a high degree of sophistication to their commercial operations in these countries. For global companies, this requires highly localized knowledge and information assets, the development of market access strategies and benchmarking performance. In addition, local players are learning that they need to compete on the basis of improved information and analytics.

Financial pressures driving the need for increased efficiency.     Despite expected accelerating growth in the global life sciences market, we believe our clients will face operating margin pressure due to their changing product mix, pricing and reimbursement challenges, and rising costs of compliance. Product portfolios for life sciences companies have shifted toward specialty products with lower peak market sales potential than traditional primary care medicines. Based on our research, we believe large pharmaceutical companies must collectively reduce costs by approximately $35 billion from 2012 to 2017 to maintain historic operating margins. As a result, our clients are looking for new ways to simplify processes and drive operational efficiencies including by using automation, consolidating vendors and adopting new technology options such as hosted and cloud-based applications. This provides opportunities for technology services vendors to capture and consolidate internal spending by providing lower-cost and variable-cost options that lower clients’ research and development selling, marketing and administrative costs.

Evolving need to integrate and structure expanding sources of data.     Over the past decade, many health systems around the world have focused on digitizing medical records. While such records theoretically enhance access to data, relevant information is often unintegrated, unstructured, siloed in disparate software systems, or entered inconsistently. In addition, new

 

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sources of data from the internet, such as social media and information on limited patient pools, and information resulting from enhanced diagnostic technologies are creating new sources of healthcare data.

In order to derive valuable insights from existing and expanding sources of information, clients need access to statistically significant data sets organized into databases that can be queried and analyzed. For example, RWE studies demonstrate the practical and clinical efficacies, which we believe require the aggregation and integration of large clinical data sets across all care settings, types of therapies and patient cohorts. Longitudinal studies require analysis of anonymous patient diagnoses, treatments, procedures and laboratory test results to identify types of patients that will likely best respond to particular therapies. Finally, manufacturers also require the ability to analyze social media activity to identify the specific patient and advocacy groups that influence the adoption of new orphan drugs. This information is highly relevant to all healthcare stakeholders and we believe the opportunity to more broadly apply healthcare data can only be realized through structuring, organizing and integrating new and existing forms of data in conjunction with sophisticated analytics.

Need for demonstrated value in healthcare.     Participants in the healthcare industry are focused on improving quality and reducing costs, both of which require assessment of quality and value of therapies and providers. As a result, physicians no longer make prescribing decisions in isolation, but rather in the context of guidance and rules from payers, integrated delivery networks and governments. We believe life sciences companies are working to bring alignment across constituents on the value of their treatments in order to successfully develop and commercialize new therapies.

There is increasing pressure on life sciences companies to support and justify the value of their therapies. Many new drugs that are being approved are more expensive than existing therapies, and will likely receive heightened scrutiny by payers to determine whether the existing treatment options would be sufficient. Additionally, many new specialty drugs are molecular-based therapies and require a more detailed understanding of clinical factors and influencers that demonstrate therapeutic value. As a result, leading life sciences companies are utilizing more sophisticated analytics for insight-driven decisions.

We believe we are well positioned to take advantage of these global trends in healthcare. Beyond our proprietary information assets, we have developed key capabilities to assess opportunities to develop and commercialize therapies, support and defend the value of medicines and help our clients operate more efficiently through the application of insight-driven decision-making and cost-efficient technology solutions.

Our strengths

Comprehensive information assets and collection network.     The scale of our information assets, breadth and depth of our data supplier network, and our global reach are distinct advantages as clients value quality, consistency and continuity across geographies to accurately measure trends and their performance. With over 10 petabytes of proprietary data sourced from over 100,000 data suppliers covering over 780,000 data feeds globally, we have one of the largest and most comprehensive collections of healthcare information in the world, which includes 85% of the world’s prescriptions by sales revenue and approximately 400 million comprehensive, longitudinal anonymous patient records. We have proprietary healthcare data management and projection methodologies developed over a long history, which enable us to extrapolate more precise

 

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insights from large-scale databases to provide greater granularity and segmentation for our clients. We continue to invest in new technology to source data that is valued by our clients, including social media analytics and mobile health solutions to continuously add records to our data sets, and refine our information and analytic methods. Use of our proprietary encryption technologies allows anonymous information to be linked across different care settings and across data sets, resulting in more complete healthcare information about anonymous patients and a deeper understanding of real world treatment, cost and outcomes.

Scaled healthcare specific technology infrastructure.     To manage our proprietary, global information base, we have built what we believe is one of the largest and most sophisticated information technology infrastructures in healthcare. By processing data from over 45 billion healthcare transactions annually, our infrastructure connects complex healthcare data while applying a wide range of privacy, security, operational, legal and contractual protections for data in response to local law, supplier requirements and industry leading practices. We have four Centers of Excellence and five operation hubs around the world, and approximately 9,300 associates, including over 1,200 experts in areas such as biostatistics, data science, bioinformatics, healthcare economics, outcomes research, epidemiology, pharmacology and key therapeutic areas. Our distributed global operations infrastructure allows us to support client deliverables 24 hours a day, seven days a week, in more than 100 countries. We believe the scale, global footprint and connectivity our infrastructure provides is unique within the healthcare vertical and will be of increasing value to our clients in a period where cost pressures will grow.

Highly differentiated technology services fully integrated with IMS information.     Our ability to integrate technology services with our data creates mission-critical, actionable intelligence that improves our overall value proposition to our clients. Our expanding set of sophisticated human capital resources and technology services offerings combined with our deep understanding of our scaled information assets provides what we believe to be a competitive advantage in an environment where clients require better performance. For example, in 2012, we introduced our healthcare-specific intelligent cloud, IMS One, which helps our clients fully recognize the benefits of our infrastructure. Our cloud is unique in the healthcare industry because it pre-integrates applications with IMS data and provides interoperability across IMS and third party applications. We believe that these benefits both reduce complexity associated with data integration and save our clients time and costs and in synchronizing data across application. We envision that over time IMS One will become an industry standard around which applications are hosted and information shared on an interoperable basis.

Long standing client relationships that are expanding.     The breadth of the intelligent, actionable information we provide is not comprehensively available from any other source and would be difficult and costly for another party to replicate. We believe our information and technology services are deeply integrated into our clients’ workflow. We maintain long-standing relationships and high renewal rates with clients due to the value of the services and solutions we provide, as well as support the need for globally consistent information to enable comprehensive trend analysis at the local, regional, national and multi-country levels. For example, we believe the majority of pharmaceutical companies across more than 50 countries rely on our information to monitor the performance of their sales representatives and use it as a key factor in making ongoing compensation decisions. The average length of our relationships with our top 25 clients is over 25 years and our retention rate for our top 1,000 clients in 2012 was over 99%. Serving over 5,000 clients creates significant opportunity to expand breadth of services we provide to our clients.

 

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Unique and scalable operating model.     We believe we have an attractive operating model due to the scalability of our solutions, the recurring nature of our revenue and the low capital intensity/high free cash flow conversion of our business. Our global infrastructure and healthcare focus allows us to provide large-scale healthcare data, technology and service solutions to clients rapidly and cost-effectively. In 2012, our revenue generated by information offerings represented approximately 62% of our total revenue, of which over 80% is recurring due to its subscription-based nature. Given the fixed-cost nature of our data, we are able to scale our solutions quickly and at low marginal cost. Revenue from our technology services offerings represented approximately 38% of our total revenue, consisting of a mix of projects, large-scale engagements, multi-year outsourcing contracts and multi-year software licenses with approximately 40% being recurring in nature. Additionally, we have executed a multi-year plan to streamline our organization and enhance our technology platform to accommodate more complex analytics and significant additional data volumes with limited incremental costs. We believe our recurring revenue, combined with our leading offerings will continue to contribute to our long-term growth and strong operating margins and flexibility in allocating capital.

Our growth strategy

We believe we are well positioned for continued growth across the markets we serve. Our strategy for achieving growth includes:

Build upon our extensive client relationships .     We have a diversified base of over 5,000 clients in over 100 countries, and have expanded our client value proposition since the Merger to now address a broader market for information and technology services approaching $50 billion. Through the development of IMS One and focused internal and external development of key client applications, such as CRM, channel management, incentive compensation, social media and clinical trials optimization, we have built a platform that allows us to be a more complete partner to our clients. We believe we are in the early stages of penetrating this expanding market within our global life sciences client base. Key elements of this strategy include:

 

 

further integrating our existing services to provide clients with interoperable solutions;

 

 

increasing the number of clients that leverage our technology services offerings, including IMS One;

 

 

using our global presence and efficient operating model to scale new applications and solutions rapidly and efficiently across clients, markets and geographies; and

 

 

expanding the number of clients that choose to drive efficiencies by consolidating their vendor needs with us.

Capitalize on our presence in emerging markets .     We believe China, India, Brazil and Russia, together with many of the 50-plus other emerging markets in which we operate, will accelerate their healthcare spending over the next five years. We have an established presence in these markets, generating $425 million of revenue for the last twelve months ended September 30, 2013 (approximately 17% of our revenue) and growing at an 11% constant dollar CAGR since 2010. We serve both multinational companies and local clients. For example, China has over 5,000 domestic pharmaceutical companies, a number of which are large with global aspirations. Key elements of this strategy include:

 

 

partnering with existing life sciences clients as they expand their businesses into emerging markets;

 

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continuing to grow our existing services in emerging markets while simultaneously introducing new services drawn from our global portfolio; and

 

 

building relationships with local companies that are expanding beyond their home markets by capitalizing on the global credibility and consistency of our platform.

Continue to innovate.     We believe a significant opportunity exists to continue to enhance our information and analytics offerings and expand our technology services offerings to capitalize on the evolving healthcare environment. Our recent investments in human capital, technology and services capabilities position us to continue to pursue rapid innovation within the life sciences sector and the broader healthcare marketplace. Examples of recent innovations include:

 

 

development of applications in the mobile health space including AppScript, an enterprise solution for providers and payers to establish a curated formulary of mobile applications that can be prescribed securely and reconciled by prescribers just like drug prescriptions, and AppNucleus, which allows developers to build mobile applications with secure containers for patient information on devices and secure communication channels to physicians and other applications; and

 

 

development of Evidence360, a collection of specialized technologies for RWE, including tailor-made data warehouses integrating our data sets with patient registries and a cohort builder tool facilitating efficient definitions and tracking of narrow cohorts to determine outcomes in small patient populations.

Expand portfolio through strategic acquisitions.     We have and expect to continue to acquire assets and businesses that strengthen our value proposition to clients. We have developed an internal capability to source, evaluate and integrate acquisitions that have created value for stockholders. Since the beginning of 2011, we have invested approximately $587 million of capital in 22 acquisitions. As the global healthcare landscape evolves, we expect that there will be a growing number of acquisition opportunities across the life sciences, payer and provider sectors. We will continue to invest in strategic acquisitions to grow our platform and enhance our ability to provide more services to our clients and expect to seek opportunities, primarily in the areas of technological platforms, data suppliers and consulting services providers.

Expand the penetration of our offerings to the broader healthcare marketplace.     We believe that substantial opportunities exist to expand penetration of our addressable market and further integrate our offerings in a broader cross-section of the healthcare marketplace. Key elements of this strategy include:

 

 

continuing to sell innovative solutions to life sciences clients in areas we have recently entered, such as clinical trial analytics;

 

 

leveraging our comprehensive collection of healthcare information to provide critical insights to payers and providers, enabling advanced patient analytics and population health management; and

 

 

utilizing our proprietary information and analytics to address the evolving needs of the broader healthcare marketplace. The development of our MD360 Provider Performance Management platform highlights augmentation of our core capabilities to penetrate a new and growing area of healthcare information management by using our proprietary library of clinical and cost measures to determine and publish highly specific performance targets for providers.

 

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Our offerings

We offer hundreds of distinct services, applications and solutions to help our clients make critical decisions and perform better. While historically our offerings focused mainly in information and analytics, we now routinely integrate information with technology services to ensure our clients receive the most value from our information to enable them to incorporate insights into their workflow. These offerings complement each other and can provide enhanced value to our clients when delivered together, with each driving demand for the other.

Our principal offerings include:

National information offerings.     Our national offerings comprise unique services in more than 70 countries that provide consistent country level performance metrics related to sales of pharmaceutical products, prescribing trends, medical treatment and promotional activity across multiple channels including retail, hospital and mail order. These products are an integral part of critical processes in life science companies around the world and are also used extensively by the investment and financial sectors that deal with life science companies. Clients use these products to measure relative performance, assess market opportunity, determine brand and company strategy, and understand market dynamics. The products are available in a range of frequencies from weekly to annually, and are delivered in a variety of formats, including online hosted, PCs and mobile platforms.

Sub-national information offerings.     Our sub-national offerings comprise unique services in more than 50 countries that provide a consistent measurement of sales or prescribing activity at the regional, zip code and individual prescriber level (depending on regulation in country). These products are used extensively, with a majority of pharmaceutical sales organizations within these countries dependent on these services to set goals, determine resourcing, measure performance and calculate compensation.

Commercial services.     We provide a broad set of strategic, analytic and support services to help the commercial operations of life sciences companies successfully transform their commercial models, engage more effectively with the marketplace and reduce their operating costs. Our global consulting teams leverage local market knowledge, therapeutic expertise and our global information resources to assist our clients with portfolio, brand and commercial strategy, pricing and market access. We leverage our global technology infrastructure and deep understanding of information and our clients’ operations to provide analytic services to sales operations, market research and managed markets and provide clients with interoperable solutions rather than individual products and services.

Real-World Evidence (RWE) solutions .    We integrate information from medical claims, prescriptions, electronic medical records, biomarkers and government statistics into anonymous, longitudinal patient journeys that provide detailed views of treatment patterns, disease progression, therapeutic switching and concomitant diseases and treatments. Combined with our health economics and outcomes research expertise, we leverage this information to help biopharmaceutical companies, health plans, providers and government agencies evaluate how treatments perform in real-world settings.

Commercial technology solutions .    We provide an extensive range of hosted and cloud-based applications and associated implementation services. The applications, hosted on IMS One, support a wide range of commercial processes including multi-channel marketing, CRM, performance management, incentive compensation, territory alignment, roster management and

 

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call planning. These solutions are used by sales and marketing operations to manage, optimize and execute their sales activities and brand campaigns. We combine our data, expert analysis and therapeutic knowledge to create a SaaS based analytics solution called AnalyticsLink. Based on proprietary linking and integration of our country data sets into a global repository, we provide an offering called MIDAS which provides a leading source of insight into international market dynamics and is used by most large pharmaceutical companies.

Clinical solutions.     By bringing together our information with advanced predictive modeling technology and sophisticated data visualization software, we help biopharmaceutical companies and CROs better design, plan, execute and track clinical trials. Our solutions allow our clients to dynamically model the size of patient populations for specific clinical protocols, estimate time and cost to recruit patients given a specific protocol and investigator selection, and optimize country allocation and patient recruitment. For payers and providers, we integrate client data with our information and proprietary analytics, to enable risk-sharing and pay-for-performance programs, network design and management, and population health management.

Our data suppliers

We maintain a diverse supplier base to support the information needs of our clients. Over the past six decades, we have developed and maintained strong relationships with data suppliers in each market in which we operate. We have historical connections with many of the relevant trade associations and professional associations. We devote significant human and financial resources to our data collection efforts and are adding new suppliers and new data sources every year to provide the most relevant information to our clients. Many of our data suppliers are also clients. For example, we offer performance monitoring and segmentation services to retail pharmacies, services that have become critical to supporting retailer growth objectives. Developing and providing services to suppliers supports a continuation of long-term supply relationships.

Our technology

We maintain what we believe is one of the largest and most sophisticated information technology infrastructures in healthcare globally. Our distributed global operations infrastructure supports client deliverables 24 hours a day, seven days a week, in more than 100 countries. Our primary data center located in Carlstadt, New Jersey manages and operates our technology infrastructure and our global network, which serves as the backbone for processing over 45 billion healthcare transactions annually. In addition, we maintain COEs and operations hubs around the world, each with a focus area of expertise.

 

 

In India, a team of over 1,200 technology experts support services delivery, software development and data management. Analytical services are deployed using common methodologies across each offering to promote consistent quality for each client deliverable.

 

 

In Manila, The Philippines, we combine IT and medical resources (with over 500 specialists in healthcare and IT) to clean and standardize information from data suppliers around the world.

 

 

Beijing, China is home to our innovative and proprietary statistical methodologies. More than 200 experts manage the statistical validity of data worldwide and guide how the data can be used.

 

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In Madrid, Spain, our experts code and manage core reference data worldwide. More than 200 IT and medical specialists with native skills in over 15 languages link information assets through in-house developed software platforms for master data management.

 

 

Our Offering Development and Delivery hubs are based in London, United Kingdom, Plymouth Meeting, Pennsylvania, and in San Francisco, California. Our product development teams leverage methodologies to release technology platforms and business intelligence tools that facilitate our clients’ ability to gain insight into information. Our applications are deployed on a common technical architecture allowing re-use across geographical locations and providing a common interface for end users.

 

 

Central and regional production focused COEs are located across the globe to efficiently support the delivery of IMS services. The Manila COE is the main global hub that provides cleaning and standardizing services, production management, and quality control operations. The Madrid COE focuses on maintaining our reference management operations. The Chile based OCLA Regional hub provides time zone sensitive production services to the Latin America, Canada and U.S. business units. The Istanbul hub provides language specific production services to the North Africa, South Europe, Middle East and East Europe regions.

Our clients

Sales to companies in life sciences, including pharmaceutical companies, biotechnology companies, device and diagnostic companies, and consumer health companies, accounted for approximately 90% of our revenue in 2012. All of the top 100 global pharmaceutical and biotechnology companies are clients, and many of these companies subscribe to reports and services in many countries. Other clients include payers, government and regulatory agencies, providers, pharmaceutical distributors, and pharmacies. Our client base is broad in scope and enables us to avoid dependence on any single client. No single client individually accounted for greater than 8% of our gross revenue in 2012, 2011 and 2010.

Our competition

We compete with a broad and diverse set of businesses. While we believe no competitor provides the combination of geographical reach and breadth of our services, we generally compete in the countries in which we operate with other information, analytics, technology, services and consulting companies, as well as with the in-house capabilities of our clients. Also, we compete with certain government agencies, private payers and other healthcare stakeholders that provide their data directly to others. In addition to country-by-country competition, we have a number of regional and global competitors in the marketplace as well. Our offerings compete with various firms, including Accenture, Cognizant Technology Solutions, Covance, Deloitte, Evidera, GfK, Health Market Science, IBM, Infosys, inVentiv Health, Kantar Health, McKinsey, Nielsen, OptumInsight, Parexel, Press Ganey, Quintiles, RTI Health Solutions, Symphony Health Solutions, Synovate Healthcare, The Advisory Board, Trizetto, Verisk and ZS Associates. We also compete with a broad range of new entrants and start-ups that are looking to bring new technologies and business models to healthcare information services and technology services.

Privacy management and security

Patient health information is among the most sensitive of personal information, and it is critically important that information about an individual’s healthcare is properly protected from

 

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inappropriate access, use and disclosure. For decades, our market research business was built using health information that did not identify a patient—long before the passage of HIPAA or other privacy laws. We continue to engage in strong privacy and security practices in the collection, processing, analysis, reporting and use of information. We employ a wide variety of methods to manage privacy and security, including:

 

 

governance, frameworks and models to promote good decision making and accountability;

 

 

a layered approach to privacy and security management to avoid a single point of failure;

 

 

ongoing evaluation of privacy and security practices to promote continuous improvement;

 

 

use of safeguards and controls, including:

 

   

technical safeguards—for example, technology and related policies and procedures to protect healthcare information and control access to it;

 

   

administrative safeguards—for example, administrative actions and related policies and procedures to manage the selection, development, implementation and maintenance of measures to protect healthcare information;

 

   

physical safeguards—for example, physical measures and related policies and procedures to protect electronic information systems and related buildings and equipment from natural and environmental hazards, and unauthorized intrusion;

 

 

collaboration with data suppliers and trusted third parties for our syndicated data offerings to remove identifiable information or employ effective encryption or other techniques to render information anonymous before data is delivered to us; and

 

 

working closely with leading researchers, policy makers, thought leaders and others in a variety of fields relevant to the application of effective privacy and security practices, including statistical, epidemiological and cryptographic sciences, legal, information security and compliance, and privacy.

Our intellectual property

We create, own and maintain a wide array of intellectual property assets which, in the aggregate, are of material importance to our business. Our intellectual property assets include: patents and patent applications related to our innovations, products and services; trademarks and trademark applications related to our brands, products and services; copyrights in software and databases; trade secrets relating to data processing, statistical methodologies, editing and bridging techniques, business rules and other aspects of our business; and other intellectual property rights and licenses of various kinds. We are licensed to use certain technology and other intellectual property rights owned and controlled by others, and, similarly, other companies are licensed on a non-exclusive basis to use certain technology and other intellectual property rights owned and controlled by us.

We seek to protect our intellectual property assets through patent, copyright, trade secret, trademark and other laws of the United States and other jurisdictions, and through confidentiality procedures and contractual provisions. A patent generally has a term of 20 years from the time the full patent application is filed. As we build a patent portfolio over time, the terms of individual patents will vary. While patents can help maintain the competitive differentiation of certain

 

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products and services and maximize the return on research and development investments, no single patent is in itself essential to our business as a whole. Further, in order to replace expiring patents and licenses or replace obsolete intellectual property, we attempt to obtain new intellectual property through protection of key innovation from a combination of our ongoing research and development activities, acquisitions of other companies and licensing of intellectual property from third parties. We enter into confidentiality and invention assignment agreements with employees and contractors, and non-disclosure agreements with third parties with whom we conduct business, in order to secure ownership rights to, limit access to, and restrict disclosure of our proprietary information.

The technology and other intellectual property rights owned and licensed by us are of importance to our business, although our management believes that our business, as a whole, is not dependent upon any one intellectual property or group of such properties. We consider our trademark and related names, marks and logos to be of material importance to our business, and we have registered or applied for registration for certain of these trademarks including IMS Health, IMS, the IMS logo, IMS One, MIDAS, Xponent, DDD, AppScript, AppNucleus and Evidence360, in the United States and other jurisdictions and aggressively seek to protect them.

Our employees

As of the date of this prospectus we have approximately 9,300 employees worldwide. Almost all of these employees are full-time. None of our U.S. employees are represented by a union. In Belgium, France, Germany, Italy, the Netherlands and Spain, we have Works Councils, which are a legal requirement in those countries. We also have a European Works Council, which is a requirement under European Union laws. Management considers its relations with our employees to be good and to have been maintained in a normal and customary manner.

Properties

Our executive offices are located at 83 Wooster Heights Road, Danbury, Connecticut in a leased property (approximately 24,000 square feet).

Our property is geographically distributed to meet our sales and operating requirements worldwide. Our properties and equipment are generally considered to be both suitable and adequate to meet current operating requirements and virtually all space is being utilized.

As of the date of this prospectus we own one property in the United States located in Pennsylvania (approximately 17,000 square feet).

Our active owned properties located outside the United States include: one property in Buenos Aires, Argentina (approximately 12,000 square feet); one property in Caracas, Venezuela (approximately 8,800 square feet); two properties in Los Ruices, Venezuela (approximately 4,000 square feet); and one property in Lisbon, Portugal (approximately 10,000 square feet). We have also entered into an agreement to purchase two facilities in Bangalore, India (approximately 374,000 square feet), which we expect to close prior to the closing of this offering.

Our operations are also conducted from 26 leased offices located throughout the United States and 93 leased offices in non-U.S. locations.

We own or lease a variety of computers and other equipment for our operational needs. We continue to upgrade and expand our computers and related equipment in order to increase efficiency, enhance reliability and provide the necessary base for business expansion.

 

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Legal proceedings

As a company operating in more than 100 countries, we are involved in a variety of legal and tax proceedings, claims and litigation that arise from time to time in the ordinary course of business. These actions may be commenced by various parties, including competitors, clients, current or former employees, government agencies or others. We record a provision with respect to a proceeding, claim or litigation when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. However, even in instances where we have recorded an estimated liability, we are unable to predict with certainty the final outcome of the matter or whether resolution of the matter will materially affect our results of operations, financial position or cash flows. As additional information becomes available, we adjust our assessment and estimates of such liabilities accordingly.

Further, we routinely enter into agreements with our suppliers to acquire data and with our clients to sell data, all in the normal course of business. In these agreements, we sometimes agree to indemnify and hold harmless the other party for any damages such other party may suffer as a result of potential intellectual property infringement and other claims related to the use of the data. We have not accrued liability with respect to these matters, as the exposure is considered remote.

Based on our review of the latest information available, management does not expect the impact of pending tax and legal proceedings, claims and litigation, either individually or in the aggregate, to have a material adverse effect on our results of operations, cash flows or financial position. However, one or more unfavorable outcomes in any claim or litigation against us could have a material adverse effect for the period in which it is resolved. The following is a summary of the more significant legal matters involving the company.

On June 5, 2009, Associacao Nacional de Farmacias (“ANF”) and Farminveste – Investimentos, Participacoes e Gestuo, S.A. (“Farminveste”) filed claims against IMS Health Portugal, Lda. (“IMS Portugal”) for breaching a 2008 agreement among the parties for approximately 21 million. IMS Portugal counterclaimed against ANF and Farminveste for approximately 19 million for damages and loss. In 2011, the Arbitration Tribunal ruled that ANF was liable to IMS Portugal for up to 14 million for damage caused to IMS Portugal’s business. The actual amount of damages will be adjudicated in a separate proceeding before the Lisbon Court of First Instance and the date has yet to be set. Prior to the commencement of the arbitration proceeding, the Lisbon Court of First Instance separately seized approximately 18.3 million from IMS Portugal in a non-interest bearing court escrow account. Under Portuguese civil procedure, the seized funds will remain in court escrow until there is a final and unappealable judicial judgment in respect of the arbitration proceeding. The arbitration decision was appealed by ANF in June 2011. The appeal will be heard before the Lisbon Court of Appeals, and either party will subsequently have a further right of appeal to the Supreme Court of Portugal.

On July 24, 2013, Symphony Health Solutions and two of its subsidiaries (collectively “Symphony”) filed a lawsuit in the U.S. District Court for the Eastern District of Pennsylvania against IMS Health alleging anticompetitive business practices in violation of the Sherman Antitrust Act and Pennsylvania state law. The complaint seeks trebled actual damages in an unspecified amount, punitive damages, costs and injunctive relief. IMS Health asserted various counterclaims against Symphony, including for misappropriation of trade secrets , tortious interference and unfair competition. We believe the complaint is without merit, reject all claims raised by Symphony and intend to vigorously defend IMS Health’s position and pursue the counterclaims.

 

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On December 20, 2013, IMS Health filed a lawsuit in the U.S. District Court for the District of Delaware against Symphony for infringement of three patents seeking injunctive relief and damages. While we intend to vigorously litigate these patents and pursue our legal rights, we can offer no assurance as to when the pending litigation will be decided or whether the lawsuit will be successful.

Our wholly-owned subsidiary, IMS Government Solutions Inc., is primarily engaged in providing services and products under contracts with the U.S. government. U.S. government contracts are subject to extensive legal and regulatory requirements and, from time to time, agencies of the U.S. government have the ability to investigate whether contractors’ operations are being conducted in accordance with such requirements. IMS Government Solutions discovered potential noncompliance with various contract clauses and requirements under its General Services Administration Contract which was awarded in 2002 to its predecessor company, Synchronous Knowledge Inc. (Synchronous Knowledge Inc. was acquired by IMS Health in May 2005). Upon discovery of the potential noncompliance, we began remediation efforts, promptly disclosed the potential noncompliance to the U.S. government, and was accepted into the Department of Defense Voluntary Disclosure Program. We filed its Voluntary Disclosure Program Report on August 29, 2008. We are currently unable to determine the outcome of these matters pending the resolution of the Voluntary Disclosure Program process and its ultimate liability arising from these matters could exceed its current reserves.

For additional information, see Note 6 to our consolidated financial statements for the nine month period ended September 30, 2013 included elsewhere in this prospectus and “Risk factors—Risks related to our business—Litigation or regulatory proceedings could have a material adverse effect on our operating results and financial condition.”

 

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Management

Executive officers and directors

Below is a list of the names, ages as of date of this prospectus, positions and a brief account of the business experience of the individuals who serve as our executive officers and directors as of the date of this prospectus.

 

Name    Age    Position    Director/officer
of IMS since

 

Ari Bousbib

   52    Director; Chairman, Chief Executive Officer & President    2010

Ronald E. Bruehlman

   53    Senior Vice President & Chief Financial Officer    2011

Harvey A. Ashman

   51    Senior Vice President, General Counsel, External Affairs & Corporate Secretary    2009

Kevin C. Knightly

   52    Senior Vice President, Supply Management    2006

Stefan C. Linn

   48    Senior Vice President, Strategy & Global Pharma Solutions    2010

Satwinder Sian

   49    Senior Vice President, Global Technology & Operations    2010

Paul M. Thomson

   64    Senior Vice President, Human Resources & Administration    2010

André Bourbonnais

   51    Director    2010

John G. Danhakl

   57    Director    2010

David Lubek

   34    Director    2013

Sharad S. Mansukani

   44    Director    2010

Nehal Raj

   35    Director    2011

Jeffrey K. Rhodes

   39    Director    2011

Ronald A. Rittenmeyer

   66    Director    2010

Todd B. Sisitsky

   42    Director    2010

Bryan M. Taylor

   43    Director    2010

 

Ari Bousbib, Chairman, Chief Executive Officer and President, Director

Mr. Bousbib was appointed Chief Executive Officer of IMS Health in August 2010 and was appointed to the additional role of Chairman in December 2010. Prior to joining IMS Health, Mr. Bousbib spent 14 years at United Technologies Corporation (“UTC”). From May 2008 until September 2010, he served as President of UTC’s Commercial Companies. From April 2002 until May 2008, Mr. Bousbib was President of Otis Elevator Company, and from 2000 to 2002 he served as its Chief Operating Officer. Previously, Mr. Bousbib was a partner at Booz Allen Hamilton. Mr. Bousbib currently serves on the board of directors of The Home Depot, Inc., and is a member

 

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of the Harvard Medical School Health Care Policy Advisory Council. He previously served on the boards of directors of Best Buy, Inc. Mr. Bousbib holds Master of Science Degree in Mathematics and Mechanical Engineering from the Ecole Superieure des Travaux Publics, Paris, and an M.B.A from Columbia University. Because of Mr. Bousbib’s extensive leadership experience, we believe he is well qualified to serve on our board of directors.

Ronald E. Bruehlman, Senior Vice President and Chief Financial Officer

Mr. Bruehlman was appointed Senior Vice President and Chief Financial Officer of IMS Health in July 2011. Prior to joining IMS, he worked for 23 years at UTC, advancing through finance positions of increasing responsibility. He was Vice President, Operations Planning and Analysis, of UTC’s Commercial Companies from 2008 to 2010. From June 2009 until April 2011, Mr. Bruehlman also held the role of Vice President, Business Development for UTC, where he led the corporation’s global strategy and development activities. From June 2005 until May 2008, he was Vice President and Chief Financial Officer of Carrier Corporation. Prior to that, Mr. Bruehlman was Vice President, Financial Planning and Analysis for UTC and also served as Director, Investor Relations of UTC. Mr. Bruehlman holds a B.S. in Economics from the University of Delaware, and an M.B.A. from the University of Chicago.

Harvey A. Ashman, Senior Vice President, General Counsel, External Affairs and Corporate Secretary

Mr. Ashman was appointed Senior Vice President, General Counsel, External Affairs and Corporate Secretary of IMS Health in October 2009. He served as Vice President, External Affairs and Associate General Counsel for the Americas region from April 2008 until October 2009, and Vice President and Associate General Counsel for the Americas region from April 1999 until April 2008. Mr. Ashman joined IMS Health’s predecessor company, IMS International, Inc., in October 1988 as a staff attorney and has held roles of increasing responsibility from that time through the present. Mr. Ashman holds a B.A. from the University of Massachusetts, Amherst, and a J.D. from the New England School of Law.

Kevin C. Knightly, Senior Vice President, Supply Management

Mr. Knightly was appointed Senior Vice President, Supply Management of IMS Health in January 2011 and served as Senior Vice President, Pharma Business Management from 2007 until 2010. Prior to that, Mr. Knightly served as President of the EMEA region. He has also served as Chief Financial Officer for IMS Health North America and Europe, and Senior Vice President, Marketing and Major Markets, EMEA. Mr. Knightly joined an IMS Health affiliate in 1983 and since then has held a number of senior financial, operations, marketing and general management posts. He holds a B.S. in Economics and Accounting from the College of the Holy Cross, and an M.B.A. from New York University’s Stern Business School.

Stefan C. Linn, Senior Vice President, Strategy and Global Pharma Solutions

Mr. Linn was appointed Senior Vice President, Strategy and Global Pharma Solutions of IMS Health in September 2012. He served as Senior Vice President, Strategy, Innovation and Development from January 2011 until September 2012, and Senior Vice President, Strategy and Business Development from October 2010 until January 2011. From March 2008 until October

 

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2010, Mr. Linn was a Director at TPG. From August 2001 until March 2007, Mr. Linn was Senior Vice President at McKesson and also served as President of Health Mart Systems, Inc. Prior to that Mr. Linn was Vice President of Marketing at Merck-Medco from 1996 until 2001. He also worked for McKinsey & Company in London. Mr. Linn holds a B.A. in Economics from the University of Dallas, and an M.B.A. from the University of California at Berkeley.

Dr. Satwinder Sian, Senior Vice President, Global Technology & Operations

Dr. Sian began serving as Senior Vice President, Global Technology & Operations on January 1, 2014. He has held various leadership roles at IMS Health. He served as Senior Vice President, Global Technology Services & Operations from September 2012 until January 2014. From June 2011 until September 2012, Dr. Sian served as Senior Vice President, Global Pharma Solutions. From July 2010 until June 2011, he served as President, China. From January 2006 until June 2010, he was General Manager, Commercial Effectiveness. From 2003 until 2006 he managed the Consulting & Services business in EMEA. Dr. Sian also served as Vice President and General Manager, Consumer Health. He earned a Ph.D. in Information Technology from Imperial College, London, and holds an M.B.A. from the Management School, Open University in the United Kingdom.

Paul M. Thomson, Senior Vice President, Human Resources and Administration

Mr. Thomson was appointed Senior Vice President, Human Resources and Administration in January 2011. In October 2010, Mr. Thomson joined IMS Health as Senior Vice President, Human Resources following a 37-year career at UTC. At UTC he served as Vice President, Human Resources for Otis Elevator Company. In this role, Mr. Thomson led the company’s worldwide human resources organization covering global operations with a combined employee population of 60,000. Prior to that, he held a number of human resources roles of increasing responsibility with UTC, including Vice President, Human Resources at Sikorsky Aircraft Corporation from 1991 to 1998; Vice President, US & International Programs, Sikorsky Aircraft from 1997 to 1998; UTC Director, Compensation and Benefits from 1988 to 1991; and several human resources leadership roles at Otis Elevator and Pratt & Whitney. Mr. Thomson holds a B.S. in Sociology and an M.B.A. from the University of Connecticut. He also received an M.S. in Management from the Massachusetts Institute of Technology.

André Bourbonnais, Director

Mr. Bourbonnais has served as a Director of IMS Health since February 2010. Mr. Bourbonnais has more than 20 years of experience in executing transactions and he is responsible for leading private equity investments in the CPPIB portfolio. Prior to joining CPPIB in 2006, Mr. Bourbonnais managed a combined private equity portfolio in financial services, telecommunications, media and entertainment sectors for another Canadian pension plan manager. Prior to that, he spent several years with a leading telecommunications company mostly as a senior officer responsible for corporate development and legal affairs. He also currently serves on the boards of directors of Anglian Water Group, Ltd., and serves as Chair of Air Distribution Technologies Inc. Mr. Bourbonnais holds an L.L.M. from the London School of Economics and Political Science, and an L.L.L. from the University of Ottawa. Because of his extensive experience in leadership and financial management, we believe Mr. Bourbonnais is well qualified to serve on our board of directors.

 

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John G. Danhakl, Director

Mr. Danhakl has served as a Director of IMS Health since February 2010. He is Managing Partner at LGP, which he joined in 1995. Previously, Mr. Danhakl was a Managing Director of Donaldson, Lufkin & Jenrette Securities Corporation, which he joined in 1990. From 1985 until 1990, Mr. Danhakl was Vice President in corporate finance at Drexel Burnham Lambert, Inc. Mr. Danhakl currently serves on the boards of directors of the following publicly traded companies: Savers, Inc., Air Lease Corporation, J. Crew Group, Inc., The Neiman Marcus Group, Inc., Petco Animal Supplies, Inc. and Arden Group, Inc. He previously served as a director of Big 5 Sporting Goods Corporation, Communications & Power Industries, Diamond Triumph Auto Glass, Inc., Liberty Group Publishing, Inc., MEMC Electronic Materials, Inc., Phoenix Scientific, Inc., Rite Aid Corporation, and VCA Antech, Inc. Mr. Danhakl holds a B.A. in Economics from the University of California at Berkeley, and an M.B.A. from Harvard Business School. Because of his extensive experience serving as a public company director and his knowledge of corporation finance, we believe Mr. Danhakl is well qualified to serve on our board of directors.

David Lubek, Director

Mr. Lubek has served as a director of IMS Health since October 2013. He is a Principal in the Direct Private Equity Group of CPPIB. Prior to joining CPPIB in 2008, Mr. Lubek worked at CIBC World Markets in the Mergers & Acquisitions investment banking group. He also is a Chartered Financial Analyst Charterholder. Mr. Lubek holds an M.B.A. from the Kellogg School of Management at Northwestern University, and a B.B.A. from the Schulich School of Business at York University. Because of his extensive experience in business and finance, we believe Mr. Lubek is well qualified to serve on our board of directors.

Sharad S. Mansukani, Director

Dr. Mansukani has served as a Director of IMS Health since April 2010. Dr. Mansukani has served as a TPG Senior Advisor since 2005. He serves on the board of directors of Surgical Care Affiliates, Inc., IASIS Healthcare Corp., Immucor Inc. and Par Pharmaceuticals Companies, Inc. Dr. Mansukani serves as Strategic Advisor to the board of directors of CIGNA and previously served as Vice Chairman of HealthSpring Inc. Dr. Mansukani also serves on the board of directors of the Children’s Hospital of Philadelphia and on the editorial boards of the American Journal of Medical Quality , Managed Care , Biotechnology Healthcare and American Health & Drug Benefits . Dr. Mansukani was appointed to Medicare’s Payment Advisory and Oversight Committee, and he was previously Senior Advisor to CMS and a member of the Medicare Reform Executive Committee. Dr. Mansukani previously served on the faculty at the University of Pennsylvania and at Temple University School of Medicine. Dr. Mansukani completed his residency and fellowship in ophthalmology at the University of Pennsylvania School of Medicine and a fellowship in quality management and managed care at the Wharton School of the University of Pennsylvania. Because of his extensive experience in leadership and the healthcare sector, we believe Dr. Mansukani is well qualified to serve on our board of directors.

Nehal Raj, Director

Mr. Raj has served as a Director of IMS Health since December 2011. Mr. Raj joined TPG in 2006, where he is a Principal and helps lead the firm’s investments in the technology sector. Prior to joining TPG, Mr. Raj was a technology private equity investor at Francisco Partners and a technology mergers

 

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and acquisitions professional at Morgan Stanley. Mr. Raj also serves as a director of Aptina Imaging, CCC Information Services, Decision Insight Information Group and Symbility Solutions, Inc., and previously was a director of Intergraph Corporation. He holds both an A.B. in Economics and an M.S. in Industrial Engineering and Engineering Management from Stanford University. He also holds an M.B.A from Harvard Business School. Because of his experience in finance and the technology industries, we believe Mr. Raj is well qualified to serve on our board of directors.

Jeffrey K. Rhodes, Director

Mr. Rhodes has served as a Director of IMS Health since December 2011. Mr. Rhodes is a Principal of TPG, where he is a leader of the firm’s investment activities in the healthcare services and pharmaceutical/medical device sectors. Mr. Rhodes serves on the board of directors of Surgical Care Affiliates, Inc., Biomet Inc., Immucor Inc, and Par Pharmaceuticals Companies, Inc. Prior to joining TPG in 2005, Mr. Rhodes worked at McKinsey & Company and Article 27 LTD, a software company. Mr. Rhodes earned his M.B.A. from the Harvard Business School, where he was a Baker Scholar, and earned his undergraduate degree in Economics from Williams College, where he graduated summa cum laude . Because of his extensive experience in healthcare services and corporate governance, we believe Mr. Rhodes is well qualified to serve on our board of directors.

Ronald A. Rittenmeyer, Director

Mr. Rittenmeyer has served as a Director of IMS Health since April 2010. He is Chairman, President and CEO of Expert Global Solutions, Inc. Previously, Mr. Rittenmeyer served as Chairman, CEO and President of Electronic Data Systems Corporation from 2005 until 2008. Prior to that, he served as Chief Operating Officer of Electronic Data Systems Corporation from October 2005 until September 2007 (including service as Co-Chief Operating Officer until May 2006) and as Executive Vice President, Global Service Delivery from July 2005 until December 2006. Mr. Rittenmeyer also serves on the boards of directors of American International Group, Inc. and Tenet Health Care Corporation. He previously served as a director of EDS and RH Donnelley (presently Dex One Corporation). Mr. Rittenmeyer holds a B.A. in Commerce and Economics from Wilkes University, and his M.B.A. from Rockhurst University. Because of his leadership experience, over 30 years of business experience and extensive experience serving on public company boards, we believe Mr. Rittenmeyer is well qualified to serve on our board of directors.

Todd B. Sisitsky, Director

Mr. Sisitsky has served as a Director of IMS Health since February 2010. Mr. Sisitsky is a Partner of TPG where he leads TPG’s investment activities in the healthcare sector globally. Mr. Sisitsky serves on the board of directors of Surgical Care Affiliates, Inc., Aptalis Pharma, Inc., formerly Axcan Pharma, IASIS Healthcare Corp., HealthScope Ltd., Immucor Inc and Par Pharmaceuticals Companies, Inc. and previously served on the boards of Biomet Inc. and Fenwal Inc. He also serves on the board of the Campaign for Tobacco Free Kids, a global not-for-profit organization, and the Dartmouth Medical School Board of Overseers. Prior to joining TPG in 2003, Mr. Sisitsky worked at Forstmann Little & Company and Oak Hill Capital Partners. Mr. Sisitsky earned an M.B.A. from the Stanford Graduate School of Business, where he was an Arjay Miller Scholar, and earned his undergraduate degree from Dartmouth College, where he graduated summa cum laude . Because of his extensive experience in leadership, business, and healthcare, we believe Mr. Sisitsky is well qualified to serve on our board of directors.

 

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Bryan M. Taylor, Director

Mr. Taylor has served as a Director of IMS Health since February 2010. He joined TPG in March 2004, and is a Partner in the firm’s Technology Group, where he is responsible for investments in software, data/analytics and technology services. Prior to joining TPG, Mr. Taylor served as a Managing Director of Lawson International AB. He also co-founded Symphony Technology Group. Mr. Taylor also served as a director of Vertafore, Inc. and Lawson International AB. He holds a B.A. in Political Science from Stanford University, and an M.B.A. from the Stanford Graduate School of Business. Because of his experience in finance and technology services, we believe Mr. Taylor is well qualified to serve on our board of directors.

Board composition and director independence

Our business and affairs are managed under the direction of the board of directors. Our board of directors is currently composed of ten directors: Messrs. Raj, Rhodes, Sisitsky and Taylor, who were designated for nomination as directors by TPG; Messrs. Bourbonnais and Lubek, who were designated for nomination as directors by CPPIB-PHI; Mr. Danhakl, who was designated for nomination as a director by LGP; Messrs. Mansukani and Rittenmeyer, who were designated for nomination as directors jointly by TPG and CPPIB-PHI; and Mr. Bousbib, who serves as a director because he is our Chief Executive Officer. Currently, each director is elected for a one-year term. A stockholders’ agreement between us and our current stockholders contains an agreement among the parties pursuant to which each of the Sponsors has certain rights to nominate individuals to serve on our board of directors.

Following the completion of this offering, we expect to be a “controlled company” under the rules of the NYSE because more than 50% of our outstanding voting power will be held by the Sponsors. See “Principal and selling stockholders.” We intend to rely upon the “controlled company” exception relating to the board of directors and committee independence requirements under the rules of the NYSE. Pursuant to this exception, we will be exempt from the rules that would otherwise require that our board of directors consist of a majority of independent directors and that our leadership development and compensation committee and nominating and governance committee be composed entirely of independent directors. The “controlled company” exception does not modify the independence requirements for the audit committee, and we intend to comply with the requirements of the Exchange Act and the rules of the NYSE, which require that our audit committee have at least one independent director upon consummation of this offering, consist of a majority of independent directors within 90 days following the effective date of the registration statement of which this prospectus forms a part and exclusively of independent directors within one year following the effective date of the registration statement of which this prospectus forms a part.

Our board of directors has determined that all of our directors, other than                     , are independent directors under the rules of the NYSE. In making this determination, the board of directors considered the relationships that each such non-employee director has with our company and all other facts and circumstances that the board of directors deemed relevant in determining their independence, including beneficial ownership of our common stock.

Board committees

Upon the completion of this offering, our board of directors will have three standing committees: the audit committee; the leadership development and compensation committee;

 

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and the nominating and corporate governance committee. Each of the committees operates under its own written charter adopted by the board of directors, each of which will be available on our website upon closing of this offering.

Audit committee

Following this offering, our audit committee will be composed of                     , with                      serving as chairman of the committee. We anticipate that, prior to the completion of this offering, our audit committee will determine that                      meets the definition of “independent director” under the rules of the NYSE and under Rule 10A-3 under the Exchange Act. Within 90 days following the effective date of the registration statement of which this prospectus forms a part, we anticipate that the audit committee will consist of a majority of independent directors, and within one year following the effective date of the registration statement of which this prospectus forms a part, the audit committee will consist exclusively of independent directors. None of our audit committee members simultaneously serves on the audit committees of more than three public companies, including ours. Our board of directors has determined that                      is an “audit committee financial expert” within the meaning of the SEC’s regulations and applicable listing standards of the NYSE. The audit committee’s responsibilities upon completion of this offering will include:

 

 

appointing, approving the compensation of, and assessing the qualifications, performance and independence of our independent registered public accounting firm;

 

 

pre-approving audit and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;

 

 

reviewing the internal audit plan with the independent registered public accounting firm and members of management responsible for preparing our financial statements;

 

 

reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us;

 

 

reviewing the adequacy of our internal control over financial reporting;

 

 

establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns;

 

 

recommending, based upon the audit committee’s review and discussions with management and the independent registered public accounting firm, the inclusion of our audited financial statements in our Annual Report on Form 10-K;

 

 

reviewing and assessing the adequacy of the committee charter and submitting any changes to the board of directors for approval;

 

 

monitoring our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters;

 

 

preparing the audit committee report required by the rules of the SEC to be included in our annual proxy statement; and

 

 

reviewing and discussing with management and our independent registered public accounting firm our earnings releases.

 

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Leadership development and compensation committee

Following this offering, our leadership development and compensation committee will be composed of                     , with                      serving as chairman of the committee. The leadership development and compensation committee’s responsibilities upon completion of this offering will include:

 

 

annually reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer and our other executive officers;

 

 

evaluating the performance of our chief executive officer in light of such corporate goals and objectives and determining and approving the compensation of our chief executive officer;

 

 

reviewing and approving the compensation of our other executive officers;

 

 

appointing, compensating and overseeing the work of any compensation consultant, legal counsel or other advisor retained by the leadership development and compensation committee;

 

 

conducting the independence assessment outlined in NYSE rules with respect to any compensation consultant, legal counsel or other advisor retained by the leadership development and compensation committee;

 

 

reviewing and assessing the adequacy of the committee charter and submitting any changes to the board of directors for approval;

 

 

reviewing and establishing our overall management compensation, philosophy and policy;

 

 

overseeing and administering our equity compensation and similar plans;

 

 

reviewing and approving our policies and procedures for the grant of equity-based awards;

 

 

reviewing and making recommendations to the board of directors with respect to director compensation; and

 

 

reviewing and discussing with management the compensation discussion and analysis to be included in our annual proxy statement or Annual Report on Form 10-K.

Nominating and corporate governance committee

Following this offering, our nominating and corporate governance committee will be composed of                 , with                      serving as chairman of the committee. The nominating and corporate governance committee’s responsibilities upon completion of this offering will include:

 

 

developing and recommending to the board of directors criteria for board and committee membership;

 

 

establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by stockholders;

 

 

identifying individuals qualified to become members of the board of directors;

 

 

recommending to the board of directors the persons to be nominated for election as directors and to each of the board’s committees;

 

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developing and recommending to the board of directors a set of corporate governance principles;

 

 

articulating to each director what is expected, including reference to the corporate governance principles and directors’ duties and responsibilities;

 

 

reviewing and recommending to the board of directors practices and policies with respect to directors;

 

 

reviewing and recommending to the board of directors the functions, duties and compositions of the committees of the board of directors;

 

 

reviewing and assessing the adequacy of the committee charter and submitting any changes to the board of directors for approval;

 

 

reviewing all related person transactions for potential conflict of interest situations and approving all such transactions;

 

 

consider and report to the board of directors any questions of possible conflicts of interest of board of directors members;

 

 

provide for new director orientation and continuing education for existing directors on a periodic basis;

 

 

performing an evaluation of the performance of the committee; and

 

 

overseeing the evaluation of the board of directors and management.

Leadership development and compensation committee interlocks and insider participation

During the fiscal year ended December 31, 2013, our leadership development and compensation committee was comprised of Messrs. Bourbonnais, Danhakl, Rittenmeyer and Taylor. None of the members of our leadership development and compensation committee has at any time during the prior three years been one of our officers or employees. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or leadership development and compensation committee of any entity that has one or more executive officers serving on our board of directors or leadership development and compensation committee. For a description of transactions between us and members of our leadership development and compensation committee and affiliates of such members, please see “Certain relationships and related party transactions.”

Board oversight of risk management

While the full board of directors has the ultimate oversight responsibility for the risk management process, its committees oversee risk in certain specified areas. In particular, our audit committee oversees management of enterprise risks as well as financial risks. Our leadership development and compensation committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements and the incentives created by the compensation awards it administers. Our nominating and corporate governance committee oversees risks associated with corporate governance, business conduct

 

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and ethics, and is responsible for overseeing the review and approval of related party transactions. Pursuant to the board of directors’ instruction, management regularly reports on applicable risks to the relevant committee or the full board of directors, as appropriate, with additional review or reporting on risks conducted as needed or as requested by the board of directors and its committees.

Codes of business conduct and ethics

We have adopted a code of business conduct that applies to all of our employees, officers and directors. We have also adopted an additional code of ethics applicable to those officers responsible for financial reporting. Upon the closing of this offering, our codes of business conduct and ethics will be available on our website. We intend to disclose any amendments to our codes, or any waivers of their requirements, on our website.

 

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Executive compensation

Compensation discussion and analysis

This discussion and analysis of our compensation program for our named executive officers should be read in conjunction with the accompanying tables below and text disclosing the compensation awarded to, earned by or paid to our named executive officers.

Compensation of our named executive officers is determined under our compensation program for senior executives. This program is overseen by the leadership development and compensation committee of our board of directors (referred to herein as the “Committee”). The Committee determines the compensation of all our executive officers. This discussion and analysis focuses on our executive officers listed in the Summary compensation table and the other compensation tables (referred to herein as our “named executive officers”). Our named executive officers for our 2013 fiscal year were:

 

 

Ari Bousbib, Chairman, Chief Executive Officer & President;

 

Ronald E. Bruehlman, Senior Vice President & Chief Financial Officer;

 

Paul M. Thomson, Senior Vice President, Human Resources & Administration;

 

Satwinder Sian, Senior Vice President, Global Technology & Operations; and

 

Kevin C. Knightly, Senior Vice President, Supply Management.

Principal objectives of our compensation program for named executive officers

Our executive team is critical to our success and to building value for our stockholders. The principal objectives of our compensation program are to:

 

 

permit us to recruit talented and well-qualified executives to serve in leadership positions;

 

retain such experienced executives to lead our organization over the long term;

 

motivate our executives to succeed by providing compensation that is directly based on performance; and

 

align the interests of our executive officers with those of our stockholders by delivering a substantial portion of the executive officer’s compensation through time- and performance-based equity awards with a longer-term value horizon.

We have designed our executive compensation program with specific features to help achieve these goals and to promote related objectives that are important to our long-term success.

We have also designed our compensation program to tie a substantial portion of each named executive officer’s compensation to the achievement of performance objectives over both the short- and long-term. This approach to compensation demonstrates our “pay for performance” philosophy as well as our focus on creating longer-term value for our stockholders. The principal measures of our business performance, as they relate to our compensation programs, are:

 

 

“Adjusted EBITDA”; and

 

“Management Cash Flow as a percentage of Adjusted EBITDA” (“Cash Flow Percentage”).

Adjusted EBITDA and Cash Flow Percentage are non-GAAP financial measures. Adjusted EBITDA is defined as net income or loss from our consolidated statements of comprehensive income before interest income and expense, income taxes, depreciation and amortization, further adjusted to eliminate severance and impairment expense, other losses, net non-cash stock-based

 

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compensation charges, acquisition-related charges, monitoring fees, deferred revenue adjustment from purchase accounting, transaction and other charges and merger costs. All of these items and related amounts are disclosed in the “Net income to Adjusted EBITDA reconciliation” section of the “Management’s discussion and analysis of financial condition and results of operations” section of this prospectus, where we disclose a reconciliation of Net Income (Loss) to Adjusted EBITDA. Although Adjusted EBITDA is determined on a constant currency basis (i.e., foreign exchange rates are fixed prior to the applicable performance period) for all of our employee plans for which it is relevant, foreign exchange rates are fixed as of different times for purposes of our annual incentive compensation plan (the “Annual Plan”) and performance-based stock options granted under our 2010 Equity Plan (described below). For the Annual Plan, they are fixed prior to the applicable calendar year. For our performance-based stock option awards, they were fixed in 2010 at the time the initial awards were granted. “Management Cash Flow” is defined as Adjusted EBITDA plus or minus changes in accounts receivable and certain other working capital items, less capital expenditures and additions to computer software. “Cash Flow Percentage” is the ratio of Management Cash Flow to Adjusted EBITDA, expressed as a percentage.

Adjusted EBITDA was selected as a performance metric because we believe it is an important measure of our financial performance and our ability to service our debt and reflects our near- and longer-term goal of increasing profitability. Cash Flow Percentage was selected because it measures how well we manage cash, and using this measure can incentivize our executives to generate a high level of cash relative to Adjusted EBITDA.

Stock options are inherently performance-based because no value is created unless the value of our common stock appreciates after the stock options are granted. In addition to stock options that vest based solely on time, we also award stock options that vest based on the achievement of one-year or two-year Adjusted EBITDA targets and/or the value returned to our stockholders as measured by a return on their investment in us or the receipt of specified internal rates of return on their investment in us.

As described below, the primary elements of our executive compensation program are annual base salary, short-term incentives, long-term incentives and retirement and termination benefits. Together, these items are intended to be complementary and serve the goals described above. The Committee, however, does not have any formal policies or guidelines for allocating compensation between short-term and long-term compensation, between cash and non-cash compensation or among different forms of cash and non-cash compensation.

Decision-making responsibility

Roles of the Committee and management in compensation decisions

Our executive compensation program is developed and overseen by the Committee, which is currently comprised of three directors affiliated with the Sponsors and one non-Sponsor director. The Committee takes into account the views and recommendations of management, in particular those of our Chairman, Chief Executive Officer & President (referred to herein as our “Chief Executive Officer”) and our Senior Vice President of Human Resources & Administration, in making decisions regarding our executive compensation program. Our Chief Executive Officer makes recommendations about annual base salary increases, annual cash bonus targets and payments and long-term equity grants for our named executive officers (other than for himself). The Committee, however, is responsible for approving, and makes all decisions regarding, the compensation of our named executive officers.

 

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Use of compensation consultants

In 2013, we engaged Steven Hall & Partners (“Steven Hall”), a nationally known compensation consulting firm, on a very limited basis to provide market data relating to the total cash compensation opportunities of our Chief Executive Officer and our Chief Financial Officer, prior to their annual performance reviews. See “Compensation setting process—Role of market data” and “Elements of compensation—Annual base salary” below. During 2013, Steven Hall requested data from us and was directed to exercise its independent judgment in advising us on executive compensation matters.

Later in 2013, as part of our preparation to become a public company, the Committee engaged Steven Hall to provide a broader range of compensation consulting services on a going forward basis. These services are expected to include a review and analysis of our executive compensation levels and practices, board remuneration, executive officer and non-employee director ownership guidelines, peer group composition, long-term incentive plan design and grant practices and change in control and severance practices.

On a going forward basis, the Committee will be solely responsible for approving payments to Steven Hall and for setting the terms and scope of Steven Hall’s engagement and the termination of this engagement. In addition, Steven Hall will report directly to the Committee. Steven Hall provides only executive compensation consulting services to us, and does not provide other services such as benefits administration or actuarial services.

Compensation setting process

Role of market data

Market surveys.     Although we have not engaged in formal peer group benchmarking with respect to our named executive officers on a regular basis since we were taken private in 2010 in connection with the Merger, the Committee has continued to review the total cash compensation opportunities of our named executive officers annually as well as the annualized equity values of any equity awards granted to them in light of available market data taken from certain surveys, as described below. As part of this review, our human resources personnel, on an annual basis, review surveys of executive compensation data from public and private companies across all sectors with approximately $1 billion to $3 billion in revenue. This survey data, in addition to the other factors described below under “Internal pay equity and other factors”, is taken into account by our Chief Executive Officer and our Senior Vice President of Human Resources & Administration in preparing their compensation recommendations to the Committee.

For each named executive officer, we have generally used market data from the market surveys reviewed by our human resources personnel as a consideration in setting annual base salary and the target level of annual incentives, with the intention that such target amounts, together with base salary, will result in total cash compensation at about the 50 th percentile of the market survey group. These comparisons are part of the total mix of information used to annually evaluate base salary, short-term incentive compensation and total cash compensation. We have also used survey data of this type on a limited basis when determining the size of equity award grants following the Merger.

Limited review of peer companies in 2013.     As noted above, we engaged Steven Hall in 2013 only to provide an additional source of market data on the total cash compensation of chief

 

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executive officers and chief financial officers of a peer group of companies. We selected the peer group companies through discussions with, and recommendations from, Steven Hall. The peer companies chosen were generally those companies that we included in our peer group prior to the time of the Merger and were as follows: Actavis, Inc., Allergan, Inc., Forest Laboratories, Inc., Mylan, Inc., St. Jude Medical, Inc., Stryker Corp., Acxiom Corp., Cerner Corp., Covance, Inc., DST Systems, Inc., Dun & Bradstreet Corp., Equifax, Inc., Fair Isaac Corp., Fiserv, Inc., Gartner, Inc., Moody’s Corp., and Nielsen Holdings NV. The peer companies selected for this purpose are companies with which we compete for executive talent, or which are broadly similar to us based on certain characteristics, such as: financial size and performance as measured by revenue, capitalization, returns, growth and/or profitability; industry focus; scope of operations, market presence outside the United States and employee base; and scope of position responsibilities, executive qualifications and expertise, and/or performance challenges. Peer companies were not pre-screened for their compensation levels or practices.

For future years, the Committee, working with Steven Hall and management, intends to re-evaluate, and expects to make changes to, this list of peer companies.

As we transition to a publicly traded company, the Committee may rely more heavily on market data and benchmarking of peer companies, which could result in changes in the level, timing and elements of compensation that we may use in the future for our named executive officers.

Internal pay equity and other factors

We take into account factors other than market data in setting salary, annual incentive and long-term incentives, which are the elements of total direct compensation. Such factors include internal pay equity, the experience and length of service of the executive, relative responsibilities among members of our executive team, contributions by the executive and business conditions. In addition, the Committee has also relied on the experience of our Sponsor-affiliated members of the Committee and on analysis performed by our Sponsors that considers the compensation of our executive team in light of the compensation structure of other portfolio companies or private equity-backed companies in general.

We do not use market surveys with respect to elements of compensation other than total direct compensation. For these other elements of compensation, such as severance, change in control benefits, retirement plans and health and welfare benefits, the Committee (and, with respect to ordinary course changes to broad-based employee benefits, our senior management) relies on its own business experience and familiarity with market conditions in determining the appropriate level of benefits for our named executive officers in light of our needs.

Elements of compensation

The following is a discussion of the primary elements of the compensation for each of our named executive officers.

Annual base salary

We pay our named executive officers a base salary to provide them with a fixed, base level of compensation. The Committee attempts to maintain base salaries at competitive levels while also reserving a substantial portion of compensation for the other elements of compensation that are more directly linked to our performance and individual performance.

 

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Generally, base salaries of the named executive officers are reviewed annually in July of each year. Annual base salaries may be adjusted by the Committee based upon the recommendations of our Chief Executive Officer (except with respect to his own salary). The recommendations made with respect to a named executive officer are generally based upon the executive’s individual annual performance review for the prior year’s performance, leadership and contribution to company performance, and internal pay equity considerations, as well as market conditions, survey data and our overall budgetary guidelines. The Committee takes all of these factors into account when making its decisions, but does not assign any specific weight to any one factor. In addition to the annual salary review, the Committee may also adjust base salaries at other times during the year in connection with promotions, increased responsibilities or to maintain competitiveness in the market.

The amount of our Chief Executive Officer’s annual base salary is set forth in his employment agreement, but remains subject to increase based on the same factors as described above for the other named executive officers. The Committee did not increase his annual base salary during 2013 and his annual base salary remains at the level first set in 2010.

For 2013, the Committee increased Mr. Bruehlman’s annual base salary by 12.5% based on a recommendation from our Chief Executive Officer (who took into account the findings of Steven Hall’s review described above). The Committee approved this increase in order to provide Mr. Bruehlman with a more competitive base salary and in recognition of his contributions to us. The Committee also approved increases in the annual base salaries of Mr. Thomson, Dr. Sian and Mr. Knightly of 8.2%, 4.6% and 2%, respectively, in connection with our annual performance review process, reflecting our 2013 budgeted level of merit increases and adjustments. All base salary increases became effective on October 1, 2013.

Short-term incentive plan

We believe that the opportunity to earn an annual incentive should be based upon actual performance against specified business and individual metrics.

Each of our named executive officers participates in the Annual Plan, and is eligible for a target annual bonus that is equal to a percentage of his annual base salary. The target annual bonus amount for each of our named executive officers is as follows:

 

Named executive officer   

Target annual bonus as a
percentage of annual

base salary

 

 

 

Ari Bousbib

     150%   

Ronald E. Bruehlman

     70%   

Paul M. Thomson

     70%   

Satwinder Sian

     70%   

Kevin C. Knightly

     70%   

 

 

These target bonus percentages were not changed for 2013 from levels in effect at the end of 2012.

Each year, the Committee establishes a notional pool to pay bonuses to all participants in the Annual Plan, including our named executive officers. The target funding for the notional pool is equal to the aggregate amount that would be payable if each participant received his or her target annual bonus. The funding of the Annual Plan is determined shortly after the end of our

 

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fiscal year based on our achievement of two pre-established metrics, Adjusted EBITDA and Cash Flow Percentage (each as defined and described above), subject to the further adjustments described below. The Committee sets reasonable, yet challenging, threshold, target and maximum Company performance-based goals early each year, taking into account current business conditions facing us and our business plan and budget for the year, with a view that the threshold level should have a relatively higher probability of achievement and the maximum level should have a relatively lower probability of achievement, and that the payouts associated with each should serve as a significant incentive. In addition, we intend that the performance levels required for threshold, target and maximum payouts will correlate to an appropriate return to our stockholders in relation to the overall budgeted compensation payable for such level of performance.

If our actual Adjusted EBITDA equals its “threshold” Adjusted EBITDA goal, “target” Adjusted EBITDA goal or “maximum” Adjusted EBITDA goal under the Annual Plan, the funding level of the pool under the Annual Plan determined at this first step will equal 50%, 100% or 150%, respectively.

The second metric that determines the level of funding for the pool under the Annual Plan is our Cash Flow Percentage. Our achievement relative to the target Cash Flow Percentage can increase or decrease the funding level established at the first step by 10%. For example, if the target Adjusted EBITDA goal was achieved and the maximum Cash Flow Percentage goal was achieved, the funding level of the Annual Plan determined at this second step would be 110% (100% due to the achievement of the target Adjusted EBITDA goal plus 10% (that is, 10% of 100%) due to the achievement of the maximum Cash Flow Percentage goal).

The level of funding of the pool can then be further adjusted either up or down by as much as 10% by our Chief Executive Officer in the third step of the Annual Plan funding determination process. In the fourth and final step for determining the funding level for the pool under the Annual Plan (as applied to our named executive officers), the amount can be further adjusted by as much as 20%, either up or down, by the Committee. The adjustments made by our Chief Executive Officer and the Committee in the third and fourth steps are entirely discretionary and allow our Chief Executive Officer and the Committee, respectively, to tailor the funding of the Annual Plan to events and circumstances that may not be fully taken into account by the objective metrics that otherwise determine the funding level.

The 2013 threshold, target and maximum Adjusted EBITDA levels were equal to $802.1 million, $840.3 million and $954.9 million, respectively, representing 5%, 10% and 25% year-over-year growth rates, respectively, on a constant dollar basis. If actual Adjusted EBITDA on a constant dollar basis had equaled less than the threshold amount, the Annual Plan would not have been funded, and if actual Adjusted EBITDA on a constant dollar basis had equaled more than the maximum amount, the Annual Plan would still have been funded at 150% (subject to the adjustments described above). The threshold, target and maximum Adjusted EBITDA levels for 2013 were each established using exchange rates prevailing at September 30, 2012.

The target Cash Flow Percentage for 2013 was 85%. If the actual Cash Flow Percentage had been achieved at the target level, the funding level of the 2013 bonus pool would not have been adjusted. If an actual Cash Flow Percentage of 80% or less had been achieved, the 2013 bonus pool funding level established based on Adjusted EBITDA would have been decreased by 10% (e.g., a 90% funding level would have been decreased to 81%). If an actual Cash Flow Percentage

 

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of 90% or greater had been achieved, the 2013 bonus pool funding level established based on Adjusted EBITDA would have been increased by 10% (e.g., a 120% funding level would have been increased to 132%).

After the end of the fiscal year, the Committee determines the achievement of both the Adjusted EBITDA and Cash Flow Percentage goals. Once the Committee has made those determinations, as described above, both our Chief Executive Officer and the Committee will have the opportunity to exercise limited discretion to adjust the funding level for the Annual Plan for our 2013 fiscal year.

Once the funding amount for the pool is determined, an amount is allocated for bonuses to be paid to our executive officers, including our named executive officers, as a group (the “senior management sub-pool”). The amount allocated to the senior management sub-pool is equal to the pool funding percentage (i.e., the amount approved for payment of all bonuses under the Annual Plan for the fiscal year expressed as a percentage of the target amount of the Annual Plan funding pool) multiplied by the sum of the target annual bonuses for each participant in the sub-pool (reduced by the “reserve” sub-pool described below). The Committee then determines how the senior management sub-pool is divided among the participants in the sub-pool, based on each named executive officer’s individual performance in the applicable fiscal year (as further described below) and each named executive officer’s target annual bonus, provided that the total amount of the annual incentive payments paid to the participants who share the senior management sub-pool generally cannot exceed (but may be less than) the amount allocated to the senior management sub-pool. If the amount of the senior management sub-pool serves to cap the amount a participant in the Annual Plan would otherwise receive based on his individual performance, the participant may be able to receive the amount of the shortfall from a plan-wide “reserve” sub-pool set aside for such purposes (to the extent such reserve is sufficiently large). The “reserve” sub-pool is a discretionary amount set aside by our Chief Executive Officer from the plan-wide pool for the purpose of rewarding high performers whose bonuses based on individual performance are otherwise capped by sub-limits, such as the senior management sub-pool limit, under the Annual Plan. Allocations to named executive officers from the reserve sub-pool are approved by the Committee, except to the extent it delegates such authority in a particular year.

At the beginning of each fiscal year, each of our named executive officers meets with our Chief Executive Officer (or, in the case of our Chief Executive Officer, with the Committee) to discuss his individual performance goals for the year. Each named executive officer’s individual performance goals are developed in consultation with our Chief Executive Officer for review with the Committee and consist of a series of key strategic, financial, operational and/or leadership objectives that relate to the duties of the named executive officer for the fiscal year and to our business objectives for the coming year. Mr. Bousbib’s individual goals for 2013 included achieving revenue and Adjusted EBITDA growth targets, EBITDA to cash performance, accelerating our growth, expanding our market potential and client reach, leveraging new technology platforms and expanding our performance culture. Mr. Bruehlman’s individual goals for 2013 included supporting the achievement of certain revenue, Adjusted EBITDA and cash flow goals, execution of acquisitions, and strengthening of our finance and business development team. Mr. Thomson’s individual goals for 2013 included managing benefit costs, support of acquisition/integration activity, achieving targeted real estate portfolio cost reductions, enhancing our learning culture and continuing to refine our leadership development review process. Dr. Sian’s individual goals for 2013 included our achievement of certain profit,

 

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revenue and financial reporting compliance goals, our achievement of certain strategic initiatives, ensuring robust integration and rollout of acquired companies and their new platforms, engaging global technology services and operations for capability build and transformation, and driving performance across all levels of our global technology services and operations. Mr. Knightly’s individual goals for 2013 included our achievement of certain profit, revenue and expense goals, executing transactions with key suppliers, and building our supplier service offering, sales and service capabilities.

After the end of the fiscal year, the Committee and our Chief Executive Officer (except with respect to his own individual performance goals) evaluate the named executive officer’s actual individual performance against those individual performance goals. Depending on the named executive officer’s individual performance level, his annual incentive bonus payout ranges will be as follows, subject to the limits on the management sub-pool described above:

 

Individual performance level    Annual incentive bonus payout
range as a percentage of
target annual bonus
opportunity
 

 

 

Exceeded All or Most Goals and Objectives

     Up to 200%   

Met Goals and Objectives

     Up to 110%   

Did Not Meet Some or All Goals and Objectives

     Up to 80%   

 

 

As of the date of this prospectus, the Committee has not met to determine Company or individual performance or annual bonuses for our 2013 fiscal year. We will supplement this “Short-term incentive plan” section once it has done so.

Long-term incentive awards

We believe substantial returns for our stockholders are achieved through a culture that focuses on long-term performance by our named executive officers and other senior management. By providing our senior management with a meaningful equity stake in us, we are better able to align the interests of our named executive officers with those of our stockholders and create value for our stockholders.

In connection with the Merger, we adopted the Healthcare Technology Holdings, Inc. 2010 Equity Incentive Plan (the “2010 Equity Plan”). All of our named executive officers, other than our Chief Financial Officer, were employed at, or shortly after, the Merger and were granted stock option awards that were intended to serve as long-term incentives covering a five-year time frame. The size of each option grant for those named executive officers was determined by our board or the Committee in consultation with our Chief Executive Officer at time the stock options were granted (other than in the case of our Chief Executive Officer’s own awards), based on their business experience, taking into account the fact that the Committee did not expect to grant additional awards to these executives in the ordinary course during the five-year period. Our Chief Financial Officer’s stock option award, granted at his time of hire, was intended to be comparable in size to the awards made to our named executive officers who were employed at or shortly after the Merger, while still providing an appropriate incentive based on factors such as internal equity, the size of grants made to employees in comparable positions, market surveys and market conditions. Our Chief Financial Officer’s stock option award was also intended to cover a five-year time frame. In addition, with respect to each of the named executive officers other than Dr. Sian and Mr. Knightly, the size of their grants reflected the outcome of negotiations with the named executive officer at the time he was hired.

 

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Since the Merger, we have not had a practice of making annual grants to our executives or employees. Rather, we have awarded equity in connection with promotions or new hires, the occurrence of significant events or as special grants intended to promote retention.

Stock options granted to our named executive officers generally are subject to time- and performance-based vesting. The time-based options generally vest over a five-year period and the performance-based options are eligible to vest over a five-year period based on our achievement of specified Adjusted EBITDA goals generally for each of the five fiscal years beginning with (or, with respect to grants made after August 1 of a given year, immediately following) the fiscal year in which the option was granted. To the extent the option does not vest because the Adjusted EBITDA goal is not met (and is not met based on the combined Adjusted EBITDA for a given fiscal year and the next succeeding fiscal year), the stock options will remain outstanding and vest (together with any other unvested performance-based options) if the Sponsors realize certain returns on their investment in us or certain internal rates of return on their investment in us. We believe that these performance-based stock option awards encourage our named executive officers to achieve key strategic objectives and maximize value creation for our stockholders. The Committee also believes that time-vesting options reinforce our goal to retain key executives while creating value for our stockholders. As discussed below in “Acceleration of options and other stock-based awards” under “Potential payments upon termination or change in control,” stock options are subject to accelerated vesting in limited circumstances relating to change in control events and certain terminations of employment.

As part of a new employment package, as additional retention grants and/or in connection with the increase in responsibilities resulting from a promotion, certain named executive officers have been granted time-vesting restricted stock units (“RSUs”), time-vesting stock options issued with an exercise price equal to the fair market value of a share of our common stock on the date of grant, and “premium priced” stock options that were granted with an exercise price equal to 150% of the fair market value of a share of our common stock on the date of grant. The Committee believes that these awards served as important tools for the recruitment and/or retention and motivation of the named executive officers that received them.

For our 2013 fiscal year, certain of our performance-based options were eligible to vest if we achieved an Adjusted EBITDA of $807 million (determined on a constant currency basis based on exchange rates set at the time of the Merger, when certain of the options were first granted). As of the date of this prospectus, the Committee has not yet determined Company performance for our 2013 fiscal year. We will supplement this “Long-term incentive awards” section once it has done so. We met or exceeded our Adjusted EBITDA targets under the performance-vesting stock options for each of our 2010 through 2012 fiscal years.

To recognize his individual leadership and contributions and to provide additional retention, Mr. Thomson was granted 350,000 time-vesting RSUs on February 13, 2013. The Committee determined that this grant was appropriate to reinforce our goal of retaining key executive talent. As described below, we granted additional RSUs to Mr. Thomson on August 6, 2013 in connection with our payment of a cash dividend to our stockholders.

No stock options were granted to our named executive officers in 2013 and, apart from the grants of RSUs to Mr. Thomson described above, no other incentive equity awards were granted to our named executive officers in 2013.

 

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The completion of this offering will not result in any acceleration of vesting of outstanding stock options or equity awards held by our named executive officers. However, if the Sponsors sell all or part of their shares of our common stock following the completion of this offering and receive certain returns on their investment, unvested performance-based stock options will vest.

Investment in the Company

In connection with the Merger, Dr. Sian and Mr. Knightly, our named executive officers who were employed by us at that time, were offered the opportunity to make an investment in us by converting their directly owned shares and certain vested stock appreciation rights into our post-Merger shares or stock appreciation rights with respect to our post-Merger common stock, as applicable. As a result of their decisions to roll over previously granted stock appreciation rights awards in connection with the Merger, Dr. Sian and Mr. Knightly hold the stock appreciation rights awards described in the Outstanding equity awards at fiscal year-end table below, all of which are fully vested. In addition, Dr. Sian and Mr. Knightly had the opportunity to notionally reinvest all or a portion of their account balances under our Defined Contribution Executive Retirement Plan (described below) into shares of the stock of the post-Merger Company. They both elected to do so and each currently notionally invests in shares of our common stock in his Defined Contribution Executive Retirement Plan account.

Dr. Sian and Mr. Knightly were also given an opportunity at the time of the Merger to make a direct cash investment in the post-Merger Company, and our named executive officers who have been hired since the Merger have had a similar opportunity. Offering our named executive officers this opportunity aligns their interests with our other stockholders, leads them to act as “employee owners” of our company and allows them to benefit from increases in value that they helped create.

Payments and adjustments in connection with cash dividend

On August 6, 2013, we paid a cash dividend of $0.26 per share on each share of our common stock that was outstanding as of that date. In order to prevent dilution of the value of our outstanding long-term incentive awards, including awards held by our named executive officers, and to reward executives for our success, in connection with the cash dividend, the Committee approved certain adjustments to, and certain payments in respect of, long-term incentive awards that were then outstanding. The adjustments described below with respect to stock options were required under the terms of the 2010 Equity Plan. Specifically, the Committee approved the following:

 

 

payment of a dividend equivalent cash amount equal to $0.26 for each share underlying an outstanding vested stock option (other than certain excluded options), an outstanding stock option eligible to vest on or before December 1, 2013 or an outstanding stock appreciation rights award;

 

 

reduction in the exercise price by $0.26 for each share underlying an outstanding stock option on which no dividend equivalent payment was made; and

 

 

the grant of new RSUs in respect of each outstanding grant of RSUs in an amount equal to the product of $0.26 multiplied by the number of RSUs that were outstanding under the grant immediately prior to the cash dividend, divided by the per share fair market value of a share of our common stock immediately after the cash dividend.

 

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Retirement programs

Senior executives participate along with broad groups of employees and/or other executives in a number of plans that provide a pension or other forms of retirement benefits earned through service to us.

All of our named executive officers other than Dr. Sian participate in our Retirement Plan (a tax-qualified defined benefit plan with a cash balance formula) and our Savings Plan (a tax-qualified defined contribution plan), each a broad-based retirement plan in which generally all of our U.S.-based employees are eligible to participate. Under the Savings Plan, we make a matching contribution of 50% of employee contributions up to 6% of compensation, subject to certain limits under the Internal Revenue Code, and employees vest in Company matching contributions after three years of service. The Retirement Plan is described further in the “Pension benefits” section below.

All of our named executive officers other than Dr. Sian also participate, along with all other eligible U.S.-based employees, in our Retirement Excess Plan and our Savings Equalization Plan, each a nonqualified excess plan to the Retirement Plan and the Savings Plan, respectively, that provides “make-whole” payments to eligible participants in place of the portion of the benefits that would have been earned if not for the limits applicable to tax-qualified plans under the Internal Revenue Code. Benefits under the Savings Equalization Plan are in the form of a matching contribution payable in cash shortly after the end of the calendar year to which it relates. The Retirement Excess Plan is described further in the “Pension benefits” section below.

Dr. Sian participates, along with all other eligible U.K.-based employees, in the IMS (UK) Pension Plan, which has a defined contribution section and a frozen defined benefit section. Under the defined contribution section of the plan (the “UK Defined Contribution Plan”), the level of our ordinary contribution ranges from 5% to 11% of a participant’s compensation depending on the level of the participant’s ordinary contribution to this plan (from 2% to 8% of compensation). The maximum amount of a participant’s ordinary contribution varies based on the employee’s age. The defined benefit section of the IMS (UK) Pension Plan (the “UK Defined Benefit Plan”) was frozen as of June 30, 2011 and is described further in the “Pension benefits” section below.

Certain of our key executives, including Dr. Sian and Mr. Knightly (but none of our other named executive officers), participate in our Defined Contribution Executive Retirement Plan (the “DCERP”), a nonqualified defined contribution plan that was frozen to new benefit accruals as of June 30, 2012. The DCERP is described further in the “Nonqualified deferred compensation” section below.

We believe that retirement programs serve as an important tool to attract and retain our named executive officers, and that we would be at a competitive disadvantage if we did not offer an attractive retirement program. We also believe that offering a baseline of stable retirement benefits encourages our named executive officers to make a long-term commitment to us. We do not adjust the level of retirement benefits based on the value of a named executive officer’s long-term incentive awards nor do we adjust the level of a named executive officer’s total direct compensation for a given year in light of the value of retirement benefits.

Severance and change in control arrangements

We provide severance protection to our Chief Executive Officer in his employment agreement, to Dr. Sian pursuant to U.K. statutory requirements and Company practice and to our other named

 

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executive officers through our Employee Protection Plan. Certain limited change in control-related protections for our named executive officers apply to their stock options and RSUs, as described below under “Potential payments upon termination or change in control.”

Our severance and change in control protections are designed to be fair and competitive to aid in attracting and retaining experienced executives, including our named executive officers. Our experience in recruiting well-qualified executives is similar to that of other companies in that our executives will often seek to be protected in the event of a termination by us without cause, an adverse change in working conditions that amounts to good reason for the executive to terminate employment or a transaction that may materially affect the terms of the executive’s employment with us. We believe the protection we provide, including the level of severance payments, post-termination benefits and our limited change in control benefits, is appropriate and within the range of competitive practice.

Perquisites

During our 2013 fiscal year, we did not provide perquisites to any of our named executive officers, apart from Dr. Sian, to whom we provided a monthly car allowance intended to cover the costs of owning and operating a vehicle. The Committee believes that the cost of providing this perquisite is reasonable relative to its value to Dr. Sian.

Other policies

Other policies and practices that will contribute to achieving the objectives of our compensation program include:

Stock ownership guidelines.     Due to restrictions on the transfer of our common stock and long-term incentive awards since the Merger, we have not needed to have stock ownership guidelines in place since the Merger. We intend to consider adopting stock ownership guidelines in the future that will require our named executive officers to own an equity stake in us during their employment.

Clawback policy .     We currently have a written policy that provides that if we are required to prepare an accounting restatement due to our material noncompliance with financial reporting requirements that results from misconduct by any of our executive officers, our chief accounting officer or any of our directors, we will have the right to recover any bonus or other incentive-based cash or equity compensation paid to, or any profits realized from the sale of Company securities by, such officer or director. We may seek recovery of such amounts only during the first 12 months following the first public issuance or filing with the SEC of the financial statements that are the subject of the restatement. In the future, we intend to amend our policy on recovery of incentive-based compensation to conform to the applicable requirements of the Dodd-Frank Act and related rulemaking.

Tax deductibility

Because our common stock is not currently publicly traded, executive compensation paid in our 2013 fiscal year was not subject to the provisions of Section 162(m) of the Internal Revenue Code, which limits the deductibility of compensation paid to certain individuals to $1 million, excluding qualifying performance-based compensation and certain other compensation. Following this

 

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offering, at such time as we are subject to the deduction limitation under Section 162(m) of the Internal Revenue Code, we expect that the Committee will consider the impact of Section 162(m) of the Internal Revenue Code when structuring our executive compensation arrangements with our named executive offers. However, the Committee will retain flexibility to approve compensation arrangements that promote the objectives of our compensation program but that may not qualify for full or partial tax deductibility.

 

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Summary compensation table

The following table sets forth information regarding the compensation awarded to, earned by or paid to each of our named executive officers during our 2013 fiscal year.

 

Name and principal position   Year    

Salary

($)

   

Stock

awards

($)(1)

    

Non-equity

incentive plan

compensation

($)(2)

    

Change in
pension value
and non-
qualified
deferred
compensation
earnings

($)(3)

    

All other

compensation

($)(4)

    

Total

($)

 

 

 

Ari Bousbib

    2013        1,200,000                        227,041         10,500         1,437,541   

Chairman, Chief Executive Officer & President

                 

Ronald E. Bruehlman

    2013        412,329                        39,215         23,321         474,865   

Senior Vice President & Chief Financial Officer

                 

Paul M. Thomson

    2013        372,397        563,500                 43,063         22,376         1,001,336   

Senior Vice President, Human Resources & Administration

                 

Satwinder Sian

    2013        391,818                        131,564         131,943         655,325   

Senior Vice President, Global Technology & Operations(5)

                 

Kevin C. Knightly

    2013        401,973                        41,960         61,975         505,908   

Senior Vice President, Supply Management

                 

 

 

 

(1)   Represents the aggregate grant date fair value of RSUs granted to Mr. Thomson in 2013 computed in accordance with FASB ASC Topic 718. The fair value of each grant of RSUs at the grant date is equal to the number of RSUs granted multiplied by the fair market value of a share of our common stock on the date of grant (excluding the effect of estimated forfeitures based on service-based vesting conditions). Mr. Thomson was granted 350,000 RSUs on February 13, 2013 when the fair market value of a share of our common stock was equal to $1.35 and an additional 83,486 RSUs on August 6, 2013 when the fair market value of a share of our common stock was equal to $1.09. See “—Payments and adjustments in connection with cash dividend.”

 

(2)   The amount of each named executive officer’s cash bonus for our 2013 fiscal year under the Annual Plan was not calculable as of the time this prospectus was filed. The amount of each named executive officer’s bonus for our 2013 fiscal year under the Annual Plan is expected to be determined as of approximately February 13, 2014 and will be included in a subsequent amendment to the registration statement of which this prospectus is a part.

 

(3)   Represents the change in the actuarial present value of the accumulated benefit of each named executive officer (other than Dr. Sian) under the Retirement Plan and Retirement Excess Plan measured from December 31, 2012 to December 31, 2013. For Dr. Sian and Mr. Knightly, amounts also represent the dollar value of interest earned on compensation deferred under the DCERP in excess of 120% of the long-term applicable federal rate for December 2013 (3.99% using annual compounding) (the current interest crediting rate on deferred compensation under the plan is assumed to be 4.47% based on the calculations as of the date hereof) ($4,408 and $7,649, respectively). As of June 30, 2012, the DCERP is frozen as to new benefit accruals but not as to earnings on previously accrued benefits. Amounts in respect of the change in actuarial value of accumulated benefits under our pension plans and interest credited under the DCERP will be updated to reflect year-end adjustments in a subsequent amendment to the registration statement of which this prospectus is a part.

 

(4)   Amounts included in the “All other compensation” include the following items, as applicable to each named executive officer for our 2013 fiscal year:

 

Name   

401(k)
company
match
contributions

($)(a)

    

Payments
under
Savings
Equalization
Plan

($)(b)

    

Company
contributions
to UK Defined

Contribution
Plan

($)(c)

    

Automobile
allowance

($)(d)

    

Dividend
equivalent
payments

($)(e)

    

Total

($)

 

 

 

Ari Bousbib

     7,650         2,850                                 10,500   

Ronald E. Bruehlman

     7,650         15,671                                 23,321   

Paul M. Thomson

     7,650         14,726                                 22,376   

Satwinder Sian

                     63,623         26,727         41,593         131,943   

Kevin C. Knightly

     7,650         13,766                         40,559         61,975   

 

 

 

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  (a)   Represents our matching contributions to the Savings Plan, which is a broad-based tax-qualified defined contribution plan.

 

  (b)   Represents certain make-whole payments made to our U.S.-based named executive officers. These amounts would have been contributed by us to the Savings Plan under the plan’s matching contribution formula if not for certain limits applicable to tax-qualified plans under the Internal Revenue Code. Amounts in this column will be updated to reflect year-end adjustments in a subsequent amendment to the registration statement of which this prospectus is a part.

 

  (c)   Represents our contributions to the investment fund maintained for Dr. Sian under the UK Defined Contribution Plan.

 

  (d)   Represents monthly car allowance payments made to Dr. Sian.

 

  (e)   Represents certain cash dividend equivalent amounts paid during our 2013 fiscal year with respect to all vested stock appreciation rights held by Dr. Sian and Mr. Knightly as of August 6, 2013. These payments were made in lieu of reducing the base price of the stock appreciation rights. Had the base price been reduced, the aggregate amount of the reduction would have equaled the amount of the cash dividend equivalent payments. In addition, certain cash dividend equivalents were also paid during our 2013 fiscal year with respect to all vested stock options and all stock options that were eligible to vest prior to December 1, 2013 held by each of our named executive officers, in the following amounts: Mr. Bousbib—$5,980,000, Mr. Bruehlman—$312,000, Mr. Thomson—$390,000, Dr. Sian—$364,000 and Mr. Knightly—$468,000. These payments were made in lieu of reducing the exercise prices of these stock options (which was required by the terms of the 2010 Equity Plan on the dates these stock options were granted) and the payment per option was equal to the amount of the per share reduction in the exercise price that would have otherwise occurred.

 

(5)   Dr. Sian was paid in U.K. pounds sterling. Amounts for Dr. Sian in the Summary compensation table and the other tables in this section, where applicable, have been converted from U.K. pounds sterling to U.S. dollars based on an exchange rate of .6169, which was set in September 2012 for purposes of the Annual Plan.

Grants of plan-based awards

The following table sets forth information regarding plan-based awards made to each of our named executive officers during our 2013 fiscal year.

 

       Grant
date
     Estimated future payouts under
non-equity incentive plan awards(1)
    

All other

stock

awards

number of

shares

of stock

or units

(#)

    

Grant

date

fair
value

of

stock
awards

($)(4)

 
Name      

   Threshold

($)(2)

    

Target

($)

    

  Maximum

($)(3)

       

 

 

Ari Bousbib

                     1,800,000         3,600,000                   

Ronald E. Bruehlman

                     288,630         577,260                   

Paul M. Thomson

                     260,678         521,356                   
     2/13/2013                                 350,000         472,500   
     8/6/2013                                 83,486         91,000   

Satwinder Sian

                     274,272         548,545                   

Kevin C. Knightly

                     281,381         562,762                   

 

 

 

(1)   Represents annual cash bonus opportunities granted under the Annual Plan. As described in “—Short-term incentive plan” above, each named executive officer is eligible to receive a target annual bonus that is equal to a percentage of his annual base salary. The actual amount paid to our named executive officers under the Annual Plan for our 2013 fiscal year will be reflected in the Summary compensation table above when determined.

 

(2)   Under the Annual Plan, if our actual Adjusted EBITDA for our 2013 fiscal year were achieved at a threshold Adjusted EBITDA level, the Annual Plan would have been funded at 50% for our 2013 fiscal year, subject to the further plan-wide adjustments described above. However, each named executive officer’s actual annual cash bonus is determined based on the achievement of individual performance goals for which there is no threshold achievement level. See “—Short-term incentive plan.”

 

(3)   Under the Annual Plan, if our actual Adjusted EBITDA and Cash Flow Percentage had been achieved at maximum levels and the Committee and Mr. Bousbib had exercised their discretion to increase the funding of the Annual Plan for our 2013 fiscal year to the maximum extent permitted by the Annual Plan, the plan-wide funding level would have exceeded 200% of the target funding level. However, each named executive officer’s actual annual cash bonus is determined based on the achievement of individual performance goals, and achievement of those goals at a maximum level will result in an annual cash bonus that cannot be greater than 200% of the named executive officer’s target incentive award under the Annual Plan. See “—Short-term incentive plan.”

 

(4)   Mr. Thomson was granted 350,000 RSUs on February 13, 2013 when the fair market value of a share of our common stock was equal to $1.35. As described in “—Payments and adjustments in connection with a cash dividend” above, in connection with the cash dividend paid on August 6, 2013, Mr. Thomson was granted an additional 83,486 RSUs when the fair market value of a share of our common stock was equal to $1.09.

 

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Narrative disclosure to Summary compensation table and grants of plan-based awards table

We are a party to an employment agreement with Mr. Bousbib dated August 16, 2010. The agreement had an initial three-year term and the term of the agreement now automatically renews on each September 1, unless either party gives a notice of non-renewal at least 60 days in advance. Under his employment agreement, Mr. Bousbib is entitled to an annual base salary of $1.2 million and is eligible to earn an annual cash bonus for each fiscal year based on individual and Company performance, with a target annual cash bonus equal to 150% of his base salary. Mr. Bousbib’s annual cash bonus for 2013, as earned under the Annual Plan, will be included in the Non-equity incentive plan compensation column of the Summary compensation table when it is determined. Pursuant to the employment agreement, Mr. Bousbib is also entitled to participate in our savings, retirement and welfare plans in accordance with their terms.

We are also party to an employment agreement with Dr. Sian dated February 24, 1993. The agreement sets forth Dr. Sian’s initial base salary, which has been subsequently increased. Pursuant to the employment agreement, Dr. Sian is entitled to participate in certain U.K.-based benefit plans and to certain automobile-related benefits, in our discretion. The contract requires both parties to give twelve weeks written notice of any intention to terminate Dr. Sian’s employment, but does not provide for benefits beyond those that are statutorily required.

We have not entered into employment agreements with any of our other named executive officers.

The RSUs granted to Mr. Thomson in 2013 will vest on February 13, 2014, subject to his continued employment with us through that date.

For a description of the payments and benefits our named executive officers may be entitled to in connection with a termination of employment, see “—Potential payments upon termination or change in control.”

 

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Outstanding equity awards at fiscal year-end

The following table sets forth information regarding equity awards held by our named executive officers as of December 31, 2013.

 

Name   Option awards     Stock awards  
 

Number of
securities
underlying
unexercised
options and

SARs

(exercisable)

(#)

   

Number of
securities
underlying
unexercised
options

(unexercisable)

(#)

   

Equity
incentive
awards:
number of
securities
underlying
unexercised
unearned
options

(#)

   

Option
or SAR
exercise
price

($)(1)

   

Option or

SAR
expiration
date

   

Number of
shares or

units of

stock that

have not

vested

(#)

   

Market
value of

shares or

units of

stock that

have not

vested

($)(2)

 

 

 

Ari Bousbib

    5,000,000                      1.08 (5)      12/1/2020                 
           5,000,000               0.82 (5)      12/1/2020                 
    12,000,000                      1.00        12/1/2020                 
    3,600,000                      0.58        12/1/2020                 
           7,200,000        4,800,000        0.32        12/1/2020                 
                  2,400,000 (4)      0.58        12/1/2020                 

Ronald E. Bruehlman

    600,000                      1.12        7/16/2021                 
    600,000                      0.70        7/16/2021                 
           1,580,000        720,000        0.44        7/16/2021                 

Paul M. Thomson

    1,000,000                      1.00        10/28/2020                 
    300,000               200,000 (4)      0.58        10/28/2020                 
           600,000        400,000        0.32        10/28/2020                 
                                       433,486        472,500   

Satwinder Sian

    159,973.33 (3)                    0.25 (6)      4/21/2016                 
    900,000                      1.00        3/15/2020                 
    450,000                      0.58        3/15/2020                 
           540,000        360,000        0.32        3/15/2020                 
    50,000                      0.98        5/8/2022                 
           120,000        80,000        0.72        5/8/2022       

Kevin C. Knightly

    155,996.85 (3)                    0.25 (6)      4/21/2016                 
    1,200,000                      1.00        3/15/2020                 
    600,000                      0.58        3/15/2020                 
           720,000        480,000        0.32        3/15/2020                 

 

 

 

(1)   Except as noted below, the exercise price of all stock options was originally equal to 100% of the fair market value of a share of our common stock on the date the options were granted, as determined by our board of directors based, in part, on an independent third party valuation. In connection with the cash dividends paid to our stockholders on October 23, 2012 and August 6, 2013, the exercise prices of certain stock options were reduced by the applicable amount of the per share dividend. With respect to the 2012 cash dividend, the exercise price of each option that was unvested as of the date the cash dividend was paid and that was not eligible to vest prior to December 1, 2012 was reduced by $0.42. With respect to the 2013 cash dividend, the exercise price of each option that was unvested as of the date the cash dividend was paid and that was not eligible to vest prior to December 1, 2013 was reduced by $0.26.

 

(2)   The value shown is equal to the number of RSUs subject to Mr. Thomson’s RSU awards multiplied by the fair market value of a share of our common stock on December 31, 2013 ($1.09).

 

(3)   Represents vested stock appreciation rights based on IMS Health common stock that were rolled over into stock appreciation rights based on our common stock by the named executive officer in connection with the Merger.

 

(4)   The exercise price of these performance-vesting options was not reduced in connection with the cash dividend paid to our stockholders on August 6, 2013 because a cash dividend equivalent payment of $0.26 per option share was paid with respect to all options (including these) that were eligible to vest prior to December 1, 2013.

 

(5)   Mr. Bousbib was granted premium priced options with an exercise price that was originally equal to 150% of the fair market value of a share of our common stock on the date the options were granted. In connection with the cash dividends paid to our stockholders on October 23, 2012 and August 6, 2013, the exercise prices of certain premium priced stock options were reduced by the applicable amount of the per share dividend in the same manner as described in footnote 1 above.

 

(6)   The exercise price of vested stock appreciation rights that were rolled over in connection with the Merger was reduced to $0.25 in a manner that complied with applicable rules under the Internal Revenue Code.

 

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The following table sets forth the vesting schedule for the stock options or restricted stock units held by our named executive officers that were unvested as of December 31, 2013:

 

Name  

Number of

stock
options or

RSUs that

have not

vested

(#)

    Type  

Vesting date

schedule

  Performance metric

 

Ari Bousbib

    2,400,000      Performance-based options(a)   9/1/2013   2013 EBITDA
    3,600,000      Time-based options(b)   9/1/2014  
    2,400,000      Performance-based options(a)   9/1/2014   2014 EBITDA
    5,000,000      Time-based sign-on options(c)   9/1/2015   Premium Priced Options
    3,600,000      Time-based options(b)   9/1/2015  
    2,400,000      Performance-based options(a)   9/1/2015   2015 EBITDA

Ronald E. Bruehlman

    360,000      Time-based options(b)   7/16/2014  
    250,000      Time-based options(d)   7/16/2014  
    240,000      Performance-based options(a)   7/16/2014   2013 EBITDA
    360,000      Time-based options(b)   7/16/2015  
    240,000      Performance-based options(a)   7/16/2015   2014 EBITDA
    250,000      Time-based options(d)   7/16/2016  
    360,000      Time-based options(b)   7/16/2016  
    240,000      Performance-based options(a)   7/16/2016   2015 EBITDA

Paul M. Thomson

    200,000      Performance-based options(a)   10/28/2013   2013 EBITDA
    433,486      Time-based RSUs(e)   2/13/2014  
    300,000      Time-based options(b)   10/28/2014  
    200,000      Performance-based options(a)   10/28/2014   2014 EBITDA
    300,000      Time-based options(b)   10/28/2015  
    200,000      Performance-based options(a)   10/28/2015   2015 EBITDA

Satwinder Sian

    270,000      Time-based options(b)   2/26/2014  
    180,000      Performance-based options(a)   2/26/2014   2014 EBITDA
    30,000      Time-based options(b)   5/8/2014  
    20,000      Performance-based options(a)   5/8/2014   2013 EBITDA
    270,000      Time-based options(b)   2/26/2015  
    180,000      Performance-based options(a)   2/26/2015   2015 EBITDA
    30,000      Time-based options(b)   5/8/2015  
    20,000      Performance-based options(a)   5/8/2015   2014 EBITDA
    30,000      Time-based options(b)   5/8/2016  
    20,000      Performance-based options(a)   5/8/2016   2015 EBITDA
    30,000      Time-based options(b)   5/8/2017  
    20,000      Performance-based options(a)   5/8/2017   2016 EBITDA

Kevin C. Knightly

    360,000      Time-based options(b)   2/26/2014  
    240,000      Performance-based options(a)   2/26/2014   2014 EBITDA
    360,000      Time-based options(b)   2/26/2015  
    240,000      Performance-based options(a)   2/26/2015   2015 EBITDA

 

 

(a)   20% of each grant of performance-based options is eligible to vest based on our achievement of Adjusted EBITDA targets for each of the five fiscal years beginning with (or, with respect to grants made after August 1 of a given year, immediately following) the fiscal year in which the option was granted. If the Adjusted EBITDA target is not met for a fiscal year, the tranche of performance-based options that was eligible to vest in such fiscal year will be eligible for “catch-up” vesting if a two-year (based on the original fiscal year and the fiscal year that immediately follows it) Adjusted EBITDA target is met.

In addition, on or prior to December 31, 2017, (i) if the Sponsors realize a return of a certain specified multiple of the amount they invested in us, to the extent not already vested, the first 50% of each grant of performance-based options will vest, and (ii) if the Sponsors realize a return of a greater specified multiple of the amount they invested in us, to the extent not already vested, the second 50% of each grant of performance-based options will vest. After December 31, 2017, the first 50% of the performance-based option grant will vest, to the extent not previously vested, solely upon the

 

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Sponsors achieving a certain specified internal rate of return with respect to each year (or partial year) during the period beginning on the closing date of the Merger (February 26, 2010) and ending on the date or dates on which the Sponsors receive proceeds with respect to the shares of our common stock that they hold, and the balance (i.e., the remaining 50%) of the performance-based option grant will vest, to the extent not previously vested, solely upon the Sponsors achieving a greater specified internal rate of return with respect to each year (or partial year) during the period beginning on the closing date of the Merger and ending on the date or dates on which the Sponsors receive proceeds with respect to the shares of our common stock that they hold.

 

(b)   20% of each grant of time-based options (excluding premium priced time-based sign-on options) vest on each the first five anniversaries of (i) with respect to Dr. Sian and Mr. Knightly, February 26, 2010 (the closing date of the Merger), and (ii) with respect to each other named executive officer, the grant date or the date the executive was hired, subject, in each case, to the named executive officer’s continued employment with us through the applicable vesting date.

 

(c)   50% of the grant of premium priced time-based sign-on options vested on the third anniversary of Mr. Bousbib’s date of hire, and 50% of the grant of premium priced time-based sign-on options vests on the fifth anniversary of Mr. Bousbib’s date of hire, subject, in each case, to Mr. Bousbib’s continued employment with us through the applicable vesting date.

 

(d)   50% of the grant of time-based options vests on the third anniversary of the grant date, and 50% of the grant of time-based options vests on the fifth anniversary of the grant date, subject, in each case, to Mr. Bruehlman’s continued employment with us through the applicable vesting date.

 

(e)   100% of Mr. Thomson’s outstanding time-vesting RSUs will vest on February 13, 2014, subject to Mr. Thomson’s continued employment with us through such date.

Option exercises and stock vested

None of our named executive officers exercised any stock options or became vested in any stock awards during our 2013 fiscal year.

Pension benefits

The following table sets forth information regarding the present value of the accumulated benefits of our named executive officers under our pension arrangements as of December 31, 2013. No amounts were paid to our named executive officers under our pension arrangements during our 2013 fiscal year.

 

Name    Plan name   

Number of

years
credited
service

(#)(1)

    

Present value of

accumulated
benefit

($)(5)

 

 

 

Ari Bousbib

   Retirement Plan      2.33         37,479 (2) 
   Retirement Excess Plan      2.33         330,273 (2)(3) 

Ronald E. Bruehlman

   Retirement Plan      1.42         20,624 (2) 
   Retirement Excess Plan      1.42         26,881 (2)(3) 

Paul M. Thomson

   Retirement Plan      2.17         31,287 (2) 
   Retirement Excess Plan      2.17         53,230 (2)(3) 

Satwinder Sian

   UK Defined Benefit Plan      18.00         879,346 (4) 

Kevin C. Knightly

   Retirement Plan      30.42         323,007 (2) 
   Retirement Excess Plan      30.42         297,716 (2)(3) 

 

 

 

(1)   Years are credited based on service from the date the individual became a participant in each plan. Individuals become participants in the Retirement Plan and the Retirement Excess Plan on the first day of the month coincident with or next following the attainment of age 21 and completion of one year of service. For Mr. Knightly, the date of participation in each of the plans is based on a provision in a predecessor plan that provided for individuals to become participants on the first day of the month coincident with or next following the attainment of age 21 and the date of hire. Dr. Sian’s credited service is based on his date of joining the IMS (UK) Pension Plan and reflects service through June 30, 2011, the date on which future benefit accruals under the plan ceased due to the plan’s being frozen as of such date.

 

(2)  

These amounts represent the actuarial present value of the total retirement benefit that would be payable to each of our named executive officers other than Dr. Sian under the Retirement Plan and Retirement Excess Plan, as applicable, as of

 

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December 31, 2013. The following key actuarial assumptions and methodologies were used to calculate the present value of accumulated benefits under both the Retirement Plan and Retirement Excess Plan: a discount rate of 4.5% and the Pension Protection Act’s 2014 Annuitant Table for post-retirement mortality. The amounts were calculated assuming no future service or compensation increases, and no pre-retirement mortality or termination (i.e., each named executive officer is assumed to retire at age 65 and to receive the benefit of annual interest credits at 3.5% on his account balance until such point). For more information on the assumptions used to derive the amounts, please see Note 8 to our consolidated financial statements included elsewhere in this prospectus. Mr. Thomson is our only named executive officer who was eligible for early retirement as of December 31, 2013. Had Mr. Thomson retired on that date, his account balance under the Retirement Plan would have been $35,340, which would be payable as an annuity under the terms of the plan, and his account balance under the Retirement Excess Plan would have been $53,961, which would be paid to him as a single lump sum equal to $54,769 under the terms of the plan.

 

(3)   Under the Retirement Excess Plan, if a change in control occurs and a participant’s employment with us is involuntarily terminated within two years following the change in control for a reason other than cause, or the participant voluntarily terminates employment with us for good reason, his accumulated benefit would be payable in a single lump sum on the date of such termination. Had a change in control occurred and our named executive officers who participate in the Retirement Excess Plan each experienced a qualifying termination on December 31, 2013, their account balances under the Retirement Excess Plan would have been as follows: Mr. Bousbib—$375,159, Mr. Bruehlman—$30,363, Mr. Thomson—$53,961 and Mr. Knightly—$337,636. Those account balances would be payable to such named executive officers on the date of their termination as single lump sums equal to the following amounts: Mr. Bousbib—$394,557, Mr. Bruehlman—$31,887, Mr. Thomson—$54,769 and Mr. Knightly—$354,944.

 

(4)   These amounts represent the actuarial present value of the total retirement benefit that would be payable to Dr. Sian under the UK Defined Benefit Plan as of December 31, 2013. The following key actuarial assumptions and methodologies were used to calculate the present value of accumulated benefits under the UK Defined Benefit Plan: a discount rate of 4.7% and post-retirement mortality assumptions based on the S-1 “All lives” Table (with scaling factors) projected to December 31, 2013 in line with the medium cohort, with future mortality improvements in accordance with CMI 2011, with a long term improvement rate of 1.25% per year. Due to the freeze of the UK Defined Benefit Plan no future service or compensation increases that occur after June 30, 2011 are taken into account under the plan. For more information on the assumptions used to derive the amounts, please see Note 8 to our consolidated financial statements included elsewhere in this prospectus. Dr. Sian is not currently eligible for early retirement under this plan.

 

(5)   Amounts in this column will be updated to reflect year-end adjustments in a subsequent amendment to the registration statement of which this prospectus is a part.

Retirement Plan .     All of our named executive officers other than Dr. Sian participate in our Retirement Plan, a tax-qualified defined benefit retirement plan that provides retirement income to our U.S.-based employees. Benefits under the Retirement Plan’s cash balance formula are expressed in the form of a notional account balance. Each month a participant’s cash balance book-keeping account is increased by (i) pay credits of 6% of the participant’s compensation (i.e., base salary, plus annual bonus, commissions, overtime and shift pay) for that month and (ii) interest credits based on the participant’s hypothetical account balance at the end of the prior month. Monthly interest credits are based on 1/12 th of the 30-year Treasury bond yields in effect during the applicable month. Participants may retire early at age 55 with three years of service. Normal retirement is at age 65. Pension benefits are payable as an actuarially equivalent annuity. Lump-sum distributions are only available for benefits valued at $5,000 or less. Retirement Plan benefits are provided on a noncontributory basis to employees.

Retirement Excess Plan .     All of our named executive officers other than Dr. Sian also participate in our Retirement Excess Plan, a nonqualified defined benefit retirement plan that provides eligible employees with retirement benefits equal to the difference between the benefits provided under the qualified Retirement Plan and the benefits that would have been provided under that plan if not for the limits applicable to tax-qualified plans under the Internal Revenue Code on the amount of compensation that can be taken into account and the amount of annual benefits that can be paid. Benefits under the Retirement Excess Plan are subject to cliff-vesting after three years of service and are payable only in a single lump sum upon the later of the participant attaining age 55 or experiencing a separation from service with us.

UK Defined Benefit Plan .     Dr. Sian participates in our UK Defined Benefit Plan, a tax-qualified defined benefit retirement plan that provides retirement income for our U.K.-based employees. The UK Defined Benefit Plan was frozen as to new accruals as of June 30, 2011. Any increases in

 

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compensation after that date are disregarded. Dr. Sian and similarly situated participants accrued a pension at a rate of 1/60 th of final pensionable salary for each year of pensionable service until June 30, 2011. Final pensionable salary under the plan is equal to the average of the participant’s highest three consecutive years of pensionable salary out of the last ten years (prior to June 30, 2011). Prior to the plan freeze, participants were required to contribute 7% of compensation to the plan.

Under the UK Defined Benefit Plan, participants may retire early from age 55. The amount of the pension benefit under the plan will be discounted by an amount determined by the plan’s actuary when the participant retires prior to the normal retirement age of 65. If a participant retires after age 65, the amount of the participant’s pension benefit is calculated as if the participant had retired at age 65 but will then be increased to take account of the fact that the participant (as determined by the plan trustee on the advice of the plan’s actuary) did not draw a pension until a later date. Pension benefits are generally payable as an actuarially equivalent life annuity, but a portion of the participant’s pension benefits (as determined by the U.K. tax authority using conversion factors that are set by the plan’s actuary) may be taken as a lump sum.

Nonqualified deferred compensation

Dr. Sian and Mr. Knightly are the only named executive officers who participate in the DCERP. As of June 30, 2012, the DCERP was frozen to new benefit accruals and participants, but previously accrued benefits continue to be eligible to be credited with interest and other investment returns, as described below. Dr. Sian and Mr. Knightly are fully vested in their respective accounts under the DCERP.

A participant in the DCERP was able to elect to have his or her account under this plan notionally credited with investment credits (the portion that is so credited is referred to as a “Designated Account”) or, with respect to his or her account as of the closing date of the Merger, notionally invested in shares of our common stock (the portion that is so notionally invested is referred to as a “Stock Account”). Annual investment credits to a Designated Account are calculated based on the average annual corporate bond yields from the AA-AAA Rated/10+ Years Component of the Merrill Lynch U.S. Corporate Master Index. With respect to a Stock Account, upon payment of a cash dividend on shares of our common stock, the amount that would have been paid to a participant had he or she held shares of common stock directly (instead of notional stock units) is credited to the Designated Account. Upon an initial public offering of our common stock, a participant may make an election to have all or a portion of his or her Stock Account reallocated to a Designated Account. A participant’s account under the DCERP is paid as a lump sum on or shortly after the date a participant terminates employment with us. To the extent required to comply with Section 409A of the Internal Revenue Code, payment upon termination of employment is subject to a six-month delay. Investment credits continue to be earned during this six-month delay period.

 

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The following table sets forth information regarding the nonqualified deferred compensation of each of our named executive officers for our 2013 fiscal year. There were no executive or Company contributions to, or, with respect to our named executive officers, distributions from, the DCERP during our 2013 fiscal year.

 

Name   

Aggregate

earnings in last

fiscal year

($)(1)

    

Aggregate
balance at

end of
fiscal 2013
($)(2)

 

 

 

Ari Bousbib

               

Ronald E. Bruehlman

               

Paul M. Thomson

               

Satwinder Sian

     125,245         801,632   

Kevin C. Knightly

     216,276         1,387,485   

 

 

 

(1)   Earnings in the last fiscal year for Dr. Sian and Mr. Knightly represent (i) interest credited to their Designated Accounts, (ii) amounts credited to their Designated Accounts as a result of the cash dividend paid on August 6, 2013 and (iii) the increase/decrease during 2013 in the fair market value of shares of our common stock notionally held in their Stock Accounts.

 

(2)   The aggregate balance at the end of the year consists of the value of the executive’s account under the DCERP as of December 31, 2013. The Stock Account has been valued using the fair market value of our common stock on this date ($1.09).

Potential payments upon termination or change in control

Each of our named executive officers is entitled to receive certain benefits upon a qualifying termination of employment and upon certain change in control transactions, as described below.

Employment agreement with Mr. Bousbib

Under the terms of his employment agreement, if we terminate Mr. Bousbib’s employment without cause (as defined in the employment agreement) or we do not renew his agreement, or if Mr. Bousbib resigns for good reason (as defined in the employment agreement), Mr. Bousbib will be entitled to severance in an amount equal to two times the sum of his base salary and target annual bonus, payable in equal installments over the 24-month period following the termination of his employment. If any such termination or resignation for good reason occurs within the 24-month period following a change in control of us (as defined in the employment agreement), Mr. Bousbib will be entitled to the cash severance described above, except that payment will be made in a single lump sum immediately upon such termination. The closing of this offering will not constitute a change in control for purposes of Mr. Bousbib’s employment agreement.

Mr. Bousbib will also be entitled to his accrued but unpaid base salary through the date of termination, any annual bonus in respect of a fiscal year that has been earned but has not been paid and unreimbursed business expenses (referred to as the “Accrued Obligations”).

Upon a termination for cause, a resignation without good reason, or a termination of employment due to his death or disability, Mr. Bousbib will be entitled only to the Accrued Obligations.

It is a condition to Mr. Bousbib’s receipt of the severance payments described above (other than the Accrued Obligations) that he timely execute (without revoking) a release of claims in favor of us and that he comply with certain restrictive covenants set forth in the employment agreement, including a covenant not to compete with us or to solicit our clients or employees during and for

 

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two years following his employment with us. Mr. Bousbib is also bound by other restrictive covenants, including covenants relating to confidentiality and non-disparagement.

Employee protection plan

Each of our named executive officers, other than Mr. Bousbib and Dr. Sian, participates in our Employee Protection Plan (the “EPP”), which provides for certain payments and benefits if the executive’s employment is terminated without cause (as defined in the EPP). Under the EPP, upon a termination of employment without cause (but not within 12 months following a change in control of us (as defined in the EPP)), the executive would be entitled to receive continued base salary payments for a period of time equal to 16 weeks or, if greater, 1.5 weeks for each $10,000 of base salary plus 2 weeks for each year of service (up to a maximum of 78 weeks). Upon a termination without cause within 12 months following a change in control, the executive would be entitled to an amount equal to 130% of the amount described in the prior sentence, payable during the same time period as described in the prior sentence. The closing of this offering will not constitute a change in control for purposes of the EPP.

Upon a termination of employment without cause, in addition to the salary continuation described above, the executive would also be entitled to continued health and life insurance coverage throughout the salary continuation period described above, a pro-rated annual bonus for the year of termination based on actual performance (but only if the executive worked for at least six months in that year), and outplacement services.

An executive will not be entitled to severance benefits under the EPP if he is offered comparable employment with us or an acquiring company. Benefits under the EPP will cease when the executive earns compensation from a new employer, and are offset by the amounts of any other severance payments that are made to the executive or by the amount of any sign-on bonus or similar amounts paid upon commencement of the executive’s employment, if such payments occurred within 12 months of the termination. Any salary continuation or benefits payable under the EPP are conditioned upon the executive’s timely execution (without revoking) of a release of claims in favor of us that may include certain restrictive covenants, including covenants relating to non-competition and non-solicitation of clients or employees that would apply, in each case, during the one-year period following the participant’s termination of employment or, if longer, the participant’s salary continuation period.

Acceleration of options and other stock-based awards

All of our named executive officers hold unvested stock options that are subject only to time-based vesting and also hold unvested stock options that are subject to both time-based and performance-based vesting, as described above. Mr. Thomson also holds time-based RSUs. All outstanding equity awards were granted under the 2010 Equity Plan, which is described below. The award agreements evidencing time-based stock options provide that if such options are not assumed, continued, substituted or cashed-out in connection with certain corporate transactions (including transactions that would constitute a change in control), they will automatically become vested in full. In addition, with respect to all time-based options and Mr. Thomson’s RSUs (to the extent they remain outstanding following a change in control), if the executive’s employment with us is terminated without cause or for good reason (each, as defined in the 2010 Equity Plan) within the two-year period following such change in control, the awards will vest in full as of immediately prior to such termination of employment.

 

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As described above, the performance-based stock options are eligible to vest based on the achievement of certain Adjusted EBITDA performance targets. To the extent such options have not vested because the Adjusted EBITDA target has not been satisfied or they are otherwise not vested, they are eligible to vest based in full or in part upon the Sponsors’ receipt of a certain level of proceeds, including in connection with certain corporate transactions. If the performance-based stock options do not vest as a result of a corporate transaction because the Sponsors do not receive the requisite amount of proceeds, the award agreements evidencing such performance-based stock options provide that such options will either remain outstanding and eligible to vest based on the achievement of Adjusted EBITDA targets for the originally specified vesting period or, if such treatment is not practical, then such options will also automatically vest in full immediately prior to the consummation of such corporate transaction.

Pursuant to the terms of their option award agreements, all of our named executive officers other than Mr. Bousbib are bound by certain restrictive covenants, including a covenant not to compete with us or to solicit our clients or employees during and for one year following the termination of their employment with us, and other covenants relating to confidentiality and non-disparagement.

Payments under pension and nonqualified deferred compensation plans

If Mr. Thomson had terminated employment on the last day of our 2013 fiscal year, assuming he elected early retirement under the Retirement Plan, he would have been entitled to the amounts described in footnote 2 to the Pension benefits table above under the Retirement Plan and the Retirement Excess Plan. If either of Messrs. Bousbib or Knightly had terminated employment on the last day of our 2013 fiscal year, no amount would have been immediately payable to him under the Retirement Plan or Retirement Excess Plan, but upon attaining age 55 each executive officer would be entitled to take early retirement benefits under the Retirement Plan and would receive a lump sum payment under the Retirement Excess Plan. If Mr. Bruehlman had terminated employment on the last day of our 2013 fiscal year, he would have forfeited all benefits under the Retirement Plan and the Retirement Excess Plan. If Dr. Sian had terminated employment on the last day of our 2013 fiscal year, no amount would have been immediately payable to him under the UK Defined Benefit Plan, but upon attaining age 55 he would be entitled to take early retirement benefits under the UK Defined Benefit Plan.

If Dr. Sian and Mr. Knightly had terminated employment on the last day of our 2013 fiscal year, their balances under the DCERP, as shown in the Nonqualified deferred compensation table above, would have been payable to them.

The occurrence of a change in control would have no impact on the amount payable, or the vesting or other terms applicable, to our named executive officers under the Retirement Plan, the DCERP or the UK Defined Benefit Plan. Under the Retirement Excess Plan, if a change in control occurs and a participant’s employment with us is involuntarily terminated within two years following the change in control for a reason other than cause, or the participant voluntarily terminates employment with us for good reason, the participant will become fully vested in his or her account balance under the plan and his or her accumulated benefit would be payable in a single lump sum on the date of such termination. The terms “change in control”, “cause” and “good reason” as applied to the Retirement Excess Plan are defined in that plan.

 

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Summary of potential payments

The following tables summarize the payments that would have been made to our named executive officers upon the occurrence of a qualifying termination of employment or change in control, assuming that each named executive officer’s termination of employment with the Company or a change in control of us occurred on December 31, 2013 (the last business day of our most recent fiscal year). If a termination of employment had occurred on this date, severance payments and benefits would have been determined, for Mr. Bousbib, under his employment agreement in effect on such date, for Dr. Sian, pursuant to U.K. statutory requirements and Company practice and, for the other named executive officers, under the EPP, as in effect on such date. Amounts shown do not include (i) accrued but unpaid salary, annual incentive bonuses for 2013 (which will be reflected in the “Non-equity incentive plan compensation” column of the Summary compensation table) and vested benefits and (ii) other benefits earned or accrued by the named executive officer during his or her employment that are available to all salaried employees and that do not discriminate in scope, terms or operations in favor of executive officers.

Potential Payments—Ari Bousbib

 

Executive payments and benefits upon termination/CIC    Involuntary
termination
without
cause/ for
good
reason
($)
    CIC without
termination
($)
     CIC with
termination
for good
reason or
without
cause
($)
 

 

 

Compensation:

       

Severance

     6,000,000 (1)              6,000,000 (1) 

Long-term incentives

                      

—Acceleration of unvested time-based options(2)

            6,894,000         6,894,000   

—Acceleration of unvested performance-based options(2)

            4,920,000         4,920,000   
  

 

 

 

Total

     6,000,000        11,814,000         17,814,000   

 

 

 

(1)   Represents two times the sum of the executive’s base salary and his target annual bonus, which is the amount payable to the executive under the terms of his employment agreement.

 

(2)   The value of the acceleration of unvested stock options is determined based on the difference between the exercise price of the options and the fair market value of a share of our common stock ($1.09) as of December 31, 2013. For purposes of this table, we have assumed that no time-based options would be assumed, continued or substituted in connection with a change in control and that, as a result, all time-based options would become fully vested in connection with such change in control. We have also assumed that the amount of proceeds received by the Sponsors in connection with a change in control would result in all performance-based options becoming fully vested in connection with such change in control. The actual treatment of stock options in connection with a change in control transaction may be different.

 

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Potential payments—Ronald E. Bruehlman

 

Executive payments and benefits upon termination/CIC    Involuntary
termination
without
cause
($)
    CIC without
termination
($)
     CIC with
termination
without
cause
($)
 

 

 

Compensation:

       

Severance

     618,750 (1)              804,375 (2) 

Long-term incentives

                      

—Acceleration of unvested time-based options(3)

            1,027,000         1,027,000   

—Acceleration of unvested performance-based options(3)

            468,000         468,000   

Benefits & perquisites:

       

Health/welfare(4)

     20,537                20,537   

Outplacement(5)

     6,500                6,500   
  

 

 

 

Total

     645,787        1,495,000         2,326,412   

 

 

 

(1)   Represents an amount equal to 71.5 weeks of the executive’s base salary, which would be payable to the executive in accordance with our customary payroll practices.

 

(2)   Represents an amount equal to 71.5 weeks of the executive’s base salary multiplied by 130%, which would be payable to the executive in accordance with our customary payroll practices.

 

(3)   The value of the acceleration of unvested stock options is determined based on the difference between the exercise price of the options and the fair market value of a share of our common stock ($1.09) as of December 31, 2013. For purposes of this table, we have assumed that no time-based options would be assumed, continued or substituted in connection with a change in control and that, as a result, all time-based options would become fully vested in connection with such change in control. We have also assumed that the amount of proceeds received by the Sponsors in connection with a change in control would result in all performance-based options becoming fully vested in connection with such change in control. The actual treatment of stock options in connection with a change in control transaction may be different.

 

(4)   Represents the cost to us of paying us portion of premiums for medical/prescription drug, dental and life insurance benefits for 17 months following the date of termination. The cost of providing these health care benefits has been calculated using the assumptions used for purposes of our financial statements.

 

(5)   Under the EPP, the executive is entitled to outplacement services not to exceed a cost of $6,500 to us.

Potential payments—Paul M. Thomson

 

Executive payments and benefits upon termination/CIC    Involuntary
termination
without
cause
($)
    CIC without
termination
($)
     CIC with
termination
without
cause
($)
 

 

 

Compensation:

       

Severance

     501,346 (1)              651,750 (2) 

Long-term incentives

                      

—Acceleration of unvested time-based options(3)

            462,000         462,000   

—Acceleration of unvested RSUs(4)

       472,500         472,500   

—Acceleration of unvested performance-based options(3)

            410,000         410,000   

Benefits & perquisites:

       

Health/welfare(5)

     5,673                5,673   

Outplacement(6)

     6,500                6,500   
  

 

 

 

Total

     513,519        1,344,500         2,008,423   

 

 

 

(1)   Represents an amount equal to 66 weeks of the executive’s base salary, which would be payable to the executive in accordance with our customary payroll practices.

 

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(2)   Represents an amount equal to 66 weeks of the executive’s base salary multiplied by 130%, which would be payable to the executive in accordance with our customary payroll practices.

 

(3)   The value of the acceleration of unvested stock options is determined based on the difference between the exercise price of the options and the fair market value of a share of our common stock ($1.09) as of December 31, 2013. For purposes of this table, we have assumed that no time-based options would be assumed, continued or substituted in connection with a change in control and that, as a result, all time-based options would become fully vested in connection with such change in control. We have also assumed that the amount of proceeds received by the Sponsors in connection with a change in control would result in all performance-based options becoming fully vested in connection with such change in control. The actual treatment of stock options in connection with a change in control transaction may be different.

 

(4)   The value of the acceleration of unvested RSUs is determined by multiplying the number of unvested RSUs (433,486) by the fair market value of a share of our common stock ($1.09) as of December 31, 2013. For purposes of this table, we have assumed that the Committee would have exercised its discretion to vest all unvested RSUs in connection with a change in control. The actual treatment of RSUs in connection with a change in control transaction may be different.

 

(5)   Represents the cost to us of paying our portion of premiums for medical/prescription drug, dental and life insurance benefits for 16 months following the date of termination. The cost of providing these health care benefits has been calculated using the assumptions used for purposes of our financial statements.

 

(6)   Under the EPP, the executive is entitled to outplacement services not to exceed a cost of $6,500 to us.

Potential payments—Satwinder Sian

 

Executive payments and benefits upon termination/CIC    Involuntary
termination
without
cause
($)
       CIC without
termination
($)
     CIC with
termination
without
cause
($)
 

 

 

Compensation:

          

Redundancy payment(1)

     467,599                   467,599   

Pay in lieu of notice(2)

     202,626              202,626   

Long-term incentives

                         

—Acceleration of unvested time-based options(3)

               460,200         460,200   

—Acceleration of unvested performance-based options(3)

               306,800         306,800   

Benefits & perquisites:

          

Outplacement(4)

     32,420                   32,420   

Total

     702,645           767,000         1,469,645   

 

 

 

(1)   Represents the benefits under an informal severance practice for U.K. employees at the executive’s level pursuant to which the executive would receive an amount equal to three weeks of base salary for each year of completed service (up to a maximum of 104 weeks of base pay) (20 years in the case of the executive). The amounts would be payable to the executive in a lump sum at the time of termination.

 

(2)   Represents an amount equal to 6 months’ base salary as payment in lieu of providing notice of termination of employment, payable to the executive in a lump sum at the time of termination.

 

(3)   The value of the acceleration of unvested stock options is determined based on the difference between the exercise price of the options and the fair market value of a share of our common stock ($1.09) as of December 31, 2013. For purposes of this table, we have assumed that no time-based options would be assumed, continued or substituted in connection with a change in control and that, as a result, all time-based options would become fully vested in connection with such change in control. We have also assumed that the amount of proceeds received by the Sponsors in connection with a change in control would result in all performance-based options becoming fully vested in connection with such change in control. The actual treatment of stock options in connection with a change in control transaction may be different.

 

(4)   Under the informal severance practice described above, the executive is entitled to outplacement services, the value of which is estimated for purposes of this table to be $32,420.

 

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Potential payments—Kevin C. Knightly

 

Executive payments and benefits upon termination/CIC    Involuntary
termination
without
cause
($)
    CIC without
termination
($)
     CIC with
termination
without
cause
($)
 

 

 

Compensation:

       

Severance

     612,000 (1)              795,600 (2) 

Long-term incentives

                      

—Acceleration of unvested time-based options(3)

            554,400         554,400   

—Acceleration of unvested performance-based options(3)

            369,600         369,600   

Benefits & perquisites:

       

Health/welfare(4)

     21,542                21,542   

Outplacement(5)

     6,500                6,500   
  

 

 

 

Total

     640,042        924,000         1,747,642   

 

 

 

(1)   Represents an amount equal to 78 weeks of the executive’s base salary, which would be payable to the executive in accordance with our customary payroll practices.

 

(2)   Represents an amount equal to 78 weeks of the executive’s base salary multiplied by 130%, which would be payable to the executive in accordance with our customary payroll practices.

 

(3)   The value of the acceleration of unvested stock options is determined based on the difference between the exercise price of the options and the fair market value of a share of our common stock ($1.09) as of December 31, 2013. For purposes of this table, we have assumed that no time-based options would be assumed, continued or substituted in connection with a change in control and that, as a result, all time-based options would become fully vested in connection with such change in control. We have also assumed that the amount of proceeds received by the Sponsors in connection with a change in control would result in all performance-based options becoming fully vested in connection with such change in control. The actual treatment of stock options in connection with a change in control transaction may be different.

 

(4)   Represents the cost to us of paying our portion of premiums for medical/prescription drug, dental and life insurance benefits for 18 months following the date of termination. The cost of providing these health care benefits has been calculated using the assumptions used for purposes of our financial statements.

 

(5)   Under the EPP, the executive is entitled to outplacement services not to exceed a cost of $6,500 to us.

Director compensation

The following table shows information regarding the compensation earned by our non-employee directors during our 2013 fiscal year. The compensation received by Mr. Bousbib as an employee during our 2013 fiscal year is included in the Summary compensation table above and he did not receive any additional compensation for his service on our board of directors. Only our Non-Sponsor directors receive compensation for their service on our board of directors.

 

Name    Fees earned
or paid in cash
($)
     Stock awards
($)(1)
       Total
($)(2)
 

 

 

Sharad S. Mansukani

     60,000         89,785           149,785   

Ronald A. Rittenmeyer

     60,000         89,785           149,785   

André Bourbonnais

                         

John G. Danhakl

                         

David Lubek

                         

Nehal Raj

                         

Jeffrey K. Rhodes

                         

Todd B. Sisitsky

                         

Bryan M. Taylor

                         

 

 

 

(1)  

The amount reported represents the aggregate grant-date fair value of RSUs granted in our 2013 fiscal year computed in accordance with FASB ASC Topic 718. The fair value of each grant of RSUs at the grant date is equal to the number of RSUs

 

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granted multiplied by the fair market value of a share of our common stock on the date of grant. Dr. Mansukani and Mr. Rittenmeyer each was granted 50,000 RSUs on May 8, 2013 when the fair market value of a share of our common stock was equal to $1.35 and an additional 20,445 RSUs when the fair market value of a share of our common stock was equal to $1.09. See “Payments and adjustments in connection with Company dividend” under “Compensation discussion and analysis” above for more information. As of December 31, 2013, Dr. Mansukani and Mr. Rittenmeyer each held 106,160 RSUs.

 

(2)   In addition to the items required to be reported in the above table, Dr. Mansukani and Mr. Rittenmeyer each received a cash dividend equivalent payment of $78,800 made with respect to all vested stock options and all stock options that were eligible to vest prior to December 1, 2013 held by the director. These payments were made in lieu of reducing the exercise prices of these stock options (as had been required by the terms of the 2010 Equity Plan on the date these stock options were granted) and the payment per option was equal to the amount of the per share reduction in the exercise price that would have otherwise occurred. As of December 31, 2013, Dr. Mansukani and Mr. Rittenmeyer each held 500,000 stock options.

Non-employee director compensation program.     Under our non-employee director compensation program, each member of our board of directors who is not our employee and who is not affiliated with our Sponsors is eligible to receive an annual cash retainer of $60,000, and an annual grant of 50,000 RSUs that vest in equal installments on each of the first two anniversaries of the date of grant, subject to continued service on each such vesting date. The RSUs will become fully vested upon certain corporate transactions, unless the Committee provides for their assumption or substitution in connection with such transaction. When a director first commences service with us, he or she is also entitled to receive an award of 500,000 stock options that vests in equal installments on each of the first five anniversaries of the date of grant, subject to continued service on each such vesting date. The stock options will become fully vested upon certain corporate transactions, unless they are assumed or substituted in connection with such transaction as provided for under the 2010 Equity Plan. The closing of this offering will not constitute a transaction that could cause full vesting of these stock options. Our board of directors has the ability to alter the terms of our director compensation program at any time.

Our board of directors may consider adopting a non-employee director compensation program in connection with this offering.

2010 Equity Plan

The following is a description of the material terms of the 2010 Equity Plan. This summary is not a complete description of all provisions of the Plan and is qualified in its entirety by reference to the 2010 Equity Plan, which is filed as an exhibit to the registration statement of which this prospectus is a part. We intend to adopt a new equity incentive plan in connection with this offering. Upon adoption of this new plan, we will no longer make awards under the 2010 Equity Plan. We also intend to adopt a new cash incentive plan in connection with this offering. When these plans are adopted we will supplement this disclosure with a description of their material terms.

Plan administration .     The 2010 Equity Plan is administered by the Committee, which has the authority to, among other things, interpret the 2010 Equity Plan, select eligible persons to receive grants of awards and determine the terms of awards under the 2010 Equity Plan.

Authorized shares .     Subject to adjustment, the maximum number of shares of our common stock that may be delivered in satisfaction of awards under the 2010 Equity Plan is 253,417,637. As of                     , 2014, awards with respect to              shares have been granted under this plan.

Eligibility .     The Committee, after consultation with our Chief Executive Officer, selects participants from among those key employees and directors of, and consultants and advisors to the Company who are in a position to make a significant contribution to the success of the Company.

 

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Types of awards; vesting .     The 2010 Equity Plan provides for grants of stock options (including incentive stock options, which are referred to herein as ISOs), stock appreciation rights, restricted and unrestricted stock and stock units, and performance awards. The Committee has the authority to determine the vesting schedule applicable to each award, and to accelerate the vesting or exercisability of any award.

Termination of employment or service .     The Committee will determine the effect of termination of employment or service on an award. Unless otherwise provided by the Committee or in an award agreement, upon a termination of employment or service all unvested options and other awards requiring exercise will terminate and all other unvested awards will be forfeited. Vested options and stock appreciation rights will remain exercisable for one year following death or disability, 90 days following a termination without cause or resignation for good reason, and 30 days following any other termination except a termination for cause (or, if shorter, for the remaining term of the option). If a participant’s service is terminated for cause, all options and other awards requiring exercise (whether or not vested) will immediately terminate.

Transferability .     Awards under the 2010 Equity Plan may not be transferred except through will or by the laws of descent and distribution, unless (for awards other than ISOs) otherwise provided by the Committee.

Corporate transactions .     In the event of certain corporate transactions (including the sale of substantially all of the assets or change in ownership of our stock or a reorganization, recapitalization, merger, consolidation, exchange, or other restructuring), the Committee may provide for continuation or assumption of outstanding awards, for new grants in substitution of outstanding awards, or for the accelerated vesting or delivery of shares under awards, in each case on such terms and with such restrictions as it deems appropriate. Except as otherwise provided in an award agreement, awards not assumed or accelerated will be terminated upon the consummation of such corporate transaction.

Change in control .     In the event of a change in control of the Company (as defined in the 2010 Equity Plan), any awards held by a participant that are continued or assumed in connection with such transaction and that are subject solely to time-based vesting conditions, will vest in full if the participant is involuntarily terminated other than for cause or voluntarily terminates for good reason within two years following the change in control.

Adjustment .     In the event of certain corporate transactions (including a stock dividend, stock split or combination of shares, recapitalization or other change in our capital structure), the Committee will make appropriate adjustments to the maximum number of shares that may be delivered under the 2010 Equity Plan, and will also make appropriate adjustments to the number and kind of shares of stock or securities subject to awards, the exercise prices of such awards or any other terms of awards affected by such change. The Committee will also make the types of adjustments described above to take into account distributions and other events other than those set forth above if it determines that such adjustments are appropriate to avoid distortion and preserve the value of awards.

Amendment and termination .     The Committee may amend the 2010 Equity Plan or outstanding awards, except that the Committee may not alter the terms of an award if it would affect adversely a participant’s rights under the award without the participant’s consent (unless expressly provided in the 2010 Equity Plan or reserved by the Committee). The 2010 Equity Plan will be terminated as to future grants of awards as of the closing of this offering.

 

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Phantom Options. Certain of our employees were granted cash-settled stock appreciation rights (“Phantom Options”) under the 2010 Equity Plan, in connection with and following the Merger. None of our directors or named executive officers hold Phantom Options. Each Phantom Option represents the conditional right to receive a cash payment based on the appreciation of our common stock upon the occurrence of certain events and will be automatically exercised on the date that is six months following the consummation of this offering. As a result, we expect to use a portion of the net proceeds from this offering to make cash payments in an estimated amount of $         million in the aggregate to holders of outstanding Phantom Options. The actual amount of the aggregate payment will be determined based on the fair market value of a share of our common stock on the date the Phantom Options are exercised. See “Use of proceeds.”

 

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Certain relationships and related party transactions

Agreements with our Sponsors and management

In connection with the Merger, we entered into various agreements with our Sponsors and members of our management. These include a stockholders agreement and a management services agreement with our Sponsors or their affiliates and management stockholder and registration rights agreements. These and related arrangements are described below.

Stockholders’ agreement

In connection with the Merger, we entered into a stockholders’ agreement with various investment entities controlled by the Sponsors. This stockholders’ agreement contains agreements among the parties with respect to the election of directors, preemptive rights, rights of first refusal and first offer upon disposition of shares, permitted transferees, tag along rights, drag along rights, registration rights and other actions requiring the approval of stockholders. In connection with this offering, certain of the provisions in the stockholders’ agreement are likely to be terminated or amended.

Management services agreement

In connection with the Merger, we entered into a management services agreement with affiliates of TPG, CPPIB and LGP (collectively, the “Managers”), pursuant to which the Managers will provide management services to us until December 31, 2020, with evergreen one-year extensions thereafter. Pursuant to this agreement, the Managers received aggregate transaction fees of approximately $60 million in connection with services provided by such entities related to the Merger. The Managers also receive an aggregate annual management fee equal to approximately $7.5 million, and reimbursement for out-of-pocket expenses incurred by them, their members or their respective affiliates in connection with the provision of services pursuant to the agreement. Pursuant to the management services agreement, the Managers may provide advisory services related to financings or refinancings, recapitalizations, acquisitions, dispositions or other similar transactions; in connection with any such services the Managers have the right to receive customary fees charged by internationally recognized investment banks for serving as financial advisor in similar transactions. The agreement includes customary exculpation and indemnification provisions in favor of the Managers and their respective affiliates.

The management services agreement will terminate pursuant to its terms upon consummation of this offering, and, upon termination, the Managers will receive a one-time fee in an amount equal to $         million.

Equity investment by management

In connection with the Merger, certain members of management were offered the opportunity to purchase our common stock at a purchase price of $1.00 per share, the then fair market value, and since that time certain new members of management and new directors have been offered the opportunity to purchase our common stock at the fair market value of a share of our common stock at the time of purchase. In addition, in connection with the Merger, certain members of management were also able to roll over IMS Health stock appreciation rights and/or IMS Health common stock held directly in exchange for stock appreciation rights to acquire

 

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shares of our common stock and/or shares of our common stock and to notionally invest their existing accounts under IMS Health’s deferred compensation plan in shares of our common stock.

Management stockholders and registration rights agreements

In connection with the Merger, we entered into stockholders’ and registration rights agreements with certain members of management, and other members of management have joined those agreements since the Merger. These stockholders’ and registration rights agreements contain agreements among the parties with respect to voting rights, preemptive rights, permitted transferees, tag along rights, drag along rights, registration rights and other actions relating to certain members of our management. In connection with this offering, certain of the provisions in the stockholders’ agreement are likely to be terminated or amended.

Transactions with other Sponsor portfolio companies

The Sponsors are private equity firms that have investments in companies that do business with us in the ordinary course of business. We believe these transactions are conducted on an arms-length basis. For fiscal 2012, 2011 and 2010, we recorded approximately $11 million, $9 million and $9 million, respectively, associated with sales of our products and services to companies in which one or more of our Sponsors have investments. For fiscal 2012, 2011 and 2010, we purchased goods and services of approximately $6 million, $5 million and $4 million, respectively, from companies in which one or more of the Sponsors have investments.

Certain other relationships

In connection with the offering by our wholly-owned direct subsidiary, Healthcare Technology Intermediate, Inc., of $750 million Senior PIK Notes in August 2013, TPG Capital BD, LLC participated as an initial purchaser, and received $0.8 million in initial purchasers’ discounts in connection therewith.

Related person transactions policy

In connection with this offering, we have adopted a policy with respect to the review, approval and ratification of related person transactions. Under the policy, our nominating and corporate governance committee is responsible for reviewing and approving related person transactions. In the course of its review and approval of related person transactions, our nominating and corporate governance committee will consider the relevant facts and circumstances to decide whether to approve such transactions. Related person transactions must be approved or ratified by the nominating and corporate governance committee based on full information about the proposed transaction and the related person’s interest. Our policy provides that we generally should not engage in related person transactions, unless:

 

 

the transaction offers clear advantages to us, and its purpose is not to confer an advantage on the related person;

 

 

we are acquiring goods or services, and comparable goods or services are not available from unrelated third parties;

 

 

we are selling goods or services, and the terms of the transaction are comparable to terms we provide to unrelated third parties;

 

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the transaction will be approved for us by independent decision-makers in good faith and without influence of the person who has a conflicting interest; or

 

 

the transaction is in our best interests.

We did not have a written policy regarding the review and approval of related person transactions immediately prior to this offering. Nevertheless, with respect to such transactions, it was our policy for our board of directors to consider the nature of and business reason for such transactions, how the terms of such transactions compared to those which might be obtained from unaffiliated third parties and whether such transactions were otherwise fair to and in the best interests of, or not contrary to, our best interests.

 

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Principal and selling stockholders

The following table sets forth information relating to the beneficial ownership of our common stock as of October 31, 2013, by:

 

 

each person, or group of affiliated persons, known by us to beneficially own more than 5% of our outstanding shares of common stock;

 

 

each of our directors;

 

 

each of our named executive officers;

 

 

all directors and executive officers as a group; and

 

 

each other selling stockholder.

Beneficial ownership is determined in accordance with SEC rules. In general, under these rules a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares voting power or investment power with respect to such security. A person is also deemed to be a beneficial owner of a security if that person has the right to acquire beneficial ownership of such security within 60 days. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock held by that person.

 

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The percentage of shares beneficially owned is computed on the basis of 2,800,210,667 shares of our common stock outstanding as of October 31, 2013. Shares of our common stock that a person has the right to acquire within 60 days of October 31, 2013 are deemed outstanding for purposes of computing the percentage ownership of such person’s holdings, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all directors and executive officers as a group. Unless otherwise indicated below, the address for each beneficial owner listed is c/o IMS Health Holdings, Inc., 83 Wooster Heights Road, Danbury, Connecticut 06810.

 

Name and address of

beneficial owners

  Shares
beneficially
owned
prior to
this offering
    Number of
shares
being
offered
  Number of
shares
subject to
option
  Shares
beneficially
owned after
this offering
(without option)
  Shares
beneficially
owned after
this offering

(with option)
  Number     Percent         Number   Percent   Number   Percent

 

5% stockholders:

               

TPG Funds(1)

    1,740,000,000        62.1%               

CPPIB-PHI(2)

    730,000,000        26.1%               

Green Equity Investors V, L.P., Green Equity Investors Side V, L.P. and LGP Iceberg Co-invest, LLC(3)

    300,000,000        10.7%               

Directors and named executive officers:

               

Ari Bousbib(4)

    37,148,500        1.3%               

Ronald E. Bruehlman(5)

    1,869,642        *               

Kevin C. Knightly(6)

    2,439,490        *               

Satwinder Sian(7)

    1,840,247        *               

Paul M. Thomson(8)

    1,850,000        *               

André Bourbonnais

           *               

John G. Danhakl(3)

           *               

David Lubek

           *               

Sharad S. Mansukani(9)

    446,428        *               

Nehal Raj(10)

           *               

Jeffrey K. Rhodes(11)

           *               

Ronald A. Rittenmeyer(12)

    1,446,428        *               

Todd B. Sisitsky(13)

           *               

Bryan M. Taylor(14)

           *               

All executive officers and directors as a group (16 persons)(15)

    51,949,714        1.8%               

 

 

*   Represents beneficial ownership of less than one percent of our outstanding shares of common stock.

 

(1)  

Shares shown as beneficially owned by the TPG Funds include the following: (a) 726,566,616 shares of common stock held by TPG Partners V, L.P., a Delaware limited partnership; (b) 1,900,708 shares of common stock held by TPG FOF V-A, L.P., a Delaware limited partnership; (c) 1,532,676 shares of common stock held by TPG FOF V-B, L.P., a Delaware limited partnership; (d) 727,125,643 shares of common stock held by TPG Partners VI, L.P., a Delaware limited partnership; (e) 2,874,357 shares of common stock held by TPG FOF VI SPV, L.P., a Delaware limited partnership; (f) 30,000,000 shares of common stock held by TPG Biotechnology Partners III, L.P., a Delaware limited partnership; and (g) 250,000,000 shares of common stock held by TPG Iceberg Co-Invest LLC, a Delaware limited liability company (together with TPG Partners V, L.P., TPG FOF V-A, L.P, TPG FOF V-B, L.P., TPG FOF VI SPV, L.P. and TPG Biotechnology Partners III, L.P., the “TPG Funds”). The general partner of each of TPG Partners V, L.P., TPG FOF V-A, L.P. and TPG FOF V-B, L.P. is TPG GenPar V, L.P., a Delaware limited partnership, whose general partner is TPG GenPar V Advisors, LLC, a Delaware limited liability company. The general partner of TPG Partners VI, L.P. is TPG GenPar VI, L.P., a Delaware limited partnership, whose general partner is TPG GenPar VI Advisors, LLC. The general partner of TPG Biotechnology Partners III, L.P. is TPG Biotechnology GenPar III, L.P., a Delaware limited partnership, whose general partner is TPG Biotechnology GenPar III Advisors, LLC, a Delaware limited liability company. The sole member of each

 

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of TPG GenPar V Advisors, LLC, TPG GenPar VI Advisors, LLC and TPG Biotechnology GenPar III Advisors, LLC is TPG Holdings I, L.P., a Delaware limited partnership, whose general partner is TPG Holdings I-A, LLC, a Delaware limited liability company, whose sole member is TPG Group Holdings (SBS), L.P., a Delaware limited partnership, whose general partner is TPG Group Holdings (SBS) Advisors, Inc., a Delaware corporation. The general partner of TPG FOF VI SPV, L.P. and the managing member of TPG Iceberg Co-Invest LLC is TPG Advisors VI, Inc., a Delaware corporation. David Bonderman and James G. Coulter are directors, officers and sole stockholders of each of TPG Advisors VI, Inc. and TPG Group Holdings (SBS) Advisors, Inc. and may therefore be deemed to be the beneficial owners of the shares held by the TPG Funds. Messrs. Bonderman and Coulter disclaim beneficial ownership of the shares held by the TPG Funds except to the extent of their pecuniary interest therein. The address of each of TPG Advisors VI, Inc., TPG Group Holdings (SBS) Advisors, Inc. and Messrs. Bonderman and Coulter is c/o TPG Global, LLC, 301 Commerce Street, Suite 3300, Fort Worth, TX 76102.

 

(2)   CPPIB-PHI is a wholly owned subsidiary of the Canada Pension Plan Investment Board, which therefore beneficially owns the ordinary shares held by CPPIB-PHI. All shares of the Canada Pension Plan Investment Board were issued to Canada’s Federal Minister of Finance to be held on behalf of Her Majesty Queen Elizabeth II in right of Canada. Messrs. Mark Wiseman and John Butler as authorized officers of CPPIB-PHI have authority to vote or dispose of the shares of CPPIB-PHI. The address of each of CPPIB-PHI and Messrs. Wiseman and Butler is c/o Canada Pension Plan Investment Board, One Queen Street East, Suite 2500, P.O. Box 101, Toronto, Ontario M5C 2W5 Canada.

 

(3)   Voting and investment power with respect to the shares of our common stock held by Green Equity Investors V, L.P. and Green Equity Investors Side V, L.P. (collectively, the “Green Funds”) and LGP Iceberg Co-invest, LLC (“LGP Ice”) may be deemed to be shared by certain affiliated entities. GEI Capital V, LLC (“GEIC”), is the general partner of the Green Funds. Green V Holdings, LLC (“Holdings”) is a limited partner of the Green Funds. LGP is the management company of the Green Funds, the Manager of LGP Ice and an affiliate of GEIC and Holdings. LGP Management, Inc. (“LGPM”) is the general partner of LGP. Each of the Green Funds, Holdings, LGP, LGPM and LGP Ice disclaims such shared beneficial ownership of our common stock, except to the extent of its pecuniary interest therein. Mr. Danhakl may also be deemed to share voting and investment power with respect to such shares due to his position with LGPM, and disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. Messrs. Danhakl, Peter J. Nolan, Jonathan D. Sokoloff, Jonathan A. Seiffer, John M. Baumer, Timothy J. Flynn, James D. Halper, Todd M. Purdy, Michael S. Solomon, and W. Christian McCollum either directly (whether through ownership interest or position) or indirectly through one or more intermediaries, may be deemed to control LGP. As such, Messrs. Danhakl, Nolan, Sokoloff, Seiffer, Baumer, Flynn, Halper, Purdy, Solomon and McCollum may be deemed to have shared voting and investment power with respect to all shares beneficially owned by LGP Ice. These individuals disclaim beneficial ownership of the securities held by LGP Ice except to the extent of his pecuniary interest therein. The address of each of the Green Funds, LGP Ice and each of the foregoing individuals is c/o Leonard Green & Partners, L.P., 11111 Santa Monica Boulevard, Suite 2000, Los Angeles, California 90025.

 

(4)   Includes 23,000,000 shares underlying stock options that are currently exercisable or vest within 60 days.

 

(5)   Includes 1,200,000 shares underlying stock options that are currently exercisable or vest within 60 days.

 

(6)   Includes 1,800,000 shares underlying stock options that are currently exercisable or vest within 60 days, 155,996 shares underlying vested stock appreciation rights and 483,494 notional shares held under the Defined Contribution Executive Retirement Plan.

 

(7)   Includes 1,400,000 shares underlying stock options that are currently exercisable or vest within 60 days and 159,973 shares underlying vested stock appreciation rights and 280,274 notional shares held under the Defined Contribution Executive Retirement Plan.

 

(8)   Includes 1,500,000 shares underlying stock options that are currently exercisable or vest within 60 days.

 

(9)   Includes 300,000 shares underlying stock options that are currently exercisable or vest within 60 days. Sharad S. Mansukani, who is one of our directors, is a TPG Senior Advisor. Mr. Mansukani has no voting or investment power over and disclaims beneficial ownership of the shares held by the TPG Funds. The address of Mr. Mansukani is c/o TPG Global, LLC, 301 Commerce Street, Suite 3300, Fort Worth, TX 76102.

 

(10)   Nehal Raj, who is one of our directors, is a TPG Principal. Mr. Raj has no voting or investment power over and disclaims beneficial ownership of the shares held by the TPG Funds. The address of Mr. Raj is c/o TPG Global, LLC, 301 Commerce Street, Suite 3300, Fort Worth, TX 76102.

 

(11)   Jeffrey K. Rhodes, who is one of our directors, is a TPG Principal. Mr. Rhodes has no voting or investment power over and disclaims beneficial ownership of the shares held by the TPG Funds. The address of Mr. Rhodes is c/o TPG Global, LLC, 301 Commerce Street, Suite 3300, Fort Worth, TX 76102.

 

(12)   Includes 300,000 shares underlying stock options that are currently exercisable or vest within 60 days.

 

(13)   Todd B. Sisitsky, who is one of our directors, is a TPG Partner. Mr. Sisitsky has no voting or investment power over and disclaims beneficial ownership of the shares held by the TPG Funds. The address of Mr. Sisitsky is c/o TPG Global, LLC, 301 Commerce Street, Suite 3300, Fort Worth, TX 76102.

 

(14)   Bryan M. Taylor, who is one of our directors, is a TPG Partner. Mr. Taylor has no voting or investment power over and disclaims beneficial ownership of the shares held by the TPG Funds. The address of Mr. Taylor is c/o TPG Global, LLC, 301 Commerce Street, Suite 3300, Fort Worth, TX 76102.

 

(15)   Includes 33,850,000 shares underlying stock options that are currently exercisable or vest within 60 days and 551,404 shares underlying vested stock appreciation rights and 763,768 notional shares held under the Defined Contribution Executive Retirement Plan.

 

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Description of indebtedness

We summarize below the principal terms of the agreements that govern our existing indebtedness. We refer you to the exhibits to the registration statement of which this prospectus forms a part for copies of agreements governing the indebtedness described below.

Senior Secured Credit Facilities

Overview .    On October 24, 2012, IMS Health, and certain of its foreign subsidiaries, as co-borrowers, entered into the Senior Secured Credit Facilities. On February 6, 2013, IMS Health entered into an amendment to the Senior Secured Credit Facilities to reduce the interest rates applicable to the term loans thereunder. The following is a summary of the terms of the Senior Secured Credit Facilities after giving effect to such subsequent repricing amendment.

As of September 30, 2013, the Senior Secured Credit Facilities provide for senior secured financing of up to approximately $3,137 million, consisting of:

 

 

a $1,750 million term loan maturing in 2017;

 

 

a 748 million (or approximately $1,012 billion based on exchange rates in effect as of September 30, 2013) term loan maturing in 2017; and

 

 

a $375.0 million revolving credit facility maturing in 2017, of which (x) $175.0 million is available to us in U.S. dollars (and includes letter of credit and swingline loan sub-facilities), (y) $100.0 million is available to us and IMS Japan K.K. in U.S. dollars and Japanese yen and (z) $100.0 million is available to us and IMS AG in U.S. dollars, euros and Swiss francs.

All borrowings under the Senior Secured Credit Facilities are subject to the satisfaction of customary conditions, including the accuracy of certain representations and warranties and the absence of a default.

The Senior Secured Credit Facilities provide that IMS Health has the right to request additional commitments (x) for new term loans and (y) to increase the size of the existing revolving credit facility, in an aggregate principal amount not in excess of the greater of (i) $300.0 million and (ii) the amount of new term loans and increased revolving credit commitments such that the senior secured net leverage ratio shall be no greater than 3.50 to 1.00 after giving pro forma effect to such increases (assuming such revolving credit commitments are fully borrowed). In addition, the Senior Secured Credit Facilities provide that we have the right to replace and extend existing commitments with new commitments from existing or new lenders. The lenders under the Senior Secured Credit Facilities are not under any obligation to provide any such additional commitments, and any increase in, or replacement or extension of, commitments is subject to several conditions precedent and limitations.

Interest rate and fees .    Borrowings under the Senior Secured Credit Facilities, other than swingline loans and loans denominated in a currency other than U.S. dollars, bear interest at a rate per annum equal to, at our option, either (a) a base rate determined by reference to the highest of (1) the prime rate of Bank of America, N.A. and (2) the federal funds effective rate plus 0.50% and (3) the one-month LIBOR rate plus 1.00%; provided, that, with respect to term loans denominated in U.S. dollars, the base rate at any time shall not be less than 2.00% or (b) the higher of (1) a LIBOR rate adjusted for statutory reserve requirements for a one-, two-, three- or six-month interest period, or if available to all applicable lenders, one or two weeks (for

 

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loans denominated in U.S. dollars) or nine- or twelve-month interest period, and (2) (x) 1.00% for term loans denominated in U.S. dollars or (y) 1.25% for term loans denominated in a currency other than U.S. dollars, in each case, plus an applicable margin. Swingline loans bear interest at the interest rate applicable to base rate loans. Borrowings denominated in currencies other than U.S. dollars bear interest at the interest rate applicable to LIBOR rate loans.

The applicable margin for borrowings of revolving loans under the Senior Secured Credit Facilities is subject to adjustment each fiscal quarter based on our leverage ratio and ranges from (a) 1.75% to 2.25% per annum with respect to revolving loans that are base rate borrowings and (b) 2.75% to 3.25% per annum with respect to revolving loans that are LIBOR borrowings. The applicable margin for borrowings of term loans under the Senior Secured Credit Facilities is equal at all times to (1) for U.S. dollar term loans, (a) 1.75% for base rate loans and (b) 2.75% for adjusted LIBOR loans and (2) for Euro term loans, 3.00%.

On the last day of each calendar quarter IMS Health is required to pay a commitment fee in respect of any unused commitments under the revolving credit facility equal to 0.75% per annum. IMS Health is also required to pay customary letter of credit fees and certain other agency fees.

Prepayments .    IMS Health is required to prepay outstanding term loans, subject to certain exceptions, with:

 

 

50% (with stepdowns to 25% and 0% based upon IMS Health’s leverage ratio) of IMS Health’s annual consolidated excess cash flow (as defined in the Senior Secured Credit Facilities agreement), subject to certain exceptions;

 

 

100% of the net proceeds of certain asset sales and insurance/condemnation events, subject to reinvestment rights and certain other exceptions; and

 

 

100% of the net proceeds of any incurrence of debt, excluding certain permitted debt issuances.

In addition, commitment reductions of the revolving credit facility, and voluntary prepayments of the term loans and loans under the revolving credit facility are permitted, in whole or in part, in minimum amounts without premium or penalty, other than customary breakage costs with respect to adjusted LIBOR loans.

Amortization of principal .    IMS Health is required to make scheduled quarterly payments on the term loans each equal to approximately 0.25% of the original principal amount of the term loans with the balance paid at maturity.

Guarantees and collateral .    The obligations under the Senior Secured Credit Facilities are guaranteed by each of IMS Health’s current and future domestic wholly-owned restricted subsidiaries (excluding IMS Japan K.K.) and by Healthcare Technology Intermediate Holdings, Inc. and, subject to the next succeeding sentence, are secured by a perfected security interest in substantially all of our assets and assets of the guarantors of the Senior Secured Credit Facilities, in each case, now owned or later acquired, including a pledge of all of the capital stock of IMS Health, the capital stock of substantially all of IMS Health’s domestic restricted subsidiaries and 66% of the voting capital stock of IMS Health’s foreign restricted subsidiaries that are directly owned by IMS Health or a guarantor of the Senior Secured Credit Facilities. The obligations of IMS AG, the Swiss subsidiary borrower, are guaranteed by certain of its current and future wholly-owned restricted subsidiaries organized in Switzerland and are secured by a perfected

 

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security interest in certain of the assets of IMS AG and the Swiss guarantors, including a pledge of the capital stock of the Swiss guarantors. The obligations of IMS Japan K.K. are secured by a perfected security in certain of its assets.

Restrictive covenants and other matters .    The Senior Secured Credit Facilities require IMS Health to comply with a quarterly maximum leverage ratio test, which financial covenant becomes more restrictive over time. In addition, the Senior Secured Credit Facilities agreement includes negative covenants that, subject to exceptions, limit the ability of IMS Health and its restricted subsidiaries, to, among other things:

 

 

incur liens and engage in sale-leaseback transactions;

 

make investments and loans;

 

make capital expenditures;

 

incur indebtedness or guarantees;

 

engage in mergers, acquisitions and asset sales;

 

declare dividends, make payments or redeem or repurchase equity interests;

 

alter the business IMS Health and its restricted subsidiaries conduct;

 

enter into agreements limiting restricted subsidiary distributions;

 

prepay, redeem or purchase certain indebtedness; and

 

engage in certain transactions with affiliates.

The Senior Secured Credit Facilities contain certain customary representations and warranties, affirmative covenants and events of default. If any such event of default occurs, the lenders under the Senior Secured Credit Facilities will be entitled to take various actions, including the acceleration of amounts due under the Senior Secured Credit Facilities and all actions permitted to be taken by a secured creditor.

Old 12.5% Senior Notes

Overview

On February 26, 2010, IMS Health entered into an indenture under which it issued an aggregate principal amount of $1.0 billion of senior unsecured notes due 2018, which we refer to as the “Old 12.5% Senior Notes.” On March 16, 2011, IMS Health entered into a Supplemental Indenture to amend certain covenants in the Old 12.5% Senior Notes indenture. On October 24, 2012, we completed an exchange offer and consent solicitation (the “Exchange Offer”) to exchange the Old 12.5% Senior Notes for new 12.5% Senior Unsecured Notes due 2018, which we refer to as the “12.5% Senior Notes,” and to solicit consents to amend certain covenants to the Old 12.5% Senior Notes in connection with the second amendment and restatement of the Senior Secured Credit Facilities and the issuance of IMS Health’s 6% Senior Notes. The Old 12.5% Senior Notes bear interest in cash at the rate of 12.5% per annum. Interest on the Old 12.5% Senior Notes is payable quarterly on March 1, June 1, September 1 and December 1 of each year. As of September 30, 2013, the outstanding aggregate principal amount of the Old 12.5% Senior Notes was $0.4 million. The following is a summary of the terms of the Old 12.5% Senior Notes following the Exchange Offer.

Optional redemption

On and after March 1, 2014, IMS Health may redeem the Old 12.5% Senior Notes, in whole or in part, at a price equal to 100% of the principal amount thereof, plus an applicable premium declining ratably to par, plus accrued and unpaid interest and special interest, if any.

 

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Prior to March 1, 2014, IMS Health may redeem the Old 12.5% Senior Notes, in whole or in part, at a price equal to 100% of the principal amount thereof, plus a “make-whole” premium, plus accrued and unpaid interest and special interest, if any.

Change of control offer

If a change of control occurs, IMS Health must give holders of the Old 12.5% Senior Notes an opportunity to sell their notes to IMS Health at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest and special interest, if any.

Mandatory offer to purchase following certain asset sales

If IMS Health or its restricted subsidiaries engage in certain asset sales, IMS Health generally must either invest the net proceeds from such sales in its business within a period of time, prepay certain debt or make an offer to purchase a principal amount of the outstanding Old 12.5% Senior Notes equal to the excess net proceeds, subject to certain exceptions. The purchase price of the Old 12.5% Senior Notes in any asset sale offer would be 100% of their principal amount, plus accrued and unpaid interest and special interest, if any.

Guarantees

IMS Health’s obligations under the Old 12.5% Senior Notes are guaranteed by Healthcare Technology Intermediate Holdings, Inc. and all of IMS Health’s existing and subsequently acquired or organized restricted subsidiaries that guarantee the Senior Secured Credit Facilities or other indebtedness of IMS Health or any guarantor of the Old 12.5% Senior Notes.

Certain covenants and events of default

The indenture governing the Old 12.5% Senior Notes contains a number of covenants that, among other things and, subject to certain exceptions, restrict the ability of IMS Health and its restricted subsidiaries to:

 

 

incur additional debt and issue certain capital stock;

 

 

pay dividends on, redeem or repurchase capital stock;

 

 

prepay subordinated debt;

 

 

make certain investments, loans, advances and acquisitions;

 

 

enter into certain types of transactions with affiliates;

 

 

incur certain liens;

 

 

consolidate, merge or transfer all or substantially all of IMS Health’s assets and the assets of IMS Health’s restricted subsidiaries; and

 

 

enter into agreements restricting IMS Health’s restricted subsidiaries’ ability to pay dividends.

The indenture governing the Old 12.5% Senior Notes also contains certain customary affirmative covenants and events of default.

 

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New 12.5% Senior Notes

Overview

In connection with the Exchange Offer, on October 24, 2012 IMS Health entered into an indenture under which it issued an aggregate principal amount of $999.6 million of 12.5% Senior Notes, which we refer to as the “New 12.5% Senior Notes.” The New 12.5% Senior Notes bear interest in cash at the rate of 12.5% per annum. Interest on the New 12.5% Senior Notes is payable quarterly on March 1, June 1, September 1 and December 1 of each year. The following is a description of the New 12.5% Senior Notes.

Optional redemption

On and after March 1, 2015, IMS Health may redeem the New 12.5% Senior Notes, in whole or in part, at a price equal to 100% of the principal amount thereof, plus an applicable premium declining ratably to par, plus accrued and unpaid interest and special interest, if any.

Prior to March 1, 2015, IMS Health may redeem the New 12.5% Senior Notes, in whole or in part, at a price equal to 100% of the principal amount thereof, plus a “make-whole” premium, plus accrued and unpaid interest and special interest, if any.

Additionally, at any time prior to March 1, 2015, IMS Health may redeem, subject to certain conditions and limitations, up to 65% of our New 12.5% Senior Notes at a redemption price equal to the sum of (a) 112.50% of the aggregate principal amount thereof, plus (b) accrued and unpaid interest and special interest, if any, to the redemption date, with the net cash proceeds raised in one or more public equity offerings of any of its direct or indirect parent companies and contributed to IMS Health.

Change of control offer

If a change of control occurs, IMS Health must give holders of the New 12.5% Senior Notes an opportunity to sell their notes to IMS Health at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest and special interest, if any.

Mandatory offer to purchase following certain asset sales

If IMS Health or its restricted subsidiaries engage in certain asset sales, IMS Health generally must invest the net proceeds from such sales in our business within a period of time, prepay certain debt or make an offer to purchase a principal amount of the outstanding New 12.5% Senior Notes equal to the excess net proceeds, subject to certain exceptions. The purchase price of the New 12.5% Senior Notes in any asset sale offer would be 100% of their principal amount, plus accrued and unpaid interest and special interest, if any.

Guarantees

IMS Health’s obligations under the New 12.5% Senior Notes are guaranteed by Healthcare Technology Intermediate Holdings, Inc. and all of IMS Health’s existing and subsequently acquired or organized restricted subsidiaries that guarantee the Senior Secured Credit Facilities or other indebtedness of the IMS Health or any guarantor of the New 12.5% Senior Notes.

 

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Certain covenants and events of default

The indenture governing the New 12.5% Senior Notes contains a number of covenants that, among other things and subject to certain exceptions, restrict the ability of IMS Health and its restricted subsidiaries to:

 

 

incur additional debt and issue certain capital stock;

 

 

pay dividends on, redeem or repurchase capital stock;

 

 

prepay subordinated debt;

 

 

make certain investments, loans, advances and acquisitions;

 

 

enter into certain types of transactions with affiliates;

 

 

incur certain liens;

 

 

consolidate, merge or transfer all or substantially all of IMS Health’s assets and the assets of IMS Health’s restricted subsidiaries; and

 

 

enter into agreements restricting IMS Health’s restricted subsidiaries’ ability to pay dividends.

The indenture governing our New 12.5% Senior Notes also contains certain customary affirmative covenants and events of default.

6% Senior Notes

Overview

On October 24, 2012 IMS Health entered into an indenture under which IMS Health issued an aggregate principal amount of $500.0 million of 6% Senior Notes. The 6% Senior Notes bear interest in cash at the rate of 6.0% per annum. Interest on the 6% Senior Notes is payable semi-annually on May 1 and November 1 of each year.

Optional redemption

On and after November 1, 2015, IMS Health may redeem the 6% Senior Notes, in whole or in part, at a price equal to 100% of the principal amount thereof, plus an applicable premium declining ratably to par, plus accrued and unpaid interest if any.

Prior to November 1, 2015, IMS Health may redeem the 6% Senior Notes, in whole or in part, at a price equal to 100% of the principal amount thereof, plus a “make-whole” premium, plus accrued and unpaid interest, if any.

Additionally, at any time prior to November 1, 2015, IMS Health may redeem, subject to certain conditions and limitations, up to 40% of our 6% Senior Notes at a redemption price equal to the sum of (a) 106.000% of the aggregate principal amount thereof, plus (b) accrued and unpaid interest, if any, to the redemption date, subject to certain exceptions, with net cash proceeds raised in one or more equity offerings or a contribution to IMS Health’s common equity capital made with the net cash proceeds of a concurrent equity offering.

 

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Change of control offer

If a change of control occurs, IMS Health must give holders of the 6% Senior Notes an opportunity to sell their notes to IMS Health at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any.

Mandatory offer to purchase following certain asset sales

If IMS Health or its restricted subsidiaries engage in certain asset sales, IMS Health generally must invest the net proceeds from such sales in our business within a period of time, prepay certain debt or make an offer to purchase a principal amount of the outstanding 6% Senior Notes equal to the excess net proceeds, subject to certain exceptions. The purchase price of the 6% Senior Notes in any asset sale offer would be 100% of their principal amount, plus accrued and unpaid interest, if any.

Guarantees

IMS Health’s obligations under the 6% Senior Notes are guaranteed by all of IMS Health’s material existing and subsequently acquired or organized wholly-owned domestic restricted subsidiaries and, subject to certain exceptions, each of IMS Health’s existing and subsequently acquired or organized domestic restricted subsidiaries that guarantee the Senior Secured Credit Facilities or other indebtedness of IMS Health or any guarantor of the 6% Senior Notes.

Certain covenants and events of default

The indenture governing the 6% Senior Notes contains a number of covenants that, among other things and subject to certain exceptions, restricts the ability of IMS Health and its restricted subsidiaries to:

 

 

incur additional debt and issue certain capital stock;

 

 

pay dividends on, redeem or repurchase capital stock;

 

 

prepay subordinated debt;

 

 

make certain investments, loans, advances and acquisitions;

 

 

enter into certain types of transactions with affiliates;

 

 

incur certain liens;

 

 

consolidate, merge or transfer all or substantially all of IMS Health’s assets and the assets of IMS Health’s restricted subsidiaries; and

 

 

enter into agreements restricting IMS Health’s restricted subsidiaries’ ability to pay dividends.

The indenture governing our 6% Senior Notes also contains certain customary affirmative covenants and events of default.

 

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Senior PIK Notes

Overview

On August 6, 2013, Healthcare Technology Intermediate, Inc., a Delaware corporation and an indirect parent company of IMS Health, entered into an indenture under which Healthcare Technology issued an aggregate principal amount of $750.0 million of Senior PIK Notes. The Senior PIK Notes due 2018 bear interest that (i) may be paid in cash at the rate of 7.375% per annum or (ii) subject to certain requirements, may be “paid in kind” with additional indebtedness at the rate of 8.125% per annum. The amount of interest payable in kind on any interest payment date is determined by reference to a scale based on (i) IMS Health’s and its affiliates’ contractual ability to dividend or distribute funds to Healthcare Technology and (ii) Healthcare Technology’s cash and cash equivalents on hand (subject, in each case, to certain adjustments). Interest on the Senior PIK Notes is payable semi-annually on March 1 and September 1 of each year, beginning March 1, 2014.

Optional redemption

On and after September 1, 2014, Healthcare Technology may redeem the Senior PIK Notes, in whole or in part, at a price equal to 100% of the principal amount thereof, plus an applicable premium declining ratably to par, plus accrued and unpaid interest, if any.

Prior to September 1, 2014, Healthcare Technology may redeem the Senior PIK Notes, in whole or in part, at a price equal to 100% of the principal amount thereof, plus a “make-whole” premium, plus accrued and unpaid interest, if any.

Additionally, at any time prior to September 1, 2015, Healthcare Technology may redeem, subject to certain conditions and limitations, up to 100% of the Senior PIK Notes at a redemption price equal to the sum of (a) (i) prior to September 1, 2014, 102.0% of the aggregate principal amount thereof and (ii) from September 1, 2014 to September 1, 2015, 101.0% of the aggregate principal amount thereof, plus (b) accrued and unpaid interest, if any, to the redemption date, so long as such redemption occurs within 180 days of the closing date of an equity offering (subject to certain exceptions) and that an amount equal to at least the applicable equity offering redemption amount is received or contributed to the capital of Healthcare Technology or any of its restricted subsidiaries.

Change of control offer

If a change of control occurs, Healthcare Technology must give holders of the Senior PIK Notes an opportunity to sell their notes to Healthcare Technology at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any. Subject to exceptions, if holders of not less than 90% of the aggregate principal amount of Senior PIK Notes outstanding tender and sell such notes in a change of control offer, Healthcare Technology has the right to purchase all remaining Senior PIK Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any.

Mandatory offer to purchase following certain asset sales

If Healthcare Technology or its restricted subsidiaries (including IMS Health and its restricted subsidiaries) engage in certain asset sales, the applicable entity generally must invest the net

 

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proceeds from such sales in our business within a period of time or prepay certain debt or Healthcare Technology must make an offer to purchase a principal amount of the outstanding Senior PIK Notes equal to the excess net proceeds from the applicable sales. Healthcare Technology’s responsibility to make such asset sale offers is subject to certain exceptions, including the ability of Healthcare Technology’s subsidiaries and affiliates to dividend or distribute the excess proceeds of such asset sales to Healthcare Technology under the terms of such subsidiaries’ indebtedness. The purchase price of the Senior PIK Notes in any asset sale offer would be 100% of their principal amount, plus accrued and unpaid interest, if any.

Guarantees

Healthcare Technology’s obligations under the Senior PIK Notes are not guaranteed by IMS Health or any of its subsidiaries. Subject to certain exceptions, subsidiaries of Healthcare Technology that guarantee the payment of other indebtedness of Healthcare Technology must thereafter guarantee the Senior PIK Notes.

Certain covenants and events of default

The indenture governing the Senior PIK Notes contains a number of covenants that, among other things and subject to certain exceptions, restricts the ability of Healthcare Technology and its restricted subsidiaries to:

 

 

incur additional debt and issue certain capital stock;

 

 

pay dividends on, redeem or repurchase capital stock;

 

 

prepay subordinated debt;

 

 

make certain investments, loans, advances and acquisitions;

 

 

enter into certain types of transactions with affiliates;

 

 

incur certain liens;

 

 

consolidate, merge or transfer all or substantially all of Healthcare Technology’s assets and the assets of Healthcare Technology’s restricted subsidiaries; and

 

 

enter into agreements restricting Healthcare Technology’s restricted subsidiaries’ ability to pay dividends.

The indenture governing the Senior PIK Notes also contains certain customary affirmative covenants and events of default.

 

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Description of capital stock

General

Upon completion of this offering, our authorized capital stock will consist of              shares of common stock, par value $0.001 per share, and              shares of preferred stock, par value $0.001 per share. The following description of our capital stock is intended as a summary only and is qualified in its entirety by reference to our certificate of incorporation and bylaws to be in effect at the closing of this offering, which are filed as exhibits to the registration statement of which this prospectus forms a part, and to the applicable provisions of the DGCL.

Common stock

Dividend rights .    Subject to preferences that may apply to shares of preferred stock outstanding at the time, holders of outstanding shares of common stock will be entitled to receive dividends out of assets legally available at the times and in the amounts as the board of directors may determine from time to time. See “Dividend policy.”

Voting rights .    Each outstanding share of common stock will be entitled to one vote on all matters submitted to a vote of stockholders. Holders of shares of our common stock will have no cumulative voting rights.

Preemptive rights .    Our common stock will not be entitled to preemptive or other similar subscription rights to purchase any of our securities.

Conversion or redemption rights .    Our common stock will be neither convertible nor redeemable.

Liquidation rights .    Upon our liquidation, the holders of our common stock will be entitled to receive pro rata our assets that are legally available for distribution, after payment of all debts and other liabilities and subject to the prior rights of any holders of preferred stock then outstanding.

Preferred stock

Our board of directors may, without further action by our stockholders, from time to time, direct the issuance of shares of preferred stock in series and may, at the time of issuance, determine the designations, powers, preferences, privileges and relative participating, optional or special rights, as well as the qualifications, limitations or restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights of the common stock. Satisfaction of any dividend preferences of outstanding shares of preferred stock would reduce the amount of funds available for the payment of dividends on shares of our common stock. Holders of shares of preferred stock may be entitled to receive a preference payment in the event of our liquidation before any payment is made to the holders of shares of our common stock. Under certain circumstances, the issuance of shares of preferred stock may render more difficult or tend to discourage a merger, tender offer or proxy contest, the assumption of control by a holder of a large block of our securities or the removal of incumbent management. Upon the affirmative vote of a majority of the total number of directors then in office, our board of directors, without stockholder approval, may issue shares of preferred stock with voting and conversion rights which could

 

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adversely affect the holders of shares of our common stock and the market value of our common stock. Upon consummation of this offering, there will be no shares of preferred stock outstanding, and we have no present intention to issue any shares of preferred stock.

Anti-takeover effects of our certificate of incorporation and our bylaws

Our certificate of incorporation and our bylaws contain provisions that may delay, defer or discourage another party from acquiring control of us. We expect that these provisions will discourage coercive takeover practices or inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with the board of directors, which we believe may result in an improvement of the terms of any such acquisition in favor of our stockholders. However, they may also discourage acquisitions that some stockholders may favor.

Corporate opportunities

Our certificate of incorporation provides that we renounce any interest or expectancy in the business opportunities of the Sponsors and of their officers, directors, agents, stockholders, members, partners, affiliates and subsidiaries and each such party shall not have any obligation to offer us those opportunities unless presented to one of our directors or officers in his or her capacity as a director or officer.

Limitations on liability and indemnification of directors and officers

Our certificate of incorporation limits the liability of our directors to the fullest extent permitted by the DGCL and requires that we will provide them with customary indemnification. We expect to enter into customary indemnification agreements with each of our executive officers and directors that provide them, in general, with customary indemnification in connection with their service to us or on our behalf. We also maintain officers’ and directors’ liability insurance that insures against liabilities that our officers and directors may incur in such capacities.

Transfer agent and registrar

The transfer agent and registrar for our common stock is                         .

Listing

We intend to apply to list our common stock on the NYSE under the symbol “IMS.”

 

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Shares eligible for future sale

Before this offering, there has been no public market for our common stock. As described below, only a limited number of shares currently outstanding will be available for sale immediately after this offering due to contractual and legal restrictions on resale. Nevertheless, future sales of substantial amounts of our common stock, including shares issued upon the exercise of outstanding options or warrants, in the public market after this offering, or the perception that those sales may occur, could cause the prevailing market price for our common stock to fall or impair our ability to raise capital through sales of our equity securities.

Upon the closing of this offering, we will have outstanding              shares of our common stock, after giving effect to the issuance of              shares of our common stock in this offering, assuming no exercise by the underwriters of their option to purchase additional shares and no exercise of options outstanding as of                     , 2014.

Of the shares that will be outstanding immediately after the closing of this offering, we expect that the              shares to be sold in this offering will be freely tradable without restriction under the Securities Act unless purchased by our “affiliates,” as that term is defined in Rule 144 under the Securities Act. Shares purchased by our affiliates may not be resold except pursuant to an effective registration statement or an exemption from registration, including the safe harbor under Rule 144 of the Securities Act described below. In addition, following this offering,              shares of common stock issuable pursuant to awards granted under certain of our equity plans that are covered by a registration statement on Form S-8 will be freely tradable in the public market, subject to certain contractual and legal restrictions described below.

The remaining              shares of our common stock outstanding after this offering will be “restricted securities,” as that term is defined in Rule 144 of the Securities Act, and we expect that substantially all of these restricted securities will be subject to the lock-up agreements described below. These restricted securities may be sold in the public market only if the sale is registered or pursuant to an exemption from registration, such as the safe harbor provided by Rule 144.

Lock-up agreements

We, the selling stockholders, and each of our directors and executive officers and certain other stockholders, who collectively own                  shares of our common stock following this offering, have agreed that, without the prior written consent of certain of the underwriters, we and they will not, subject to limited exceptions, directly or indirectly sell or dispose of any shares of common stock or any securities convertible into or exchangeable or exercisable for shares of common stock for a period of 180 days after the date of this prospectus, unless extended pursuant to its terms. The lock-up restrictions and specified exceptions are described in more detail under “Underwriting.”

Rule 144

In general, under Rule 144, beginning 90 days after the date of this prospectus, any person who is not our affiliate and has held their shares for at least six months, including the holding period of any prior owner other than one of our affiliates, may sell shares without restriction, subject to the availability of current public information about us. In addition, under Rule 144, any person

 

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who is not our affiliate and has not been our affiliate at any time during the preceding three months and has held their shares for at least one year, including the holding period of any prior owner other than one of our affiliates, would be entitled to sell an unlimited number of shares immediately upon the closing of this offering without regard to whether current public information about us is available.

Beginning 90 days after the date of this prospectus, a person who is our affiliate or who was our affiliate at any time during the preceding three months and who has beneficially owned restricted securities for at least six months, including the holding period of any prior owner other than one of our affiliates, is entitled to sell a number of shares within any three-month period that does not exceed the greater of: (i) 1% of the number of shares of our common stock outstanding, which will equal approximately              shares immediately after this offering; and (ii) the average weekly trading volume of our common stock on the NYSE during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales under Rule 144 by our affiliates are also subject to certain manner of sale provisions, notice requirements and the availability of current public information about us.

Rule 701

In general, under Rule 701 under the Securities Act, beginning 90 days after we become subject to the public company reporting requirements of the Exchange Act, any of our employees, directors, officers, consultants or advisors who acquired ordinary shares from us in connection with a written compensatory stock or option plan or other written agreement in compliance with Rule 701 is entitled to sell such shares in reliance on Rule 144 but without compliance with certain of the requirements contained in Rule 144. Accordingly, subject to any applicable lock-up agreements, beginning 90 days after we become subject to the public company reporting requirements of the Exchange Act, under Rule 701 persons who are not our affiliates may resell those shares without complying with the minimum holding period or public information requirements of Rule 144, and persons who are our affiliates may resell those shares without compliance with Rule 144’s minimum holding period requirements.

Equity incentive plans

Following this offering, we intend to file with the SEC a registration statement on Form S-8 under the Securities Act covering the shares of common stock that are subject to outstanding options and other awards issuable pursuant to our equity incentive plans. Shares covered by such registration statement will be available for sale in the open market following its effective date, subject to certain Rule 144 limitations applicable to affiliates and the terms of lock-up agreements applicable to those shares.

Registration rights

Subject to the lock-up agreements described above, certain holders of our common stock may demand that we register the sale of their shares under the Securities Act or, if we file another registration statement under the Securities Act other than a Form S-8 covering securities issuable under our equity plans or on Form S-4, may elect to include their shares of common stock in such registration. Following such registered sales, the shares will be freely tradable without restriction under the Securities Act, unless held by our affiliates.

 

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Material United States federal income tax considerations for Non-U.S. Holders

The following is a summary of material U.S. federal income and estate tax considerations relating to the purchase, ownership and disposition of shares of our common stock issued pursuant to this offering by Non-U.S. Holders (defined below). This summary does not purport to be a complete analysis of all the potential tax considerations relevant to Non-U.S. Holders of shares of our common stock. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), the Treasury regulations promulgated or proposed thereunder and administrative and judicial interpretations thereof, all as of the date hereof and all of which are subject to change or differing interpretations at any time, possibly with retroactive effect.

This summary assumes that shares of our common stock are held by a Non-U.S. Holder as “capital assets” within the meaning of Section 1221 of the Internal Revenue Code. This summary does not purport to deal with all aspects of U.S. federal income and estate taxation that might be relevant to particular Non-U.S. Holders in light of their particular investment circumstances or status, nor does it address specific tax considerations that may be relevant to particular persons who are subject to special treatment under U.S. federal income tax laws (including, for example, financial institutions, broker-dealers, insurance companies, partnerships or other pass-through entities, certain U.S. expatriates or former long-term residents of the United States, tax-exempt organizations, pension plans, “controlled foreign corporations,” “passive foreign investment companies,” corporations that accumulate earnings to avoid U.S. federal income tax, persons in special situations, such as those who have elected to mark securities to market or those who hold shares of our common stock as part of a straddle, hedge, conversion transaction, synthetic security or other integrated investment, persons that have a “functional currency” other than the U.S. dollar, or holders subject to the alternative minimum or the 3.8% Medicare tax on net investment income). In addition, except as explicitly addressed herein with respect to estate tax, this summary does not address certain estate and any gift tax considerations or considerations arising under the tax laws of any state, local or non-U.S. jurisdiction.

For purposes of this summary, a “Non-U.S. Holder” means a beneficial owner of shares of our common stock that for U.S. federal income tax purposes, is an individual, corporation, estate or trust other than:

 

 

an individual who is a citizen or resident of the United States;

 

 

a corporation, or any other organization taxable as a corporation for U.S. federal income tax purposes, that is created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

 

 

an estate, the income of which is included in gross income for U.S. federal income tax purposes regardless of its source; or

 

 

a trust if (1) a U.S. court is able to exercise primary supervision over the trust’s administration and one or more United States persons (as define in the Internal Revenue Code) have the authority to control all of the trust’s substantial decisions or (2) the trust has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

 

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A modified definition of Non-U.S. Holder applies for U.S. federal estate tax purposes (as discussed below).

If an entity that is classified as a partnership for U.S. federal income tax purposes holds shares of our common stock, the tax treatment of persons treated as its partners for U.S. federal income tax purposes will generally depend upon the status of the partner and the activities of the partnership. Partnerships and other entities that are classified as partnerships for U.S. federal income tax purposes and persons holding our common stock through a partnership or other entity classified as a partnership for U.S. federal income tax purposes are urged to consult their own tax advisors.

There can be no assurance that the Internal Revenue Service (“IRS”) will not challenge one or more of the tax consequences described herein, and we have not obtained, nor do we intend to obtain, a ruling from the IRS or an opinion of counsel with respect to the U.S. federal income or estate tax consequences to a Non-U.S. Holder of the purchase, ownership or disposition of shares of our common stock.

THIS SUMMARY IS FOR GENERAL INFORMATION ONLY AND IS NOT INTENDED TO BE TAX ADVICE. PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME AND ESTATE TAXATION, STATE, LOCAL AND NON-U.S. TAXATION AND OTHER TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF SHARES OF OUR COMMON STOCK, AS WELL AS THE APPLICATION OF STATE, LOCAL AND NON-U.S. INCOME AND OTHER TAX LAWS.

Distributions on shares of our common stock

As discussed under “Dividend policy” above, we do not currently anticipate paying cash dividends on shares of our common stock in the foreseeable future. In the event that we do make a distribution of cash or property with respect to shares of our common stock, any such distributions generally will constitute dividends for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits as determined under U.S. federal income tax principles, and will be subject to withholding as described in the next paragraph below. If a distribution exceeds our current or accumulated earnings and profits, the excess will be treated as a tax-free return of the Non-U.S. Holder’s investment, up to such holder’s adjusted tax basis in its shares of our common stock. Any remaining excess will be treated as capital gain, subject to the tax treatment described below in “—Gain on sale, exchange or other taxable disposition of our common stock.” Any distribution described in this paragraph would also be subject to the discussion below in “—Additional withholding and information reporting requirements for shares of our common stock held by or through non-U.S. entities.”

Any dividends paid to a Non-U.S. Holder with respect to shares of our common stock generally will be subject to a 30% U.S. federal withholding tax unless such Non-U.S. Holder provides us or our agent, as the case may be, with an appropriate IRS Form W-8, such as:

 

 

IRS Form W-8BEN (or successor form) certifying, under penalties of perjury, that such Non-U.S. Holder is entitled to a reduction in withholding under an applicable income tax treaty; or

 

 

IRS Form W-8ECI (or successor form) certifying, under penalties of perjury, that a dividend paid on shares of our common stock is not subject to withholding tax because it is effectively connected with conduct of a trade or business in the United States of the Non-U.S. Holder (in

 

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which case such dividend generally will be subject to regular graduated U.S. federal income tax rates on a net income basis as described below).

The certifications described above must be provided to us or our agent prior to the payment of dividends and must be updated periodically. The certification also may require a Non-U.S. Holder that provides an IRS form or that claims treaty benefits to provide its U.S. taxpayer identification number. Special certification and other requirements apply in the case of certain Non-U.S. Holders that are intermediaries or pass-through entities for U.S. federal income tax purposes.

Each Non-U.S. Holder is urged to consult its own tax advisor about the specific methods for satisfying these requirements. A claim for exemption will not be valid if the person receiving the applicable form has actual knowledge or reason to know that the statements on the form are false.

If dividends are effectively connected with the conduct of a trade or business in the United States of the Non-U.S. Holder (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base maintained by such Non-U.S. Holder in the United States), the Non-U.S. Holder, although exempt from the withholding tax described above (provided that the certifications described above are satisfied), will generally be subject to U.S. federal income tax on such dividends on a net income basis in the same manner as if it were a resident of the United States. In addition, if such Non-U.S. Holder is taxable as a corporation for U.S. federal income tax purposes, such Non-U.S. Holder may be subject to an additional “branch profits tax” equal to 30% of its effectively connected earnings and profits for the taxable year, unless an applicable income tax treaty provides otherwise.

If a Non-U.S. Holder is eligible for a reduced rate of U.S. federal withholding tax pursuant to an applicable income tax treaty, such Holder may obtain a refund or credit of any excess amount withheld by timely filing an appropriate claim for refund with the IRS.

Gain on sale, exchange or other taxable disposition of shares of our common stock

Subject to the discussion below under “—Additional withholding and information reporting requirements for shares of our common stock held by or through non-U.S. entities,” in general, a Non-U.S. Holder will not be subject to U.S. federal income tax or withholding tax on any gain realized upon such holder’s sale, exchange or other disposition of shares of our common stock unless (i) such Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition, and certain other conditions are met, (ii) we are or have been a “United States real property holding corporation,” as defined in the Internal Revenue Code (a “USRPHC”), at any time within the shorter of the five-year period preceding the disposition and the Non-U.S. Holder’s holding period with respect to the applicable shares of our common stock (the “relevant period”), or (iii) such gain is effectively connected with the conduct by such Non-U.S. Holder of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base maintained by such Non-U.S. Holder in the United States).

If the first exception applies, the Non-U.S. Holder generally will be subject to U.S. federal income tax at a rate of 30% (unless an applicable income tax treaty provides otherwise) on the amount by which such Non-U.S. Holder’s capital gains allocable to U.S. sources exceed capital losses allocable to U.S. sources during the taxable year of the disposition.

 

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With respect to the second exception above, although there can be no assurance, we believe we are not, and we do not currently anticipate becoming, a USRPHC. However, because the determination of whether we are a USRPHC depends on the fair market value of our U.S. real property relative to the fair market value of other business assets, there can be no assurance that we are not currently or will not become a USRPHC in the future. Generally, a corporation is a USRPHC only if the fair market value of its United States real property interests (as defined in the Internal Revenue Code) equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus certain other assets used or held for use in a trade or business. Even if we are or become a USRPHC, a Non-U.S. Holder would not be subject to U.S. federal income tax on a sale, exchange or other taxable disposition of our common stock by reason of our status as a USRPHC so long as (a) our common stock is regularly traded on an established securities market (within the meaning of Internal Revenue Code Section 897(c)(3)) during the calendar year in which such sale, exchange or other taxable disposition of our common stock occurs and (b) such Non-U.S. Holder does not own and is not deemed to own (directly, indirectly or constructively) more than 5% of our common stock at any time during the relevant period. If we are a USRPHC and the requirements of (a) or (b) are not met, gain on the disposition of shares of our common stock generally will be taxed in the same manner as gain that is effectively connected with the conduct of a U.S. trade or business, except that the “branch profits tax” will not apply.

If the third exception applies, the Non-U.S. Holder generally will be subject to U.S federal income tax on a net income basis with respect to such gain in the same manner as if such holder were a resident of the United States, unless otherwise provided in an applicable income tax treaty, and a Non-U.S. Holder that is a corporation for U.S federal income tax purposes may also be subject to a “branch profits tax” on its effectively connected earnings and profits at a rate of 30%, unless an applicable income tax treaty provides otherwise.

Additional withholding and information reporting requirements for shares of our common stock held by or through non-U.S. entities

Legislation enacted in March 2010 and related Treasury guidance (commonly referred to as “FATCA”) generally will impose a U.S. federal withholding tax of 30% on payments to certain non-U.S. entities (including certain intermediaries), including dividends on and the gross proceeds from a sale or other disposition of our common stock unless such persons comply with a complicated U.S. information reporting, disclosures and certification regime. This new regime requires, among other things, a broad class of persons to enter into agreements with the IRS to obtain, disclose and report information about their investors and account holders. This new regime and its requirements are different from and in addition to the certification requirements described elsewhere in this discussion. As currently proposed, the FATCA withholding rules would apply to certain payments, including dividend payments on our common stock, if any, paid after June 30, 2014, and gross proceeds from the sale or other dispositions of our common stock paid after December 31, 2016. Prospective investors should consult their own tax advisors regarding the possible impact of these rules on their investment in our common stock, and the entities through which they hold our common stock, including, without limitation, the process and deadlines for meeting the applicable requirements to prevent the imposition of this 30% withholding tax under FATCA.

 

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Backup withholding and information reporting

We must report annually to the IRS and to each Non-U.S. Holder the gross amount of the distributions on shares of our common stock paid to such holder and the tax withheld, if any, with respect to such distributions. These information reporting requirements apply even if withholding was not required. Subject to the discussion above under “—Additional withholding and information reporting requirements for shares of our common stock held by or through non-U.S. entities,” a Non-U.S. Holder may have to comply with specific certification procedures to establish that the holder is not a United States person (as defined in the Internal Revenue Code) or otherwise establish an exemption in order to avoid backup withholding at the applicable rate with respect to dividends on our common stock. Dividends paid to Non-U.S. Holders subject to the U.S. federal withholding tax, as described above In “—Distributions on shares of our common stock,” generally will be exempt from U.S. backup withholding.

Information reporting and backup withholding will generally apply to the payment of the proceeds of a disposition of shares of our common stock by a Non-U.S. Holder effected by or through the U.S. office of any broker, U.S. or non-U.S., unless the holder certifies that it is not a United States person (as defined in the Internal Revenue Code) and satisfies certain other requirements, or otherwise establishes an exemption. For information reporting purposes, dispositions effected through a non-U.S. office of a broker with substantial U.S. ownership or operations generally will be treated in a manner similar to dispositions effected through a U.S. office of a broker, and dispositions otherwise effected through a non-U.S. office generally will not be subject to information reporting. Generally, backup withholding will not apply to a payment of disposition proceeds to a Non-U.S. Holder where the transaction is effected through a non-U.S. office of a U.S. broker or non-U.S. office of a non-U.S broker. Prospective investors are urged to consult their own tax advisors regarding the application of the information reporting and backup withholding rules to them.

Copies of information returns may be made available to the tax authorities of the country in which the Non-U.S. Holder resides or is incorporated, under the provisions of a specific treaty or agreement.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment made to a Non-U.S. Holder can be refunded or credited against such Non-U.S. Holder’s U.S. federal income tax liability, if any, provided that an appropriate claim is timely filed with the IRS.

Federal estate tax

Shares of our common stock held (or treated as held) by an individual who is not a U.S. citizen or resident (as defined for U.S. federal estate tax purposes) at the time of such individual’s death will be included in such individual’s gross estate for U.S. federal estate tax purposes, unless an applicable estate tax treaty provides otherwise.

 

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Underwriting

We are offering the shares of common stock described in this prospectus through a number of underwriters. J.P. Morgan Securities LLC, Goldman, Sachs & Co. and Morgan Stanley & Co. LLC are acting as joint book-running managers of the offering and as representatives of the underwriters. In addition, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Deutsche Bank Securities Inc. and Wells Fargo Securities, LLC are joint book-running managers in the offering. We have entered into an underwriting agreement with the underwriters. Subject to the terms and conditions of the underwriting agreement, we and the selling stockholders have agreed to sell to the underwriters, and each underwriter has severally agreed to purchase, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of shares of common stock listed next to its name in the following table:

 

Name    Number of shares

 

J.P. Morgan Securities LLC

  

Goldman, Sachs & Co.

  

Morgan Stanley & Co. LLC

  

Merrill Lynch, Pierce, Fenner & Smith

                   Incorporated

  

Barclays Capital Inc.

  

Deutsche Bank Securities Inc.

  

Wells Fargo Securities, LLC

  

Total

  

 

The underwriters are committed to purchase all the common shares offered by us and the selling stockholders if they purchase any shares. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may also be increased or the offering may be terminated.

The underwriters propose to offer the common shares directly to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $         per share. Any such dealers may resell shares to certain other brokers or dealers at a discount of up to $         per share from the initial public offering price. After the initial public offering of the shares, the offering price and other selling terms may be changed by the underwriters. Sales of shares made outside of the United States may be made by affiliates of the underwriters.

The underwriters have an option to buy up to              additional shares of common stock to cover sales of shares by the underwriters which exceed the number of shares specified in the table above. The underwriters have 30 days from the date of this prospectus to exercise this over-allotment option. If any shares are purchased with this over-allotment option, the underwriters will purchase shares in approximately the same proportion as shown in the table above. If any additional shares of common stock are purchased, the underwriters will offer the additional shares on the same terms as those on which the shares are being offered.

 

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The underwriting fee is equal to the public offering price per share of common stock less the amount paid by the underwriters to us per share of common stock. The underwriting fee is $         per share. The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares.

 

       Paid by the company      Paid by the selling stockholders  
     No exercise      Full exercise      No exercise      Full exercise  

 

 

Per share

   $                          $                          $                          $                      

Total

   $                    $                    $                    $                

 

 

We estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately $        .

A prospectus in electronic format may be made available on the websites maintained by one or more underwriters, or selling group members, if any, participating in the offering. The underwriters may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives to underwriters and selling group members that may make Internet distributions on the same basis as other allocations.

We have agreed that we will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act relating to, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge or disposition, or (ii) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any shares of common stock or any such other securities (regardless of whether any of these transactions are to be settled by the delivery of shares of common stock or such other securities, in cash or otherwise), in each case without the prior written consent of certain of the underwriters for a period of 180 days after the date of this prospectus, other than the shares of our common stock to be sold hereunder and subject to certain other limited exceptions. Notwithstanding the foregoing, if (1) during the last 17 days of the 180-day restricted period, we issue an earnings release or material news or a material event relating to our company occurs; or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event

Our directors and executive officers, the selling stockholders, and certain of our other significant stockholders have entered into lock-up agreements with the underwriters prior to the commencement of this offering pursuant to which each of these persons or entities, with limited exceptions, for a period of 180 days after the date of this prospectus, may not, without the prior written consent of certain of the underwriters, (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of our

 

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common stock or any securities convertible into or exercisable or exchangeable for our common stock (including, without limitation, common stock or such other securities which may be deemed to be beneficially owned by such directors, executive officers, managers and members in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant), (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the common stock or such other securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of common stock or such other securities, in cash or otherwise, or (3) make any demand for or exercise any right with respect to the registration of any shares of our common stock or any security convertible into or exercisable or exchangeable for our common stock. Notwithstanding the foregoing, if (1) during the last 17 days of the 180-day restricted period, we issue an earnings release or material news or a material event relating to our company occurs; or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended.

We intend to apply to have our common stock approved for listing on the NYSE under the symbol “IMS.”

In connection with this offering, the underwriters may engage in stabilizing transactions, which involves making bids for, purchasing and selling shares of common stock in the open market for the purpose of preventing or retarding a decline in the market price of the common stock while this offering is in progress. These stabilizing transactions may include making short sales of the common stock, which involves the sale by the underwriters of a greater number of shares of common stock than they are required to purchase in this offering, and purchasing shares of common stock on the open market to cover positions created by short sales. Short sales may be “covered” shorts, which are short positions in an amount not greater than the underwriters’ over-allotment option referred to above, or may be “naked” shorts, which are short positions in excess of that amount. The underwriters may close out any covered short position either by exercising their over-allotment option, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market compared to the price at which the underwriters may purchase shares through the over-allotment option. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market that could adversely affect investors who purchase in this offering. To the extent that the underwriters create a naked short position, they will purchase shares in the open market to cover the position.

The underwriters have advised us that, pursuant to Regulation M of the Securities Act of 1933, they may also engage in other activities that stabilize, maintain or otherwise affect the price of the common stock, including the imposition of penalty bids. This means that if the representatives of the underwriters purchase common stock in the open market in stabilizing transactions or to cover short sales, the representatives can require the underwriters that sold those shares as part of this offering to repay the underwriting discount received by them.

 

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These activities may have the effect of raising or maintaining the market price of the common stock or preventing or retarding a decline in the market price of the common stock, and, as a result, the price of the common stock may be higher than the price that otherwise might exist in the open market. If the underwriters commence these activities, they may discontinue them at any time. The underwriters may carry out these transactions on the NYSE, in the over-the-counter market or otherwise.

Prior to this offering, there has been no public market for our common stock. The initial public offering price will be determined by negotiations between us and the representatives of the underwriters. In determining the initial public offering price, we and the representatives of the underwriters expect to consider a number of factors including:

 

 

the information set forth in this prospectus and otherwise available to the representatives;

 

 

our prospects and the history and prospects for the industry in which we compete;

 

 

an assessment of our management;

 

 

our prospects for future earnings;

 

 

the general condition of the securities markets at the time of this offering;

 

 

the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

 

 

other factors deemed relevant by the underwriters and us.

Neither we nor the underwriters can assure investors that an active trading market will develop for our common shares, or that the shares will trade in the public market at or above the initial public offering price.

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling with Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). The securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

 

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In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), from and including the date on which the European Union Prospectus Directive (the “EU Prospectus Directive”) was implemented in that Relevant Member State (the “Relevant Implementation Date”) an offer of securities described in this prospectus may not be made to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the EU Prospectus Directive, except that, with effect from and including the Relevant Implementation Date, an offer of securities described in this prospectus may be made to the public in that Relevant Member State at any time:

 

 

to any legal entity which is a qualified investor as defined under the EU Prospectus Directive;

 

 

to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the EU Prospectus Directive); or

 

 

in any other circumstances falling within Article 3(2) of the EU Prospectus Directive, provided that no such offer of securities described in this prospectus shall result in a requirement for the publication by us of a prospectus pursuant to Article 3 of the EU Prospectus Directive.

For the purposes of this provision, the expression an “offer of securities to the public” in relation to any securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe for the securities, as the same may be varied in that Member State by any measure implementing the EU Prospectus Directive in that Member State. The expression “EU Prospectus Directive” means Directive 2003/71/EC (and any amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State, and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

Other relationships

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities.

Certain of the underwriters and their affiliates have provided in the past to us and our affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for us and such affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. Certain of the underwriters and/or their affiliates are lenders under our Senior Secured Credit Facilities. In addition, from time to time, certain of the underwriters and their affiliates may effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future. In the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers,

 

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and such investment and securities activities may involve securities and/or instruments of the issuer. The underwriters and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

 

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Legal matters

The validity of the issuance of our common stock offered in this prospectus will be passed upon for us by Ropes & Gray LLP, Boston, Massachusetts. Some attorneys of Ropes & Gray LLP are members in RGIP, LLC, which is an investor in certain investment funds affiliated with TPG. RGIP, LLC indirectly owns less than 1% of our outstanding shares of common stock. Cleary Gottlieb Steen & Hamilton LLP, New York, New York will act as counsel to the underwriters.

Experts

The financial statements of IMS Health Holdings, Inc. and its subsidiaries (the “Successor”) as of December 31, 2012 and December 31, 2011 and for each of the three years in the period ended December 31, 2012 and the financial statements of IMS Health Incorporated and its subsidiaries (the “Predecessor”) for the period from January 1, 2010 through February 26, 2010 included in this Prospectus have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

Where you can find more information

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules filed therewith. For further information with respect to us and the common stock offered hereby, please refer to the registration statement and the exhibits and schedules filed therewith. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the registration statement. A copy of the registration statement and the exhibits and schedules filed therewith may be inspected without charge at the public reference room maintained by the SEC, located at 100 F Street N.E., Washington, D.C. 20549, and copies of all or any part of the registration statement may be obtained from such offices upon the payment of the fees prescribed by the SEC. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room. The SEC also maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The SEC’s website address is www.sec.gov.

Upon completion of this offering, we will become subject to the information and periodic reporting requirements of the Exchange Act and, in accordance therewith, we will file periodic reports, proxy statements and other information with the SEC. Such periodic reports, proxy statements and other information will be available for inspection and copying at the public reference room and website of the SEC referred to above.

 

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Index to consolidated financial statements and

financial statement schedules

 

     Page  

Audited Consolidated Financial Statements

  

Reports of Independent Registered Public Accounting Firm

     F-2   

Financial Statements:

  

As of December 31, 2012 and 2011:

  

Consolidated Statements of Financial Position

     F-4   

For years ended December 31, 2012, 2011 and 2010 (successor) and January 1, 2010 through February 26, 2010 (predecessor):

  

Consolidated Statements of Comprehensive (Loss) Income

     F-5   

Consolidated Statements of Cash Flows

     F-6   

Consolidated Statements of Shareholders’ Equity

     F-8   

Notes to Consolidated Financial Statements

     F-10   

Other Financial Information:

  

Five-Year Selected Financial Data

     F-57   

Schedule I. Condensed Financial Information

     F-58   

Schedule II. Valuation and Qualifying Accounts for the years ended December  31, 2012, 2011 and 2010 (successor) and January 1, 2010 through February 26, 2010
(predecessor)

     F-62   

Unaudited Condensed Consolidated Financial Statements

  

Financial Statements:

  

As of September 30, 2013 (Unaudited) and December 31, 2012:

  

Condensed Consolidated Statements of Financial Position

     F-63   

For the nine months ended September 30, 2013 and 2012:

  

Condensed Consolidated Statements of Comprehensive Loss (Unaudited)

     F-64   

Condensed Consolidated Statements of Cash Flows (Unaudited)

     F-65   

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

     F-66   

Notes to Condensed Consolidated Financial Statements (Unaudited)

     F-67   

 

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Report of independent registered public accounting firm

To the Board of Directors and Shareholders of IMS Health Holdings, Inc.:

In our opinion, the accompanying consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of IMS Health Holdings, Inc. and its subsidiaries (the “Successor”) at December 31, 2012 and December 31, 2011, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2012 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the accompanying index present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

New York, New York

January 2, 2014

 

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Report of independent registered public accounting firm

To the Board of Directors and Shareholders of IMS Health Holdings, Inc.:

In our opinion, the consolidated statements of comprehensive loss, of shareholders’ equity and of cash flows listed in the accompanying index present fairly, in all material respects, the results of operations and cash flows of IMS Health, Incorporated and its subsidiaries (the “Predecessor”) for the period from January 1, 2010 through February 26, 2010 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audit. We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

New York, New York

March 3, 2011

Except for the effect of earnings per share discussed in Note 16, as to which the date is

January 2, 2014

 

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IMS Health Holdings, Inc.

Consolidated statements of financial position

 

(Dollars and shares in millions, except per share data)   

December 31,

2012

   

December 31,

2011

 

 

 

Assets:

    

Current Assets:

    

Cash and cash equivalents

   $ 580      $ 453   

Restricted cash

     25        27   

Short-term investments

     61          

Accounts receivable, net

     308        310   

Other current assets

     263        279   
  

 

 

 

Total Current Assets

   $ 1,237      $ 1,069   
  

 

 

 

Property, plant and equipment, net of accumulated depreciation of $114 and $77 in 2012 and 2011, respectively

     117     

 
120   

Computer software

     254        286   

Goodwill

     3,583        3,591   

Other intangibles, net of accumulated amortization of $802 and $515 in 2012 and 2011, respectively

     2,873        3,171   

Other assets

     151        121   
  

 

 

 

Total Assets

   $ 8,215      $ 8,358   
  

 

 

 

Liabilities and Shareholders’ Equity:

    

Current Liabilities:

    

Accounts payable

   $ 109      $ 85   

Accrued and other current liabilities

     533        511   

Short-term debt

     28        21   

Deferred revenues

     173        176   
  

 

 

 

Total Current Liabilities

   $ 843      $ 793   
  

 

 

 

Postretirement and postemployment benefits

     116        106   

Long-term debt

     4,149        2,940   

Deferred tax liability

     1,317        1,453   

Other liabilities

     107        95   
  

 

 

 

Total Liabilities

   $ 6,532      $ 5,387   
  

 

 

 

Commitments and Contingencies (Notes 11 and 12)

    

Shareholders’ Equity:

    

Common Stock, $.001 par value, 3,075 and 3,075 shares authorized, 2,804 and 2,791 issued and outstanding in 2012 and 2011, respectively.

   $ 3      $ 3   

Capital in excess of par

     1,634        2,812   

Accumulated deficit

     (102     (60

Treasury stock, at cost, 4 and 3 shares in 2012 and 2011, respectively

     (4     (3

Accumulated other comprehensive income

     152        219   
  

 

 

 

Total Shareholders’ Equity

   $ 1,683      $ 2,971   
  

 

 

 

Total Liabilities and Shareholders’ Equity

   $ 8,215      $ 8,358   

 

 

The accompanying notes are an integral part of the Consolidated Financial Statements.

 

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IMS Health Holdings, Inc.

Consolidated statements of comprehensive (loss) income

 

      Successor     Predecessor  
   

Year ended December 31,

   

Jan. 1
through

Feb. 26,
2010

 
(Dollars and shares in millions, except per share data)  

2012

   

2011

   

2010

   

 

 

Revenue

  $ 2,443      $ 2,364      $ 1,869      $ 293   
 

 

 

 

Information

    1,521        1,532        1,234        214   

Technology services

    922        832        635        79   
 

 

 

 

Operating costs of information, exclusive of depreciation and amortization

    675        698        543        126   

Direct and incremental costs of technology services, exclusive of depreciation and amortization

    476        396        322        63   

Selling and administrative expenses, exclusive of depreciation and amortization

    579        604        507        149   

Depreciation and amortization

    424        393        310        21   

Severance, impairment and other charges

    48        31        54        (13

Merger costs

    2        23        65        45   
 

 

 

 

Operating Income (Loss)

    239        219        68        (98
 

 

 

 

Interest income

    4        3        1          

Interest expense

    (275     (277     (237     (5

Other loss, net

    (29     (7     (35     (9
 

 

 

 

Non-Operating Loss, net

    (300     (281     (271     (14
 

 

 

 

Loss before benefit from income taxes

    (61     (62     (203     (112

Benefit from income taxes

    19        173        85        28   
 

 

 

 

Net (Loss) Income

  $ (42   $ 111      $ (118   $ (84
 

 

 

 
 

(Loss) Income per share attributable to common shareholders:

         

Basic

  $ (0.02   $ 0.04      $ (0.05   $ (0.46

Diluted

  $ (0.02   $ 0.04      $ (0.05   $ (0.46

Weighted-average common shares outstanding:

         

Basic

    2,795        2,788        2,348        183   

Diluted

    2,795        2,854        2,348        183   

Unaudited pro forma net (loss) income per share:

         

Basic

         

Diluted

         

Unaudited pro forma weighted-average common shares outstanding:

         

Basic

         

Diluted

         
 

Other Comprehensive (Loss) Income:

         

Net (Loss) Income

  $ (42   $ 111      $ (118   $ (84
 

 

 

 

Cumulative translation adjustments

  $ (49   $ 51      $ 190      $ (38

Change in derivatives in OCI (net of taxes of $(2), $3, $2 and $(1), respectively)

    3        (6     (5     2   

Change in derivatives from OCI to earnings (net of taxes of $2, $(7), $- and $(1), respectively)

    (4     13               2   

Postretirement and postemployment adjustments (net of taxes of $5, $9, $3 and $-, respectively)

    (17     (22     (2     1   
 

 

 

 

Other Comprehensive (Loss) Income

  $ (67   $ 36      $ 183      $ (33
 

 

 

 

Total Comprehensive (Loss) Income

  $ (109   $ 147      $ 65      $ (117

 

 

The accompanying notes are an integral part of the Consolidated Financial Statements.

 

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IMS Health Holdings, Inc.

Consolidated statements of cash flows

 

       Successor     Predecessor  
       Year Ended December 31,       Jan. 1
through

Feb. 26,
 
(Dollars in millions)   

2012

     2011     2010    

2010

 

 

 
 

Cash Flows from Operating Activities:

           

Net (loss) income

   $ (42    $ 111      $ (118   $ (84
 

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

           

Depreciation and amortization

     424         393        310        21   

Bad debt expense

     2         1        2          

Loss on extinguishment of debt

                    70          

Deferred income taxes

     (109      (199     (133     23   

Loss (gain) on investments and sale of assets, net

     2         1        (36       

Non-cash stock-based compensation charges

     19         18        25        68   

Non-cash portion of severance, impairment and other charges

     25         2                 

Net tax benefit on stock-based compensation

                           2   

FX loss (gain) on revaluation of foreign denominated debt

     18         3        (28       

Non-cash (gains) losses on interest rate derivatives

     (2      17        11          

Non-cash amortization of successor debt original issue discount

     18         18        17          

Excess tax benefits from stock-based compensation

                           (10
 

Change in assets and liabilities, excluding effects from acquisitions and dispositions:

           

Net decrease (increase) in accounts receivable

     7         11        31        (8

Net decrease (increase) in other current assets

     5         (6     13        (17

Net increase (decrease) in accounts payable

     24         (19     25        (33

Net increase (decrease) in accrued and other current liabilities

     10         (10     (24     (51

Net (decrease) increase in deferred revenues

     (7      12        36        41   

Net increase in pension assets (net of liabilities)

     (8      (29     (5     (4

Net decrease (increase) in other long-term assets (net of long term liabilities)

     13         10        8        (2
  

 

 

 

Net Cash Provided by (Used in) Operating Activities

   $ 399       $ 334      $ 204      $ (54

 

 

 

The accompanying notes are an integral part of the Consolidated Financial Statements.

 

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IMS Health Holdings, Inc.

Consolidated statements of cash flows (continued)

 

       Successor     Predecessor  
     Year Ended December 31,     Jan. 1
through

Feb. 26,
 
(Dollars in millions)   

2012

    2011     2010    

2010

 

 

 
 

Cash Flows Used in Investing Activities:

          

Capital expenditures

   $ (44   $ (30   $ (32   $ (3

Additions to computer software

     (64     (74     (59     (10

Proceeds from sale of assets

     25               62          

Increase in short-term investments

     (55                     

Payments for acquisitions of businesses, net of cash acquired

     (72     (380     (58       

Acquisition of IMS Health

                   (4,156       

Other investing activities, net

     1        (1     (13     (5
  

 

 

 

Net Cash Used in Investing Activities

     (209     (485     (4,256     (18
  

 

 

 
 

Cash Flows (Used in) Provided by Financing Activities:

          

Net borrowings under revolving credit facility

     116        57        (666     237   

Net repayments of revolving credit facility

     (169     (4              

Repayment of predecessor term loan

                   (50       

Repayment of private placement notes and short-term credit agreement

                   (390     (378

Proceeds from issuance of successor debt, net of issuance costs

     1,233        70        2,809          

Repayment of successor term loans

     (22     (16     (20       

Debt issuance costs

     (24     (3     (26       

Payment of predecessor debt

                   (68       

Contributions from shareholders

                   2,770          

Dividends paid

     (1,202                     

Proceeds from equity plan activity

     7        5        12        10   

Payments for treasury stock

     (2     (3              

Excess tax benefits from stock-based compensation

                          10   

Other financing activities, net

                   (13     (3
  

 

 

 

Net Cash (Used in) Provided by Financing Activities

     (63     106        4,358        (124
  

 

 

 

Effect of Exchange Rate Changes on Cash and Cash Equivalents

            2        10        (4
  

 

 

 

Increase (Decrease) in Cash and Cash Equivalents

     127        (43     316        (200

Cash and Cash Equivalents, Beginning of Period

     453        496        180        380   
  

 

 

 

Cash and Cash Equivalents, End of Period

   $ 580      $ 453      $ 496      $ 180   
  

 

 

 
 

Supplemental Disclosure of Cash Flow Information:

          

Cash paid during the period for interest

   $ 230      $ 228      $ 178      $ 15   

Cash paid during the period for income taxes

   $ 93      $ 70      $ 46      $ 16   

Cash received from income tax refunds

   $ 12      $ 9      $ 17      $ 1   

 

 

The accompanying notes are an integral part of the Consolidated Financial Statements.

 

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IMS Health Holdings, Inc.

Consolidated statements of shareholders’ equity

 

(Dollars and shares in millions)  

Shares

common
stock

   

Shares

treasury
stock

    Common
stock
   

Treasury

stock

    Capital
in
excess
of par
   

Retained
earnings
(accumulated

deficit)

    Cumulative
translation
adjustment
    Unamortized
postretirement
&
postemployment
adjustment
    Change in
derivatives
in OCI
    Change in
derivatives from
OCI into earnings
    Accumulated
other
comprehensive
(loss) income
    Total
shareholders’
equity
 

 

 

Predecessor

                       
 

 

 

 

Balance, December 31, 2009

    335        152      $ 3      $ (3,549   $ 548      $ 3,297      $ (126   $ (97   $ (4   $      $ (227   $ 72   
 

 

 

 

Net loss

              (84               (84

Repurchases of common stock

      (7       167        (158                 9   

Stock-based compensation expense

            68                    68   

Net tax benefit on stock-based compensation

            1                    1   

Cumulative translation adjustments

                (38           (38     (38

Postretirement & postemployment adjustments, net of tax

                  1            1        1   

Change in derivatives in OCI, net of tax

                    2          2        2   

Change in derivatives from OCI into earnings , net of tax

                      2        2        2   
 

 

 

 

Balance, February 26, 2010

    335        145      $ 3      $ (3,382   $ 459      $ 3,213      $ (164   $ (96   $ (2   $ 2      $ (260   $ 33   
 

 

 

 

Successor

                       
 

 

 

 

Balance, January 1, 2010

                $      $      $      $ (53   $      $      $      $      $      $ (53
 

 

 

 

Net loss

              (118               (118

Capital contribution by shareholders

    2,770          3          2,767                    2,770   

Issuances under stock plans and management investments

    15              14                    14   

Stock-based compensation expense

            25                    25   

Other equity transactions

            (8                 (8

Cumulative translation adjustments

                190              190        190   

Postretirement & postemployment adjustments, net of tax

                  (2         (2     (2

Change in derivatives in OCI , net of tax

                    (5       (5     (5
 

 

 

 

Balance, December 31, 2010

    2,785             $ 3      $      $ 2,798      $ (171   $ 190      $ (2   $ (5   $      $ 183      $ 2,813   

 

 

The accompanying notes are an integral part of the Consolidated Financial Statements.

 

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IMS Health Holdings, Inc.

Consolidated statements of shareholders’ equity (continued)

 

(Dollars and shares in millions)  

Shares

common
stock

   

Shares

treasury
stock

    Common
stock
   

Treasury

stock

    Capital in
excess
of par
   

Retained
earnings
(accumulated

deficit)

    Cumulative
translation
adjustment
    Unamortized
postretirement
&
postemployment
adjustment
    Change in
derivatives
in OCI
    Change in
derivatives from
OCI into earnings
    Accumulated
other
comprehensive
income
    Total
shareholders’
equity
 

 

 

Balance, December 31, 2010

    2,785             $ 3      $      $ 2,798      $ (171   $ 190      $ (2   $ (5   $      $ 183      $ 2,813   
 

 

 

 

Net income

              111                  111   

Issuances under stock plans and management investments

    6              4                    4   

Repurchases of common stock

      3          (3                   (3

Stock-based compensation expense

            18                    18   

Other equity transactions

            (8                 (8

Cumulative translation adjustments

                51              51        51   

Postretirement & postemployment adjustments, net of tax

                  (22         (22     (22

Change in derivatives in OCI , net of tax

                    (6       (6     (6

Change in derivatives from OCI into earnings, net of tax

                      13        13        13   
 

 

 

 

Balance, December 31, 2011

    2,791        3      $ 3      $ (3   $ 2,812      $ (60   $ 241      $ (24   $ (11   $ 13      $ 219      $ 2,971   
 

 

 

 

Net loss

              (42               (42

Issuances under stock plans and management investments

    13              (3                 (3

Repurchases of common stock

      1          (1                   (1

Stock-based compensation expense

            19                    19   

Dividends paid to shareholders, net of tax

            (1,194                 (1,194

Cumulative translation adjustments

                (49           (49     (49

Postretirement & postemployment adjustments, net of tax

                  (17         (17     (17

Change in derivatives in OCI , net of tax

                    3          3        3   

Change in derivatives from OCI into earnings, net of tax

                      (4     (4     (4
 

 

 

 

Balance, December 31, 2012

    2,804        4      $ 3      $ (4   $ 1,634      $ (102   $ 192      $ (41   $ (8   $ 9      $ 152      $ 1,683   

 

 

 

The accompanying notes are an integral part of the Consolidated Financial Statements.

 

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Notes to consolidated financial statements

Note 1. Basis of presentation

IMS Health Holdings, Inc. (the “Company”) is a leading global information and technology services company providing clients in the healthcare industry with comprehensive solutions to measure and improve their performance. The Company has one of the largest and most comprehensive collections of healthcare information in the world, spanning sales, prescription and promotional data, medical claims, electronic medical records and social media data. The Company standardizes, organizes, structures and integrates this data by applying its sophisticated analytics and leveraging its global technology infrastructure to help its clients run their organizations more efficiently and make better decisions. The Company has a presence in over 100 countries, and generated 64% of its 2012 revenue from outside the United States.

The Company serves key healthcare organizations and decision makers around the world, spanning the breadth of life science companies, including pharmaceutical, biotechnology, consumer health and medical device manufacturers, as well as distributors, providers, payers, government agencies, policymakers, researchers and the financial community. The Company’s information and technology services, which it has developed with significant investment over its 60-year history, are deeply integrated into its clients’ workflow.

On October 23, 2009, the Company was formed as Healthcare Technology Holdings, Inc. by investment entities affiliated with TPG Capital, L.P., CPP Investment Board Private Holdings Inc. and Leonard Green & Partners, L.P (collectively, the “Sponsors”). On December 20, 2013, the Company changed its name to IMS Health Holdings, Inc. On February 26, 2010, the Company acquired 100% of the outstanding shares of IMS Health Incorporated (“IMS Health”) through its wholly owned subsidiary Healthcare Technology Acquisition Inc. (the “Merger”). The Company was formed for the purpose of consummating the Merger with IMS Health and had no operations from inception other than its investment in IMS Health and its subsidiaries and costs incurred associated with its formation and the Merger.

The Consolidated Financial Statements of our successor and predecessor entities have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). All material intercompany balances and transactions have been eliminated in the Consolidated Financial Statements.

Successor —The Consolidated Financial Statements as of December 31, 2012 and 2011 and for the years ended December 31, 2012, 2011 and 2010 include the accounts of the Company for the entire period and IMS Health from the closing of the Merger on February 26, 2010. The Consolidated Financial Statements of the successor reflect the Merger under the acquisition method of accounting, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations .

Predecessor —The accompanying consolidated financial statements for the period January 1, 2010 to February 26, 2010, include the Consolidated Financial Statements of IMS Health (our predecessor).

Note 2. Summary of significant accounting policies

Consolidation.     The Consolidated Financial Statements of the Company include the accounts of the Company, its subsidiaries and investments in which the Company has control. Intercompany

 

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accounts and transactions are eliminated in consolidation. The Company recognizes in the income statement any gains or losses related to investments accounted for under the equity method.

Cash and cash equivalents and restricted cash.     Cash and cash equivalents include primarily time and demand deposits in the Company’s operating bank accounts. The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Restricted cash consists of amounts not immediately available.

Property, plant and equipment.     Buildings, machinery and equipment are recorded at cost and depreciated over their estimated useful lives to their salvage values using the straight-line method. Leasehold improvements are recorded at cost and amortized on a straight-line basis over the shorter of the term of the lease or the estimated useful life of the improvement. See Note 13.

Computer software.     Direct costs incurred in the development of the Company’s internal-use computer software are capitalized. Costs are capitalized from completion of the preliminary project stage and when it is considered probable that the software will be used to perform its intended function, up until the time the software is placed into service. Once placed into service, the software is amortized generally over a period of three to seven years. The Company periodically reviews the unamortized capitalized costs of its computer software to assess for any potential impairment. The Company recognizes immediately any impairment losses on software as a result of its review. Research and development costs are expensed in the periods in which they are incurred.

Business combinations.     Business combinations are accounted for using the acquisition method, and accordingly, the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree are recorded at their estimated fair values on the date of acquisition.

Goodwill.     Goodwill represents the excess purchase price over the fair value of identifiable net assets of businesses acquired, and is not amortized. The Company reviews the recoverability of goodwill annually (or based on any triggering event) by comparing the estimated fair values (based on discounted cash flow analysis) of reporting units with their respective net book values. If the carrying amount of the reporting unit exceeds its fair value, the goodwill impairment loss is measured as the excess of the carrying value of goodwill over its fair value. The Company completed its annual impairment tests in 2012, 2011 and 2010 and no goodwill impairment charges were recorded. See Note 5.

Other long-lived assets.     The Company reviews the recoverability of its long-lived assets and finite-lived identifiable intangibles held and used whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In general, the assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset from the undiscounted expected future cash flows of the asset. If the future cash flows are less than the carrying value of such asset, an impairment charge is recognized for the difference between the estimated fair value and the carrying value. In addition, the Company also reviews its indefinite-lived intangible assets on an annual basis.

Revenue recognition.     The Company recognizes revenue when the following criteria have been met: 1) persuasive evidence of an arrangement exists; 2) delivery has occurred or services have been rendered; 3) the seller’s price to the buyer is fixed or determinable; and 4) collectibility is reasonably assured.

 

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The Company offers various information offerings developed to meet its clients’ needs by using data secured from a worldwide network of suppliers. The Company’s revenue arrangements may include multiple elements. A typical information offerings arrangement (primarily under fixed-price contracts) may include an ongoing subscription-based deliverable for which revenue is recognized ratably as earned over the contract period, and/or a one-time delivery of data offerings for which revenue is recognized upon delivery, assuming all other criteria are met. These deliverables qualify as separate units of accounting as each has value on a standalone basis to the client, objective and reliable evidence of fair value for any undelivered item(s) exists, and where the arrangement includes a general right of return relative to the delivered item(s), delivery of the undelivered item(s) is probable and within the Company’s control. The Company allocates revenue to each element within its arrangements based upon their respective relative selling price. Fair values for these elements are based upon the normal pricing practices for these offerings when sold separately. The Company defers revenue for any undelivered elements, and recognizes revenue when the product is delivered or over the term of the agreement, in accordance with its revenue recognition policy for such element as noted above.

The Company also offers technology services offerings that enable its clients to make informed business decisions. Revenues for certain of these arrangements are recognized on a straight-line basis over the term of the arrangement. Revenues for time and material contracts are recognized as the services are provided. Revenues for fixed price contracts are recognized either over the contract term based on the ratio of the number of hours incurred for services provided during the period compared to the total estimated hours to be incurred over the entire arrangement (efforts based), or upon delivery.

The Company presents its revenues net of taxes assessed by government authorities.

Payment terms vary by client, but are typically stipulated in the contract and are generally invoiced with 30 day payment terms. The Company generally does not offer extended payment terms. Advance payments from clients are credited to Deferred revenues and reflected in Revenue as earned over the contract term. Unbilled receivables are included in Accounts receivable, net in the Consolidated Statements of Financial Position and represent revenues for products delivered or services performed that have not yet been invoiced to the client. Unbilled receivables are generally invoiced within the following month.

Operating costs of information.     Operating costs of information include costs of acquiring data, data processing and costs attributable to personnel involved in production, data management and delivery of the Company’s information offerings.

One of the Company’s major expenditures is the cost for the data it receives from suppliers. After receipt of the raw data and prior to the data being available for use in any part of the business, the Company is required to transform the raw data into useful information through a series of comprehensive processes. These processes involve significant employee costs and data processing costs.

Costs associated with purchases are deferred within work-in-process inventory and recognized as expense as the corresponding data product revenue is recognized, generally over a thirty to sixty day period.

Direct and incremental costs of technology services.     Direct and incremental costs of technology services include costs of staff directly involved with delivering technology-related, consulting and

 

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services generating offerings and engagements, related accommodations and the costs of data purchased specifically for technology services engagements. Direct and incremental costs of technology services do not include an allocation of direct costs of data that are included in operating costs of information. Although the Company’s data, the costs of which are included in Operating costs of information, is used in multiple client solutions across different offerings within both information and technology services, the Company does not have a meaningful way to allocate the direct cost of the data between information and technology services. As such, the direct and incremental costs of technology services do not reflect the total costs incurred to deliver technology services engagements.

Pensions and other post retirement benefits.     The Company provides a number of retirement benefits to its employees, including defined benefit pension plans and postretirement medical 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 plan assets, cash balance crediting rate, lump sum conversion rate and the assumed rate of compensation increases. In addition, retiree medical care cost trend rates are a key assumption used exclusively in determining costs for the Company’s postretirement health care and life insurance benefit plans. Management reviews these critical assumptions at least annually. Other assumptions involve demographic factors such as the turnover, retirement and mortality rates. Management reviews these assumptions periodically and updates them when its experience deems it appropriate to do so.

The discount rate is the rate at which the benefit obligations could be effectively settled and is determined annually by management. For U.S. plans, the discount rate is based on results of a modeling process in which the plans’ expected cash flow (determined on a projected benefit obligation basis) is matched with spot rates developed from a yield curve comprised of high-grade (Moody’s Aa and above, or Standard and Poor’s AA and above) non-callable corporate bonds to develop the present value of the expected cash flow, and then determining the single rate (discount rate) which when applied to the expected cash flow derives that same present value. In the U.K. specifically, the discount rate is set based on the yields on a universe of approximately 150 high quality (Aa rated) corporate bonds denominated in UK Sterling, appropriate to the duration of Plan liabilities. For the other non-U.S. plans, the discount rate is based on the current yield of an index of high quality corporate bonds. At December 31, 2012, the discount rate was decreased to 3.8% from 4.6% at December 31, 2011 for its U.S. pension plans and postretirement benefit plan. Similarly, the discount rate for its U.K. pension plan was decreased to 4.7% from 5.3% at December 31, 2011. The U.S. and U.K. plans represent 98% of the consolidated benefit obligation as of December 31, 2012. The discount rate in other non-U.S. countries decreased, where the range of applicable discount rates at December 31, 2012 was 1.4%—6.53%.

Under the U.S. qualified retirement plan, participants have a notional retirement account that increases with pay and investment credits. The rate used to determine the investment credit (cash balance crediting rate) varies monthly and is equal to 1/12th of the yield on 30-year U.S. Government Treasury Bonds, with a minimum of 0.25%. At retirement, the account is converted to a monthly retirement benefit.

In selecting an expected return on plan asset assumption, the Company considers the returns being earned by each plan investment category in the fund, the rates of return expected to be available for reinvestment and long-term economic forecasts for the type of investments held by the plan. The expected return on plan assets for the U.S. pension plans was 8.0% at January 1, 2013 and January 1, 2012. Outside the U.S. the range of applicable expected rates of return was

 

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1.0% – 6.5% as of January 1, 2013 and 1.0%—7.0% at January 1, 2012. The actual return on plan assets will vary from year to year versus this assumption. The Company believes it is appropriate to use long-term expected forecasts in selecting the expected return on plan assets. As such, there can be no assurance that the Company’s actual return on plan assets will approximate the long-term expected forecasts. The expected return on assets (“EROA”) was $27 million and $26 million, and the actual return on assets was $44 million and $3 million for the years ended December 31, 2012 and 2011, respectively. While the Company believes that the assumptions used are reasonable, differences in actual experience or changes in assumptions may materially affect its pension and postretirement obligations and future expense.

The Company utilizes a corridor approach to amortizing unrecognized gains and losses in the pension and postretirement plans. Amortization occurs when the accumulated unrecognized net gain or loss balance exceeds the criterion of 10% of the larger of the beginning balances of the projected benefit obligation or the market-related value of the plan assets. The excess unrecognized gain or loss balance is then amortized using the straight-line method over the average remaining service-life of active employees expected to receive benefits. At December 31, 2012, the weighted-average remaining service-life of active employees was 19.28 years.

At December 31, 2012, the projected benefit obligation exceeded the fair value of assets in the Company’s pension plans by $63 million.

Additional information on pension and other postretirement benefit plans is contained in Note 8.

Foreign currency.     The Company has significant investments in non-U.S. countries. Therefore, changes in the value of foreign currencies affect the Company’s Consolidated Financial Statements when translated into U.S. dollars. For all operations outside the U.S. where the Company has designated the local currency as the functional currency, assets and liabilities are translated using end-of-period exchange rates; revenues, expenses and cash flows are translated using average rates of exchange prevailing during the period the transactions occurred. Translation gains and losses are included as an adjustment to the accumulated other comprehensive income (loss) component of Shareholders’ Equity. In addition, gains and losses from foreign currency transactions, such as those resulting from the settlement and revaluation of third-party and intercompany foreign receivables and payables, are included in the determination of net (loss) income.

For operations in countries that are considered to be highly inflationary or where the U.S. dollar is designated as the functional currency, monetary assets and liabilities are remeasured using end-of-period exchange rates, whereas non-monetary accounts are remeasured using historical exchange rates, and all remeasurement and transaction adjustments are recognized in Other loss, net.

Income taxes.     The Company operates in more than 100 countries around the world and its earnings are taxed at the applicable income tax rate in each of those countries. The Company provides for income taxes utilizing the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each balance sheet date, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. If it is determined that it is more likely than not that future tax benefits associated with a deferred tax asset will not be realized, a valuation allowance is provided. In the event the Company was to determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded

 

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amount, an adjustment to the deferred tax asset would increase income in the period such determination was made. Likewise, should the Company determine that it would not be able to realize all or part of its net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made. The effect on deferred tax assets and liabilities of a change in the tax rates is recognized in income in the period that includes the enactment date. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.

Stock-based compensation.     The Company maintains a stock incentive plan, which provides for the grant of stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, and/or performance awards to key employees and directors, consultants, and advisors to the Company as determined by the plan administrator. The Company is required to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense either on a straight-line basis over the requisite service period of the award or on a graded vesting basis (performance-based awards) in the Company’s Consolidated Statements of Comprehensive Income. As the stock-based compensation is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. The Company is required to estimate the forfeitures at the time of grant and revise, if necessary, in subsequent periods if actual forfeitures differ from those estimates. See Note 9 for additional information.

Computation of net income per share.     Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed, when the result is dilutive, using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares primarily consist of employee stock options and restricted stock units.

Employee equity share options, restricted stock units and similar equity instruments granted by the Company are treated as potential common shares outstanding in computing diluted earnings per share. Diluted shares outstanding include restricted stock units and the dilutive effect of in-the-money options which is 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.

Treasury stock .    The Company records treasury stock purchases under the cost method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid in capital. If the Company reissues treasury stock at an amount below its acquisition cost and additional paid in capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is recorded against retained earnings.

Legal costs.     Legal costs are expensed as incurred.

Reportable segments.     The Company’s operations consist of one reportable segment, which represents management’s view of the Company’s operations based on its management and internal reporting structure.

 

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Use of estimates.     The preparation of financial statements and related disclosures in accordance with generally accepted accounting principles in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates. The most significant estimates relate to allowances, depreciation of fixed assets including salvage values, carrying value of goodwill and intangible assets, provision for income taxes and tax assets and liabilities, reserves for severance, pensions and reserves for employee benefits, stock-based compensation, contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The accounting estimates used in the preparation of the Company’s Consolidated Financial Statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Actual results could vary from the estimates and assumptions used in the preparation of the Consolidated Financial Statements.

Subsequent events.     The financial statements of IMS Health Holdings, Inc. are substantially comprised of the financial statements of IMS Health Incorporated, which issued its annual financial statements on March 4, 2013. Accordingly, the Company has evaluated transactions for consideration as recognized subsequent events in the annual financial statements through the date of March 4, 2013. Additionally, the Company has evaluated transactions that occurred through the issuance of these financial statements, January 2, 2014, for purposes of disclosure of unrecognized subsequent events.

Note 3. Summary of recent accounting pronouncements

In September 2011, the FASB issued new accounting guidance which allows an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment. An entity will be required to perform the two-step impairment test only if it concludes, based on a qualitative assessment, the fair value of a reporting unit is more likely than not to be less than its carrying value. The new accounting guidance is effective for impairment tests performed during entities’ fiscal years (and interim periods within those years) that begin after December 15, 2011. The adoption of this guidance did not have a material impact on the Company’s financial results.

In June 2011, the FASB issued authoritative guidance on the presentation of comprehensive income. This standard eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. The guidance is effective for annual periods ending after December 15, 2012, with early adoption permitted. The Company adopted this guidance on January 1, 2012.

In July 2012, the FASB amended its guidance related to indefinite-lived intangibles by providing entities an option to use a qualitative approach to test these assets for impairment. An entity will be able to first perform a qualitative assessment to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired. If it is concluded that this is the case, then the entity must perform a quantitative impairment test. This amendment is effective for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial results.

In February 2013, the FASB amended existing guidance by requiring companies to present information about reclassification adjustments from accumulated other comprehensive income in

 

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their financial statements in a single note or on the face of the financial statements. The amendments are effective for the Company prospectively for reporting periods beginning after December 15, 2012, with early adoption permitted. As these amendments require only additional disclosure, adoption did not have a material impact on the Company’s financial results.

Note 4. Acquisitions and dispositions

The Merger

On February 26, 2010 (the “Merger Date”), the Company completed its acquisitions of 100% of the outstanding shares of IMS Health for $22.00 in cash, without interest and less any applicable withholding taxes. The aggregate purchase price paid for all equity securities of IMS Health was approximately $4.2 billion. The purchase price was funded by (i) a senior secured term loan facility in an aggregate principal amount of approximately $2.0 billion, a senior secured revolving credit facility with a maximum availability of $275 million and $1.0 billion of senior notes (see Note 7), (ii) equity financing from the Sponsors, members of the Company’s management and certain other indirect investors and (iii) cash of IMS Health.

Merger-related costs

The Company incurred approximately $214 million of original issue discount and fees and expenses related to the issuance of successor debt in order to fund the merger. Approximately $140 million was reflected as a reduction to long-term debt and approximately $74 million was included in Other assets in the Consolidated Statements of Financial Position in the successor period and is being amortized over the term of the debt to which they relate (see Note 7).

The following table summarizes the additional merger-related costs recognized during the years ended December 31, 2012, 2011 and 2010 (successor) and January 1, 2010 through February 26, 2010 (predecessor), along with the line item in the Consolidated Statements of Comprehensive (Loss) Income in which those expenses were recognized. In addition, the Company incurred $53 million of merger-related costs in 2009.

 

       Successor      Predecessor  
     Year Ended December 31,     

Jan. 1

through

Feb. 26,

2010

 
(Dollars in millions)    2012      2011      2010     

 

 

Investment banker, legal, accounting, valuation services and other (included in Merger costs)

   $       $       $ 20      $ 45   

Employment contract related payments (included in Merger costs)

     2         23         45           

Debt extinguishment costs (included in Other loss, net)

                     70           
  

 

 

 

Total merger-related costs

   $ 2       $ 23       $ 135       $ 45   

 

 

Deferred revenues

In connection with the purchase price allocation, the Company estimated the fair value of the assumed product and service obligations as a result of the Merger. The estimated fair value of the product and service obligations was determined using a cost build-up approach. The cost build-up approach determines fair value by estimating the costs relating to fulfilling the

 

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obligations plus a normal profit margin. The sum of the costs and operating profit approximates the amount that the Company would be required to pay a third party to assume the product and service obligations. The estimated costs to fulfill the product and service obligations were based on historical costs related to the acquired agreements with clients. The Company recorded a decrease of approximately $60 million to its deferred revenue balance to reflect the estimate of the fair value of the acquired product and service obligations as described above.

Pre-acquisition contingencies

The Company has evaluated contingencies that existed as of the Merger Date. No pre-acquisition contingencies that existed as of the Merger Date became probable in nature and estimable during the remainder of the one-year measurement period. The Company is not aware of any material pre-acquisition contingencies.

Unaudited supplemental pro forma results

The following table presents the Company’s unaudited supplemental pro forma results for the year ended December 31, 2010 as if the Merger had occurred as of the beginning of 2009. The pro forma adjustments include $39 million for interest expense, $43 million for depreciation and amortization, $60 million for deferred revenue and $2 million for sponsor fees, and excludes $65 million for merger costs, $70 million for debt extinguishment costs and $64 million for equity-related benefits. The adjustments also reflect the related income tax effects. The unaudited supplemental pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations had the Merger occurred at the beginning of the period presented or the results of operations that may be obtained in the future.

 

(Dollars in millions)

Supplemental pro forma results

  

Year ended

Dec. 31,
2010

Revenue

     $ 1,929  

Net loss

     $ (9 )

Acquisitions

The Company makes acquisitions in order to expand its products, services and geographic reach. During the year ended December 31, 2012, the Company completed nine acquisitions; PharmARC Analytical Solutions Private Limited (India), Pharmadata s.r.o. (Europe), Suomen Lääkedata Oy (Europe), DecisionView, Inc. (U.S.), Pharma Ventures Limited (Europe), Tar Heel Trading Company, LLC (U.S.), Life Science Partners Pty Limited (Australia), Pharmexpert Group (Europe) and Marina Consulting, LLC (U.S.) to strengthen our product offerings. The total cost for these acquisitions was approximately $77 million. The Company incurred approximately $11 million of acquisition-related costs, which are expensed as incurred and recorded in selling and administrative expense, exclusive of depreciation and amortization. All of the business combinations were accounted for under the acquisition method of accounting, and as such, the aggregate purchase price was allocated to the assets acquired based on estimated fair values as of the closing date. The Consolidated Financial Statements include the results of the acquisitions subsequent to the closing. Had these acquisitions occurred as of January 1, 2011, the impact on the Company’s results of operations would not have been material. In connection with these acquisitions, the Company recorded goodwill of approximately $30 million, of which approximately $10 million is deductible for tax purposes,

 

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computer software of $15 million (weighted-average amortization period of 4.9 years) and intangible assets of approximately $29 million. The intangible assets acquired were comprised of client relationships of $24 million (weighted-average amortization period of 10 years) and databases of $5 million (weighted-average amortization period of 4.2 years).

During the year ended December 31, 2011, the Company completed three acquisitions; Med-Vantage, Inc. in the U.S., Ardentia Limited in Europe and SDI Health LLC in the U.S. The total cost for the three acquisitions was approximately $380 million. The Company incurred approximately $13 million of acquisition-related costs, which are expensed as incurred and recorded in selling and administrative expense, exclusive of depreciation and amortization. The acquisitions were accounted for under the purchase method of accounting, and as such, the aggregate purchase price was allocated to the assets acquired based on fair values. The Consolidated Financial Statements include the results of the acquisition subsequent to the closing. Had these acquisitions occurred as of January 1, 2010, the impact on the Company’s results of operations would not have been material. In connection with these acquisitions, the Company recorded goodwill of approximately $203 million, of which approximately $199 million is deductible for tax purposes, computer software of $21 million (weighted-average amortization period of 5 years) and intangible assets of approximately $136 million. The intangible assets acquired were comprised of client relationships of $87 million (weighted-average amortization period of 16 years), databases of $35 million (weighted-average amortization period of 5 years) and trade names and other of $14 million (weighted-average amortization period of 9.5 years).

Under the terms of certain acquisition-related purchase agreements, the Company may be required to pay additional amounts as contingent consideration based on the achievement of certain financial performance related metrics, ranging from $0 to $25 million through 2017. The Company’s contingent consideration recorded on the balance sheet was approximately $25 million and $17 million at December 31, 2012 and 2011, respectively. The fair value measurement of this contingent consideration is classified within Level 3 of the fair value hierarchy (see Note 7) and reflects the Company’s own assumptions in measuring fair values using the income approach. In developing these estimates, the Company considered certain performance projections, historical results and industry trends.

Dispositions

In connection with the acquisition of SDI, the Federal Trade Commission (“FTC”) required the Company to divest a portion of the acquired business. As a result, the Company sold a portion of the business to a third party and received $16 million during the first quarter of 2012. In connection with this divestiture, the Company also received approximately $9 million due from the former SDI shareholders.

As of December 31, 2011, the Company classified a building in the U.S. as held for sale. As a result of this classification, the Company recorded a $2 million impairment loss based on the then estimated fair value of the building. The sale of the facility was completed in January 2012 and the Company received net proceeds of approximately $9 million.

Note 5. Goodwill and Intangible Assets

Goodwill and intangible assets that have indefinite useful lives are not amortized and are tested at least annually (or based on any triggering event) for impairment.

 

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The following table sets forth changes in the Company’s goodwill for the years ended December 31, 2012 and 2011.

 

(Dollars in millions)    Goodwill  

 

 

Balance at December 31, 2010

   $ 3,353   

Goodwill assigned in acquisition purchase price allocations (see Note 4)

     203   

Foreign currency translation adjustments

     35   
  

 

 

 

Balance at December 31, 2011

   $ 3,591   

Goodwill assigned in acquisition purchase price allocations (see Note 4)

     30   

Foreign currency translation adjustments

     (38
  

 

 

 

Balance at December 31, 2012

   $ 3,583   

 

 

Intangible assets that have finite useful lives are amortized using the straight-line method over periods ranging from five to twenty years. Intangible asset amortization expense was $291 million, $287 million, $229 million and $2 million during the years ended December 31, 2012, 2011 and 2010 (successor) and January 1, 2010 through February 26, 2010 (predecessor), respectively. At December 31, 2012, intangible assets were comprised of databases, client relationships and trade names. The gross carrying amounts and related accumulated amortization of these intangibles are listed in the following table:

 

       December 31, 2012      December 31, 2011  
(Dollars in millions)   

Gross

carrying

amount

     Accumulated
amortization
     Weighted avg.
amortization
period (years)
    

Gross

carrying
amount

     Accumulated
amortization
 

 

 

Databases

   $ 727       $ 405         2.2       $ 724       $ 259   

Client Relationships

     2,225         375         15.5         2,234         243   

Trade Names and Other (Finite-Lived)

     149         22         16.1         149         13   

Trade Names (Indefinite-Lived)

     574                 N/A         579           
  

 

 

 

Total Intangible Assets

   $ 3,675       $ 802         12.4       $ 3,686       $ 515   

 

 

Based on current estimated useful lives, amortization expense associated with intangible assets at December 31, 2012 is estimated to be as follows:

 

(Dollars in millions)

Year ended December 31,

   Amortization
expense
 

 

 

2013

   $ 288   

2014

     287   

2015

     175   

2016

     140   

2017

     106   

Thereafter

   $ 1,303   

 

 

Note 6. Severance, impairment and other charges

In December 2012, as a result of ongoing cost reduction efforts, the Company implemented a restructuring plan (the “2012 Plan”) and recorded a pre-tax severance charge of $23 million as a component of operating income consisting of global workforce reductions to streamline the Company’s organization. The severance benefits under the 2012 Plan were calculated pursuant to

 

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the terms of established employee protection plans, in accordance with local statutory minimum requirements or individual employee contracts, as applicable. The Company expects that cash outlays related to severance benefits for the 2012 Plan will be substantially complete by the end of the second quarter of 2014.

During the fourth quarter of 2012, the Company recorded impairment charges of $2 million related to the write-down of certain assets to their net realizable values, $3 million for contract-related charges for which the Company will not realize any future economic benefits and $1 million related to a lease impairment for property in the U.S.

During the third quarter of 2012, the Company recorded $7 million of impairment charges as a component of operating income related to a leased facility in the U.S. which was vacated on September 30, 2012.

During the second quarter of 2012, the Company recorded $23 million of impairment charges as a component of operating income related to the write-down of certain assets to their net realizable values and contract-related charges for which the Company will not realize any future economic benefits.

In December 2010, the Company implemented a multi-year restructuring plan and recorded a pre-tax severance, impairment and other charge totaling $50 million related to ongoing cost reduction efforts, including workforce reductions to streamline the Company’s organization, the elimination of certain regional headquarter functions and asset impairments (the “2010 Plan”). In connection with the overall 2010 Plan, the Company eliminated positions in all areas of the business, with a majority of the actions in the Company’s Global Operations function. The severance benefits under the 2010 Plan were calculated pursuant to the terms of established employee protection plans, in accordance with local statutory minimum requirements or individual employee contracts, as applicable. During December 2011, the Company recorded an incremental charge of $19 million; bringing the total charge under the 2010 Plan to $69 million. During the fourth quarter of 2012, the Company reversed approximately $10 million of severance accruals for the 2010 Plan related to the favorable settlement of required termination benefits and strategic business changes. During the second quarter of 2011, the Company also reversed the facility exit portion of the 2010 Plan as the Company was able to successfully assign the related lease to a third party. The Company expects that cash outlays related to severance benefits for the 2010 Plan will be substantially complete by the end of 2013.

 

(Dollars in millions)    Severance
related
reserves
    Facility
exit
charges
    Currency
translation
adjustments
     Total  

 

 

Balance at December 31, 2010

   $ 48      $ 1      $       $ 49   

2011 utilization

     (26                    (26

Q2 2011 reversal

            (1             (1

Q4 2011 charge

     19                       19   

Currency translation adjustments

                   1         1   
  

 

 

 

Balance at December 31, 2011

   $ 41      $      $ 1       $ 42   

2012 utilization

     (26                    (26

Q4 2012 reversal

     (10                    (10
  

 

 

 

Balance at December 31, 2012

   $ 5      $      $ 1       $ 6   

 

 

 

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In the fourth quarter of 2011, as a result of classifying a building in the U.S. as held for sale, the Company recorded an impairment charge of $2 million.

During the second quarter of 2011, the Company recorded $10 million in contract-related charges as a component of operating income related to a cash payment made to a vendor for which the Company did not realize any future economic benefits.

In connection with the acquisition of Brogan, the Company recorded a charge of $3 million during the third quarter of 2010 related to employee termination benefits to be paid. The severance charge related to the streamlining of certain functions as a result of the acquisition. The Company recorded the charge under existing employee protection plans. During the fourth quarter of 2012, the Company reversed $1 million of the charge as a result of the favorable settlement of termination benefits.

Note 7. Financial instruments

Foreign exchange risk management

The Company transacts business in more than 100 countries and is subject to risks associated with changing foreign exchange rates. The Company’s objective is to reduce earnings and cash flow volatility associated with foreign exchange rate changes. Accordingly, the Company enters into foreign currency forward contracts to minimize the impact of foreign exchange movements on EBITDA, and to hedge non-U.S. Dollar anticipated royalties. It is the Company’s policy to enter into foreign currency transactions only to the extent necessary to meet its objectives as stated above. The Company does not enter into foreign currency transactions for investment or speculative purposes. The principal currencies hedged are the Euro, the Japanese Yen, the British Pound, the Swiss Franc and the Canadian Dollar.

The impact of foreign exchange on pre-tax income resulted in net losses of $26 million, $6 million, $1 million and $10 million for the years ended December 31, 2012, 2011 and 2010 (successor) and for the period ending February 26, 2010 (predecessor), respectively. The years ended December 31, 2012, 2011 and 2010 (successor) included foreign exchange (losses) gains of $(18) million, $3 million and $28 million, respectively, related to the translation of non-functional currency debt. These foreign exchange losses are included in Other loss, net, in the Consolidated Statements of Comprehensive (Loss) Income. Additionally, Other loss, net included (losses) gains of $(13) million, $16 million, $(36) million and $(6) million related to the revaluation of other functional assets and liabilities for the years ended December 31, 2012, 2011 and 2010 (successor) and for the period ending February 26, 2010 (predecessor), respectively.

At December 31, 2012, the Company’s notional amount of forward contacts designated as cash flow and EBITDA hedges was $174 million and $366 million, respectively. These foreign exchange forward contracts outstanding have various expiration dates through September 2014 relating to non-U.S. Dollar anticipated royalties and EBITDA. Foreign exchange forward contracts are recorded at estimated fair value. The estimated fair values of the forward contracts are based on quoted market prices.

Unrealized and realized gains and losses on the contracts hedging EBITDA do not qualify for hedge accounting, and therefore are not deferred and are included in the Consolidated Statements of Comprehensive Income in Other loss, net.

 

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Unrealized gains and losses on the contracts hedging non-U.S. Dollar anticipated royalties qualify for hedge accounting, and are therefore deferred and included in Accumulated Other Comprehensive Income (Loss) (“AOCI”).

 

       Fair value of derivative instruments  
     Asset derivatives      Liability derivatives  
     As of December 31,  
(Dollars in millions)   

2012

     2011     

2012

     2011  

 

 

Derivatives designated as hedging instruments

           

Foreign Exchange Contracts (1)

   $ 5       $ 6       $ 2       $ 2   

Derivatives not designated as hedging instruments

           

Foreign Exchange Contracts (1)

     3         3         9         2   

Interest Rate Swaps (2)

                     21         23   
  

 

 

 

Total Derivatives

   $ 8       $ 9       $ 32       $ 27   

 

 

 

(1)   Included in Current Assets and Current Liabilities in the Consolidated Statements of Financial Position.

 

(2)   Included in Other liabilities in the Consolidated Statements of Financial Position.

 

(Dollars in millions)    Effect of derivatives on financial performance  

 

 
Derivatives in cash flow hedging
relationships
    

Amount of gain/(loss)
recognized in other
comprehensive (loss) income

on derivatives

    Location of gain/(loss)
reclassified from AOCI
into earnings
         Amount of gain/(loss)
from AOCI into earnings
 

 

 
       Successor     Predecessor            Successor      Predecessor  

 

   

 

 

    

 

 

 
    

Year Ended December 31,

   

Jan. 1

through

Feb. 26,

2010

       

Year Ended December 31,

    

Jan. 1,
through
Feb. 26,

2010

 
  

 

 

       

 

 

    
     2012      2011     2010           2012      2011     2010     

 

   

 

 

    

 

 

 

Foreign Exchange Contracts

   $ 5       ($ 9   ($ 7   $ 4      Other Loss, net   $ 6       ($ 20   $       ($ 3

 

   

 

 

    

 

 

 

The pre-tax gain/(loss) recognized in earnings on derivatives not designated as hedging instruments was as follows:

 

       Successor     Predecessor  
     Year Ended December 31,    

Jan. 1,

through

Feb. 26,

2010

 
  

 

 

   
(Dollars in millions)   

2012

   

2011

   

2010

   

 

 

Foreign Exchange Contracts(1)

   $ (4   $ (5   $      $   

Interest Rate Swaps and Caps(2)

     (2     (17     (11       
  

 

 

 

Total Derivatives not Designated as Hedging Instruments

   $ (6   $ (22   $ (11   $   

 

 

 

(1)   Included in Other loss, net

 

(2)   Included in Interest expense.

Changes in the fair value of derivatives that are designated as a cash flow hedges are recorded in AOCI to the extent effective and reclassified into earnings in the same period or periods during which the transaction hedged by that derivative also affects earnings. The Company expects approximately $3 million of pre-tax unrealized gain related to our foreign exchange contracts included in AOCI at December 31, 2012 to be reclassified into earnings within the next twelve months.

 

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Fair value disclosures

At December 31, 2012, the Company’s financial instruments included cash, cash equivalents, restricted cash, short-term investments, receivables, accounts payable and debt. At December 31, 2012, the fair values of cash, cash equivalents, restricted cash, short-term investments, receivables and accounts payable approximated carrying values due to the short-term nature of these instruments. Short-term investments consist of time deposits and government bond funds with maturities greater than ninety days, but less than one year. At December 31, 2012, the fair value of total debt approximated $4,498 million as determined under Level 2 measurements based on quoted prices for these financial instruments.

The Company is subject to authoritative guidance which requires a three-level hierarchy for disclosure of fair value measurements as follows:

 

Level 1

          Quoted prices in active markets for identical assets or liabilities.

Level 2

          Quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets; and model-derived valuations in which all significant inputs are observable in active markets.

Level 3

          Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

Recurring measurements

The following table summarizes assets and liabilities measured at fair value on a recurring basis at the dates indicated:

 

       Basis of fair value measurements  
(Dollars in millions)    December 31, 2012  
     Level 1      Level 2      Level 3      Total  

 

 

Assets

           

Short-term investments

   $ 56       $ 5       $       $ 61   

Derivatives

             8                 8   
  

 

 

 

Total

   $ 56       $ 13       $       $ 69   
  

 

 

 

Liabilities

           

Contingent consideration

   $       $       $ 25       $ 25   

Derivatives

             32                 32   
  

 

 

 

Total

   $       $ 32       $ 25       $ 57   

 

 
  
       December 31, 2011  

 

 

Assets

           

Derivatives

   $       $ 9       $       $ 9   
  

 

 

 

Total

   $       $ 9       $       $ 9   
  

 

 

 

Liabilities

           

Contingent consideration

   $       $       $ 17       $ 17   

Derivatives

             27                 27   
  

 

 

 

Total

   $       $ 27       $ 17       $ 44   

 

 

 

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Derivatives consist of foreign exchange contracts and interest rate caps and swaps. The fair value of foreign exchange contracts is based on observable market inputs of spot and forward rates. See below in this Note for the fair value determination of interest rate caps and swaps.

The following table summarizes Level 3 acquisition-related contingent consideration liabilities (see Note 4) carried at fair value on a recurring basis with the use of unobservable inputs for the period indicated.

 

(Dollars in millions)    Contingent
consideration liabilities
 

 

 

Balance at 12/31/10

   $ 7   

New acquisitions

     10   
  

 

 

 

Balance at 12/31/11

   $ 17   

New acquisitions

     9   

Changes in fair value estimates included in Selling and administrative expenses

     (1
  

 

 

 

Balance at 12/31/12

   $ 25   

 

 

Non-recurring measurements

In 2012, the Company wrote-off the value of computer software that was no longer in use to zero and recorded an impairment charge of $22 million. The fair value reflects an internal review of the net realizable value of the software and thus is a Level 3 measurement. In 2011, the Company sold a building that was included in assets held for sale for $9 million, resulting in a $2 million impairment charge. The fair value measurement was based on the negotiated sales price, a Level 1 measurement.

Credit concentrations

The Company continually monitors its positions with, and the credit quality of, the financial institutions which are counterparties to its financial instruments and does not anticipate non-performance by the counterparties. In general, we enter into transactions only with financial institution counterparties that are large banks and financial institutions. In addition, the Company attempts to limit the amount of credit exposure with any one institution. The Company would not have realized a material loss during the year ended of December 31, 2012 in the event of non-performance by any one counterparty.

The Company maintains accounts receivable balances ($308 million and $310 million, net of allowances, at December 31, 2012 and 2011, respectively), principally from clients in the pharmaceutical industry. The Company’s trade receivables do not represent significant concentrations of credit risk at December 31, 2012 due to the credit worthiness of its clients and their dispersion across many geographic areas.

 

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Debt

The following table summarizes the Company’s debt at the dates indicated:

 

       December 31,  
(Dollars in millions)    2012     2011  

 

  

 

 

   

 

 

 

Senior Secured Term Loan due 2017—USD LIBOR at average floating rates of 4.50%

   $ 1,766      $ 1,280   

Senior Secured Term Loan due 2017—EUR LIBOR at average floating rates of 5.00%

     999        732   

Revolving Credit Facility due 2017—USD LIBOR at average floating rates of 4.40%

            53   

12.50% Senior Notes due 2018

     1,000        1,000   

6.00% Senior Notes due 2020

     500          
  

 

 

 

Principal Amount of Debt

     4,265        3,065   

Less: Unamortized Discounts

     (88     (104
  

 

 

 

Total Debt per Consolidated Statements of Financial Position

   $ 4,177      $ 2,961   

 

 

Scheduled principal payments due on our debt as of December 31, 2012 were as follows:

 

       Year  
(Dollars in millions)    2013      2014      2015      2016      2017      Thereafter      Total  

 

 

Debt

   $ 28       $ 28       $ 26       $ 26       $ 2,657       $ 1,500       $ 4,265   

 

 

For information on debt transactions subsequent to December 31, 2012, see Note 17, Subsequent Events.

On October 24, 2012, the Company completed a recapitalization (the “Recapitalization”). The Recapitalization included an amendment (the “Amendment”) to the New Term Loan Agreement (see below) for additional term loans in the aggregate U.S. dollar equivalent of approximately $760 million, which included 200 million Euros. Among other modifications, the Amendment: (a) extended the maturity date of the Revolving Credit Facility to August 2017; and (b) increased the maximum leverage ratio.

The Recapitalization also included a new offering of $500 million aggregate principal amount of 6% Senior Notes due 2020 (the “6% Senior Notes”). The 6% Senior Notes are guaranteed on a senior unsecured basis by the Company’s wholly-owned domestic subsidiaries. The 6% Senior Notes have terms substantially similar to the existing $1,000 million 12.5% Senior Notes due 2018 (“Existing 2018 Notes”), except that, most notably, the 6% Senior Notes have a three-year no call redemption period.

In order to effect the Recapitalization, the Company conducted an exchange offer and consent solicitation to exchange the Existing 2018 Notes for new 12.5% Senior Notes due 2018 (“New 12.5% Senior Notes”), and to solicit consents to proposed amendments to the indenture governing the Existing 2018 Notes to permit the recapitalization. The requisite consents were obtained and 99.96% of the holders of the Existing 2018 Notes agreed to participate in the exchange and received New 12.5% Senior Notes in an equal principal amount.

The proceeds from the Recapitalization were used to pay a $1,202 million dividend to shareholders of the Company and for payment of fees and expense of the transaction of approximately $48 million, which were capitalized.

 

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In March 2011, the Company entered into an Amended and Restated Credit and Guaranty Agreement (“New Term Loan Agreement”) replacing its Credit and Guaranty Agreement dated February 2010. Under the New Term Loan Agreement, the Company increased its borrowings by $52 million and EUR 21 million. The terms of the New Term Loan Agreement extended the maturity date of the term loan and revolver by eighteen months to August 2017 and one year to February 2016, respectively, reduced the borrowing margins and LIBOR floor, expanded the revolver borrowing capacity by $100 million, and eliminated the interest coverage ratio covenant.

At December 31, 2012 short-term and long-term debt was $28 million and $4,149 million respectively, in the Consolidated Statements of Financial Position. The Company’s senior secured credit facilities are secured by a security interest in substantially all of our tangible and intangible assets, including the stock and the assets of certain of its current and certain future wholly-owned U.S. subsidiaries and a portion of the stock of certain of its non-U.S. subsidiaries. In addition, certain of the assets of the Company’s Swiss subsidiaries have been pledged to secure any borrowings under the Senior Term Loan by IMS AG.

Costs 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. As of December 31, 2012 the unamortized balance of original issue discount reflected as a reduction to long term debt and fees and expenses related to the issuance of the successor debt included in Other assets was $88 million and $97 million, respectively. During the year ended December 31, 2012, the Company recorded interest expense of $30 million related to the amortization of these balances.

The Company’s financing arrangements provide for certain covenants and events of default customary for similar instruments, including in the case of the Company’s New Term Loan Agreement (as amended), a covenant to maintain a specific ratio of consolidated total indebtedness to Adjusted EBITDA. If an event of default occurs under any of the Company’s financing arrangements, the creditors under such financing arrangements will be entitled to take various actions, including the acceleration of amounts due under such arrangements, and in the case of the lenders under the Company’s New Term Loan Agreement (as amended), other actions permitted to be taken by a secured creditor. At December 31, 2012, the Company was in compliance with the financial covenant under the Company’s New Term Loan Agreement (as amended).

In May 2010, the Company purchased interest rate caps and entered into interest rate swap agreements for purposes of managing our risk in interest rate fluctuations. The Company purchased U.S. Dollar and Euro denominated interest rate caps for a total nominal value of approximately $1,675 million at strike rates ranging from 3% to 4%. These caps cover different periods between May 2010 and January 2015. The total premiums paid were $5 million.

The Company also entered into interest rate swap agreements to hedge notional amounts of $375 million of its borrowings. All were effective January 2012, and expire at various times from January 2014 through January 2016. On these agreements, the Company pays a fixed rate ranging from 2.6% to 3.3% and receives a variable rate of interest equal to the three-month London Interbank Offered Rate (“LIBOR”).

The fair value of the interest rate caps and swaps is the estimated amount that it would receive or pay to terminate such agreements, taking into account market interest rates and the remaining time to maturities. As of December 31, 2012 and 2011, based upon mark-to-market valuation, we recorded on the Consolidated Statements of Financial Position a long-term liability of $21 million and $23 million, respectively.

 

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Note 8. Pension and postretirement benefits

The Company sponsors both funded and unfunded defined benefit pension plans. These plans provide benefits based on various criteria, including, but not limited to, years of service and salary. The Company also sponsors an unfunded postretirement benefit plan in the U.S. that provides health and prescription drug benefits to retirees who meet the eligibility requirements. The Company uses a December 31 measurement date for all pension and postretirement benefit plans.

In connection with the Merger on February 26, 2010, pension liability, accumulated other comprehensive income and pension expense were re-measured. The Company re-measured the acquired U.S. and UK pension plans. Due to the U.S. and UK plans accounting for 98% of the Company’s total pension obligation, the remaining plans were considered immaterial and were not re-measured. The re-measurement involved reviewing the actuarial assumptions used to value the plan and recognizing the worldwide pension balances in accumulated other comprehensive income as of the transaction date. Due to the short period of time between the December 31, 2009 valuations and the transaction date, no changes were made to the actuarial assumptions. The changes in pension liability and expense resulted from the change in asset value for the U.S. plan.

In addition, consistent with purchase accounting rules, the Company chose to adopt a 3-year smoothing of investment gains and losses to determine market related value of assets and to continue amortizing gains and losses using the 10% corridor method, amortizing over the average remaining service for active plan participants.

The UK Defined Benefit Plan closed to future accrual at June 30, 2011, giving rise to a curtailment under U.S. GAAP accounting. At June 30, 2011, the Plan was re-measured to recalculate the liability and determine the U.S. GAAP funding level based on market conditions and asset values at June 30, 2011.

 

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The following tables summarize changes in the benefit obligation, the plan assets and the funded status of the Company’s pension and postretirement benefit plans as well as the components of net periodic benefit costs, including key assumptions.

 

       Pension benefits  
     U.S. plans       Non-U.S. plans    
     Year ended December 31,     Year ended December 31,  
(Dollars in millions)    2012     2011     2012     2011  

 

 

Obligation and Funded Status

        

Change in benefit obligation

        

Benefit obligation at beginning of periods/year

   $ 218      $ 203      $ 198      $ 194   

Service cost

     7        7        5        7   

Interest cost

     10        10        10        10   

Foreign currency exchange adjustment

                   6        4   

Amendments

                            

Divestitures

                            

Plan participants’ contributions

                            

Expenses paid from assets

                            

Actuarial loss

     23        7        17        1   

Benefits paid(net of Medicare subsidy in 2012)

     (7     (7     (10     (9

Curtailments

                          (7

Settlements

            (2     (2     (2
  

 

 

 

Benefit obligation at end of periods/year

   $ 251      $ 218      $ 224      $ 198   
  

 

 

 

Change in plan assets

        

Fair value of plan assets at beginning of periods/year

   $ 204      $ 207      $ 163      $ 156   

Actual return on assets

     31        1        13        2   

Foreign currency exchange adjustment

                   5        4   

Expenses paid from assets

                            

Employer contributions

     4        5        11        10   

Plan participants’ contributions

                            

Benefits paid (net of Medicare subsidy in 2012)

     (7     (7     (10     (9

Settlements

            (2     (2       
  

 

 

 

Fair value of plan assets at end of periods/year

   $ 232      $ 204      $ 180      $ 163   
  

 

 

 

Funded status

   $ (19   $ (14   $ (44   $ (35
  

 

 

 

Amounts recognized in the Consolidated Statements of Financial Position consist of:

        

Other assets

   $ 26      $ 29      $ 1        1   

Accrued and other current liabilities

     (3     (3     (1     (1

Postretirement and postemployment benefits liability

     (42     (40     (44     (35
  

 

 

 

Net amount recognized

   $ (19   $ (14   $ (44   $ (35

 

 

 

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       Other benefits  
     Year ended December 31,  
(Dollars in millions)    2012     2011  

 

 

Obligation and Funded Status

    

Change in benefit obligation

    

Benefit obligation at beginning of periods/year

   $ 13      $ 13   

Interest cost

            1   

Plan participants’ contributions

     1        1   

Actuarial loss

              

Benefits paid (net of Medicare subsidy in 2012)

     (1     (2
  

 

 

 

Benefit obligation at end of periods/year

   $ 13      $ 13   
  

 

 

 

Change in plan assets

    

Fair value of plan assets at beginning of periods/year

   $      $   

Employer contributions

            1   

Plan participants’ contributions

     1        1   

Benefits paid (net of Medicare subsidy in 2012)

     (1     (2
  

 

 

 

Fair value of plan assets at end of periods/year

   $      $   
  

 

 

 

Funded status

   $ (13   $ (13
  

 

 

 

Amounts recognized in the Consolidated Statements of Financial Position consist of:

    

Accrued and other current liabilities

   $ (1   $ (1

Postretirement and postemployment benefits liability

     (12     (12
  

 

 

 

Net amount recognized

   $ (13   $ (13

 

 

At December 31, 2012, the accumulated benefit obligation for all defined benefit pension plans was $467 million, of which $221 million related to our non-U.S. plans. At December 31, 2011, the accumulated benefit obligation for all defined benefit pension plans was $410 million, of which $195 million related to our non-U.S. plans.

 

(Dollars in millions)

Information for pension plans with an accumulated benefit

obligation in excess of plan assets as of December 31,

   2012      2011  

 

 

U.S. Plans

     

Projected benefit obligation(1)

   $ 45       $ 44   

Accumulated benefit obligation

   $ 44       $ 43   

Fair value of plan assets(1)

   $ 1       $   
  

 

 

 

Non-U.S. Plans

     

Projected benefit obligation(1)

   $ 223       $ 196   

Accumulated benefit obligation

   $ 221       $ 194   

Fair value of plan assets(1)

   $ 177       $ 161   

 

 

 

(1)   The values are the equivalent for pension plans with projected benefit obligation in excess of plan assets.

 

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The amounts recognized in accumulated other comprehensive income consist of:

 

       Pension benefits  
     Year ended December 31,  
(Dollars in millions)    2012      2011  

 

 

Additional Information

     

Net actuarial loss(1)

   $ 55       $ 32   

Prior service credit

               

Transition asset

               
  

 

 

 

Total

   $ 55       $ 32   

 

 

(1)   Amounts related to our Non-U.S. plans were $23 million and $8 million at December 31, 2012 and 2011, respectively.

 

      

       Other benefits  

 

 

Net actuarial loss

   $ 2       $ 2   

 

 

 

       Pension benefits—U.S. plans  
     Successor     Predecessor  
(Dollars in millions)    Year ended December 31,    

January 1,

2010
through

February 26,

2010

 

Components of net periodic benefit cost for periods/years

   2012     2011    

2010

   

 

   

 

 

 

Service cost

   $ 7      $ 7      $ 6      $ 2   

Interest cost

     10        11        9        1   

Expected return on plan assets

     (16     (16     (13     (3

Amortization of net loss

                          1   

Amortization of prior service cost (credit)

                            

Curtailment gain

                            

Settlement loss

                            
  

 

 

   

 

 

 

Net periodic benefit cost

   $ 1      $ 2      $ 2      $ 1   
  

 

 

   

 

 

 
 

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss)

        

Actuarial loss—current periods/years

   $ 8      $ 22      $ 1      $ 4   

Prior service cost (credit)—current periods/years

                            

Amortization of actuarial loss

                          (1

Amortization of prior service (cost) credit

                            

Settlement loss

                            

Other—Acquisition/Business Combination

                          (79
  

 

 

   

 

 

 

Total recognized in other comprehensive income

   $ 8      $ 22      $ 1      $ (76
  

 

 

   

 

 

 

Total recognized in net periodic benefit cost and other comprehensive income

   $ 9      $ 24      $ 3      $ (75

 

   

 

 

 

 

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       Pension benefits—Non-U.S. plans  
     Successor     Predecessor  
(Dollars in millions)    Year Ended December 31,    

January 1,

2010
Through

February 26,

2010

 

Components of net periodic benefit cost for periods/years

   2012     2011    

2010

   

 

  

 

 

   

 

 

   

 

 

   

 

 

 

Service cost

   $ 5      $ 7      $ 6      $ 1   

Interest cost

     10        10        8        2   

Expected return on plan assets

     (11     (10     (8     (2

Amortization of net loss

                       

Amortization of prior service cost (credit)

                   1          

Curtailment gain

            (7              

Settlement loss

                            
  

 

 

   

 

 

 

Net periodic benefit cost

   $ 4      $      $ 7      $ 1   
  

 

 

   

 

 

 
 

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income

        

Actuarial loss—current periods/years

   $ 14      $ 9      $      $ 3   

Prior service cost (credit)—current periods/years

                            

Amortization of actuarial loss

                            

Amortization of prior service (cost) credit

                            

Settlement loss

                            

Other—Acquisition/Business Combination

                          (66
  

 

 

   

 

 

 

Total recognized in other comprehensive income

   $ 14      $ 9      $      $ (63
  

 

 

   

 

 

 

Total recognized in net periodic benefit cost and other comprehensive income

   $ 18      $ 9      $ 7      $ (62

 

   

 

 

 

 

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       Other benefits  
     Successor      Predecessor  

(Dollars in millions)

Components of net periodic benefit cost for periods/years

   Year Ended December 31,     

January 1,

2010
through

February 26,

2010

 
   2012      2011     

2010

    

 

    

 

 

 

Interest cost

   $ 1       $ 1       $ 1       $   

Amortization of net loss

                               

Amortization of prior service credit

                               
  

 

 

    

 

 

 

Net periodic benefit cost

   $ 1       $ 1       $ 1       $   
  

 

 

    

 

 

 
 

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income

             

Actuarial loss (gain)—current periods/years

   $       $       $ 2       $   

Amortization of actuarial loss

                               

Amortization of prior service credit

                               

Other—Acquisition/Business Combination

                             (2
  

 

 

    

 

 

 

Total recognized in other comprehensive income

   $       $       $ 2       $ (2
  

 

 

    

 

 

 

Total recognized in net periodic benefit cost and other comprehensive income

   $ 1       $ 1       $ 3       $ (2

 

    

 

 

 

The amounts in accumulated other comprehensive income that are expected to be recognized as components of net periodic benefit cost (credit) during the next fiscal year are as follows:

 

(Dollars in millions)    Pension
benefits
     Other
benefits
     Total  

 

 

Net actuarial loss

   $       $       $ 1   

Prior service credit

                       
  

 

 

 

Total

   $       $       $ 1   

 

 

Assumptions

 

       Pension benefits      Other benefits  
     U.S. plans      Non-U.S. plans                

Weighted average assumptions used to

determine benefit obligations at December 31,

   2012      2011      2012      2011      2012      2011  

 

 

Discount rate

     3.80%         4.60%         4.44%         5.02%         3.80%         4.60%   

Rate of compensation increase

     3.00%         3.00%         1.85%         1.62%         N/A         N/A   

 

 

 

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       Pension benefits     Other benefits  
     U.S. plans      Non-U.S. plans                      
Weighted average
assumptions used to
determine net periodic
benefit cost for years
ended December 31,
   2012      2011     2010        2012      2011     2010     2012      2011      2010  

 

 

Discount rate

     4.60%         5.25%        6.00%         5.02%         5.17%        5.61%        4.60%         5.25%         6.00%   

Expected long-term return on plan assets

     8.00%         8.00%        8.50%         6.28%         6.75%        6.94%        N/A         N/A         N/A   

Rate of compensation increase

     3.00%         3.00%        4.00%         1.62%         2.61%        2.59%        N/A         N/A         N/A   

 

 

 

Assumed health care cost trend rates at December 31,    2012      2011      2010  

 

 

Health care cost trend rate assumed for next year

     8.50%         8.50%         8.50%   

Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)

     5.0%         5.0%         5.0%   

Year that the rate reaches the ultimate trend rate

     2019         2019         2017   

 

 

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

 

(Dollars in millions)    1-percentage-
point increase
     1-percentage-
point decrease
 

 

 

Effect on total of service and interest cost

   $       $   

Effect on accumulated postretirement benefit obligation

   $ 1       $ (1

 

 

Plan assets

The Company’s pension plan weighted average asset allocations at December 31, 2012 and 2011, by asset category, follows:

 

       Plan assets at December 31,  
     U.S. plans      Non-U.S. plans      Total  
Asset category    2012      2011      2012      2011      2012      2011  

 

 

Equity securities

     70%         72%         49%         47%         60%         61%   

Debt securities

     25         25         38         39         31         31   

Real estate

     5         3         9         9         7         6   

Other

                     4         5         2         2   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     100%         100%         100%         100%         100%         100%   

 

 

The target asset allocation for the Company’s pension plans is as follows:

 

Asset category    2012  

 

 

Equity securities

     60—80%   

Debt securities

     20—30%   

Real estate

     0—10%   

Other

     0—1%   

 

 

 

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The Company adopted authoritative guidance which established a three-level hierarchy for disclosure of fair value measurements as follows:

 

Level 1  —   Quoted prices in active markets for identical assets or liabilities.
Level 2   Quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets; and model-derived valuations in which all significant inputs are observable in active markets.
Level 3   Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

The following table summarizes plan assets measured at fair value on the dates indicated:

 

       Fair value measurements at
December 31, 2012
 
(Dollars in millions)    Total      Level 1      Level 2      Level 3  

 

 

Asset Category

           

Investment Funds

           

Domestic Equities(1)

   $ 126       $ 27       $ 99       $   

International Equities(2)

     125         15         110           

Debt issued by national, state or local govt.(3)

     51         1         50           

Corporate Bonds(4)

     75         35         41           

Real Estate(5)

     27         12                 15   

Investment Fund(6)

     1                 1           

Insurance Contracts(7)

     7                 6           
  

 

 

 

Total Assets

   $ 412       $ 90       $ 307       $ 15   

 

 

 

       Fair value measurements at
December 31, 2011
 
     Total      Level 1      Level 2      Level 3  

 

 

Asset Category

           

Investment Funds

           

Domestic Equities(1)

   $ 128       $ 23       $ 105       $   

International Equities(2)

     96         17         79           

Debt issued by national, state or local govt.(3)

     49         1         48           

Corporate Bonds(4)

     65         30         35           

Real Estate(5)

     21         7                 14   

Investment Fund(6)

     1                 1           

Insurance Contracts(7)

     7                 6           
  

 

 

 

Total Assets

   $ 367       $ 78       $ 274       $ 14   

 

 

Notes:

 

(1)   Comprises actively managed mutual funds, passively managed collective trusts and pooled funds investing primarily in companies with market capitalizations similar to that of the S&P 500, S&P Small Cap 600, Russell 1000 and Russell 2000 indexes. The collective trusts do not participate in securities lending.

 

(2)   Comprises actively managed mutual funds, passively managed collective trust fund and pooled funds investing primarily in companies in non-U.S. countries and non-U.S. developed market countries similar to that of the Morgan Stanley Capital International EAFE index. The collective trust does not participate in securities lending.

 

(3)   Comprises passively managed pooled funds primarily invested in debt instruments from non-U.S. national state or local Governments.

 

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(4)   Comprises actively managed mutual funds, passively managed collective trust fund and pooled funds investing primarily in a diversified portfolio of investment grade U.S. and non-U.S. fixed income securities. The collective trust does not participate in securities lending.

 

(5)   Comprises an actively managed mutual fund and an actively managed pooled fund which primarily invests in real estate, including but not limited to offices, retail warehouses and shopping centers.

 

(6)   Comprises an actively managed investment fund which primarily invests in a diversified portfolio consisting of approximately 60% equities and equal parts fixed income, real estate, insurance policies and cash.

 

(7)   Comprises an insurance product that guarantees principal and a minimum rate of return.

Investments in mutual funds are valued at quoted market prices. Investments in common/collective trusts and pooled funds are valued at the net asset value (“NAV”) as reported by the trust. The NAV is based on the fair value of the underlying investments held by the fund less its liabilities. The value for the investments in real estate funds is provided by the fund managers. The fund managers value the real estate investments using third party appraisals on a periodic basis.

 

       Fair value measurements
using significant unobservable
inputs (level 3)
 
(Dollars in millions)    2012(1)      2011(1)  

 

 

Asset Description

     

Beginning balance

   $ 14       $ 13   

Actual return on plan assets

     

— Assets held at end of year

             1   

— Assets sold during year

               

Purchases, sales and settlements

               

Transfers in and/or out of level 3

               

Change in asset value due to foreign currency exchange adjustment

     1           
  

 

 

 

Ending balance

   $ 15       $ 14   

 

 

 

(1)   All amounts relate to property.

Investment policies and strategies

The Company invests primarily in a diversified portfolio of equity and debt securities that provide for long-term growth within reasonable and prudent levels of risk. The asset allocation targets established by the Company are strategic and applicable to the Plan’s long-term investing horizon. The portfolio is constructed and maintained to provide adequate liquidity to meet associated liabilities and minimize long-term expense and provide prudent diversification among asset classes in accordance with the principles of modern portfolio theory. The plan employs a diversified mix of actively managed investments around a core of passively managed index exposures in each asset class. Within each asset class, rapid market shifts, changes in economic conditions or an individual fund manager’s outlook may cause the asset allocation to fall outside the prescribed targets. The majority of the Company’s plan assets are measured quarterly against benchmarks established by the Company’s investment advisors and the Company’s Asset Management Committee, who reviews actual plan performance and has the authority to recommend changes as deemed appropriate. Assets are rebalanced periodically to their strategic targets to maintain the Plan’s strategic risk/reward characteristics. The Company periodically conducts asset liability modeling studies to ensure that the investment strategy is aligned with the obligations of the plans and that the assets will generate income and capital growth to meet the cost of current and future benefits that the plans provide. The pension plans do not include investments in Company stock at December 31, 2012 or 2011.

 

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The portfolio for the Company’s UK Pension plan seeks to invest in a range of suitable assets of appropriate liquidity which will generate in the most effective manner possible, income and capital growth to ensure that there are sufficient assets to meet benefit payments when they fall due, while controlling the long-term costs of the plan and avoiding short-term volatility of investment returns. The plan seeks to achieve these objectives by investing in a mixture of real (equities) and monetary (fixed interest) assets. It recognizes that the returns on real assets, while expected to be greater over the long-term than those on monetary assets, are likely to be more volatile. A mixture across asset classes should nevertheless provide the level of returns required by the Plan. The trustee periodically conducts asset liability modeling exercises to ensure the investments are aligned with the appropriate benchmark to better reflect the Plan’s liabilities. The trustee also undertakes to review this benchmark on a regular basis.

Expected long-term rate-of-return on assets

In selecting an expected return on plan asset assumption, the Company considers the returns being earned by each plan investment category in the fund, the rates of return expected to be available for reinvestment and long-term economic forecasts for the type of investments held by the plan. The expected return on plan assets for the U.S. pension plans was 8.0% at January 1, 2013 and January 1, 2012. Outside the U.S. the range of applicable expected rates of return was 1.0% – 6.5% as of January 1, 2013 and 1.0%—7.0% at January 1, 2012. The actual return on plan assets will vary from year to year versus this assumption. The Company believes it is appropriate to use long-term expected forecasts in selecting its expected return on plan assets. As such, there can be no assurance that its actual return on plan assets will approximate the long-term expected forecasts. The expected return on assets (“EROA”) was $27 million and $26 million and the actual return on assets was $44 million and $3 million for the year ended December 31, 2012 and 2011 respectively. The variance between the EROA and the actual return on assets is a function of the methodology used to determine the EROA as mentioned above, specifically the long-term economic forecasts for the type of investments held by the plan. Actual annual return variances to EROA were higher in 2012 than in 2011 due to stronger market performance in 2012.

The Company’s estimated long-term rate of return on plan assets is based on the principles of capital market theory which maintain that over the long run, prudent investment risk taking is rewarded with incremental returns and that combining non-correlated assets can maximize risk adjusted portfolio returns. Long-term return estimates are developed by asset category based on actual class return data, historical relationships between asset classes and risk factors and peer plan data. Long-term return estimates for the Company’s U.K. pension plan are developed by asset category based on actual class return data, historical relationships between asset classes and risk factors.

Cash flows

Contributions.     During fiscal 2012, the Company contributed $15 million to its pensions and postretirement benefit plan which included voluntary contributions above the minimum requirements for the pension plans. The Company currently expects to contribute $14 million in required contributions to its pension and postretirement benefit plans during fiscal 2013. The Company may make additional contributions into its pension plans in fiscal 2013 depending on, among other factors, how the funded status of those plans changes and in order to meet minimum funding requirements as set forth in employee benefit and tax laws, plus additional amounts the Company may deem to be appropriate.

 

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Estimated future benefit payments and subsidy receipts.     The following benefit payments (net of expected participant contributions), which reflect expected future service and the Medicare Part D subsidy receipts, are expected to be paid or received as follows:

 

(Dollars in millions)

Expected benefit payments/(subsidy receipts)

   Pension
benefits
     Other
benefits
     Expected
federal
subsidy
 

 

 

2013

   $ 16       $ 2       $   

2014

     14         2           

2015

     15         2           

2016

     16         2           

2017

     17         2           

Years 2018—2022

     106         10         (1

 

 

Plans accounted for as deferred compensation contracts.     The Company provides certain executives with supplemental pension benefits in accordance with their individual employment arrangements. The tables of this Note 8 do not include the Company’s expense or obligation associated with providing these benefits. The Company’s obligation for these unfunded arrangements was $1 million at December 31, 2012 and 2011. Annual expense was de-minimis for the years ended 2012 and 2011, and $2 million for 2010 (successor). The annual expense was $11 million for the period ending February 26, 2010 (predecessor). The discount rate used to measure year-end obligations was 3.8% as of December 31, 2012, and 4.6% as of December 31, 2011.

Plans accounted for as post retirement benefits.     The Company provides certain executives with post retirement medical, dental and life insurance benefits. These benefits are individually negotiated arrangements in accordance with their individual employment arrangements. The tables of this Note 8 do not include the Company’s expense or obligation associated with providing these benefits. The Company’s obligation for these unfunded arrangements was $11 million at December 31, 2012 and $7 million at December 31, 2011. Annual expense was de-minimis for the years ended 2012 and 2011. The Company’s unfunded obligation at December 31, 2010 of $5 million was recorded as a one-time charge in the successor period of 2010. The discount rate used to measure year-end obligations was 3.8% as of December 31, 2012, and 4.6% as of December 31, 2011.

Defined contribution plans.     Certain employees of the Company in the U.S. are eligible to participate in the Company-sponsored defined contribution plan. The Company makes a matching contribution of up to 50% of the employee’s contribution based on specified limits of the employee’s salary. The Company’s expense related to this plan was approximately $6 million, $5 million, $4 million, and $1 million for the years ended 2012, 2011, and 2010 (successor) and the period ending February 26, 2010 (predecessor), respectively. None of the plan assets were invested in Company stock at December 31, 2012 or December 31, 2011.

On January 1, 2007, the defined contribution executive retirement plan was established. Participants are certain key executives who are designated by the CEO and approved by the Human Resource Committee of the board. Contributions are defined in the plan document and consist of basic and past service contributions as well as an annual investment credit. Both types of contributions are based on age and service, however, the past service contribution is only granted to the participants for the first ten years of participation in the plan. Each account is credited with an annual investment credit based on the average of the annual yields at the end of each month on the AA-AAA rated 10+ year maturity component of the Merrill Lynch U.S.

 

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Corporate Bond Master Index. The plan has no assets, but a liability equal to the contributions credited to the participants is recorded in the balance sheet of the Company. The Company’s expense related to this plan was approximately $1 million, $3 million, $— million and $2 million for the years ended 2012, 2011 and 2010 (successor) and January 1, 2010 through February 26, 2010 (predecessor), respectively. On June 30, 2012, the defined contribution executive retirement plan was frozen to additional accruals for future service contributions. However, the annual investment credit will continue.

There are additional Company-sponsored defined contribution arrangements for employees of the Company residing in countries other than the U.S. The Company is required to make contributions based on the specific requirements of the plans. The Company’s expense related to these plans was approximately $9 million, $7 million, $5 million and $1 million for the years ended 2012, 2011, and 2010 (successor) and the period ending February 26, 2010 (predecessor), respectively. None of the plan assets were invested in Company stock at any time during 2012, 2011, or 2010.

Note 9. Stock-based compensation

The Company recognizes as stock-based compensation expense for all share-based payments to employees over the requisite service period (generally the vesting period) in the Consolidated Statements of Comprehensive Income based on the fair values of the number of awards that are ultimately expected to vest. As a result, for most awards, recognized stock-based compensation expense is reduced for estimated forfeitures prior to vesting primarily based on historical annual forfeiture rates. Estimated forfeitures will be reassessed in subsequent periods and may change based on new facts and circumstances. The Company satisfies exercises and issuances of vested equity awards with issuances of common stock.

In connection with the acquisition of IMS Health, on February 26, 2010, the vesting requirements for outstanding service-based stock appreciation rights and restricted stock units of the predecessor company were accelerated and the vesting and performance requirements for outstanding performance-based restricted stock units were deemed to be met at target performance. Immediately following the acceleration of the equity awards, the outstanding stock appreciation rights and stock options were cancelled and converted into the right to receive cash in an amount equal to the product of (a) the total number of shares of common stock subject to such stock appreciation rights and stock options and (b) the excess, if any, of the per share acquisition consideration of $22.00 per share, over the exercise price per share of such stock appreciation rights and stock options, less any applicable withholding taxes. In addition, the outstanding restricted stock units and performance restricted stock units were cancelled and converted into the right to receive cash in an amount equal to the product of (a) the total number of shares of common stock subject to such restricted stock units and performance restricted stock units and (b) the per share merger consideration of $22.00 per share, less any applicable withholding taxes. The total cash payment of $125 million consisted of a cash payment of $108 million for accelerated restricted stock units, and a cash payment of $17 million for fully vested stock options and accelerated stock appreciation rights. Any restricted stock units that were granted after the date the merger agreement was executed and before the February 26, 2010 close of the transaction vested on a pro rata basis based on the number of months that had elapsed from the month of grant through and including the month of the transaction close relative to 48 months. Any performance restricted stock units that were granted after the date

 

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the merger agreement was executed and before the February 26, 2010 close of the transaction vested on a pro rata basis based on the number of months that had elapsed from the month of grant through and including the month of the transaction close relative to 24 months.

At December 31, 2012, there were 251 million shares reserved for issuance under the Company’s 2010 Equity Incentive Plan (the “Equity Plan”), of which 43 million shares are still available for future grants. This plan was approved and adopted by the Board of Directors in March 2010. The Equity Plan authorizes equity awards to be granted to key employees and directors, consultants, and advisors to the Company as determined by the plan administrator. Awards may be granted as stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, and/or performance awards.

The Company provided certain executives with the opportunity to convert outstanding, in-the-money stock appreciation rights (“SARs”) granted by the predecessor entity on April 21, 2009 into SARs of the Company (“Rollover SARs”). The exercise price of the predecessor SARs was equal to $13.43, where as the exercise price of the Rollover SARs is equal to $0.25. The SARs under the predecessor entity accelerated and became fully vested as of the February 26, 2010 transaction date. The Rollover SARs are not subject to additional vesting requirements; therefore, no additional expense is recorded for these awards. The Rollover SARs generally assume the same terms as the original predecessor entity SAR award and will expire on the seventh anniversary of the original date of grant.

The Company granted cash settled stock appreciation rights (“Phantom SARS”) to certain employees in 2012, 2011 and 2010. The Phantom SARS have an exercise price equal to the fair market value on the date of grant. Unless previously terminated or forfeited, the Phantom SARS will automatically be exercised upon the first to occur of a “change in ownership” or a date that is six months following an “Initial Public Offering” (each a ‘Liquidity Event’). The Phantom SARS expire on the tenth anniversary of the date of grant. No expense will be recorded until the Liquidity Event occurs. The Company granted service-based and performance-based stock options in 2012, 2011 and 2010. Unless previously terminated or forfeited, the service-based options vest in equal increments of 20% on each of the five anniversaries of the date of grant and the performance-based options vest in equal increments of 20% on each of the five anniversaries of the date of grant if the Annual or Cumulative EBITDA Target, with respect to the fiscal year to which the performance-based options are aligned, is achieved. The service-based and performance-based awards both have an exercise price equivalent to the fair market value on the date of grant and expire on the tenth anniversary of the date of grant.

The Company granted premium priced service-based options (“Premium Priced Options”) in 2010. The Premium Priced Options vest 50% on each of the third and fifth anniversaries of the grant date. The awards have an exercise price equal to 150% of the fair market value on the date of grant and expire on the tenth anniversary of the date of grant.

The Company granted service-based stock options in 2010 and service-based restricted stock units in 2012, 2011 and 2010 to directors who were not employees and not affiliated with our Sponsors. The service-based stock options vest in equal increments of 20% on each of the first five anniversaries of the commencement of service to the Company. The exercise price is equal to the fair market value on the date of grant, and the options expire on the tenth anniversary of the date of grant. The service-based restricted stock units vest in equal increments of 50% on each of the first two anniversaries of the grant date and were granted at a price equal to the fair market value of a share of Common Stock on the date of grant.

 

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The Company granted service-based restricted stock in 2010. The restricted stock vests either in equal increments of 50% on each of the first two anniversaries of the transaction date or cliff vests in 2010 and 2012, and were granted at a price equal to the fair market value of a share of Common Stock on the date of grant.

In 2010, pursuant to an employment agreement and subsequent consulting agreement, equity awards were granted to an individual while employed and continued to vest after termination of employment. Given that substantive future service is not required under the consulting agreement, the service-based stock options and service-based restricted stock awards were fully expensed during the fourth quarter of 2010, although the shares will vest in the future. The performance-based stock options will continue to be expensed over the vesting period and remain dependent upon achieving the Adjusted EBITDA targets as stated in the consulting agreement.

In October 2012, the Board of Directors of the Company declared a cash dividend of $0.42 per share. In accordance with the terms of the Equity Plan, option holders received $0.42 per share in respect of vested options and a corresponding $0.42 per share reduction in the exercise price of unvested options. The other terms of the equity awards, including vesting schedules, remained unchanged. The Company did not record a charge for modification of the exercise price for unvested awards as the modification was provided for by the terms of the Equity Plan.

The fair value of stock options is estimated using the Black-Scholes option-pricing model. For service-based options, the Company values stock option grants and recognizes compensation expense on a straight-line basis over the requisite service period of the award. For options with graded vesting, the Company values stock option grants and recognizes compensation expense as if each vesting portion of the award was part of the total award and not a separate award. This model requires the input of subjective assumptions that will usually have a significant impact on the fair value estimate. The assumptions for prior year grants were developed based on relevant guidance. The following table summarizes the weighted average assumptions used to compute the weighted average fair value of stock option grants:

 

       2012      2011      2010  

 

 

Dividend Yield

     0.0%         0.0%         0.0%   

Weighted Average Volatility

     27.00%         25.2%         34.1%   

Risk Free Interest Rate

     0.92%         1.56%         2.32%   

Expected Term

     5.50 years         5.50 years         5.36 years   

Weighted Average Fair Value of Options Granted

     $0.33         $0.30         $0.35   

Weighted Average Grant Price

     $1.24         $1.12         $1.03   

 

 

 

 

The dividend yield of 0.0% is used because no recurring dividends have been authorized. An increase in the dividend yield will decrease stock compensation expense.

 

 

The weighted average volatility was developed using the historical volatility of several peer companies to IMS Health Holdings, Inc. for periods equal to the expected life of the options. An increase in the weighted average volatility assumption will increase stock compensation expense.

 

 

The risk-free interest rate was developed using the U.S. Treasury yield curve for periods equal to the expected life of the options on the grant date. An increase in the risk-free interest rate will increase stock compensation expense.

 

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The expected term was estimated for the 2012 grant of stock options as the vesting term plus 6 months. Participants are unlikely to exercise before a liquidity event because there is no market to sell the shares. The current estimated liquidity date for IMS Health Holdings, Inc. is shortly after the vesting date of the last tranche for 2012 awards. An increase in the expected holding period will increase stock compensation expense.

The following table summarizes the components and classification of stock-based compensation expense for the periods indicated:

 

      Successor     Predecessor  
    Year Ended December 31,     January 1, 2010
through
February 26,
2010
 
(Dollars in millions)   2012     2011     2010    

 

 

Stock Options

  $ 16      $ 12      $ 17      $ 8   

Restricted Stock Units

    3        6        8        60   
 

 

 

 

Total Stock-Based Compensation Expense

  $ 19      $ 18      $ 25      $ 68   
 

 

 

 

Operating Costs of Information, Exclusive of Depreciation and Amortization

  $ 2      $ 1      $ 1      $ 14   

Direct and Incremental Costs of Technology Services, Exclusive of Depreciation and Amortization

    1        1        1        2   

Selling and Administrative Expenses, Exclusive of Depreciation and Amortization

    16        16        23        52   
 

 

 

 

Total Stock-Based Compensation Expense

  $ 19      $ 18      $ 25      $ 68   
 

 

 

 

Tax Benefit on Stock-Based Compensation Expense

  $ 8      $ 7      $ 9      $ 21   

 

 

The tax benefit realized on stock options exercised and restricted stock issued for the year ended December 31, 2012 was $7 million. Realized tax benefits in excess of amounts recognized in the Consolidated Statements of Comprehensive Income were recognized as a financing activity rather than an operating activity for purposes of the Consolidated Statement of Cash Flows and were equal to $0 million, $0 million, $0 million and $10 million for the years ended December 31, 2012, 2011 and 2010 (successor) and the period ending February 26, 2010 (predecessor), respectively.

Stock options and stock appreciation rights

Proceeds received from the exercise of service based stock options for the years ended December 31, 2012, 2011 and 2010 were $2 million, $1 million, and $10 million, respectively. The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of the Company’s Common Stock as of the end of the period. The intrinsic value of service based stock options that were exercised during the years ended December 31, 2012, 2011 and 2010 was $1 million, $0 million, and $2 million, respectively.

 

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The following tables summarize activity of stock options with service conditions for the periods indicated:

 

       Successor  
(Shares in millions)    Shares     Weighted
average
exercise price
per share
     Weighted
average
remaining
term
     Aggregate
intrinsic value
 

 

 

Options Outstanding, December 31, 2011

     119      $ 1.06         8.54       $ 12   

Granted

     5      $ 1.31         

Forfeitures

     (3   $ 1.06         

Exercises

     (2   $ 1.00         

Cancels

     (1   $ 1.01         
  

 

 

 

Options Outstanding on Distribution Date before Dividend

     118      $ 1.07         

Options Outstanding on Distribution Date after Dividend

     118      $ 0.84         
  

 

 

 

Granted

     1      $ 0.98         

Forfeitures

     (2   $ 0.68         
  

 

 

 

Options Outstanding, December 31, 2012

     117      $ 0.84         7.63       $ 23   
  

 

 

 

Options Vested or Expected to Vest, December 31, 2012

     106      $ 0.85         7.62       $ 20   
  

 

 

 

Options Exercisable, December 31, 2012

     40      $ 1.00         7.43       $ 103   

 

 

As of December 31, 2012, approximately $16 million of unrecognized stock compensation expense related to unvested service-based stock options (net of estimated forfeitures) is expected to be recognized over a weighted-average period of approximately 1.52 years.

The following table summarizes activity of stock options with performance conditions for the periods indicated:

 

      Successor  
(Shares in millions)   Shares     Weighted
average
exercise price
per share
    Weighted
average
remaining
term
    Aggregate
intrinsic value
 

 

 

Options Outstanding, December 31, 2011

    71      $ 1.01        8.49      $ 8   

Granted

    4      $ 1.24       

Forfeitures

    (4   $ 1.03       

Exercises

    (1   $ 1.00       

Cancels

    (1   $ 1.01       
 

 

 

 

Options Outstanding on Distribution Date before Dividend

    69      $ 1.03       

Options Outstanding on Distribution Date after Dividend

    69      $ 0.77       
 

 

 

 

Options Outstanding, December 31, 2012

    69      $ 0.77        7.60      $ 15   
 

 

 

 

Options Vested or Expected to Vest, December 31, 2012

    63      $ 0.79        7.59      $ 13   
 

 

 

 

Options Exercisable, December 31, 2012

    26      $ 1.00        7.43      $ 69   

 

 

 

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As of December 31, 2012, approximately $6 million of unrecognized stock compensation expense related to unvested performance-based stock options (net of estimated forfeitures) is expected to be recognized over a weighted-average period of approximately 1.48 years.

The following table summarizes activity of phantom SARS with performance conditions for the periods indicated:

 

       Successor  
(Shares in millions)    Shares     Weighted
average
exercise price
per share
     Weighted
average
remaining
term
     Aggregate
intrinsic value
 

 

 

Options Outstanding, December 31, 2011

     15      $ 1.01         8.45       $ 2   

Granted

     1      $ 1.35         

Forfeitures

     (2   $ 1.08         
  

 

 

 

Options Outstanding on Distribution Date before Dividend

     14      $ 1.02         

Options Outstanding on Distribution Date after Dividend

     14      $ 0.60         
  

 

 

 

Granted

     1      $ 0.98         
  

 

 

 

Options Outstanding, December 31, 2012

     15      $ 0.63         7.69       $ 5   
  

 

 

 

Options Vested or Expected to Vest, December 31, 2012

     15      $ 0.63         7.69       $ 5   
  

 

 

 

Options Exercisable, December 31, 2012

                              

 

 

Unless previously terminated or forfeited, the Phantom SARS will automatically be exercised upon the first to occur of a “change in ownership” or a date that is six months following an “Initial Public Offering” (each a ‘Liquidity Event’). Since equity compensation expense for performance-based awards is not recorded until the performance is probable, no expense will be recorded until the Liquidity Event occurs.

The following table summarizes activity of SARS with service conditions for the periods indicated:

 

       Successor  
(Shares in millions)    Shares      Weighted
average
exercise price
per share
     Weighted
average
remaining
term
     Aggregate
intrinsic value
 

 

 

Options Outstanding, December 31, 2011

     7       $ 0.25         4.30       $ 6   
  

 

 

 

Options Outstanding, December 31, 2012

     7       $ 0.25         3.30       $ 5   
  

 

 

 

Options Vested or Expected to Vest, December 31, 2012

     7       $ 0.25         3.30       $ 5   
  

 

 

 

Options Exercisable, December 31, 2012

     7       $ 0.25         3.30       $ 5   

 

 

The SARS under the predecessor entity accelerated and became fully vested as of the February 26, 2010 transaction. The Rollover SARS are not subject to additional vesting requirements; therefore, no additional expense is recorded for these awards.

 

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Restricted stock and restricted stock units

The intrinsic value for restricted stock and restricted stock units is calculated based on the market price of the Company’s Common Stock as of the end of the period. The total fair value of restricted stock units with service conditions which vested during the periods ended December 31, 2012, 2011 and 2010 was $13 million, $2 million and $3 million, respectively. The total fair value of restricted stock units with performance conditions which vested during the periods ended December 31, 2012, 2011 and 2010 was $0 million, $0 million, and $2 million, respectively.

The following table summarizes activity of restricted stock and restricted stock units with service conditions for the periods indicated:

 

       Successor  
(Shares in millions)    Shares     Weighted
average
exercise
price
per share
     Aggregate
intrinsic value
 

 

 

Unvested, December 31, 2011

     13      $ 1.12       $ 15   

Issued

     (13   $ 1.00      
  

 

 

 

Options Outstanding on Distribution Date before Dividend

          $ 1.31      

Options Outstanding on Distribution Date after Dividend

          $ 1.31      
  

 

 

 

Unvested, December 31, 2012

          $ 1.21       $   
  

 

 

 

Vested or Expected to Vest, December 31, 2012

          $ 1.21       $   

 

 

Note 10. Income Taxes

Loss before benefit from income taxes consisted of:

 

      Successor     Predecessor  
    Year Ended December 31,    

January 1, 2010

through
February 26,
2010

 
 

 

 

   
(Dollars in millions)   2012     2011     2010    

 

 

U.S.

  $ (212   $ (243   $ (280   $ (63

Non-U.S.

    151        181        77        (49
 

 

 

 

Total

  $ (61   $ (62   $ (203   $ (112

 

 

 

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Benefit from income taxes consisted of:

 

       Successor     Predecessor  
     Year Ended December 31,     January 1, 2010
through
February 26,
2010
 
  

 

 

   
(Dollars in millions)   

2012

   

2011

   

2010

   

 

 
 

U.S. Federal and State:

          

Current

   $ 23      $ (6   $ 22      $ (31

Deferred

     (76     (207     (112     14   
  

 

 

 
   $ (53   $ (213   $ (90   $ (17
  

 

 

 
 

Non-U.S.:

          

Current

   $ 60      $ 74      $ 40      $ (19

Deferred

     (26     (34     (35     8   
  

 

 

 
     34        40        5        (11
  

 

 

 

Total

   $ (19   $ (173   $ (85   $ (28

 

 

The following table summarizes the significant differences between the U.S. Federal statutory taxes and the Company’s provision for income taxes for consolidated financial statement purposes.

 

       Successor     Predecessor  
     Year Ended December 31,    

January 1, 2010
through

February 26,
2010

 
  

 

 

   
    

2012

   

2011

   

2010

   

 

 

Tax Benefit at Statutory Rate

     (35%     (35%     (35%     (35%

State and Local Income Taxes, net of Federal Tax Benefit

     (19     5                 

Impact of Non-U.S. Tax Rates and Credit

     17        8        1        7   

Impact of Tax Rate Changes

     (11                     

Deferred Tax on Non-U.S. Operations

            (274              

Contract/Statute of Limitation Expirations

     (8     (16     (14     (2

Uncertain Tax Benefit Reserve

     13        12        8        1   

Merger Impact

     6        10        (2     5   

Audit Settlements

     (4     (5     (1       

Other, net

     10        15        1        (1
  

 

 

 

Total Tax Benefit

     (31%     (280%     (42%     (25%

 

 

In 2012, the Company’s effective tax rate of (31%) was favorably impacted by a reduction of $7 million to deferred tax liability and a tax reduction of $5 million as a result of the expiration of certain statutes of limitation. The Company recorded a tax charge of $3 million for interest and penalties related to unrecognized tax benefits. As of December 31, 2012 the Company had $39 million of unrecognized tax benefits that if recognized would favorably affect the effective tax rate and $10 million of interest and penalties associated with unrecognized tax benefits.

 

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In 2011, the Company’s effective tax rate of (280%) was favorably impacted by a reduction to deferred taxes on non-U.S. operations of $170 million due to a restructuring and a tax reduction of $10 million as a result of the expiration of certain statutes of limitation. The Company recorded a tax charge of $6 million associated with the impact of the merger and a tax charge of $3 million for interest and penalties related to unrecognized tax benefits. As of December 31, 2011 the Company had $41 million of unrecognized tax benefits that if recognized would favorably affect the effective tax rate and $9 million of interest and penalties associated with unrecognized tax benefits.

In 2010, the Company’s effective tax rate of (42%) was impacted by a tax reduction of $28 million as a result of the expiration of various statutes of limitation and a net tax benefit of $5 million as a result of merger costs, including a valuation allowance release of 2009 merger costs of $12 million. Also during this period, the Company recorded $3 million of interest and penalties related to unrecognized tax benefits. For the predecessor period (January 1, 2010 through February 26, 2010), the Company’s effective tax rate of (25%) was impacted by a tax reduction of $2 million as a result of the expiration of a statute of limitation. Also during this period, the Company recorded $5 million of tax expense as a result of non-deductible merger costs and $1 million of interest and penalties related to unrecognized tax benefits. As of December 31, 2010, the Company had $48 million of unrecognized tax benefits that if recognized would favorably affect the effective tax rate and $9 million of interest and penalties associated with unrecognized tax benefits.

The Company files numerous consolidated and separate income tax returns in U.S. (federal and state) and non-U.S. jurisdictions. The Company is no longer subject to U.S. federal income tax examination by tax authorities for years before 2008. Further, with few exceptions, the Company is no longer subject to tax examination in state and local jurisdictions for years prior to 2004 and in its material non-U.S. jurisdictions prior to 2006. It is reasonably possible that within the next twelve months the Company could realize $10 million of unrecognized tax benefits as a result of the expiration of certain statutes of limitation.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

 

      Successor     Predecessor  
    Year Ended December 31,    

January 1,
2010

through
February 26,
2010

 
(Dollars in millions)       2012             2011             2010        

 

 
 

Tabular Reconciliation of Uncertain Tax Benefits

         

Gross unrecognized tax benefits at beginning of period

  $ 45      $ 53      $      $ 69   

Gross (decreases) increases—prior period positions

    1        (1     67          

Gross increases—current period positions

    1        5        13          

Decreases—settlement with tax authorities

    (2     (3     (3       

Reductions—lapse of statute of limitations

    (4     (9     (24     (1

Other

    1                      (1
 

 

 

 

Gross unrecognized tax benefits at end of the period

  $ 42      $ 45      $ 53      $ 67   

 

 

 

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The Company’s deferred tax assets (liabilities) are comprised of the following at December 31:

 

(Dollars in millions)    2012     2011  

 

 

Deferred Tax Assets:

    

Net Operating Losses

   $ 111      $ 60   

Foreign Tax Credits

     56        34   

Employment Benefits

     24        21   

Deferred Revenues

     15        16   

Equity Compensation

     15        14   

Post Employment Benefits

     14        21   

Non-U.S. Intangibles

     12        18   

Accrued Liabilities

     16        16   

Other

     5        2   
  

 

 

 
     268        202   

Valuation Allowance

     (45     (40
  

 

 

 
     223        162   
  

 

 

 

Deferred Tax Liabilities:

    

Intangible Assets

     (935     (1,031

Undistributed Earnings

     (426     (415

Computer Software

     (107     (105

Depreciation

     (11     (8

Other

     (13     (13
  

 

 

 
     (1,492     (1,572
  

 

 

 

Net Deferred Tax Liability

   $ (1,269   $ (1,410

 

 

The 2012 and 2011 net deferred tax liability consists of a current deferred tax asset of $60 million and $55 million, a non-current deferred tax asset of $5 million and $3 million, a current deferred tax liability of $17 million and $15 million, and a non-current deferred tax liability included in Other liabilities of $1,317 million and $1,453 million, respectively. See Notes 2 and 13.

The Company has federal, state and local, and non-U.S. tax credit and tax loss carryforwards, the tax effect of which was $167 million as of December 31, 2012. Of this amount, $10 million has an indefinite carryforward period, and $157 million expires at various times beginning in 2014. As of December 31, 2012, the Company has $45 million of valuation allowances established against state and local and non-U.S. net operating losses that based on available evidence, are more likely than not to expire before they can be utilized.

 

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Note 11. Commitments

The Company’s contractual obligations include facility leases, agreements to purchase data and telecommunications services, and leases of certain computer and other equipment. At December 31, 2012, the minimum annual payment under these agreements and other contracts that have initial or remaining non-cancelable terms in excess of one year are as listed in the following table:

 

       Year  
(Dollars in millions)    2013      2014      2015      2016      2017      Thereafter      Total  

 

 

Operating Leases(1)

   $ 47       $ 45       $ 37       $ 36       $ 34       $ 76       $ 275   

Data Acquisition and Telecommunication Services(2)

     147         65         40         23         3         12         290   

Computer and Other Equipment Leases(3)

     25         17         8         6         6         15         77   

Projected Pensions and Other Postretirement Benefit Plan Contributions(4)

     14                                                 14   

Other Liabilities(5)

     31         1                                 3         35   
  

 

 

 

Total

   $ 264       $ 128       $ 85       $ 65       $ 43       $ 106       $ 691   

 

 

Notes to Commitments table:

 

(1)   Rental expense under real estate operating leases for the years ended 2012, 2011 and 2010 (successor) and January 1, 2010 through February 26, 2010 (predecessor) were $21 million, $34 million, $26 million and $5 million, respectively.

 

(2)   Expense under data and telecommunications contracts for the years ended 2012, 2011 and 2010 (successor) and January 1, 2010 through February 26, 2010 (predecessor) were $191 million, $212 million, $188 million and $37 million, respectively.

 

(3)   Rental expense under computer and other equipment leases for the years ended 2012, 2011 and 2010 (successor) and January 1, 2010 through February 26, 2010 (predecessor) were $26 million, $24 million, $22 million and $4 million, respectively. These leases are frequently renegotiated or otherwise changed as advancements in computer technology produce opportunities to lower costs and improve performance.

 

(4)   Our contributions to pension and other postretirement benefit plans for the years ended 2012, 2011 and 2010 (successor) and January 1, 2010 through February 26, 2010 (predecessor) were $15 million, $16 million, $9 million and $4 million, respectively. The estimated contribution amount shown for 2012 relates to required contributions to funded plans as well as benefit payments from unfunded plans. The expected contribution shown for 2013 is required.

 

(5)   Includes estimated future funding requirements related to severance, impairment and other charges (see Note 6).

Note 12. Contingencies

The Company and its subsidiaries are involved in legal and tax proceedings, claims and litigation arising in the ordinary course of business. Management periodically assesses the Company’s liabilities and contingencies in connection with these matters based upon the latest information available. For those matters where management currently believes it is probable that the Company will incur a loss and that the probable loss or range of loss can be reasonably estimated, the Company has recorded reserves in the Consolidated Financial Statements based on its best estimates of such loss. In other instances, because of the uncertainties related to either the probable outcome or the amount or range of loss, management is unable to make a reasonable estimate of a liability, if any. However, even in many instances where the Company has recorded an estimated liability, the Company is unable to predict with certainty the final outcome of the matter or whether resolution of the matter will materially affect the Company’s results of operations, financial position or cash flows. As additional information becomes available, the Company adjusts its assessments and estimates of such liabilities accordingly.

The Company routinely enters into agreements with its suppliers to acquire data and with its clients to sell data, all in the normal course of business. In these agreements, the Company

 

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sometimes agrees to indemnify and hold harmless the other party for any damages such other party may suffer as a result of potential intellectual property infringement and other claims related to the use of the data. The Company has not accrued a liability with respect to these matters, as the exposure is considered remote.

Based on its review of the latest information available, management does not expect the impact of pending tax and legal proceedings, claims and litigation, either individually or in the aggregate, to have a material adverse effect on our results of operations, cash flows or financial position. However, one or more unfavorable outcomes in any claim or litigation against us could have a material adverse effect for the period in which it is resolved. The following is a summary of certain legal matters involving the Company.

IMS Health Government Solutions Voluntary Disclosure Program Participation

The Company’s wholly-owned subsidiary, IMS Government Solutions Inc., is primarily engaged in providing services and products under contracts with the U.S. government. U.S. government contracts are subject to extensive legal and regulatory requirements and, from time to time, agencies of the U.S. government have the ability to investigate whether contractors’ operations are being conducted in accordance with such requirements. U.S. government investigations, whether relating to these contracts or conducted for other reasons, could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed on us, or could lead to suspension or debarment from future U.S. government contracting. U.S. government investigations often take years to complete and may result in no adverse action against the Company.

IMS Government Solutions discovered potential noncompliance with various contract clauses and requirements under its General Services Administration Contract which was awarded in 2002 to its predecessor company, Synchronous Knowledge Inc. (Synchronous Knowledge Inc. was acquired by IMS Health in May 2005). Upon discovery of the potential noncompliance, the Company began remediation efforts, promptly disclosed the potential noncompliance to the U.S. government, and was accepted into the Department of Defense Voluntary Disclosure Program. The Company filed its Voluntary Disclosure Program Report (“Disclosure Report”) on August 29, 2008. Based on the Company’s findings as disclosed in the Disclosure Report, the Company recorded a reserve of approximately $4 million for this matter in the third quarter of 2008. During the second quarter of 2010, the Company recorded an additional reserve of approximately $2 million as a result of its ongoing investigation relating to this matter. The Company is currently unable to determine the outcome of these matters pending the resolution of the Voluntary Disclosure Program process and its ultimate liability arising from these matters could exceed its current reserves.

Note 13. Supplemental financial data

Accounts Receivable, net:

 

(Dollars in millions)    At December 31,  
   2012     2011  

 

 

Trade and notes

   $ 275      $ 273   

Allowances/recoveries

     (5     2   

Unbilled receivables

     38        35   
  

 

 

 
   $ 308      $ 310   

 

 

 

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Other Current Assets:

 

(Dollars in millions)    At December 31,  
     2012          2011    

 

 

Deferred income taxes

   $ 60       $ 55   

Prepaid expenses

     45         42   

Work-in-process inventory

     47         56   

Assets held for sale

             30   

Income taxes receivable

     50         47   

Other

     61         49   
  

 

 

 
   $ 263       $ 279   

 

 

Property, Plant and Equipment, net:

 

       At December 31,  
(Dollars in millions)    2012     2011     Estimated
useful lives
 

 

 

Buildings and improvements

   $ 10      $ 10        40—50 years   

Less: Accumulated depreciation

     (2     (1  

Machinery and equipment

     160        120        3—12 years   

Less: Accumulated depreciation

     (88     (48  

Leasehold improvements, less accumulated amortization of $25 and $13, respectively

     35        36        1—11 years   

Construction-in-progress

     2        3     
  

 

 

   
   $ 117      $ 120     

 

 

Depreciation expense was $42 million, $36 million, $30 million, and $5 million for the years ended December 31, 2012, 2011, and 2010 (successor) and January 1, 2010 through February 26, 2010 (predecessor), respectively.

Computer Software, net:

 

(Dollars in millions)         

 

 

December 31, 2010

   $ 259   
  

 

 

 

Additions at cost

     74   

Amortization

     (68

Impairments, foreign exchange and other

     21   
  

 

 

 

December 31, 2011

   $ 286   
  

 

 

 

Additions at cost

     64   

Amortization

     (90

Impairments, foreign exchange and other

     (6
  

 

 

 

December 31, 2012

   $ 254   

 

 

Accumulated amortization of total computer software was $207 million and $115 million at December 31, 2012 and 2011, respectively. Amortization expense was $47 million and $13 million for the year ended December 31, 2010 (successor) and the period ended February 26, 2010 (predecessor).

 

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Other Assets:

 

(Dollars in millions)    At December 31,  
   2012      2011  

 

 

Long-term pension assets

   $ 27       $ 29   

Securities and other investments

     9         12   

Long-term deferred tax asset

     5         3   

Other

     110         77   
  

 

 

 
   $ 151       $ 121   

 

 

Accounts Payable:

 

(Dollars in millions)    At December 31,  
   2012      2011  

 

 

Trade

   $ 23       $ 25   

Taxes other than income taxes

     71         58   

Other

     15         2   
  

 

 

 
   $ 109       $ 85   

 

 

Accrued and Other Current Liabilities:

 

(Dollars in millions)    At December 31,  
   2012      2011  

 

 

Salaries, wages, bonuses and other compensation

   $ 149       $ 131   

Accrued data acquisition costs

     97         90   

Accrued professional fees

     66         55   

Accrued income taxes

     30         45   

Deferred tax liability

     17         15   

Accrued severance and other costs

     30         36   

Liabilities held for sale

             5   

Other

     144         134   
  

 

 

 
   $ 533       $ 511   

 

 

Other Liabilities:

 

(Dollars in millions)    At December 31,  
   2012      2011  

 

 

Long-term uncertain tax benefits reserve

   $ 47       $ 42   

Other

     60         53   
  

 

 

 
   $ 107       $ 95   

 

 

Note 14. Related Party

Due to related party relationships, it is possible that the terms of these transactions are not the same as those that would result from transactions among wholly unrelated parties.

Management services agreement

We entered into a management services agreement with affiliates of TPG, CPPIB and LGP (collectively, the “Managers”), pursuant to which the Managers will provide management

 

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services to us until December 31, 2020, with evergreen one year extensions thereafter. Pursuant to this agreement, the Managers received aggregate transaction fees of approximately $60 million in connection with services provided by such entities related to the acquisition of IMS Health. The Managers also receive an aggregate annual management fee equal to $7.5 million, and reimbursement for out-of-pocket expenses incurred by them, their members or their respective affiliates in connection with the provision of services pursuant to the agreement. Pursuant to the management services agreement, the Managers may provide advisory services related to financings or refinancings, recapitalizations, acquisitions, dispositions or other similar transactions; in connection with any such services the Managers have the right to receive customary fees charged by internationally-recognized investment banks for serving as financial advisor in similar transactions. The agreement includes customary exculpation and indemnification provisions in favor of the Managers and their respective affiliates.

At any time in connection with or in anticipation of a change of control or an initial public offering, the Managers may elect to receive their management fees payable under the management services agreement in a single lump sum cash payment equal to the present value of the then unpaid current and future management fees payable under the management services agreement.

Transactions with other Sponsor portfolio companies

The Sponsors are private equity firms that have investments in companies that do business with IMS Health in the ordinary course of business. The Company believes these transactions are conducted on an arms-length basis. For fiscal 2012, 2011 and 2010, the Company recorded approximately $11 million, $9 million and $9 million, respectively, associated with sales of the Company’s offerings to companies in which our Sponsors have investments. For fiscal 2012, 2011 and 2010, the Company purchased goods and services of $6 million, $5 million and $4 million, respectively from companies in which one or both of the Sponsors have investments.

Note 15. Operations by business segment

Operating segments are defined as components of an enterprise about which financial information is available that is evaluated on a regular basis by the chief operating decision-maker, or decision-making groups, in deciding how to allocate resources to an individual segment and in assessing performance of the segment. The Company operates a globally consistent business model, offering pharmaceutical business information and related services to its clients in more than 100 countries. See Note 1.

The Company maintains regional geographic management who are responsible for bringing the Company’s full suite of offerings to their respective markets and to facilitate local execution of its global strategies. However, the Company maintains global leaders for the majority of its critical business processes; and the most significant performance evaluations and resource allocations made by the Company’s chief operating decision maker is made on a global basis. As such, the Company has concluded that it maintains one operating and reportable segment.

 

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Geographic financial information

The following represents selected geographic information for the regions in which the Company operates for the periods and dates indicated below.

 

(Dollars in millions)   Americas(1)     EMEA(2)     Asia
Pacific(3)
    Corporate
& Other
    Total IMS
Health
 

 

 

Successor—Year Ended December 31, 2012:

         

Revenue(4)

  $ 1,098      $ 889      $ 456      $      $ 2,443   

Operating Income (Loss)(5)

    294        230        170        (455     239   

Total Assets

    3,933        2,263        1,634        385        8,215   

Successor—Year Ended December 31, 2011:

         

Revenue(4)

  $ 1,013      $ 915      $ 436      $      $ 2,364   

Operating Income (Loss)(5)

    289        262        152        (484     219   

Total Assets

    4,106        2,203        1,763        286        8,358   
 

 

 

 

Successor—Year Ended December 31, 2010:

         

Revenue(4)

  $ 848      $ 758      $ 322      $ (60   $ 1,869   

Operating Income (Loss)(5)

    224        139        106        (401     68   

Total Assets

    3,753        2,138        1,716        613        8,220   
 

 

 

 

Predecessor—Jan. 1—Feb. 26, 2010:

         

Revenue(4)

  $ 125      $ 107      $ 61      $      $ 293   

Operating Income (Loss)(5)

    14        (17     21        (116     (98

 

 

Notes to Geographic Financial Information:

(1)   Americas includes the United States, Canada and Latin America. Revenue in the U.S. was $885 million, $808 million, $686 million and $105 million for the years ended December 31, 2012, 2011, 2010 and the predecessor period of 2010, respectively. Total U.S. assets were $3,900 million, $3,880 million and $3,543 million at December 31, 2012, 2011 and 2010, respectively.

 

(2)   EMEA includes countries in Europe, the Middle East and Africa.

 

(3)   Asia Pacific includes Japan, Australia and other countries in the Asia Pacific region. Revenue in Japan was $286 million, $277 million, $185 million and $61 million for the years ended December 31, 2012, 2011, 2010 and the predecessor period of 2010, respectively.

 

(4)   Revenue relates to external clients and is primarily based on the location of the client. Revenue for the geographic regions includes the impact of foreign exchange in converting results into U.S. dollars.

 

(5)   Operating Income for the three geographic regions does not reflect the allocation of certain expenses that are maintained in Corporate and Other and as such, is not a true measure of the respective regions’ profitability. The Operating Income amounts for the geographic regions include the impact of foreign exchange in converting results into U.S. dollars. For 2012, depreciation and amortization related to purchase accounting adjustments of $126 million, $84 million and $51 million for the Americas, EMEA and Asia Pacific, respectively, are presented in Corporate & Other. For 2011, depreciation and amortization related to purchase accounting adjustments of $126 million, $91 million and $52 million for the Americas, EMEA and Asia Pacific, respectively, are presented in Corporate & Other. For the successor period of 2010, depreciation and amortization related to purchase accounting adjustments of $86 million, $66 million and $39 million for the Americas, EMEA and Asia Pacific, respectively, are presented in Corporate & Other.

 

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Note 16. Earnings (loss) per share

The following table reconciles the basic and diluted weighted average shares outstanding:

 

       Successor     Predecessor  
     As of December 31,    

As of

Feb. 26,

2010

 
(Shares in millions)   

2012

     2011      2010    

 

 

Basic weighted-average common shares outstanding

     2,795         2,788         2,348        183   

Effect of dilutive options

             66                  
  

 

 

 

Diluted weighted-average common shares outstanding

     2,795         2,854         2,348        183   

 

 

Anti-dilutive weighted average outstanding stock options of approximately 104 million, 12 million, 12 million and nil were not included in the diluted earnings (loss) per share calculations for the years ended December 31, 2012, 2011 and 2010 (successor) and for the period ending February 26, 2010 (predecessor), respectively, because their inclusion would have the effect of increasing earnings per share. Stock options will have a dilutive effect under the treasury method only when the respective period’s average market value of the Company’s common stock exceeds the exercise proceeds.

Unaudited pro forma earnings (loss) per share

The Company declared and paid a dividend to shareholders of $753 million in August 2013 and $1,202 in October 2012. Under certain interpretations of the Securities and Exchange Commission, dividends declared in the twelve months preceding an initial public offering (“IPO”) are deemed to be in contemplation of the offering with the intention of repayment out of the offering proceeds to the extent that the dividends exceeded earnings during such period. As such, the unaudited pro forma loss per share for 2012 give effect to the number of shares whose proceeds are deemed to be necessary to pay the dividend amount that is in excess of earnings during 2012, up to the amount of shares assumed to be issued in the offering.

The below table sets forth the computation of unaudited pro forma basic and diluted loss per share as of December 31, 2012:

 

(in millions, except per share data)    Basic     Diluted  

 

 

Net loss attributable to the Company

   $ (42   $ (42
  

 

 

 

Weighted-average shares outstanding

     2,795        2,795   

Shares assumed in offering to pay dividends in excess of earnings(1)

    
  

 

 

 

Pro forma weighted-average shares outstanding

    
  

 

 

 

Pro forma earnings per shares

   $        $     
  

 

 

 

(1) Dividends declared in last twelve months

     $ 1,955   

Net loss attributable to the Company in the last twelve months

     $ (42
    

 

 

 

Dividends in excess of earnings

     $ 1,955   

Assumed IPO price

    

Shares issued in the IPO to pay dividends in excess of earnings

    

 

 

 

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Note 17. Subsequent events

During the nine months ended September 30, 2013, the Company completed seven acquisitions; Vedere Group Limited (Australia), Appature, Inc. (U.S.), Semantelli, LLC (U.S.), 360 Vantage, LLC (U.S.), Incential Software, Inc. (U.S.), Diversinet Corp. (Canada), and the consumer health business of Nielsen Holdings N.V. (Europe) to strengthen our product offerings. The total cost for these acquisitions was approximately $105 million. The Company incurred approximately $6 million of acquisition-related costs, which are expensed as incurred and recorded in Selling and administrative expense, exclusive of depreciation and amortization. These business combinations were accounted for under the acquisition method of accounting, and as such, the aggregate purchase prices were allocated on a preliminary basis to the assets acquired and liabilities assumed based on estimated fair values as of the closing dates. The purchase price allocations will be finalized after the completion of the valuation of certain intangible assets and any adjustments to the preliminary purchase price allocations are not expected to have a material impact on the Company’s results of operations. Had these acquisitions occurred as of January 1, 2012, the impact on the Company’s results of operations would not have been material. In connection with these acquisitions, the Company recorded goodwill of approximately $115 million, of which approximately $62 million is deductible for tax purposes, computer software of $16 million (weighted-average amortization period 4.5 years), and intangible assets of approximately $31 million. The intangible assets acquired were comprised of client relationships of $12 million (weighted-average amortization period of 10.1 years), databases of $1 million (weighted-average amortization period of 2 years) and trade names and other of $18 million (weighted-average amortization period of 3.5 years).

During the fourth quarter of 2013, the Company completed three acquisitions: HCM-BIOS (France), Pygargus AB (Sweden) and Amundsen Group, Inc. (U.S.) for a total cost of approximately $25 million. The purchase price allocations for these acquisitions have not yet been finalized.

In August 2013, the Company issued $750 million of 7.375% cash interest and 8.125% Senior Payment-in-Kind (“PIK”) Toggle Notes due 2018 (the “PIK Toggle Senior Notes”). The PIK Toggle Senior Notes are unsecured obligations of the Company and mature on September 1, 2018. Interest is paid semi-annually in March and September of each year, commencing March 1, 2014. Subject to certain restrictions, the Company may elect to pay a portion of the interest due on the outstanding principal amount of the PIK Toggle Senior Notes by issuing PIK Notes in a principal amount equal to the interest due. Future mandatory debt principal payments associated with these Notes are zero for 2013 through 2017, and $750 million thereafter.

In February 2013, the Company entered into an amendment of its existing Senior Secured Term Loans due 2017 (“Term Loan Amendment”) to reduce the interest rate paid by the Company. The Company reduced the borrowing margins and LIBOR floors by 50 basis points and 25 basis points, respectively, for both the USD and EUR tranches of debt.

Symphony Health Solutions Litigation

On July 24, 2013, Symphony Health Solutions filed a lawsuit in the U.S. District Court for the Eastern District of Pennsylvania against IMS Health alleging that IMS Health is actively engaging in anticompetitive business practices in violation of the Sherman Antitrust Act and Pennsylvania state law. The complaint seeks trebled actual damages in an unspecified amount, punitive damages, costs and injunctive relief. The company believes the complaint is without merit, rejects all claims raised and will vigorously defend IMS Health’s position.

 

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Five-year selected financial data (unaudited) (1)

 

      Successor     Predecessor  
(Dollars in millions)   2012     2011     2010     October 23,
2009
(Inception)
through
December 31,
2009
    January 1,
2010 through
February 26,
2010
    2009     2008  

 

 
 

Results of Operations:

               

Revenue

  $ 2,443      $ 2,364      $ 1,869      $      $ 293      $ 2,190      $ 2,330   

Costs and Expenses(2)

    2,204        2,145        1,801        53        391        1,919        1,832   
 

 

 

 

Operating Income (Loss)

    239        219        68        (53     (98     271        498   
 

 

 

 

Net (Loss) Income

  $ (42   $ 111      $ (118   $ (53   $ (84   $ 261      $ 317   
 

 

 

 
 

Net (Loss) Income per Share:

           

Basic

  $ (0.02   $ 0.04      $ (0.05   $      $ (0.46   $ 1.42      $ 1.70   

Diluted

  $ (0.02   $ 0.04      $ (0.05   $      $ (0.46   $ 1.42      $ 1.70   

Cash dividends declared by common share

  $ 0.42      $      $      $      $      $ 0.12      $ 0.12   
 

As a % of Revenue:

           

Operating Income

    9.8%        9.3%        3.6%        —%        (33.4%     12.4%        21.4%   

Net (Loss) Income

    (1.7%     4.7%        (6.3%     —%        (28.7%     11.9%        13.6%   
 

 

 

 
 

Balance Sheet Data:

           

Shareholders’ Equity (Deficit)

  $ 1,683      $ 2,971      $ 2,813      $ (53     $ 72      $ (255

Total Assets

  $ 8,215      $ 8,358      $ 8,220      $        $ 2,223      $ 2,087   

Postretirement and Postemployment Benefits

  $ 116      $ 106      $ 117      $        $ 112      $ 110   

Long-term Debt, Deferred Tax Liability and Other Long-Term Liabilities

  $ 5,573      $ 4,488      $ 4,555      $        $ 1,393      $ 1,590   

 

 

 

(1)   On October 23, 2009, Healthcare Technology Holdings, Inc. (the “Company”) was formed by investment entities affiliated with TPG Capital, L.P., CPP Investment Board Private Holdings Inc. and Leonard Green & Partners, L.P (collectively, the “Sponsors”). On December 20, 2013, the Company changed its name to IMS Health Holdings, Inc. On February 26, 2010, the Company acquired 100% of the outstanding shares of IMS Health Incorporated (“IMS Health”) through its wholly owned subsidiary Healthcare Technology Acquisition Inc. (the “Merger”). The Company was formed for the purpose of consummating the Merger with IMS Health and its subsidiaries and had no operations from inception other than its investment in IMS Health and costs incurred associated with its formation and the Merger.

Successor —The financial information as of December 31, 2012, 2011, 2010 and 2009 and for the years ended December 31, 2012, 2011 and 2010 and October 23, 2009 through December 31, 2009 include the accounts of the Company for the entire period and IMS Health from the closing of the Merger on February 26, 2010.

Predecessor —The financial information as of December 31, 2009 and 2008 and for the period January 1, 2010 to February 26, 2010 and the years ended December 31, 2009 and 2008, include the accounts of IMS Health (our predecessor).

The results of the Successor are not comparable to the results of the Predecessor due to the difference in the basis of presentation of purchase accounting as compared to historical cost.

 

(2)   The years ended 2012, 2011 and 2010 (successor), October 23, 2009 through December 31, 2009 (successor), January 1, 2010 through February 26, 2010 (predecessor), and the years ended 2009 and 2008 (predecessor) include severance, impairment and other charges of $48 million, $31 million, $54 million, $—, ($13) million, $144 million and $9 million, respectively (see Note 6). The years ended 2012, 2011, and 2010 (successor), October 23, 2009 through December 31, 2009 (successor), January 1, 2010 through February 26, 2010 (predecessor) and the year ended 2009 (predecessor) include merger costs of $2 million, $23 million, $65 million, $53 million, $45 million and $11 million, respectively, related to the Company’s acquisition of IMS Health. (See Note 4).

 

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Schedule I—Condensed financial information

IMS Health Holdings, Inc.

Parent Company Only

Condensed Statements of Financial Position

 

(Dollar in millions)    December 31, 2012      December 31, 2011  

 

 

Assets:

     

Current Assets:

     

Other current assets

   $ 5       $ 5   

Amounts receivable from subsidiaries

     16         13   
  

 

 

 

Total Current Assets

   $ 21       $ 18   
  

 

 

 

Investment in subsidiaries

     1,709         2,999   

Other assets

     32         26   
  

 

 

 

Total Assets

   $ 1,762       $ 3,043   
  

 

 

 

Liabilities and Shareholders’ Equity:

     

Current Liabilities:

     

Amounts payable to subsidiaries

   $ 79       $ 72   
  

 

 

 

Total Liabilities

   $ 79       $ 72   
  

 

 

 

Shareholders’ Equity:

     

Total Shareholders’ Equity

   $ 1,683       $ 2,971   
  

 

 

 

Total Liabilities and Shareholders’ Equity

   $ 1,762       $ 3,043   

 

 

 

 

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IMS Health Holdings, Inc.

Parent Company Only

Condensed Statements of Comprehensive Income

 

       Year Ended December 31,  
(Dollar in millions)   

2012

   

2011

   

2010

 

 

 

Operating costs of information

   $ 2      $ 1      $ 1   

Direct and incremental costs of technology services

     1        1        1   

Selling and administrative expenses

     16        16        23   

Merger costs

                   20   
  

 

 

 

Operating loss before benefit from income taxes and equity in net (loss) income of subsidiaries

  

 

(19

 

 

(18

 

 

(45

  

 

 

 

Benefit from income taxes

     6        6        25   

Equity in net (loss) income of subsidiaries

     (29     123        (98
  

 

 

 

Net (Loss) Income

   $ (42   $ 111      $ (118
  

 

 

 

Other Comprehensive (Loss) Income:

      

Cumulative translation adjustments

   $ (49   $ 51      $ 190   

Change in derivatives in OCI (net of taxes of $(2), $3 and $2, respectively)

     3        (6     (5

Change in derivatives from OCI to earnings (net of taxes of $2, $(7) and $-, respectively)

     (4     13          

Postretirement and postemployment adjustments (net of taxes of $5, $9 and $3, respectively)

  

 

(17

 

 

(22

 

 

(2

  

 

 

 

Other Comprehensive (Loss) Income

   $ (67   $ 36      $ 183   
  

 

 

 

Total Comprehensive (Loss) Income

   $ (109   $ 147      $ 65   

 

 

 

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IMS Health Holdings, Inc.

Parent Company Only

Condensed Statements of Cash Flows

 

       Year Ended December 31,  
(Dollar in millions)    2012     2011      2010  

 

 

Net Cash Provided by (Used in) Operating Activities

   $      $       $   
  

 

 

 

Net Cash Provided by (Used in) Investing Activities

                      
  

 

 

 

Net Cash Provided by (Used in) Financing Activities

                      
  

 

 

 

Increase (Decrease) in Cash and Cash Equivalents

                      

Cash and Cash Equivalents, Beginning of Period

                      
  

 

 

 

Cash and Cash Equivalents, End of Period

   $      $       $   

Non-Cash Investing and Financing Activities:

       

Acquisition of IMS Health

                    (4,031

Contributions from shareholders

                    2,770   

Net borrowings for acquisition of IMS Health

                    1,261   

Dividends paid

     (1,202               

 

 

 

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IMS Health Holdings, Inc.

Parent Company Only

Notes to condensed financial statements

Basis of Presentation .    IMS Health Holdings, Inc. (the “Parent Company”), has accounted for the earnings of its subsidiaries under the equity method of accounting in these unconsolidated condensed financial statements. There are restrictions on the Parent Company’s ability to obtain funds from any of its subsidiaries. Accordingly, these condensed financial statements have been presented on a Parent-only basis. The notes to the condensed financial statements are an integral part of these condensed financial statements.

Dividends.     In October 2012, the Parent Company declared and paid a dividend to shareholders of $0.42 per share for a total of $1,202. The dividend was paid by a subsidiary of the Parent Company.

Commitments and Contingencies.     The Parent Company had no material commitments during the reported periods.

 

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Schedule II—Valuation and qualifying accounts

For the years ended December 31, 2012, 2011, 2010 and the predecessor period of 2010

 

(Dollars in millions)

COL. A

  COL. B     COL. C     COL. D     COL. E  
          Additions              
    Balance
beginning of
period
    Charged to
costs
and
expenses
    Charged
to other
accounts
    Deductions     Balance
at end of
period
 

 

 

Valuation allowance for deferred income taxes:

         

Successor

         

For the Year Ended December 31, 2012

  $ 40      $ 8 (a)    $      $ 3      $ 45   

For the Year Ended December 31, 2011

  $ 34      $ 11 (a)    $      $ 5      $ 40   

For the Year Ended December 31, 2010

  $ 12      $ 38 (a)    $      $ 16      $ 34   
 

 

 

 

Predecessor

         

January 1 Through February 26, 2010

  $ 34      $ 1 (a)    $      $      $ 35   

 

 

Notes:

 

a)   Valuation allowances on assets related to additional Net Operating Losses created during the year where, based on available evidence, it is more likely than not that such assets will not be realized.

 

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IMS Health Holdings, Inc.

Condensed consolidated statements of financial position (unaudited)

 

(Dollars and shares in millions, except per share data)  

September 30,

2013

   

December 31,

2012

 

 

 

Assets:

   

Current Assets:

   

Cash and cash equivalents

  $ 663      $ 580   

Restricted cash

    26        25   

Short-term investments

    83        61   

Accounts receivable

    291        308   

Other current assets

    205        263   
 

 

 

 

Total Current Assets

  $ 1,268      $ 1,237   
 

 

 

 

Property, plant and equipment, net of accumulated depreciation of $136 and $114 in 2013 and 2012, respectively

    113        117   

Computer software

    258        254   

Goodwill

    3,597        3,583   

Other intangibles, net of accumulated amortization of $1,002 and $802 in 2013 and 2012, respectively

    2,597        2,873   

Other assets

    157        151   
 

 

 

 

Total Assets

  $ 7,990      $ 8,215   
 

 

 

 

Liabilities and Shareholders’ Equity:

   

Current Liabilities:

   

Accounts payable

  $ 96      $ 109   

Accrued and other current liabilities

    527        533   

Short-term debt

    25        28   

Deferred revenues

    182        173   
 

 

 

 

Total Current Liabilities

  $ 830      $ 843   
 

 

 

 

Postretirement and postemployment benefits

    110        116   

Long-term debt

    4,916        4,149   

Deferred tax liability

    1,210        1,317   

Other liabilities

    118        107   
 

 

 

 

Total Liabilities

  $ 7,184      $ 6,532   
 

 

 

 

Commitments and Contingencies (Note 6)

   

Shareholders’ Equity:

   

Common Stock, $.001 par value, 3,075 and 3,075 shares authorized, 2,805 and 2,804 shares issued and outstanding in 2013 and 2012, respectively

  $ 3      $ 3   

Capital in excess of par

    909        1,634   

Accumulated deficit

    (102     (102

Treasury stock, at cost, 5 and 4 shares in 2013 and 2012, respectively

    (6     (4

Accumulated other comprehensive income

    2        152   
 

 

 

 

Total Shareholders’ Equity

  $ 806      $ 1,683   
 

 

 

 

Total Liabilities and Shareholders’ Equity

  $ 7,990      $ 8,215   

 

 

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements (Unaudited).

 

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IMS Health Holdings, Inc.

Condensed consolidated statements of comprehensive loss (unaudited)

 

(Dollars and shares in millions, except per share data)

  

Nine months ended

September 30,

 
       2013             2012      

 

 

Revenue

   $ 1,870      $ 1,798   
  

 

 

 

Information

     1,138        1,134   

Technology services

     732        664   
  

 

 

 

Operating costs of information, exclusive of depreciation and amortization

     480        504   

Direct and incremental costs of technology services, exclusive of depreciation and amortization

     377        341   

Selling and administrative expenses, exclusive of depreciation and amortization

     433        431   

Depreciation and amortization

     303        317   

Severance, impairment and other charges

     1        30   

Merger costs

            2   
  

 

 

 

Operating Income

     276        173   
  

 

 

 

Interest income

     3        2   

Interest expense

     (241     (196

Other (loss) income, net

     (44     6   
  

 

 

 

Non-Operating Loss, Net

     (282     (188
  

 

 

 

Loss before benefit from income taxes

     (6     (15

Benefit from income taxes

     6        26   
  

 

 

 

Net (Loss) Income

   $      $ 11   
  

 

 

 

Earnings per share attributable to common shareholders:

    

Basic

   $      $   

Diluted

   $      $   

Weighted-average common shares outstanding:

    

Basic

     2,800        2,794   

Diluted

     2,800        2,875   

Unaudited pro forma net income per share:

    

Basic

    

Diluted

    

Unaudited pro forma weighted-average common shares outstanding:

    

Basic

    

Diluted

    
  

 

 

 

Other Comprehensive Loss:

    

Net (Loss) Income

   $      $ 11   
  

 

 

 

Cumulative translation adjustment

   $ (150   $ (15

Change in derivatives in OCI (net of taxes of ($3) and ($-), respectively)

     6          

Change in derivatives from OCI to earnings (net of taxes of $4 and $1, respectively)

     (7     (3

Postretirement and postemployment adjustments (net of taxes)

     1          
  

 

 

 

Other Comprehensive Loss

   $ (150   $ (18
  

 

 

 

Total Comprehensive Loss

   $ (150   $ (7

 

 

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements (Unaudited).

 

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IMS Health Holdings, Inc.

Condensed consolidated statements of cash flows (unaudited)

 

(Dollars in millions)   

Nine months ended

September 30,

 
   2013     2012  

 

 

Cash Flows from Operating Activities:

    

Net income

   $      $ 11   

Adjustments to reconcile Net income to Net Cash Provided by Operating Activities:

    

Depreciation and amortization

     303        317   

Bad debt expense

     1        1   

Deferred income taxes

     (48     (27

Loss from investments and sale of assets, net

     3        2   

Non-cash stock-based compensation charges

     18        16   

Non-cash impairment charges

            23   

FX loss (gain) on revaluation of foreign denominated debt

     22        (8

Debt amendment extinguishment loss

     9          

Non-cash (gains) losses on derivative instruments

     (8     1   

Non-cash amortization of debt original issue discount

     13        13   

Change in assets and liabilities, excluding effects from acquisitions and dispositions:

    

Net decrease in accounts receivable

     20        16   

Net decrease (increase) in other current assets

     6        (5

Net (decrease) increase in accounts payable

     (12     4   

Net decrease in accrued and other current liabilities

     (5     (105

Net increase (decrease) in deferred revenues

     7        (13

Net increase in pension assets (net of liabilities)

     (8     (9

Net decrease in other long-term assets (net of long-term liabilities)

     1        19   
  

 

 

 

Net Cash Provided by Operating Activities

     322        256   
  

 

 

 

Cash Flows Used in Investing Activities:

    

Capital expenditures

     (25     (30

Additions to computer software

     (53     (48

Proceeds from sale of assets and investments

            25   

Investments in short-term marketable securities

     (21       

Payments for acquisitions of businesses, net of cash acquired

     (74     (60

Funding of investments

     (3     (41

Other investing activities, net

     3        (4
  

 

 

 

Net Cash Used in Investing Activities

     (173     (158
  

 

 

 

Cash Flows Used in Financing Activities:

    

Net borrowings under revolving credit facility

     135        115   

Net repayments of revolving credit facility

     (135     (169

Proceeds from issuance of notes

     750          

Repayments of term loans

     (25     (15

Debt issuance costs

     (17       

Proceeds from equity plan activity

     2        7   

Payments for treasury stock

     (2     (11

Dividends paid

     (753       

Other financing activities

     (3       
  

 

 

 

Net Cash Used in Financing Activities

     (48     (73
  

 

 

 

Effect of Exchange Rate Changes on Cash and Cash Equivalents

     (18       
  

 

 

 

Increase in Cash and Cash Equivalents

     83        25   

Cash and Cash Equivalents, Beginning of Period

     580        453   
  

 

 

 

Cash and Cash Equivalents, End of Period

   $ 663      $ 478   

 

 

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements (Unaudited).

 

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IMS Health Holdings, Inc.

Condensed consolidated statements of shareholders’ equity (unaudited)

 

(Dollars and shares in millions)  

Shares

common
stock

   

Shares

treasury
stock

    Common
stock
   

Treasury

stock

    Capital in
excess
of par
   

Accumulated

deficit

    Cumulative
translation
adjustment
    Unamortized
Postretirement &
postemployment
adjustment
    Change in
derivatives
in OCI
    Change in
derivatives
from OCI
into earnings
    Accumulated
other
comprehensive
income
    Total
shareholders’
equity
 

 

 

Balance, December 31, 2011

    2,791        3      $ 3      $ (3   $ 2,812      $ (60   $ 241      $ (24   $ (11   $ 13      $ 219      $ 2,971   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

              (42               (42

Issuances under stock plans and management investments

    13              (3                 (3

Repurchases of common stock

      1          (1                   (1

Stock-based compensation expense

            19                    19   

Dividends paid to shareholders, net of tax

            (1,194                 (1,194

Cumulative translation adjustments

                (49           (49     (49

Postretirement & postemployment adjustments, net of tax

                  (17         (17     (17

Change in derivatives in OCI , net of tax

                    3          3        3   

Change in derivatives from OCI into earnings, net of tax

                      (4     (4     (4
 

 

 

 

Balance, December 31, 2012

    2,804        4      $ 3      $ (4   $ 1,634      $ (102   $ 192      $ (41   $ (8   $ 9      $ 152      $ 1,683   
 

 

 

 

Net loss

                                 

Issuances under stock plans and management investments

    1              2                    2   

Repurchases of common stock

      1          (2                   (2

Stock-based compensation expense

            18                    18   

Dividends paid to shareholders, net of tax

            (745                 (745

Cumulative translation adjustments

                (150           (150     (150

Postretirement & postemployment adjustments, net of tax

                  1            1        1   

Change in derivatives in OCI , net of tax

                    6          6        6   

Change in derivatives from OCI into earnings, net of tax

                      (7     (7     (7
 

 

 

 

Balance, September 30, 2013

    2,805        5      $ 3      $ (6   $ 909      $ (102   $ 42      $ (40   $ (2   $ 2      $ 2      $ 806   

 

 

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements (Unaudited).

 

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Notes to condensed consolidated financial statements (unaudited)

Note 1. Interim condensed consolidated financial statements

The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. The Condensed Consolidated Financial Statements do not include all the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, all of which are of a normal recurring nature, considered necessary for a fair statement of the statements of financial position, comprehensive income, cash flows and shareholders’ equity for the periods presented have been included. The results of operations for interim periods are not necessarily indicative of the results expected for the full year. The December 31, 2012 balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The Condensed Consolidated Financial Statements and related notes should be read in conjunction with the Consolidated Financial Statements and related notes of IMS Health Holdings, Inc. (the “Company”) included in its consolidated financial statements for the three years ended December 31, 2012. Amounts presented in the Condensed Consolidated Financial Statements may not add due to rounding.

The financial statements of IMS Health Holdings, Inc. are substantially comprised of the financial statements of IMS Health Incorporated, which issued its 2013 third quarter financial statements on November 4, 2013. Accordingly, the Company has evaluated transactions for consideration as recognized subsequent events in the 2013 third quarter financial statements through the date of November 4, 2013. Additionally, the Company has evaluated transactions that occurred through the issuance of these financial statements, January 2, 2014, for purposes of disclosure of unrecognized subsequent events.

Note 2. Basis of presentation and description of business

The Company is a leading global information and technology services company providing clients in the healthcare industry with comprehensive solutions to measure and improve their performance. The Company has one of the largest and most comprehensive collections of healthcare information in the world, spanning sales, prescription and promotional data, medical claims, electronic medical records and social media data. The Company standardizes, organizes, structures and integrates this data by applying its sophisticated analytics and leveraging its global technology infrastructure to help its clients run their organizations more efficiently and make better decisions. The Company has a presence in over 100 countries, and generated 64% of its 2012 revenue from outside the United States.

The Company serves key healthcare organizations and decision makers around the world, spanning the breadth of life science companies, including pharmaceutical, biotechnology, consumer health and medical device manufacturers, as well as distributors, providers, payers, government agencies, policymakers, researchers and the financial community. The Company’s information and technology services, which it has developed with significant investment over its 60-year history, are deeply integrated into its clients’ workflow.

On October 23, 2009, the Company was formed as Healthcare Technology Holdings, Inc. by investment entities affiliated with TPG Capital, L.P., CPP Investment Board Private Holdings Inc.

 

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and Leonard Green & Partners, L.P (collectively, the “Sponsors”). On December 20, 2013, the Company changed its name to IMS Health Holdings, Inc. On February 26, 2010, the Company acquired 100% of the outstanding shares of IMS Health Incorporated (“IMS Health”) through its wholly owned subsidiary Healthcare Technology Acquisition Inc. (the “Merger”). The Company was formed for the purpose of consummating the Merger with IMS Health and had no operations from inception other than its investment in IMS Health and its subsidiaries and costs incurred associated with its formation and the Merger.

Note 3. Summary of recent accounting pronouncements

In July 2012, the FASB amended its guidance related to indefinite-lived intangibles by providing entities an option to use a qualitative approach to test these assets for impairment. An entity will be able to first perform a qualitative assessment to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired. If it is concluded that this is the case, then the entity must perform a quantitative impairment test. This amendment was effective for fiscal years beginning after September 15, 2012, with early adoption permitted. The adoption of this guidance did not have a material impact on the Company’s financial results.

In February 2013, the FASB amended existing guidance by requiring companies to present information about reclassification adjustments from accumulated other comprehensive income in their financial statements in a single note or on the face of the financial statements. The amendments are effective for the Company prospectively for reporting periods beginning after December 15, 2012, with early adoption permitted. As these amendments required only additional disclosure, adoption did not have a material impact on the Company’s financial results.

In March 2013, the FASB issued amendments to address the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The amendments are effective for the Company prospectively for fiscal years beginning after December 15, 2013, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial results.

In June 2013, the FASB determined that an unrecognized tax benefit should be presented as a reduction of a deferred tax asset for a net operating loss (“NOL”) carryforward or other tax credit carryforward when settlement in this manner is available under applicable tax law. This guidance is effective for the Company’s interim and annual periods beginning January 1, 2014. The Company does not believe the adoption of this guidance will have a material impact on its financial results.

Note 4. Acquisitions and dispositions

Acquisitions

The Company makes acquisitions in order to expand its products, services and geographic reach. During the nine months ended September 30, 2013, the Company completed seven acquisitions; Vedere Group Limited (Australia), Appature, Inc. (U.S.), Semantelli, LLC (U.S.), 360 Vantage, LLC (U.S.), Incential Software, Inc. (U.S.), Diversinet Corp. (Canada), and the consumer health business of Nielsen Holdings N.V. (Europe) to strengthen our product offerings. The total cost for these

 

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acquisitions was approximately $105 million. The Company incurred approximately $6 million of acquisition-related costs, which are expensed as incurred and recorded in Selling and administrative expense, exclusive of depreciation and amortization. These business combinations were accounted for under the acquisition method of accounting, and as such, the aggregate purchase prices were allocated on a preliminary basis to the assets acquired and liabilities assumed based on estimated fair values as of the closing dates. The purchase price allocations will be finalized after the completion of the valuation of certain intangible assets and any adjustments to the preliminary purchase price allocations are not expected to have a material impact on the Company’s results of operations. The Condensed Consolidated Financial Statements include the results of the acquisitions subsequent to the closing. Had these acquisitions occurred as of January 1, 2012, the impact on the Company’s results of operations would not have been material. In connection with these acquisitions, the Company recorded goodwill of approximately $115 million, of which approximately $62 million is deductible for tax purposes, computer software of $16 million (weighted-average amortization period of 4.5 years), and intangible assets of approximately $31 million. The intangible assets acquired were comprised of client relationships of $12 million (weighted-average amortization period of 10.1 years), databases of $1 million (weighted-average amortization period of 2.0 years) and trade names and other of $18 million (weighted-average amortization period of 3.5 years).

During the nine months ended September 30, 2012, the Company completed seven acquisitions; PharmARC Analytical Solutions Private Limited (India), Pharmadata s.r.o.(Europe), Suomen Lääkedata Oy (Europe), DecisionView, Inc. (U.S.), Pharma Ventures Limited (Europe), Tar Heel Trading Company, LLC (U.S.) and Life Science Partners Pty Limited (Australia) to strengthen our product offerings. The total cost for these acquisitions was approximately $64 million. The Company incurred approximately $8 million of acquisition-related costs, which are expensed as incurred and recorded in Selling and administrative expense, exclusive of depreciation and amortization. All of the business combinations were accounted for under the acquisition method of accounting, and as such, the aggregate purchase prices were allocated to the assets acquired and liabilities assumed based on fair values. The Condensed Consolidated Financial Statements include the results of the acquisitions subsequent to the closing. Had these acquisitions occurred as of January 1, 2011, the impact on the Company’s results of operations would not have been material. In connection with these acquisitions, the Company recorded goodwill of approximately $34 million, of which approximately $4 million is deductible for tax purposes, computer software of $15 million (weighted-average amortization period of 5.0 years) and intangible assets of approximately $24 million. The intangible assets acquired were comprised of client relationships of $21 million (weighted-average amortization period of 10 years), databases of $2 million (weighted-average amortization period of 4.6 years) and trade names and other of $1 million (weighted-average amortization period of 3.5 years).

Under the terms of certain acquisition-related purchase agreements, the Company may be required to pay additional amounts as contingent consideration based on the achievement of certain financial performance related metrics, ranging from $0 to $100 million. The Company’s contingent consideration recorded on the balance sheet was approximately $69 million and $25 million at September 30, 2013 and December 31, 2012, respectively. The fair value measurement of this contingent consideration is classified within Level 3 of the fair value hierarchy (see Note 8) and reflects the Company’s own assumptions in measuring fair values using the income approach. In developing these estimates, the Company considered certain performance projections, historical results, and industry trends.

 

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Dispositions

In connection with the Company’s acquisition of SDI during the fourth quarter of 2011, the Federal Trade Commission required the Company to divest a portion of the acquired business. As a result, the Company sold a portion of the business to a third party and received $16 million during the three months ended March 31, 2012.

During the three months ended March 31, 2012, the Company sold a building in the U.S. and received net proceeds of $9 million.

Note 5. Goodwill and intangible assets

Goodwill and intangible assets that have indefinite useful lives are not amortized and are tested at least annually (or based on any triggering event) for impairment.

The following table sets forth changes in the Company’s goodwill for the nine months ended September 30, 2013.

 

(Dollars in millions)    Goodwill  

 

 

Balance at December 31, 2012

   $ 3,583   

Goodwill assigned in purchase price allocations (see Note 4)

     115   

Foreign currency translation adjustments

     (101
  

 

 

 

Balance at September 30, 2013

   $ 3,597   

 

 

Intangible assets that have finite useful lives are amortized using the straight-line method over periods ranging from five to twenty years. Intangible asset amortization expense was $214 million and $218 million during the nine months ended September 30, 2013 and 2012, respectively. At September 30, 2013, intangible assets were composed of databases, client relationships and trade names. The gross carrying amounts, related accumulated amortization and the weighted average amortization periods of these intangibles are listed in the following table:

 

       September 30, 2013      December 31, 2012  
(Dollars in millions)   

Gross

carrying

amount

     Accumulated
amortization
     Weighted avg.
amortization
period (years)
     Gross
carrying
amount
     Accumulated
amortization
 

 

 

Databases

   $ 723       $ 511         1.4       $ 727       $ 405   

Client Relationships

     2,164         462         14.6         2,225         375   

Trade Names and Other (Finite-Lived)

     150         29         15.0         149         22   

Trade Names (Indefinite-Lived)

     562                 N/A         574           
  

 

 

 

Total Intangible Assets

   $ 3,599       $ 1,002         11.5      $ 3,675       $ 802   

 

 

 

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Based on current estimated useful lives, amortization expense associated with intangible assets at September 30, 2013 is estimated to be approximately $70 million for the remaining quarter of 2013 and thereafter as follows:

 

(Dollars in millions)

Year ended December 31,

   Amortization
expense
 

 

 

2014

   $ 280   

2015

     166   

2016

     145   

2017

     120   

2018

     102   

Thereafter

   $ 1,152   

 

 

Note 6. Contingencies

The Company and its subsidiaries are involved in legal and tax proceedings, claims and litigation arising in the ordinary course of business. Management periodically assesses the Company’s liabilities and contingencies in connection with these matters based upon the latest information available. For those matters where management currently believes it is probable that the Company will incur a loss and that the probable loss or range of loss can be reasonably estimated, the Company has recorded reserves in the Condensed Consolidated Financial Statements based on its best estimates of such loss. In other instances, because of the uncertainties related to either the probable outcome or the amount or range of loss, management is unable to make a reasonable estimate of a liability, if any. However, even in many instances where the Company has recorded an estimated liability, the Company is unable to predict with certainty the final outcome of the matter or whether resolution of the matter will materially affect the Company’s results of operations, financial position or cash flows. As additional information becomes available, the Company adjusts its assessment and estimates of such liabilities accordingly.

The Company routinely enters into agreements with its suppliers to acquire data and with its clients to sell data, all in the normal course of business. In these agreements, the Company sometimes agrees to indemnify and hold harmless the other party for any damages such other party may suffer as a result of potential intellectual property infringement and other claims related to the use of the data. The Company has not accrued a liability with respect to these matters, as the exposure is considered remote.

Based on its review of the latest information available, management does not expect the impact of pending tax and legal proceedings, claims and litigation, either individually or in the aggregate, to have a material adverse effect on our results of operations, cash flows or financial position. However, one or more unfavorable outcomes in any claim or litigation against us could have a material adverse effect for the period in which it is resolved. The following is a summary of certain legal matters involving the Company.

IMS Health government solutions voluntary disclosure program participation

The Company’s wholly-owned subsidiary, IMS Government Solutions Inc., is primarily engaged in providing services and products under contracts with the U.S. government. U.S. government contracts are subject to extensive legal and regulatory requirements and, from time to time,

 

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agencies of the U.S. government have the ability to investigate whether contractors’ operations are being conducted in accordance with such requirements. U.S. government investigations, whether relating to these contracts or conducted for other reasons, could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed on us, or could lead to suspension or debarment from future U.S. government contracting. U.S. government investigations often take years to complete and may result in no adverse action against the Company.

IMS Government Solutions discovered potential noncompliance with various contract clauses and requirements under its General Services Administration Contract which was awarded in 2002 to its predecessor company, Synchronous Knowledge Inc. (Synchronous Knowledge Inc. was acquired by IMS Health in May 2005). Upon discovery of the potential noncompliance, the Company began remediation efforts, promptly disclosed the potential noncompliance to the U.S. government, and was accepted into the Department of Defense Voluntary Disclosure Program. The Company filed its Voluntary Disclosure Program Report (“Disclosure Report”) on August 29, 2008. Based on the Company’s findings as disclosed in the Disclosure Report, the Company recorded a reserve of approximately $4 million for this matter in the third quarter of 2008. During the second quarter of 2010, the Company recorded an additional reserve of approximately $2 million as a result of its ongoing investigation relating to this matter. The Company is currently unable to determine the outcome of these matters pending the resolution of the Voluntary Disclosure Program process and its ultimate liability arising from these matters could exceed its current reserves.

Symphony Health Solutions litigation

On July 24, 2013, Symphony Health Solutions filed a lawsuit in the U.S. District Court for the Eastern District of Pennsylvania against IMS Health alleging that IMS Health is actively engaging in anticompetitive business practices in violation of the Sherman Antitrust Act and Pennsylvania state law. The complaint seeks trebled actual damages in an unspecified amount, punitive damages, costs and injunctive relief. The Company believes the complaint is without merit, rejects all claims raised and will vigorously defend IMS Health’s position.

Note 7. Stock-based compensation

In August 2013, the Board of Directors of the Company declared a cash dividend of $0.26 per share. In accordance with the terms of the Company’s 2010 Equity Incentive Plan (the “Equity Plan”), option holders received $0.26 per share in respect of vested options and a corresponding $0.26 per share reduction in the exercise price of unvested options. The other terms of the equity awards, including vesting schedules, remained unchanged. The Company did not record a charge for modification of the exercise price for unvested awards as the modification was provided for by the terms of the Equity Plan.

Note 8. Financial instruments

Foreign exchange risk management

The Company transacts business in more than 100 countries and is subject to risks associated with changing foreign exchange rates. The Company’s objective is to reduce earnings and cash flow volatility associated with foreign exchange rate changes. Accordingly, the Company enters into foreign currency forward contracts to minimize the impact of foreign exchange movements on

 

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EBITDA, and to hedge non-U.S. Dollar anticipated royalties. It is the Company’s policy to enter into foreign currency transactions only to the extent necessary to meet its objectives as stated above. The Company does not enter into foreign currency transactions for investment or speculative purposes. The principal currencies hedged are the Euro, the Japanese Yen, the British Pound, the Swiss Franc and the Canadian Dollar.

The impact of foreign exchange on pre-tax income for the nine months ended September 30, 2013 were net losses of $29 million. For the nine months ended September 30, 2012, the Company had net gains of $8 million. The nine months ended September 30, 2013 included foreign exchange losses of approximately $22 million related to the translation of non-functional currency debt and foreign exchange gains of approximately $8 million for the nine months ended September 30, 2012. These foreign exchange gains and losses are included in Other (loss) income, net, in the Condensed Consolidated Statements of Comprehensive Loss. Additionally, Other (loss) income, net included gains (losses) of $— million and $(5) million related to the revaluation of other functional assets and liabilities for the nine months ended September 30, 2013 and 2012, respectively.

At September 30, 2013, the Company’s notional amount of forward contacts designated as cash flow and EBITDA hedges was $191 million and $274 million, respectively. These foreign exchange forward contracts outstanding have various expiration dates through December 2014 relating to non-U.S. Dollar anticipated royalties and EBITDA. Foreign exchange forward contracts are recorded at estimated fair value. The estimated fair values of the forward contracts are based on quoted market prices.

Unrealized and realized gains and losses on the contracts hedging EBITDA do not qualify for hedge accounting, and therefore are not deferred and are included in the Condensed Consolidated Statements of Comprehensive Income in Other (loss) income, net.

Unrealized gains and losses on the contracts hedging non-U.S. Dollar anticipated royalties qualify for hedge accounting, and are therefore deferred and included in Accumulated Other Comprehensive Income (“AOCI”).

 

       Fair value of derivative instruments  
     Asset derivatives      Liability derivatives  
(Dollars in millions)   

As of

September 30,
2013

     As of
December 31,
2012
    

As of

September 30,
2013

     As of
December 31,
2012
 

 

  

 

 

    

 

 

    

 

 

    

 

 

 

Derivatives designated as hedging instruments

           

Foreign Exchange Contracts (1)

   $ 6       $ 5       $ 4       $ 2   

Derivatives not designated as hedging instruments

           

Foreign Exchange Contracts (1)

     1         3         9         9   

Interest Rate Swaps (2)

                     14         21   
  

 

 

 

Total Derivatives

   $ 7       $ 8       $ 27       $ 32   

 

 

 

(1)   Included in Current Assets and Current Liabilities in the Condensed Consolidated Statement of Financial Position.

 

(2)   Included in Other liabilities in the Condensed Consolidated Statement of Financial Position.

 

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(Dollars in millions)

Effect of derivatives on financial performance for the nine months ended September 30,

 

 

 
Derivatives in cash flow hedging
relationships
  Amount of gain/(loss)
recognized in other
comprehensive income
on derivatives
   

Location of gain/(loss)

reclassified from AOCI into

earnings

  Amount
of gain/
(loss) from
AOCI into
earnings
 

 

 
    2013     2012         2013     2012  

 

 

Foreign Exchange Contracts

  $ 9      $      Other Income (Loss), Net   $ 11      $ 4   

 

 

The pre-tax gain/(loss) recognized in earnings on derivatives not designated as hedging instruments was as follows:

 

       For the nine months ended
September 30,
 
(Dollars in millions)    2013     2012  

 

 

Foreign Exchange Contracts(1)

   $ (4   $ 2   

Interest Rate Swaps and Caps(2)

     7        (1
  

 

 

 

Total Derivatives not Designated as Hedging Instruments

   $ 3      $ 1   

 

 

 

(1)   Included in Other (loss) income, net

 

(2)   Included in Interest expense

Changes in the fair value of derivatives that are designated as a cash flow hedges are recorded in AOCI to the extent effective and reclassified into earnings in the same period or periods during which the transaction hedged by that derivative also affects earnings. The Company expects approximately $2 million of pre-tax unrealized gain related to our foreign exchange contracts included in AOCI at September 30, 2013 to be reclassified into earnings within the next twelve months.

Fair value disclosures

At September 30, 2013, the Company’s financial instruments included cash, cash equivalents, restricted cash, short-term investments, receivables, accounts payable and debt. At September 30, 2013, the fair values of cash, cash equivalents, restricted cash, short-term investments, receivables and accounts payable approximated carrying values due to the short-term nature of these instruments. Short-term investments consist of time deposits and government bond funds with maturities greater than ninety days, but less than one year. At September 30, 2013 and December 31, 2012, the fair value of total debt approximated $5,233 million and $4,498 million, respectively, as determined under Level 2 measurements based on quoted prices for these financial instruments.

The Company is subject to authoritative guidance which requires a three-level hierarchy for disclosure of fair value measurements as follows:

 

Level 1

         Quoted prices in active markets for identical assets or liabilities.

Level 2

         Quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets; and model-derived valuations in which all significant inputs are observable in active markets.

Level 3

         Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

 

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Recurring measurements

The following table summarizes assets and liabilities measured at fair value on a recurring basis at the dates indicated:

 

       Basis of fair value measurements  
     September 30, 2013  
(Dollars in millions)    Level 1      Level 2      Level 3      Total  

 

 

Assets

           

Short-term investments

   $ 79       $ 4       $       $ 83   

Derivatives

             7                 7   
  

 

 

 

Total

   $ 79       $ 11       $       $ 90   
  

 

 

 

Liabilities

           

Contingent consideration

   $       $       $ 69       $ 69   

Derivatives

             27                 27   
  

 

 

 

Total

   $       $ 27       $ 69       $ 96   

 

 
           
       December 31, 2012  

 

 

Assets

           

Short-term investments

   $ 56       $ 5       $       $ 61   

Derivatives

             8                 8   
  

 

 

 

Total

   $ 56       $ 13       $       $ 69   
  

 

 

 

Liabilities

           

Contingent consideration

   $       $       $ 25       $ 25   

Derivatives

             32                 32   
  

 

 

 

Total

   $       $ 32       $ 25       $ 57   

 

 

Derivatives consist of foreign exchange contracts, whose fair value is based on observable market inputs of spot and forward rates, and interest rate caps and swaps.

The following table summarizes Level 3 acquisition-related contingent consideration liabilities (see Note 4) carried at fair value on a recurring basis with the use of unobservable inputs for the period indicated.

 

(Dollars in millions)

   Contingent
consideration liabilities
 

 

  

 

 

 

Balance at December 31, 2012

   $ 25   

New acquisitions

     48   

Cash payments

     (3

Changes in fair value estimates included in Selling and administrative expenses

     (1
  

 

 

 

Balance at September 30, 2013

   $ 69   

 

  

 

 

 

Non-recurring measurements

In the nine months ended September 30, 2013, the Company wrote-off the value of a cost method investment and an associated asset that was no longer in use to zero and recorded

 

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charges of $5 million, $3 million of which were recorded in Severance, impairment and other charges and $2 million of which were recorded in Other (loss) income, net. The fair value reflects an internal review of the net realizable value of the assets and thus is a Level 3 measurement. Also, in the nine months ended September 30, 2013, the Company recorded an additional $3 million impairment charge for a leased facility, resulting in a fair value measurement of the liability of $9 million at September 30, 2013. The fair value was based on a third party market assessment, a Level 2 measurement. In 2012, the Company wrote-off the value of computer software that was no longer in use to zero and recorded an impairment charge of $22 million. The fair value reflects an internal review of the net realizable value of the software and thus is a Level 3 measurement.

Devaluation of Venezuelan Bolívars

In February 2013, the Venezuelan government announced the devaluation of its currency. The official exchange rate was adjusted from 4.30 Bolívars to each U.S. Dollar to 6.30. The Company’s Swiss operating subsidiary, IMS AG, maintains certain account balances in Bolívars (mainly cash and cash equivalents). As these balances are held in a non-functional currency of IMS AG, the Company is required to mark-to-market these balances at each reporting date and reflect these movements as gains or losses in income. Additionally, Venezuela is currently designated as hyper-inflationary, and as such, all foreign currency fluctuations are recorded in income for certain account balances at the Company’s local Venezuelan operating subsidiary. The Company recorded a pre-tax charge of approximately $14 million to Other (loss) income, net, in the first quarter of 2013 related to the remeasurement of the IMS AG Venezuelan Bolívar account balances and the remeasurement of certain local Bolívar account balances.

Credit concentrations

The Company continually monitors its positions with, and the credit quality of, the financial institutions which are counterparties to its financial instruments and does not anticipate non-performance by the counterparties. In general, we enter into transactions only with financial institution counterparties that are large banks and financial institutions. In addition, the Company attempts to limit the amount of credit exposure with any one institution. The Company would not have realized a material loss during the nine months ended September 30, 2013 in the event of non-performance by any one counterparty.

The Company maintains accounts receivable balances ($291 million and $308 million, net of allowances, at September 30, 2013 and December 31, 2012, respectively), principally from clients in the pharmaceutical industry. The Company’s trade receivables do not represent significant concentrations of credit risk at September 30, 2013 due to the credit worthiness of its clients and their dispersion across many geographic areas.

 

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Debt

The following table summarizes the Company’s debt as of September 30, 2013 and December 31, 2012:

 

(Dollars in millions)   

September 30,

2013

   

December 31,

2012

 

 

 

Senior Secured Term Loan due 2017—USD LIBOR at average floating rates of 3.75%

   $ 1,750      $ 1,766   

Senior Secured Term Loan due 2017—EUR LIBOR at average floating rates of 4.25%

     1,012        999   

12.50% Senior Notes due 2018

     1,000        1,000   

7.375%/8.125% Senior PIK Toggle Notes due 2018

     750          

Revolving Credit Facility due 2017—USD LIBOR at average floating rates of 3.44%

              

6.00% Senior Notes due 2020

     500        500   
  

 

 

 

Principal Amount of Debt

     5,012        4,265   

Less: Unamortized Discounts

     (71     (88
  

 

 

 

Total Debt per Condensed Consolidated Statements of Financial Position

   $ 4,941      $ 4,177   

 

 

In August 2013, Healthcare Technology Intermediate, Inc. issued $750 million of 7.375% cash interest and 8.125% Senior Payment-in-Kind (“PIK”) Toggle Notes due 2018 (the “Senior PIK Notes”). The Senior PIK Notes are unsecured obligations of Healthcare Technology Intermediate, Inc. and mature on September 1, 2018. Interest is paid semi-annually in March and September of each year, commencing March 1, 2014. Subject to certain restrictions, the Company may elect to pay a portion of the interest due on the outstanding principal amount of the Senior PIK Notes by issuing PIK Notes in a principal amount equal to the interest due. The proceeds, along with cash provided by the Company, were used to pay an approximate $753 million dividend to shareholders of the Company and for the payment of fees and expenses of the transaction of approximately $17 million. Future mandatory debt principal payments associated with these Notes are zero for 2013 through 2017, and $750 million thereafter.

In February 2013, the Company entered into an amendment of its existing Senior Secured Term Loans due 2017 (“Term Loan Amendment”) to reduce the interest rate paid by the Company. The Company reduced the borrowing margins and LIBOR floors by 50 basis points and 25 basis points, respectively, for both the USD and EUR tranches of debt. As a result of the Term Loan Amendment, the Company recorded $9 million of debt extinguishment losses and $3 million of third party fees in Other (loss) income, net during the nine months ended September 30, 2013.

On October 24, 2012, the Company completed a recapitalization (the “Recapitalization”). The Recapitalization included an amendment (the “Amendment”) to the Amended and Restated Credit and Guaranty Agreement (“New Term Loan Agreement”) for additional term loans in the aggregate U.S. dollar equivalent of approximately $760 million, which included 200 million Euros. Among other modifications, the Amendment: (a) extended the maturity date of the Revolving Credit Facility to August 2017; and (b) increased the maximum leverage ratio.

The Recapitalization also included a new offering of $500 million aggregate principal amount of 6% senior notes due 2020 (the “6% Senior Notes”). The 6% Senior Notes are guaranteed on a senior unsecured basis by the Company’s wholly-owned domestic subsidiaries. The 6% Senior

 

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Notes have terms substantially similar to the existing $1,000 million 12.5% Senior Notes due 2018 (“Existing 2018 Notes”), except that, most notably, the 6% Senior Notes have a three-year no call redemption period.

In order to effect the Recapitalization, the Company conducted an exchange offer and consent solicitation to exchange the Existing 2018 Notes for new 12.5% Senior Notes due 2018 (“New 12.5% Senior Notes”), and to solicit consents to proposed amendments to the indenture governing the Existing 2018 Notes to permit the recapitalization. The requisite consents were obtained and 99.96% of the holders of the Existing 2018 Notes agreed to participate in the exchange and received New 12.5% Senior Notes in an equal principal amount.

The proceeds from the Recapitalization were used to pay a $1,202 million dividend to shareholders of the Company and for payment of fees and expenses of the transaction of approximately $48 million during the fourth quarter of 2012, which were capitalized.

At September 30, 2013, short-term and long-term debt was $25 million and $4,916 million, respectively, in the Condensed Consolidated Statements of Financial Position. The Company’s senior secured credit facilities are secured by a security interest in substantially all of our tangible and intangible assets, including the stock and the assets of certain of its current and certain future wholly-owned U.S. subsidiaries (and the stock held by the Company’s immediate direct parent holding company) and a portion of the stock of certain of its non-U.S. subsidiaries. In addition, certain of the assets of the Company’s Swiss subsidiaries have been pledged to secure any borrowings under the Senior Term Loan by IMS AG.

Costs 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. As of September 30, 2013, the unamortized balance of original issue discount reflected as a reduction to long term debt and fees and expenses related to the issuance of debt included in Other assets was $71 million and $78 million, respectively. During the nine months ended September 30, 2013, the Company recorded interest expense of $27 million related to the amortization of these balances.

The Company’s financing arrangements provide for certain covenants and events of default customary for similar instruments, including in the case of the Company’s New Term Loan Agreement (as amended), a covenant to maintain a specific ratio of consolidated total indebtedness to Credit Agreement Adjusted EBITDA. If an event of default occurs under any of the Company’s financing arrangements, the creditors under the financing arrangements will be entitled to take various actions, including the acceleration of amounts due under such arrangements, and in the case of the lenders under the Company’s New Term Loan Agreement (as amended), other actions permitted to be taken by a secured creditor. At September 30, 2013, the Company was in compliance with the financial covenant under the Company’s New Term Loan Agreement (as amended).

In May 2010, the Company purchased interest rate caps and entered into interest rate swap agreements for purposes of managing our risk in interest rate fluctuations. The Company purchased U.S. Dollar and Euro denominated interest rate caps for a total nominal value of approximately $1,675 million at strike rates ranging from 3% to 4%. These caps covered different periods between May 2010 and January 2015. The total premiums paid were $5 million. Most of these caps have expired and the nominal value of caps currently outstanding is approximately $355 million.

 

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The Company also entered into interest rate swap agreements to hedge notional amounts of $375 million of its borrowings. All were effective January 2012, and expire at various times from January 2014 through January 2016. On these agreements, the Company pays a fixed rate ranging from 2.6% to 3.3% and receives a variable rate of interest equal to the three-month London Interbank Offered Rate (“LIBOR”).

The fair value of the interest rate caps and swaps is the estimated amount that it would receive or pay to terminate such agreements, taking into account market interest rates and the remaining time to maturities. As of September 30, 2013 and December 31, 2012, based upon mark-to-market valuation, we recorded in the Condensed Consolidated Statements of Financial Position a long-term liability of $14 million and $21 million, respectively.

Note 9. Pension and postretirement benefits

The following tables summarize the components of net periodic benefit cost for the Company’s pension and postretirement benefits for the nine months ended September 30.

 

       Pension benefits                  

(Dollars in millions)

   U.S. plans      Non-U.S. plans     Other benefits  

Components of Net

   Nine months ended September 30,  

Periodic Benefit Cost

   2013     2012      2013     2012     2013     2012  

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Service cost

   $ 8      $ 5       $ 4      $ 4      $      $   

Interest cost

     7        7         7        8        1        1   

Expected return on plan assets

     (14     (12      (8     (8              

Amortization of prior service credit

                                           

Amortization of net loss

     1                                       
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net periodic benefit cost

   $ 2      $       $ 3      $ 4      $ 1      $ 1   

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Note 10. Income taxes

The Company operates in more than 100 countries around the world and its earnings are taxed at the applicable income tax rate in each of these countries. As required, the Company computes interim taxes based on an estimated annual effective tax rate.

For the nine months ended September 30, 2013, the Company recorded deferred income tax expense related to non-U.S. earnings and the associated tax credits. During this period, the Company also recorded a tax reduction of $10 million as a result of the conclusion of U.S. audits. In connection with one of the audits, the Company received a $47 million refund for which a receivable had been previously established. Additionally, the Company recorded tax rate reductions of $3 million as a result of the expiration of various statutes of limitation, and $2 million for the reversal of a valuation allowance due to a change in enacted state tax law changes. The Company recorded $4 million of tax expense related to unrecognized tax benefits that if recognized would favorably affect the effective tax rate. Included in this amount is $2 million of interest and penalties.

For the nine months ended September 30, 2012, the Company’s effective tax rate was impacted by deferred income tax expense related to non-U.S. earnings and associated tax credits. Also during this period, the Company recorded a tax reduction of $4 million as a result of the expiration of certain statutes of limitation. The Company recorded $5 million of tax expense related to unrecognized tax benefits that if recognized would favorably affect the effective tax rate. Included in this amount is $2 million of interest and penalties.

 

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The Company files numerous consolidated and separate income tax returns in U.S. (federal and state) and non-U.S. jurisdictions. The Company is no longer subject to U.S. federal income tax examination by tax authorities for years before 2010. With few exceptions, the Company is no longer subject to tax examination in state and local jurisdictions for years prior to 2009 and in its material non-U.S. jurisdictions prior to 2007. It is reasonably possible that within the next twelve months the Company could realize $8 million of unrecognized tax benefits as a result of the expiration of certain statutes of limitation.

Note 11. Severance, impairment and other charges

During the nine months ended September 30, 2013, the Company recorded severance, impairment and other charges of $7 million related to impaired leases for properties in the U.S. and contract-related charges for which the Company will not realize any future economic benefits, partially offset by the reversal of approximately $6 million of severance accruals for the 2012 Plan (see below) due to the favorable settlement of required termination benefits and strategic business changes.

During the third quarter of 2012, the Company recorded $7 million of impairment charges as a component of operating income related to a leased facility in the U.S. which was vacated on September 30, 2012.

During the second quarter of 2012, the Company recorded $23 million of impairment charges related to the write-down of certain assets to their net realizable values and contract-related charges for which the Company did not realize any future economic benefits.

In December 2012, as a result of ongoing cost reduction efforts, the Company implemented a restructuring plan (the “2012 Plan”) and recorded a pre-tax severance charge of $23 million in the fourth quarter of 2012 as a component of operating income consisting of global workforce reductions to streamline the Company’s organization. The severance benefits under the 2012 Plan were calculated pursuant to the terms of established employee protection plans, in accordance with local statutory minimum requirements or individual employee contracts, as applicable. The Company expects that cash outlays related to severance benefits for the 2012 Plan will be substantially complete by the end of the second quarter of 2014.

 

(Dollars in millions)    Severance
related
reserves
 

 

 

Balance at December 31, 2012

   $ 23   

2013 utilization

     (8

Q3 2013 reversal

     (6
  

 

 

 

Balance at September 30, 2013

   $ 9   

 

 

In December 2010, the Company implemented a multi-year restructuring plan and recorded a pre-tax severance, impairment and other charge totaling $50 million related to ongoing cost reduction efforts, including workforce reductions to streamline the Company’s organization, the elimination of certain regional headquarter functions and asset impairments (the “2010 Plan”). In connection with the overall 2010 Plan, the Company eliminated positions in all areas of the business, with a majority of the actions in the Company’s Global Operations function. The severance benefits under the 2010 Plan were calculated pursuant to the terms of established employee protection plans, in accordance with local statutory minimum requirements or

 

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individual employee contracts, as applicable. During the second quarter of 2011, the Company reversed the facility exit portion of the 2010 Plan as the Company was able to successfully assign the related lease to a third party. During December 2011, the Company recorded an incremental charge of $19 million, bringing the total charge under the 2010 Plan to $69 million. During the fourth quarter of 2012, the Company reversed approximately $10 million of severance accruals for the 2010 Plan related to either the favorable settlement of required termination benefits or as a result of strategic business changes. The cash outlays related to severance benefits for the 2010 Plan have been substantially completed.

Note 12. Related party

Due to related party relationships, it is possible that the terms of these transactions are not the same as those that would result from transactions among wholly unrelated parties.

Management services agreement

In connection with the Merger, we entered into a management services agreement with affiliates of TPG, CPPIB and LGP (collectively, the “Managers”), pursuant to which the Managers will provide management services to us until December 31, 2020, with evergreen one year extensions thereafter. The Managers receive an aggregate annual management fee equal to $7.5 million, and reimbursement for out-of-pocket expenses incurred by them, their members or their respective affiliates in connection with the provision of services pursuant to the agreement. Pursuant to the management services agreement, the Managers may provide advisory services related to financings or refinancings, recapitalizations, acquisitions, dispositions or other similar transactions; in connection with any such services the Managers have the right to receive customary fees charged by internationally-recognized investment banks for serving as financial advisor in similar transactions. The agreement includes customary exculpation and indemnification provisions in favor of the Managers and their respective affiliates.

At any time in connection with or in anticipation of a change of control or an initial public offering, the Managers may elect to receive their management fees payable under the management services agreement in a single lump sum cash payment equal to the present value of the then unpaid current and future management fees payable under the management services agreement.

Transactions with other sponsor portfolio companies

The Sponsors are private equity firms that have investments in companies that do business with IMS Health in the ordinary course of business. The Company believes these transactions are conducted on an arms-length basis. For the nine months ended September 30, 2013 and 2012, the Company recorded approximately $8 million and $8 million, respectively, associated with sales of the Company’s offerings to companies in which our Sponsors have investments. For the nine months ended September 30, 2013 and 2012, the Company purchased goods and services of $5 million and $5 million, respectively from companies in which one or both of the Sponsors have investments.

Certain other relationships

In connection with the offering by our wholly-owned direct subsidiary, Healthcare Technology Intermediate, Inc., of $750 million Senior PIK Notes in August 2013, TPG Capital BD, LLC participated as an initial purchaser, and received approximately $1 million in connection therewith.

 

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Note 13. Operations by business segment

Operating segments are defined as components of an enterprise about which financial information is available that is evaluated on a regular basis by the chief operating decision-maker, or decision-making groups, in deciding how to allocate resources to an individual segment and in assessing performance of the segment. The Company operates a globally consistent business model, offering pharmaceutical business information and related services to its clients in more than 100 countries (see Note 2).

The Company maintains regional geographic management who are responsible for bringing the Company’s full suite of offerings to their respective markets and to facilitate local execution of its global strategies. However, the Company maintains global leaders for the majority of its critical business processes; and the most significant performance evaluations and resource allocations made by the Company’s chief operating decision makers are made on a global basis. As such, the Company has concluded that it maintains one operating and reportable segment.

Geographic financial information:

The following represents selected geographic information for the regions in which the Company operates for the nine months ended September 30, 2013 and 2012.

 

(Dollars in millions)    Americas(1)      EMEA(2)     

Asia

Pacific(3)

    

Corporate

& Other

    Total IMS
Health
 

 

 

Nine Months Ended September 30, 2013:

           

Revenue(4)

   $ 851       $ 682       $ 337       $      $ 1,870   

Operating Income (Loss)(5)

   $ 224       $ 176       $ 117       $ (241   $ 276   

Nine Months Ended September 30, 2012:

           

Revenue(4)

   $ 803       $ 656       $ 339       $      $ 1,798   

Operating Income (Loss)(5)

   $ 204       $ 158       $ 123       $ (312   $ 173   

 

 

Notes to Geographic Financial Information:

 

(1)   Americas includes the United States, Canada and Latin America. Revenue in the United States was $682 million and $646 million for the first nine months of 2013 and 2012, respectively.

 

(2)   EMEA includes countries in Europe, the Middle East and Africa.

 

(3)   Asia Pacific includes Japan, Australia and other countries in the Asia Pacific region. Revenue in Japan was $200 million and $214 million for the first nine months of 2013 and 2012, respectively.

 

(4)   Revenue relates to external clients and is primarily based on the location of the client. Revenue for the geographic regions includes the impact of foreign exchange in converting results into U.S. dollars.

 

(5)   Operating Income for the three geographic regions does not reflect the allocation of certain expenses that are maintained in Corporate and Other and as such, is not a true measure of the respective regions’ profitability. The Operating Income amounts for the geographic segments include the impact of foreign exchange in converting results into U.S. dollars.

 

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Note 14. Earnings per share

The following table reconciles the basic and diluted weighted average shares outstanding:

 

(Shares in millions)   

As of

September 30,
2013

    

As of

September 30,
2012

 

 

 

Basic weighted-average common shares outstanding

     2,800         2,794   

Effect of dilutive options

             81   
  

 

 

 

Diluted weighted-average common shares outstanding

     2,800         2,875   

 

 

Anti-dilutive weighted average outstanding stock options of approximately 98 million and 12 million were not included in the diluted earnings per share calculations for the nine months ended September 30, 2013 and 2012, respectively, because their inclusion would have the effect of increasing earnings per share. Stock options will have a dilutive effect under the treasury method only when the respective period’s average market value of the Company’s common stock exceeds the exercise proceeds.

Unaudited pro forma earnings per share

The Company declared and paid a dividend to shareholders of $753 million in August 2013 and $1,202 in October 2012. Under certain interpretations of the Securities and Exchange Commission, dividends declared in the twelve months preceding an initial public offering (“IPO”) are deemed to be in contemplation of the offering with the intention of repayment out of the offering proceeds to the extent that the dividends exceeded earnings during such period. As such, the unaudited pro forma loss per share for 2013 give effect to the number of shares whose proceeds are deemed to be necessary to pay the dividend amount that is in excess of earnings during 2013, up to the amount of shares assumed to be issued in the offering.

The below table sets forth the computation of unaudited pro forma basic and diluted loss per share as of September 30, 2013:

 

(in millions, except per share data)    Basic     Diluted  

 

 

Net loss attributable to the Company

   $ (—   $ (—
  

 

 

 

Weighted-average shares outstanding

     2,800        2,800   

Shares assumed in offering to pay dividends in excess of earnings(1)

    
  

 

 

 

Pro forma weighted-average shares outstanding

    
  

 

 

 

Pro forma earnings per shares

   $        $     

 

(1)

   Dividends declared in last twelve months    $ 1,955   
   Net loss attributable to the Company in the last twelve months    $ (53
     

 

 

 
   Dividends in excess of earnings    $ 1,955   
   Assumed IPO price   
   Shares issued in the IPO to pay dividends in excess of earnings   

 

  

 

  

 

 

 

Note 15. Subsequent events

During the fourth quarter of 2013, the Company completed three acquisitions: HCM-BIOS (France), Pygargus AB (Sweden) and Amundsen Group, Inc. (U.S.) for a total cost for approximately $25 million. The purchase price allocations for these acquisitions have not yet been finalized.

 

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             Shares

IMS Health Holdings, Inc.

Common Stock

 

LOGO

Prospectus

 

 

J.P. Morgan   Goldman, Sachs & Co.   Morgan Stanley

 

BofA Merrill Lynch   Barclays   Deutsche Bank Securities   Wells Fargo Securities

                    , 2014

Through and including                         , 2014 (25 days after the commencement of this offering), all dealers that effect transactions in shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

 


Table of Contents

Part II

Information not required in prospectus

Item 13. Other expenses of issuance and distribution

The following table sets forth the costs and expenses, other than the underwriting discounts and commissions, payable by the registrant in connection with the sale of common stock being registered. All amounts are estimates except for the SEC registration fee, the FINRA filing fee and the NYSE listing fee.

 

Item    Amount to be
paid
 

 

 

SEC registration fee

   $ 12,880   

FINRA filing fee

     15,500   

NYSE listing fee

     *   

Blue sky fees and expenses

     *   

Printing and engraving expenses

     *   

Legal fees and expenses

     *   

Accounting fees and expenses

     *   

Transfer Agent fees and expenses

     *   

Miscellaneous expenses

     *   
  

 

 

 

Total

   $ *   

 

 

 

*   To be completed by amendment.

Item 14. Indemnification of directors and officers

Section 102(b)(7) of the General Corporation Law of the State of Delaware (the “DGCL”) enables a corporation to eliminate or limit the personal liability of a director for violations of the director’s fiduciary duty, except (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for liability of directors for unlawful payment of dividends or unlawful stock purchase or redemptions pursuant to Section 174 of the DGCL or (iv) for any transaction from which a director derived an improper personal benefit. Our certificate of incorporation includes a provision that eliminates the personal liability of directors for monetary damages for actions taken as a director to the fullest extent authorized by the DGCL.

Section 145(a) of the DGCL provides in relevant part that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that such person is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another entity, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall

 

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not, of itself, create a presumption that such person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.

Section 145(b) of the DGCL provides in relevant part that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another entity, against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

Our certificate of incorporation provides that we will indemnify our directors and officers to the fullest extent permitted by law. Our certificate of incorporation also provides that the indemnification and advancement of expenses provided by, or granted pursuant to the certificate of incorporation, are not exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or otherwise. Section 145(f) of the DGCL further provides that a right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation shall not be eliminated or impaired by an amendment to such provision after the occurrence of the act or omission which is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought.

We have also entered into indemnification agreements with certain of our directors and officers. Such agreements generally provide for indemnification by reason of being our director or officer, as the case may be. These agreements are in addition to the indemnification provided by our certificate of incorporation and bylaws.

The underwriting agreement provides that the underwriters are obligated, under certain circumstances, to indemnify our directors, officers and controlling persons against certain liabilities, including liabilities under the Securities Act. Please refer to the form of underwriting agreement filed as Exhibit 1.1 hereto.

We also maintain officers’ and directors’ liability insurance that insures against liabilities that our officers and directors may incur in such capacities. Section 145(g) of the DGCL provides that a corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another entity, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under that section.

 

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Item 15. Recent sales of unregistered securities

In the three years preceding the filing of this registration statement, we have issued the following securities that were not registered under the Securities Act. No underwriters were involved in any of the following transactions.

Equity Securities

During the year ended December 31, 2011, we issued a total of 2,060,000 shares of common stock in connection with the cashless exercise of stock options. We also issued 2,050,000 shares of common stock in connection with restricted stock units previously issued and granted 100,000 restricted stock units during this period. We also granted to certain eligible participants 18,500,000 options to purchase our common stock at a weighted average exercise price of $1.12, as well as 1,270,000 cash-settled stock appreciation rights (herein referred to as “phantom options”) that will be settled in cash in connection with this offering. These securities were issued without registration in reliance on the exemptions afforded by Section 4(a)(2) of the Securities Act and Rule 701 promulgated under the Securities Act.

During the year ended December 31, 2012, we issued a total of 3,532,000 shares of common stock in connection with the cashless exercise of stock options. We also issued 13,100,000 shares of common stock in connection with restricted stock units previously issued and granted 164,286 restricted stock units during this period. We also granted to certain eligible participants 9,790,000 options to purchase our common stock at a weighted average exercise price of $1.24, as well as 1,620,000 phantom options that will be settled in cash in connection with this offering. These securities were issued without registration in reliance on the exemptions afforded by Section 4(a)(2) of the Securities Act and Rule 701 promulgated under the Securities Act.

Since December 31, 2012, we have issued a total of 2,780,000 shares of common stock in connection with the cashless exercise of stock options. We also issued 142,856 shares of common stock in connection with restricted stock units previously issued and granted 574,376 restricted stock units during this period. We also granted to certain eligible participants 14,625,000 options to purchase our common stock at a weighted average exercise price of $1.30, as well as 5,110,000 phantom options that will be settled in cash in connection with this offering. These securities were issued without registration in reliance on the exemptions afforded by Section 4(a)(2) of the Securities Act and Rule 701 promulgated under the Securities Act.

Debt Securities

On October 23, 2012, IMS Health, Incorporated issued an aggregate principal amount of $999.6 million of 12.5% Senior Notes in connection with an exchange offer and consent solicitation to exchange previously issued notes for these notes. The 12.5% Senior Notes were issued without registration in reliance on the exemptions afforded by Section 4(a)(2) of the Securities Act, as a transaction by an issuer not involving a public offering, to “qualified institutional buyers” in the United States as defined in Rule 144A of the Securities Act, and outside the United States pursuant to Regulation S under the Securities Act.

On October 23, 2012 IMS Health, Incorporated issued an aggregate principal amount of $500.0 million of 6% Senior Notes, which was used to fund a distribution to the stockholders of IMS Health Holdings, Inc. Interest on the 6% Senior Notes is payable semi-annually on May 1 and November 1 of each year. The initial purchasers for the 6% Senior notes were Goldman, Sachs &

 

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Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated. The 6% Senior Notes were offered and sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act or to non-U.S. investors outside the United States in compliance with Regulation S of the Securities Act.

On August 6, 2013, Healthcare Technology Intermediate, Inc. issued an aggregate principal amount of $750.0 million of Senior PIK Notes due 2018, which was used to fund a distribution to the stockholders of IMS Health Holdings, Inc. The initial purchasers for the Senior PIK Notes were Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, Fifth Third Securities, Inc., Mizuho Securities USA Inc., RBC Capital Markets, LLC, SunTrust Robinson Humphrey, Inc. and TPG Capital BD, LLC. The Senior PIK Notes were offered and sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act or to non-U.S. investors outside the United States in compliance with Regulation S of the Securities Act.

Item 16. Exhibits and financial statement schedules

(a) Exhibits

See Exhibit Index following the signature page.

(b) Financial statement schedules

Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.

Item 17. Undertakings

The undersigned Registrant hereby undertakes:

(1) That for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) That for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus 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) For the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement

 

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will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(4) 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:

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

(ii) 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;

(iii) 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

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(5) 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.

(6) To provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

 

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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 the city of Danbury, Connecticut on January 2, 2014.

 

IMS HEALTH HOLDINGS, INC.
By:  

/s/ Ari Bousbib

Name:    Ari Bousbib
Title:   Chairman, Chief Executive Officer and President

***

Power of attorney

The undersigned directors and officers of IMS Health Holdings, Inc. hereby appoint each of Ari Bousbib, Ronald E. Bruehlman and Harvey A. Ashman, as attorney-in-fact for the undersigned, with full power of substitution for, and in the name, place and stead of the undersigned, to sign and file with the Securities and Exchange Commission under the Securities Act of 1933, any and all amendments (including post-effective amendments) and exhibits to this registration statement on Form S-1 (or any other registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933) and any and all applications and other documents to be filed with the Securities and Exchange Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite and necessary or desirable, hereby ratifying and confirming all that said attorney-in-fact, or his 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.

 

Signature    Title   Date

 

/s/ Ari Bousbib

Ari Bousbib

  

Chairman of the Board of Directors, Chief Executive Officer and President

(Principal Executive Officer)

  January 2, 2014

/s/ Ronald E. Bruehlman

Ronald E. Bruehlman

  

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

 

January 2, 2014

/s/ Harshan Bhangdia

Harshan Bhangdia

   Vice President and Controller (Principal Accounting Officer)  

January 2, 2014

/s/ Bryan M. Taylor

Bryan M. Taylor

   Director  

January 2, 2014

 

 

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Signature    Title   Date

 

/s/ André Bourbonnais

André Bourbonnais

   Director  

January 2, 2014

/s/ John G. Danhakl

John G. Danhakl

   Director  

January 2, 2014

/s/ David Lubek

David Lubek

   Director  

January 2, 2014

/s/ Todd B. Sisitsky

Todd B. Sisitsky

   Director  

January 2, 2014

/s/ Ronald A. Rittenmeyer

Ronald A. Rittenmeyer

   Director  

January 2, 2014

/s/ Jeffrey K. Rhodes

Jeffrey K. Rhodes

   Director  

January 2, 2014

/s/ Nehal Raj

Nehal Raj

   Director  

January 2, 2014

/s/ Sharad S. Mansukani

Sharad S. Mansukani

   Director  

January 2, 2014

 

 

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Exhibit
number
   Exhibit title

 

  1.1*    Form of Underwriting Agreement
  3.1*    Amended and Restated Certificate of Incorporation of IMS Health Holdings, Inc.
  3.2*    Amended and Restated Bylaws of IMS Health Holdings, Inc.
  4.1    Indenture, dated February 26, 2010, among IMS Health Incorporated, as Issuer, the Guarantors named on the Signature Pages thereto, and U.S. Bank National Association, as Trustee
  4.2    First Supplemental Indenture, dated as of March 14, 2011, among IMS Health Incorporated, as Issuer, the Guarantors listed on the signature pages thereto, and U.S. Bank National Association, as Trustee
  4.3    Second Supplemental Indenture, dated as of July 8, 2011, among Med-Vantage, Inc., as Guaranteeing Subsidiary, and U.S. Bank National Association, as Trustee
  4.4    Third Supplemental Indenture, dated as of September 28, 2012, among TTC Acquisition Corporation and The Tar Heel Trading Company, LLC, each as a Guaranteeing Subsidiary, and U.S. Bank National Association, as Trustee
  4.5    Fourth Supplemental Indenture, dated as of October 24, 2012, among IMS Health Incorporated, as Issuer, the Guarantors listed on the signature pages thereto, and U.S. Bank National Association, as Trustee
  4.6    Fifth Supplemental Indenture, dated as of May 28, 2013, between Appature Inc., as Guaranteeing Subsidiary, and U.S. Bank National Association, as Trustee
  4.7    Exchange Note Indenture, dated as of October 24, 2012, among IMS Health Incorporated, as Issuer, the Guarantors named on the signature pages thereto, and U.S. Bank National Association, as Trustee
  4.8    First Supplemental Indenture, dated as of May 28, 2013, between Appature Inc., as Guaranteeing Subsidiary, and U.S. Bank National Association, as Trustee
  4.9    Senior Note Indenture, dated as of October 24, 2012, among IMS Health Incorporated, as Issuer, the Guarantors party thereto, and Wells Fargo Bank, National Association, as Trustee
  4.10    First Supplemental Indenture, dated as of May 28, 2013, between Appature Inc., as Guaranteeing Subsidiary, and Wells Fargo Bank, National Association, as Trustee
  4.11    Indenture, dated as of August 6, 2013, between Healthcare Technology Intermediate, Inc., as Issuer, and Wells Fargo Bank, National Association, as Trustee
  4.12    Registration and Preemptive Rights Agreement, dated as of February 26, 2010, by and among IMS Health Holdings, Inc. and each of the Managers and Manager Designees named therein
  5.1*    Opinion of Ropes & Gray LLP
10.1*    Amended and Restated Shareholders’ Agreement by and among TPG Partners V, L.P., TPG FOF V-A, L.P., TPG FOF V-B, L.P., TPG Partners VI, L.P., TPG FOF VI SPV, L.P., TPG Biotechnology Partners III, L.P., TPG Iceberg Co-Invest LLC, CPP Investment Board Private Holdings Inc., Green Equity Investors V, L.P., Green Equity Investors Side V, L.P., LPG Iceberg Coinvest, LLC and IMS Health Holdings, Inc.
10.2    Management Stockholders Agreement, dated as of February 26, 2010, by and among IMS Health Holdings, Inc., Healthcare Technology Acquisition, Inc., IMS Health Incorporated, and the Investors and the Managers named therein

 


Table of Contents
Exhibit
number
   Exhibit title

 

10.3*    Management Services Agreement by and among Healthcare Technology Acquisition, Inc., Healthcare Technology Intermediate, Inc., Healthcare Technology Intermediate Holdings, Inc., IMS Health Holdings, Inc., a Delaware corporation, TPG Capital, L.P., TPG Growth, LLC, CPP Investment Board Private Holdings Inc. and Leonard Green & Partners, L.P.
10.4    Second Amended and Restated Credit and Guaranty Agreement, dated as of October 24, 2012, among IMS Health Incorporated, as a Borrower and a Guarantor, IMS AG, as a Borrower, IMS Japan K.K., as a Borrower, Healthcare Technology Intermediate Holdings, Inc., as a Guarantor, Certain Subsidiaries of IMS Health Incorporated, as Guarantors, Various Lenders, Bank of America, N.A. and Goldman Sachs Lending Partners LLC, as Joint Lead Arrangers and Joint Lead Bookrunners, Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender, and Issuing Bank, Goldman Sachs Lending Partners LLC, as Syndication Agent, Barclays Bank PLC, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association, as Co-Documentation Agents, and Fifth Third Bank, Mizuho Corporate Bank, Ltd., RBC Capital Markets, Suntrust Bank as Senior Managing Agents
10.5    First Amendment to the Second Amended and Restated Credit and Guaranty Agreement, dated as of February 6, 2013, among IMS Health Incorporated, IMS AG, IMS Japan K.K., each a Borrower, Bank of America, N.A., as Administrative Agent, each Tranche B-1 Dollar Term Lender, and each Tranche B-1 Euro Term Lender
10.6    2013 IMS Health Annual Incentive Compensation Plan
10.7    IMS Health Incorporated Employee Protection Plan (as amended and restated effective as of September 1, 2009)
10.8    First Amendment to the IMS Health Incorporated Employee Protection Plan (effective January 1, 2011)
10.9    Second Amendment to the IMS Health Incorporated Employee Protection Plan (effective January 1, 2012)
10.10    IMS Health Incorporated Defined Contribution Executive Retirement Plan (as amended and restated)
10.11    IMS Health Incorporated Retirement Excess Plan (as amended and restated effective as of January 1, 2005)
10.12    First Amendment to the IMS Health Incorporated Retirement Excess Plan (dated March 17, 2009)
10.13    Second Amendment to the IMS Health Incorporated Retirement Excess Plan (dated December 8, 2009)
10.14    Third Amendment to the IMS Health Incorporated Retirement Excess Plan (dated April 5, 2011)
10.15    IMS Health Incorporated Savings Equalization Plan (as amended and restated effective as of January 1, 2011)
10.16    Healthcare Technology Holdings, Inc. 2010 Equity Incentive Plan (as amended and restated)
10.17    Form of Time- and Performance-Based Stock Option Award under the 2010 Equity Incentive Plan

 


Table of Contents
Exhibit
number
   Exhibit title

 

10.18    Form of Time-Based Stock Option Award under the 2010 Equity Incentive Plan
10.19    Form of Director Stock Option Award under the 2010 Equity Incentive Plan
10.20    Form of Restricted Stock Unit Award under the 2010 Equity Incentive Plan
10.21    Form of Director Restricted Stock Unit Award under the 2010 Equity Incentive Plan
10.22    Form of Rollover Stock Appreciation Right Award under the 2010 Equity Incentive Plan
10.23    Senior Management Nonstatutory Option Agreement between Healthcare Technology Holdings, Inc. and Ari Bousbib dated September 1, 2010
10.24    Senior Management Nonstatutory Option Agreement between Healthcare Technology Holdings, Inc. and Ari Bousbib dated December 1, 2010
10.25*    Amended and Restated Employment Agreement among IMS Health Holdings, Inc., IMS Health Incorporated and Ari Bousbib
10.26*    2014 Equity Incentive Plan
10.27*    Form of Director and Officer Indemnification Agreement
21.1    List of Subsidiaries
23.1    Consent of PricewaterhouseCoopers LLP
23.2    Consent of PricewaterhouseCoopers LLP
23.3*    Consent of Ropes & Gray LLP (included in the opinion filed as Exhibit 5.1)
24.1    Powers of Attorney (included in the signature pages of this Registration Statement)

 

 

*   To be filed by amendment.

Exhibit 4.1

Execution Version

 

 

 

INDENTURE

Dated as of February 26, 2010

Among

IMS HEALTH INCORPORATED (formerly known as HEALTHCARE TECHNOLOGY ACQUISITION, INC.),

as Issuer

THE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO

and

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

12  1 2 % SENIOR NOTES DUE 2018

 

 

 


CROSS-REFERENCE TABLE*

 

Trust Indenture Act Section

  

Indenture Section

310(a)(1)    7.10
      (a)(2)    7.10
      (a)(3)    N.A.
      (a)(4)    N.A.
      (a)(5)    7.10
      (b)    7.10
      (c)    N.A.
311(a)    7.11
      (b)    7.11
      (c)    N.A.
312(a)    2.05
      (b)    14.03
      (c)    14.03
313(a)    7.06
      (b)(1)    N.A.
      (b)(2)    7.06; 7.07
      (c)    7.06; 14.02
      (d)    7.06
314(a)    4.03; 14.02; 14.05
      (b)    N.A.
      (c)(1)    14.04
      (c)(2)    14.04
      (c)(3)    N.A.
      (d)    N.A.
      (e)    14.05
      (f)    N.A.
315(a)    7.01
      (b)    7.05; 14.02
      (c)    7.01
      (d)    7.01
      (e)    6.14
316(a)(last sentence)    2.09
      (a)(1)(A)    6.05
      (a)(1)(B)    6.04
      (a)(2)    N.A.
      (b)    6.07
      (c)    2.12; 9.04
317(a)(1)    6.08
      (a)(2)    6.12
      (b)    2.04
318(a)    14.01
      (b)    N.A.
      (c)    14.01

N.A. means not applicable.

* This Cross-Reference Table is not part of the Indenture.

 

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TABLE OF CONTENTS

 

        

Page

 
ARTICLE 1   
DEFINITIONS AND INCORPORATION BY REFERENCE   
Section 1.01   Definitions      1   
Section 1.02   Other Definitions      33   
Section 1.03   Incorporation by Reference of Trust Indenture Act      34   
Section 1.04   Rules of Construction      34   
Section 1.05   Acts of Holders      35   
Section 1.06   Predecessor to the Issuer      36   
ARTICLE 2   
THE NOTES   
Section 2.01   Form and Dating; Terms      37   
Section 2.02   Execution and Authentication      38   
Section 2.03   Registrar and Paying Agent      39   
Section 2.04   Paying Agent to Hold Money in Trust      39   
Section 2.05   Holder Lists      39   
Section 2.06   Transfer and Exchange      39   
Section 2.07   Replacement Notes      52   
Section 2.08   Outstanding Notes      52   
Section 2.09   Treasury Notes      53   
Section 2.10   Temporary Notes      53   
Section 2.11   Cancellation      53   
Section 2.12   Defaulted Interest      53   
Section 2.13   CUSIP Numbers      54   
ARTICLE 3   
REDEMPTION   
Section 3.01   Notices to Trustee      54   
Section 3.02   Selection of Notes to Be Redeemed or Purchased      54   
Section 3.03   Notice of Redemption      55   
Section 3.04   Effect of Notice of Redemption      56   
Section 3.05   Deposit of Redemption or Purchase Price      56   
Section 3.06   Notes Redeemed or Purchased in Part      56   
Section 3.07   Optional Redemption      56   
Section 3.08   Mandatory Redemption      57   
Section 3.09   Offers to Repurchase by Application of Excess Proceeds      57   

 

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Page

 
ARTICLE 4   
COVENANTS   
Section 4.01   Payment of Notes      59   
Section 4.02   Maintenance of Office or Agency      60   
Section 4.03   Reports and Other Information      60   
Section 4.04   Compliance Certificate      63   
Section 4.05   Taxes      63   
Section 4.06   Stay, Extension and Usury Laws      63   
Section 4.07   Limitation on Restricted Payments      63   
Section 4.08   Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries      70   
Section 4.09   Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock      72   
Section 4.10   Asset Sales      78   
Section 4.11   Transactions with Affiliates      80   
Section 4.12   Liens      82   
Section 4.13   Corporate Existence      83   
Section 4.14   Offer to Repurchase Upon Change of Control      83   
Section 4.15   Limitation on Guarantees of Indebtedness by Restricted Subsidiaries      85   
Section 4.16   Activities of Holdings      86   
Section 4.17   Business Activities      86   
Section 4.18   Limitations on Sale and Leaseback Transactions      86   
Section 4.19   Maintenance of Properties      86   
Section 4.20   Insurance      87   
Section 4.21   Books and Records      87   
Section 4.22   Compliance with Laws      87   
ARTICLE 5   
SUCCESSORS   
Section 5.01   Merger, Consolidation or Sale of All or Substantially All Assets      87   
Section 5.02   Successor Company Substituted      89   
ARTICLE 6   
DEFAULTS AND REMEDIES   
Section 6.01   Events of Default      89   
Section 6.02   Acceleration      92   
Section 6.03   Other Remedies      93   
Section 6.04   Waiver of Past Defaults      93   
Section 6.05   Control by Majority      93   
Section 6.06   Limitation on Suits      94   
Section 6.07   Rights of Holders of Notes to Receive Payment      94   
Section 6.08   Collection Suit by Trustee      94   
Section 6.09   Restoration of Rights and Remedies      94   
Section 6.10   Rights and Remedies Cumulative      95   
Section 6.11   Delay or Omission Not Waiver      95   

 

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Page

 
Section 6.12   Trustee May File Proofs of Claim      95   
Section 6.13   Priorities      95   
Section 6.14   Undertaking for Costs      96   
ARTICLE 7   
TRUSTEE   
Section 7.01   Duties of Trustee      96   
Section 7.02   Rights of Trustee      97   
Section 7.03   Individual Rights of Trustee      98   
Section 7.04   Trustee’s Disclaimer      98   
Section 7.05   Notice of Defaults      99   
Section 7.06   Reports by Trustee to Holders of the Notes      99   
Section 7.07   Compensation and Indemnity      99   
Section 7.08   Replacement of Trustee      100   
Section 7.09   Successor Trustee by Merger, etc.      101   
Section 7.10   Eligibility; Disqualification      101   
Section 7.11   Preferential Collection of Claims Against Issuer      101   
ARTICLE 8   
LEGAL DEFEASANCE AND COVENANT DEFEASANCE   
Section 8.01   Option to Effect Legal Defeasance or Covenant Defeasance      101   
Section 8.02   Legal Defeasance and Discharge      101   
Section 8.03   Covenant Defeasance      102   
Section 8.04   Conditions to Legal or Covenant Defeasance      103   
Section 8.05   Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions      104   
Section 8.06   Repayment to Issuer      104   
Section 8.07   Reinstatement      105   
ARTICLE 9   
AMENDMENT, SUPPLEMENT AND WAIVER   
Section 9.01   Without Consent of Holders of Notes      105   
Section 9.02   With Consent of Holders of Notes      106   
Section 9.03   Compliance with Trust Indenture Act      107   
Section 9.04   Revocation and Effect of Consents      107   
Section 9.05   Notation on or Exchange of Notes      108   
Section 9.06   Trustee to Sign Amendments, etc.      108   
Section 9.07   Payment for Consent      108   

 

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Page

 
ARTICLE 10   
[RESERVED]   
ARTICLE 11   
GUARANTEES   
Section 11.01   Guarantee      109   
Section 11.02   Limitation on Guarantor Liability      110   
Section 11.03   Execution and Delivery      110   
Section 11.04   Subrogation      111   
Section 11.05   Benefits Acknowledged      111   
Section 11.06   Release of Guarantees      111   
ARTICLE 12   
[RESERVED]   
ARTICLE 13   
SATISFACTION AND DISCHARGE   
Section 13.01   Satisfaction and Discharge      112   
Section 13.02   Application of Trust Money      113   
ARTICLE 14   
MISCELLANEOUS   
Section 14.01   Trust Indenture Act Controls      113   
Section 14.02   Notices      114   
Section 14.03   Communication by Holders of Notes with Other Holders of Notes      115   
Section 14.04   Certificate and Opinion as to Conditions Precedent      115   
Section 14.05   Statements Required in Certificate or Opinion      115   
Section 14.06   Rules by Trustee and Agents      116   
Section 14.07   No Personal Liability of Directors, Officers, Employees and Stockholders      116   
Section 14.08   Governing Law      116   
Section 14.09   Waiver of Jury Trial      116   
Section 14.10   Force Majeure      116   
Section 14.11   No Adverse Interpretation of Other Agreements      116   
Section 14.12   Successors      117   
Section 14.13   Severability      117   
Section 14.14   Counterpart Originals      117   
Section 14.15   Table of Contents, Headings, etc.      117   
Section 14.16   Qualification of Indenture      117   

 

—iv—


EXHIBITS   
Exhibit A    Form of Note
Exhibit B    Form of Certificate of Transfer
Exhibit C    Form of Certificate of Exchange
Exhibit D    Form of Supplemental Indenture to Be Delivered by Subsequent Guarantors

 

—i—


INDENTURE, dated as of February 26, 2010, among Healthcare Technology Acquisition, Inc., a Delaware corporation that shall be merged with and into IMS Health Incorporated, a Delaware corporation as the surviving corporation, as the Issuer (as defined herein), the Guarantors (as defined herein) listed on the signature pages hereto and U.S. Bank National Association, as Trustee.

W I T N E S S E T H

WHEREAS, on or around the date hereof, Healthcare Technology Acquisition, Inc. shall be merged with and into IMS Health Incorporated, with IMS Health Incorporated continuing as the surviving corporation, and, by its execution hereof and by operation of law, assuming all of the obligations of Healthcare Technology Acquisition, Inc. under this Indenture;

WHEREAS, the Issuer has duly authorized the creation of an issue of $1,000,000,000 aggregate principal amount of 12  1 2 % Senior Notes due 2018 (the “ Initial Notes ”);

WHEREAS, the Issuer may authorize the creation of one or more issues of Additional Notes (as defined below), as more particularly, described herein; and

WHEREAS, the Issuer and each of the Guarantors has duly authorized the execution and delivery of this Indenture.

NOW, THEREFORE, each of the Issuer, the Guarantors and the Trustee agrees as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Notes.

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01 Definitions .

144A Global Note ” means a Global Note substantially in the form of Exhibit A hereto, bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.

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, including Indebtedness 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.

Acquisition Agreement ” means the Agreement and Plan of Merger, dated November 5, 2009, among IMS Health Incorporated, Holdings and Healthcare Technology Acquisition, Inc., together with all exhibits, schedules, documents, agreements, and instruments executed and delivered in connection therewith, as the same may be amended, or modified in accordance with the terms and provisions thereof.


Additional Notes ” means the Notes (other than the Initial Notes) issued under this Indenture in accordance with the terms of this Indenture, including Sections 2.01 and 2.02 hereof, as part of the same series as the Initial Notes ranking equally with the Initial Notes in all respects (other than the issuance dates). The Initial Notes and any Additional Notes subsequently issued under this Indenture shall be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions, and offers to purchase.

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.

Agent ” means any Registrar or Paying Agent.

Applicable Premium ” means, with respect to any Note on any Redemption Date, the excess, if any, of (a) the present value at such Redemption Date of (i) the redemption price of such Note at March 1, 2014 (each such redemption price being set forth in Section 3.07(d) hereof), plus (ii) all required remaining scheduled interest payments due on such Note through March 1, 2014 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over (b) the then outstanding principal amount of such Note.

Applicable Procedures ” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and/or Clearstream that apply to such transfer or exchange.

Asset Sale ” means:

(1) the sale, conveyance, transfer, assignment, lease (other than operating leases entered into in the ordinary course of business) or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a Sale and Lease-Back Transaction) of the Issuer or any of its Restricted Subsidiaries (each referred to in this definition as a “disposition”); or

(2) the issuance or sale of Equity Interests of any Restricted Subsidiary, whether in a single transaction or a series of related transactions (other than Disqualified Stock or Preferred Stock issued in compliance with Section 4.09 hereof);

in each case, other than:

(a) any disposition of Cash Equivalents or obsolete or worn out equipment, vehicles or other similar assets in the ordinary course of business 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 disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to Section 5.01 hereof or any disposition that constitutes a Change of Control pursuant to this Indenture;

 

—2—


(c) the making of any Restricted Payment that is permitted to be made, and is made, under Section 4.07 hereof or the making of any Permitted Investment;

(d) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of related transactions with an aggregate fair market value of less than $10,000,000;

(e) any (i) disposition of property or assets by the Issuer or a Restricted Subsidiary or (ii) issuance of securities by a Restricted Subsidiary of the Issuer, in each case, to the Issuer, any of its Wholly-Owned Restricted Subsidiaries or any Subsidiary Guarantor;

(f) to the extent allowable under Section 1031 of the Code, any exchange of like property (excluding any boot thereon) for use in a Similar Business between the Issuer or any of its Restricted Subsidiaries and another Person with a fair market value in an aggregate amount for all such exchanges from the Closing Date not to exceed $25,000,000;

(g) any leases, subleases, assignments, licenses or sublicenses of any real or personal property, including any intellectual property, in the ordinary course of business;

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

(i) the granting of Liens not prohibited by this Indenture or foreclosures, expropriations, condemnations or similar actions with respect to assets;

(j) any financing transaction with respect to property built or acquired by the Issuer or any Restricted Subsidiary after the Closing Date, including Sale and Leaseback Transactions, in each case, permitted by this Indenture;

(k) dispositions of accounts receivable in connection with the collection or compromise thereof in the ordinary course of business and sales of accounts receivable, or participations therein, in connection with any Receivables Facility to the extent permitted by Section 4.09(b)(12) hereof;

(l) any surrender or waiver of contract rights or the settlement, release or surrender of contract rights or other litigation claims in the ordinary course of business; and

(m) the voluntary unwinding of any Hedging Obligations.

Attributable Debt ” in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended); provided, however that if such Sale and Leaseback Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby shall be determined in accordance with the definition of “Capitalized Lease Obligation”.

Bankruptcy Law ” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

 

—3—


Broker-Dealer ” has the meaning set forth in the Registration Rights Agreement.

Business Day ” means each day which is not a Legal Holiday.

Calculation Date ” means the date on which the event for which the calculation of the Consolidated Secured Leverage Ratio or the Fixed Charge Coverage Ratio, as applicable, shall occur.

Capital Stock ” means:

(1) in the case of a corporation, corporate stock or shares in the capital of such corporation;

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital 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) prepared in accordance with GAAP.

Capitalized Software Expenditures ” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Restricted Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of a Person and its Restricted Subsidiaries.

Cash Equivalents ” means:

(1) United States dollars;

(2) (a) sterling, yen, Swiss francs, euros, or any national currency of any participating member state of the EMU;

(b) such local currencies held by the Issuer or any Restricted Subsidiary from time to time in the ordinary course of business;

(3) securities issued or directly and fully and unconditionally guaranteed or insured by the U.S. government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of the U.S. government with maturities of 24 months or less from the date of acquisition;

(4) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus of not less than $500,000,000 in the case of U.S. banks and $100,000,000 (or the U.S. dollar equivalent as of the date of determination) in the case of non-U.S. banks;

 

—4—


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

(6) commercial paper rated at least P-1 by Moody’s or at least A-1 by S&P (or, if at any time neither Moody’s or S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 24 months after the date of creation thereof;

(7) marketable short-term money market and similar securities having a rating of at least P-1 or A-1 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 24 months after the date of creation thereof;

(8) readily marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof having an Investment Grade Rating from either Moody’s or S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) with maturities of 24 months or less from the date of acquisition;

(9) Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency);

(10) readily marketable direct obligations issued by any foreign government or any political subdivision or public instrumentality thereof having an Investment Grade Rating from either Moody’s or S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) with maturities of 24 months or less from the date of acquisition; and

(11) investment funds investing substantially all of their assets in securities of the types described in clauses (1) through (10) above.

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (1) and (2) above, provided that such amounts are converted into any currency listed in clauses (1) and (2) as promptly as practicable and in any event within ten Business Days following the receipt of such amounts. In the case of Investments by any Foreign Subsidiary that is a Restricted Subsidiary or Investments made in a country outside the United States of America, Cash Equivalents shall also include (i) investments of the type and maturity described in clauses (1) through (11) above of foreign obligors, which Investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies and (ii) other short-term investments utilized by Foreign Subsidiaries that are Restricted Subsidiaries in accordance with normal investment practices for cash management in investments analogous to the foregoing investments in clauses (1) through (11) above.

Cash Management Obligations ” shall mean obligations of the Issuer or any Restricted Subsidiary under any agreement or arrangement with a lender under the Credit Facilities or an affiliate of

 

—5—


such lender at the time such agreement or arrangement is entered into and pursuant to which such lender or affiliate provides treasury, depository, overdraft, credit or debit card, purchase card, electronic funds transfer (including automated clearing house fund transfer services) and other cash management services to the Issuer or its Restricted Subsidiaries in the ordinary course of their businesses.

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

(1) the sale, lease, transfer or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Issuer and its Subsidiaries, taken as a whole (other than by way of merger, amalgamation or consolidation), to any Person other than to any Permitted Holder made in compliance with Article 5 hereof; or

(2) prior to the first Qualified Public Offering to occur after the Closing Date, (x) Permitted Holders directly or indirectly cease to beneficially own (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) Capital Stock of Holdings representing more than 50% of the total voting power and economic power of all of the outstanding Capital Stock of Holdings (for avoidance of doubt, exclusive of debt securities which are convertible into Capital Stock until converted), or (y) TPG Group directly or indirectly ceases to beneficially own (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) Capital Stock of Holdings representing 33.33% or more of the total voting power and economic power of all of the outstanding Capital Stock of Holdings (for avoidance of doubt, exclusive of debt securities which are convertible into Capital Stock until converted); or

(3) at any time on or after the first Qualified Public Offering to occur after the Closing Date, the Issuer becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) that both (x) any Person (other than any Permitted Holder) or Persons (other than any Permitted Holder) that are together a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any such 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), has acquired, directly or indirectly, 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) 40% or more of the total voting power or economic power of all of the outstanding Capital Stock of Holdings (for avoidance of doubt, exclusive of debt securities which are convertible into Capital Stock until converted) and (y) the Permitted Holders do not directly or indirectly beneficially own (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) a greater percentage of both the voting and economic power of all of such outstanding Capital Stock of Holdings than the Person or group referred to in the foregoing clause (3)(x).

Clearstream ” means Clearstream Banking, Société Anonyme.

Closing Date ” means February 26, 2010, the date of the issuance of the Initial Notes.

Code ” means the Internal Revenue Code of 1986, as amended from time to time and the rules and regulations promulgated thereunder from time to time.

Consolidated Depreciation and Amortization Expense ” means with respect to any Person for any period, the total amount of depreciation and amortization expense of such Person and its Restricted Subsidiaries including the amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and Capitalized Software Expenditures of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

 

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Consolidated Interest Expense ” means, with respect to any Person for any period, without duplication, the sum of:

(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) all commissions, discounts, yield and other fees and charges (including any interest expense) related to any Receivables Facility, (d) 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), (e) the interest component of Capitalized Lease Obligations, and (f) net payments, if any, made (less net payments, if any received), pursuant to interest rate Hedging Obligations with respect to Indebtedness and excluding (x) any expense resulting from the discounting of any Indebtedness in connection with the application of recapitalization accounting or purchase accounting, as the case may be, in connection with the Transaction or any acquisition, (y) the amortization of deferred financing fees, debt issuance costs and similar fees and expenses (other than, for avoidance of doubt, the amortization of original issue discount referred to in clause (a) above), and (z) the expensing of bridge, commitment and other financing fees; 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.

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

Consolidated Net Income ” means, with respect to any Person for any period, the aggregate of the Net Income, of such Person 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 net after tax effect of extraordinary, nonrecurring or unusual gains or losses, costs, charges or expenses and Transaction Expenses shall be excluded,

(2) any net after tax effect of gains or losses (less all fees, expenses and charges) attributable to asset dispositions other than in the ordinary course of business, as determined in good faith by the Issuer, shall be excluded,

(3) 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 shall be excluded,

(4) 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, shall be excluded; provided that Consolidated Net Income of the Issuer shall be increased by the amount of dividends or distributions or other payments that are actually paid in Cash Equivalents (or to the extent converted into Cash Equivalents) to the referent Person or a Restricted Subsidiary thereof in respect of such period,

 

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(5) effects of all non-cash adjustments (including the effects of such adjustments pushed down to the Issuer and the Restricted Subsidiaries) in such Person’s consolidated financial statements pursuant to GAAP (including in the inventory, property and equipment, software, goodwill, intangible assets, in-process research and development, deferred revenue and debt line items thereof) resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded,

(6) solely for the purpose of determining the amount available for Restricted Payments under clause (3)(A) of Section 4.07(a) hereof, the Net Income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent 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 the Issuer will be increased by the amount of dividends or other distributions or other payments actually paid in Cash Equivalents (or to the extent converted into Cash Equivalents) to the Issuer or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein,

(7) any after-tax effect of income (loss) from the early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments shall be excluded,

(8) any impairment charge or asset write-off pursuant to Financial Accounting Standards Board (“ FASB ”) Statement No. 142 “Goodwill and Other Intangible Assets” or FASB Statement No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets”, any impairment charges or asset write offs for equity and debt securities, and the amortization of intangibles arising pursuant to FASB Statement No. 141 “Business Combinations” shall be excluded, and

(9) any non-cash compensation charge or expense, including any such charge or expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights or equity incentive programs for any future, present, or former employee, director, officer or consultant of the Issuer or any of its Restricted Subsidiaries shall be excluded.

Notwithstanding the foregoing, for the purpose of Section 4.07(a) hereof only (other than clause (3)(D) of Section 4.07(a) hereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Issuer and its Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Issuer and its Restricted Subsidiaries, any repayments of loans and advances which constitute Restricted Investments by the Issuer 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 clause (3)(D) of Section 4.07(a) hereof.

Consolidated Secured Leverage Ratio ” means, with respect to any specified Person on any Calculation Date, the ratio of (1) the sum of (without duplication) (x) the aggregate outstanding

 

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amount of Secured Indebtedness of such Person and its Restricted Subsidiaries, plus (y) the aggregate liquidation preference of all outstanding Disqualified Stock and Preferred Stock (except Disqualified Stock and Preferred Stock issued to the Issuer or a Restricted Subsidiary) of such Person and its Restricted Subsidiaries secured by a Lien, plus (z) the aggregate outstanding amount of all Receivables Facilities established by or for such Person and its Restricted Subsidiaries (and without regard to whether such facilities would be reflected on the consolidated balance sheet of such Person and its Restricted Subsidiaries), in each case as of the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the Calculation Date to (2) the EBITDA of such Person and its Restricted Subsidiaries for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the Calculation Date.

In the event that the Issuer or any Restricted Subsidiary incurs, assumes, guarantees, redeems, repays, retires or extinguishes any Indebtedness or issues or redeems Disqualified Stock or Preferred Stock during the period (the “ Stub Period ”) subsequent to the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the Calculation Date, then the Consolidated Secured Leverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, repayment, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable period; provided that Indebtedness incurred or repaid under any revolving credit facility in the ordinary course of business for working capital purposes during the Stub Period shall be only be treated as having been incurred or repaid during such period if the average daily balances of such Indebtedness during the Stub Period exceeds or is less than the amount of such Indebtedness outstanding as of the last day of the applicable period.

For purposes of making the computation referred to above, Specified Transactions that have been made by the Issuer or any Restricted Subsidiary during the four-quarter period ending on the last day of the reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date (a) shall be calculated in good faith by the Chief Financial Officer of the Issuer on a pro forma basis assuming that all such Specified Transactions had occurred on the first day of the reference period and (b) in connection with any such Specified Transaction (other than, for avoidance of doubt, the Transactions), there shall be given pro forma effect to (A) expected cost savings resulting therefrom permitted to be reflected in pro forma financial information with respect to any such Specified Transaction under Rule 11.02 of Regulation S-X under the Securities Act and (B) additional cost savings that result or are expected to result from actions taken, committed to be taken or planned to be taken pursuant to a factually supported plan in connection with any such Specified Transaction prior to the Calculation Date; provided, that such cost savings referred to in this clause (B) (x) are factually supportable and determined in good faith by the Issuer, as certified in an Officer’s Certificate executed by the Chief Financial Officer of the Issuer to the Trustee and, prior to the Disposition Date, the GSMP Group, and (y) do not exceed the actual cost savings expected in good faith to be realized by the Issuer and its Restricted Subsidiaries over such 12 month period commencing with the Calculation Date (as opposed, for the avoidance of doubt, to the annualized impact of such cost savings). If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Specified Transaction that would have required adjustment pursuant to this definition, then the Consolidated Secured Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Specified Transaction had occurred at the beginning of the reference period.

Any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period, and any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period.

 

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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, without limitation, 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.

Controlled Investment Affiliate ” means, as to any future, present, or former employee, director, officer or consultant of the Issuer and its Restricted Subsidiaries, any other Person, which directly or indirectly is in control of, is controlled by, or is under common control with such Person and is organized by such Person (or any Person controlling such Person) primarily for making direct or indirect equity investments in the Issuer.

Corporate Trust Office of the Trustee ” shall be at the address of the Trustee specified in Section 14.02 hereof or such other address as to which the Trustee may give notice to the Holders and the Issuer.

CPP ” means CPP Investment Board Private Holdings Inc.

CPP Group ” means CPP and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt their portfolio companies or other operating companies affiliated with CPP).

Credit Agreement ” means that certain Credit Agreement, dated as of the Closing Date, among IMS Health Incorporated, Holdings, the Restricted Subsidiaries party thereto, Bank of America, N.A., as Administrative Agent, and each other agent and lender from time to time party thereto, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings or refinancings thereof.

Credit Facilities ” means, with respect to the Issuer or any of its Restricted Subsidiaries, one or more debt facilities, including the Credit Agreement, or other financing arrangements (including, without limitation, commercial paper facilities or indentures) providing for revolving credit loans, term loans, letters of credit or other long-term indebtedness, including any notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings or refinancings thereof and any one or more indentures or credit facilities or commercial paper facilities that extend, replace, refund, refinance, renew or defease any part of the loans, notes, other credit facilities or commitments thereunder, including any such extending, replacement, refunding, refinancing, renewing or defeasing facility or indenture that increases the amount permitted to be borrowed thereunder or alters the maturity thereof

 

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(provided that such increase is permitted under Section 4.09 hereof) or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, lender or group of lenders or investors.

Custodian ” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.

Default ” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

Default Interest Rate ” means a rate equal to 2% per annum.

Definitive Note ” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06(c) hereof, substantially in the form of Exhibit A hereto, except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

Depositary ” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

Designated Non-cash Consideration ” means the fair market value of non-cash consideration received by the Issuer or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer’s Certificate delivered to the Trustee, setting forth the basis of such valuation, less the amount of cash or 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 company thereof (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate delivered to the Trustee on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (3) of Section 4.07(a) hereof.

Designated Sale and Leaseback Transaction ” means a sale and leaseback transaction of any property located at (x) 7 Harewood Avenue, London, United Kingdom and (y) 660 West Germantown Pike, Plymouth Meeting, Pennsylvania.

Disposition Date ” means the first time after any Notes have been issued or sold to the GSMP Group on which the GSMP Group ceases to beneficially own at least 10% of the aggregate principal amount of the Notes then outstanding.

Disqualified Stock ” means any class or series of Capital Stock of any Person that by its terms or otherwise is:

(1) required to be redeemed or is redeemable at the option of the holder of such class or series of Capital Stock at any time prior to the date that is 91 days after the Stated Maturity of the Notes; or

(2) convertible into or exchangeable at the option of the holder thereof at any time prior to the date that is 91 days after the Stated Maturity of the Notes for Capital Stock referred to in clause (1) above or Indebtedness.

 

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Notwithstanding the preceding sentence, (A) if such Capital Stock is issued to any plan for the benefit of employees or by any such plan to such employees, in each case in the ordinary course of business of the Issuer or its Restricted Subsidiaries, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer in order to satisfy applicable statutory or regulatory obligations; (B) any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Issuer to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that the Issuer may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 4.07; and (C) no Capital Stock held by any future, present or former employee, director, officer or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer (or any of its direct or indirect parents or Subsidiaries) shall be considered Disqualified Stock because such stock is redeemable or subject to repurchase pursuant to any management equity subscription agreement, stock option agreement, stock ownership plan, put agreement, stockholder agreement or similar agreement that may be in effect from time to time.

EBITDA ” means, with respect to any Person for any period, the Consolidated Net Income of such Person 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, federal, state, franchise, excise or similar taxes of such Person and its Restricted Subsidiaries paid or accrued during such period, including any penalties and interest related to such taxes or arising from any tax examinations, to the extent the same were deducted (and not added back) in computing Consolidated Net Income; plus

(b) total interest expense of such Person and its Restricted Subsidiaries for such period, net of interest income, plU.S. Bank fees and costs of surety bonds in connection with financing activities, to the extent the same was deducted (and not added back) in calculating Consolidated Net Income; plus

(c) Consolidated Depreciation and Amortization Expense of such Person and its Restricted Subsidiaries for such period to the extent the same were deducted (and not added back) in computing Consolidated Net Income; plus

(d) any fees, expenses or charges (other than depreciation or amortization expense) related to any Equity Offering, Permitted Investment, Restricted Investment, Asset Sale, disposition, incurrence or repayment of Indebtedness (including such fees, expenses or charges related to the offering of the Notes or any Credit Facility), or refinancing transaction or amendment or modification of any debt instrument (including any amendment or other modification of the Notes or any Credit Facility), including in each case, any such transaction consummated prior to the Closing Date and any such transaction undertaken but not completed, and any nonrecurring charges and costs incurred in connection with acquisitions or mergers after the Closing Date, in each case, deducted (and not added back) in computing Consolidated Net Income; plus

 

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(e) the amount of any restructuring charges, accruals or reserves, in each case, actually incurred in any period and to the extent deducted (and not added back) in such period in computing Consolidated Net Income; plus

(f) any non-cash charges, including any write offs or write downs, reducing (and not added back in computing) Consolidated Net Income for such period, including (x) any non-cash impairment charge or asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets, investments in debt and equity securities or as a result of a change in law or regulation, in each case, pursuant to GAAP and (y) the amortization of intangibles arising pursuant to GAAP (excluding for purposes of this clause (f) any such non-cash item to the extent that it represents an accrual or reserve for potential cash items in any future period or 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 and related expenses paid in cash or accrued in such period to the Sponsors pursuant to the Management Agreement (including termination fees but excluding any indemnities paid in such period under the Management Agreement) to the extent otherwise permitted under Section 4.11(b)(10) hereof and to the extent deducted (and not added back) in computing Consolidated Net Income; plus

(i) in connection with any material restructuring of the business of the Issuer and its Restricted Subsidiaries outside of the ordinary course of business and described in reasonable detail in the Officer’s Certificate referred to below (each a “ Specified Restructuring ”), the amount of expected cost savings that result or are expected to result from actions taken, committed to be taken or planned to be taken pursuant to a factually supported plan in connection with such Specified Restructuring prior to the Calculation Date that (x) are factually supportable and determined in good faith by the Issuer, as certified in an Officer’s Certificate executed by the Chief Financial Officer of the Issuer to the Trustee and, prior to the Disposition Date, the GSMP Group, and (y) do not exceed the actual cost savings expected in good faith to be realized by the Issuer and its Restricted Subsidiaries over such 12 month period commencing with the Calculation Date (as opposed, for the avoidance of doubt, to the annualized impact of such cost savings); provided, that no adjustments to EBITDA shall be made pursuant to this clause (j) in connection with any Calculation Date occurring after the second anniversary of the Closing Date; plus

(j) any costs or expense incurred by the Issuer 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, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of the Issuer or net cash proceeds of an issuance of Equity Interests of the Issuer (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation set forth in clause (3) of Section 4.07(a) hereof and to the extent deducted (and not added back) in computing Consolidated Net Income; plus

(k) any net loss from discontinued operations of the Issuer or any of its Restricted Subsidiaries;

 

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(2) decreased by (without duplication), in each case to the extent included in computing Consolidated Net Income for such period:

(a) any net income from discontinued operations of the Issuer or any of its Restricted Subsidiaries; and

(3) increased (by losses) or decreased (by gains), as applicable, without duplication, in each case, except for the adjustments set forth in the proviso to this clause (3), to the extent included in computing Consolidated Net Income for such period:

(a) any net gain or loss resulting in such period from Hedging Obligations and the application of Statement of Financial Accounting Standards No. 133;

(b) any net gain or loss resulting in such period from a sale of receivables and related assets to a Receivables Subsidiary in connection with a Receivables Facility;

(c) any realized or unrealized gains or losses in such period from (i) balance sheet currency translation, (ii) currency translation of assets or liabilities that are not denominated in the functional currency of a Person into the functional currency of that Person and (iii) Hedging Obligations that are designated by a Person as a hedge of an asset or liability in clause (c)(i) or (ii) ;

(d) any adjustments resulting from the application of FASB Interpretation No. 45 (Guarantees);

provided that, the notwithstanding the foregoing, EBITDA shall include (without duplication) (i) any net realized gain or loss from any Hedging Obligations accounted for as cash flow hedges of intercompany royalties and (ii) any net realized gain or loss from any Hedging Obligations that are designated by the Issuer as EBITDA hedges, except to the extent any such Hedging Obligations are terminated by such Person prior to their scheduled maturity.

EMU ” means economic and monetary union as contemplated in the Treaty on European Union.

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 issuance or sale in a public offering of Capital Stock of Holdings or any of Holdings’ direct or indirect parent companies (excluding, in any such case, Disqualified Stock), other than public offerings with respect to Holdings or any direct or indirect parent company’s common stock registered on Form S-8.

euro ” means the single currency of participating member states of the EMU.

Euroclear ” means Euroclear S.A./N.V., as operator of the Euroclear system.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

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Exchange Notes ” means the Notes issued in the Exchange Offer pursuant to Section 2.06(f) hereof.

Exchange Offer ” means the offer that may be made by the Issuer pursuant to the Registration Rights Agreement to exchange Exchange Notes for Notes.

Exchange Offer Registration Statement ” has the meaning set forth in the Registration Rights Agreement.

Excluded Contribution ” means net cash proceeds or Cash Equivalents received by the Issuer from:

(1) contributions to its common equity capital, and

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

in each case designated as Excluded Contributions pursuant to an Officer’s Certificate executed by the Chief Financial Officer of the Issuer to the Trustee on the date such capital contributions are made or the date such Capital Stock is sold, as the case may be, and which are excluded from the calculation set forth in clause (3) of Section 4.07(a) hereof.

Existing Notes means the 5.55% Senior Notes, Series 2006-A due April 27, 2016, 5.58% Senior Notes, Series 2008-A, Tranche 1, due February 6, 2015, 5.99% Senior Notes, Series 2008-A, Tranche 2, due February 6, 2018 issued by the Issuer and the 1.70% Guaranteed Senior Notes, Series 2006-A, due January 27, 2013 issued by a Subsidiary of the Issuer.

fair market value ” means, with respect to any property, asset or liability, the fair market value of such property, asset or liability as determined by the Issuer in good faith; provided that, solely for purposes of clause (2) within the definition of “Investments” and clauses (B),(C) and (D) of Sections 4.07(a)(3) hereof, the determination of fair market value of property or assets shall be confirmed by (x) in the case of any transaction or series of related transactions exceeding $15,000,000 by a resolution adopted by the majority of the board of directors of the Issuer as certified by an Officer’s Certificate delivered to the Trustee and (y) in the case of any transaction or series of related transactions exceeding $50,000,000, a written opinion from an Independent Financial Advisor delivered to the Trustee.

Fixed Charge Coverage Ratio ” means with respect to any specified Person for any period, the ratio of EBITDA of such Person and its Restricted Subsidiaries for such period to the Fixed Charges of such Person and its Restricted Subsidiaries for such period. In the event that the Issuer or any Restricted Subsidiary incurs, assumes, guarantees, redeems, repays, retires or extinguishes any Indebtedness 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 Calculation Date, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, repayment, 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 (the “ reference period ”).

For purposes of making the computation referred to above, Specified Transactions that have been made by the Issuer or any Restricted Subsidiary during the four-quarter period ending on the

 

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last day of the reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date (a) shall be calculated in good faith by the Chief Financial Officer of the Issuer on a pro forma basis assuming that all such Specified Transactions had occurred on the first day of the reference period and (b) in connection with any such Specified Transactions (other than, for avoidance of doubt, the Transactions), there shall be given pro forma effect to (A) expected cost savings resulting therefrom permitted to be reflected in pro forma financial information with respect to any such Specified Transactions under Rule 11.02 of Regulation S-X under the Securities Act and (B) additional cost savings that result or are expected to result from actions taken, committed to be taken or planned to be taken pursuant to a factually supported plan in connection with such Specified Transaction prior to the Calculation Date; provided, that such cost savings referred to in this clause (B) (x) are factually supportable and determined in good faith by the Issuer, as certified in an Officer’s Certificate executed by the Chief Financial Officer of the Issuer to the Trustee and, prior to the Disposition Date, the GSMP Group, and (y) do not exceed the actual cost savings expected in good faith to be realized by the Issuer and its Restricted Subsidiaries over such 12 month period commencing with the Calculation Date (as opposed, for the avoidance of doubt, to the annualized impact of such cost savings). If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Specified Transaction 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 Specified Transaction had occurred at the beginning of 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 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 the Chief Financial Officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of the computation above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed on the average daily balances 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 Issuer may designate.

Any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period, and any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period.

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

(1) Consolidated Interest Expense of such Person for such period;

(2) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Preferred Stock of any Restricted Subsidiary during such period; and

(3) all dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Disqualified Stock during such period.

Foreign Subsidiary ” means, with respect to any Person, any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof and any Restricted Subsidiary of such Foreign Subsidiary.

 

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GAAP ” means generally accepted accounting principles in the United States which are in effect on the Closing Date.

Global Note Legend ” means the legend set forth in Section 2.06(g)(ii) hereof, which is required to be placed on all Global Notes issued under this Indenture.

Global Notes ” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of Exhibit A hereto, issued in accordance with Section 2.01, 2.06(b), 2.06(d) or 2.06(f) hereof.

Government Securities ” 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 either case, are not callable or redeemable at the option of the issuers 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 Government Securities or a specific payment of principal of or interest on any such Government Securities 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 Government Securities or the specific payment of principal of or interest on the Government Securities evidenced by such depository receipt.

GSMP Agreement ” means the agreement, dated as of the date hereof, by and among the Issuer, GS Mezzanine Partners V Onshore Fund, L.P. and other members of the GSMP Group, pursuant to which, among other things, the Issuer has acknowledged that certain representations described therein with respect to the issuance of the Notes are made for the benefit of the GSMP Group.

GSMP Group ” means, collectively, (i) GS Mezzanine Partners V Onshore Fund, L.P., (ii) any other Affiliate thereof or of The Goldman Sachs Group, Inc., and (iii) any Subsidiaries of the foregoing.

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

Guarantee ” means the guarantee by any Guarantor of the Issuer’s Obligations under this Indenture and the Notes.

Guarantor ” means Holdings and each Subsidiary Guarantor.

Hedging Obligations ” means, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar agreement providing for the transfer, modification or mitigation of interest rate, commodity or currency risks either generally or under specific contingencies.

 

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Holder ” means the Person in whose name a Note is registered on the Registrar’s books.

Holdings ” means Healthcare Technology Intermediate Holdings, Inc., a Delaware corporation.

IAI Global Note ” mean the global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued on an Issue Date or thereafter in a denomination equal to the outstanding principal amount of the Notes sold to Institutional Accredited Investors.

Immediate Family Member ” means with respect to any individual, such individual’s child, stepchild, grandchild or more remote descendant, parent, stepparent, grandparent, spouse, former spouse, qualified domestic partner, sibling, mother-in-law, father-in-law, son-in-law and daughter-in-law (including adoptive relationships) and any trust, partnership or other bona fide estate-planning vehicle the only beneficiaries of which are any of the foregoing individuals or any private foundation or fund that is controlled by any of the foregoing individuals or any donor-advised fund of which any such individual is the donor.

Incremental Facilities ” means any incremental credit facilities pursuant to the Credit Agreement on the terms of such incremental facility as in effect on the Closing Date.

Indebtedness ” means, with respect to any Person, without duplication:

(1) any indebtedness (including principal and premium) 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 balance of the purchase price of any property (including Capitalized Lease Obligations), except (i) any such balance that constitutes an obligation in respect of a commercial letter of credit, a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP; or

(d) representing any Hedging Obligations; provided that the Hedging Obligations shall be subject to netting to the extent such Hedging Obligations are with the same counterparty and are contractually permitted to be netted and enforceable;

if and to the extent that any of the foregoing Indebtedness (other than letters of credit (excluding commercial letters of credit) and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

 

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(2) the outstanding principal amount of any Receivables Facilities established by or for such Person or its Restricted Subsidiaries (whether or not the same would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP);

(3) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clauses (1) or (2) of a third Person (whether or not such items would appear upon the balance sheet of such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business; and

(4) to the extent not otherwise included, the obligations of the type referred to in clauses (1) or (2) of a third Person secured by a Lien on any asset owned by such first Person, whether or not such Indebtedness is assumed by such first Person.

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

Independent Financial Advisor ” means any accounting, appraisal, investment banking firm or consultant of nationally recognized standing that is, in the good faith judgment of the Issuer, qualified to perform the task for which it has been engaged. Promptly after receipt thereof, the Company shall deliver to the Trustee a copy of any opinion or letter provided or required to be provided by an Independent Financial Advisor pursuant to the terms of this Indenture.

Indirect Participant ” means a Person who holds a beneficial interest in a Global Note through a Participant.

Institutional Accredited Investor ” means an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs.

Interest Payment Date ” means March 1, June 1, September 1 and December 1 of each year to Stated Maturity.

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.

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, advances to customers and distributors and trade credit 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 (excluding the footnotes) of the Issuer 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 4.07 hereof:

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

(a) the Issuer’s “Investment” in such Subsidiary at the time of such redesignation; less

 

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(b) the portion (proportionate to the Issuer’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.

The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by the aggregate amount of any dividends, distributions, interest payments, returns of capital, repayments or other amounts received in Cash Equivalents by the Issuer or a Restricted Subsidiary in respect of such Investment.

Issue Date ” means the Closing Date and each Subsequent Issue Date.

Issuer ” means, prior to the consummation of the merger contemplated in the Acquisition Agreement, Healthcare Technology Acquisition, Inc., and following the consummation of the merger contemplated by the Acquisition Agreement, IMS Health Incorporated, and any successor thereto.

Issuer Order ” means a written request or order signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer, and delivered to the Trustee.

Legal Holiday ” means a Saturday, a Sunday or a day on which commercial banking institutions are not required to be open in the State of New York or the city in which the Corporate Trust Office of the Trustee or Paying Agent is located.

Lien ” means, with respect to any asset, any mortgage, lien (statutory or otherwise), 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 be deemed to constitute a Lien.

LGP ” means Leonard Green & Partners, L.P.

LGP Group ” means LGP and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt their portfolio companies or other operating companies affiliated with LGP).

Management Agreement ” means the management agreement dated as of the Closing Date between one or more of the Sponsors or their advisors, if applicable, and Holdings, as amended, restated, supplemented or otherwise modified.

Moody’s ” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

 

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

Net Proceeds ” means the aggregate cash proceeds received by the Issuer or any of its Restricted Subsidiaries in respect of any Asset Sale, including any cash received upon the sale, other disposition or maturity of any Cash Equivalents or Designated Non-cash Consideration received in any Asset Sale, net of the direct costs relating to such Asset Sale and any such sale, disposition or maturity of such Cash Equivalents or Designated Non-cash Consideration, including legal, accounting and investment banking fees, payments made in order to obtain a necessary consent or required by applicable law to consummate any Asset Sale, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, other fees and expenses, including title and recordation expenses, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of principal, premium, if any, and interest on Secured Indebtedness required (other than required by clause (1) of Section 4.10(b) hereof) to be paid as a result of such transaction and any deduction of appropriate amounts to be provided by the Issuer 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 the Issuer or any of its Restricted Subsidiaries after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

Net Tangible Assets ” means, as of any date of determination, (i) all assets of the Issuer and its Restricted Subsidiaries less (ii) the stated balance sheet “goodwill” of the Issuer and its Restricted Subsidiaries and less (iii) the stated balance sheet “intangible assets” of the Issuer and its Restricted Subsidiaries, in each case determined on a consolidated basis in accordance with GAAP as of such date.

Non-U.S. Person ” means a Person who is not a U.S. Person.

Notes ” means any Note authenticated and delivered under this Indenture. For all purposes of this Indenture, the term “Notes” shall include the Initial Notes and shall also include any Additional Notes that may be issued under a supplemental indenture. For purposes of this Indenture, all references to Notes to be issued or authenticated upon transfer, replacement or exchange shall be deemed to refer to Notes of the applicable series.

Obligations ” means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), penalties, premiums, if any, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and banker’s acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.

Officer ” means the Chairman of the board of directors, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Issuer.

Officer’s Certificate ” means a certificate signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer, that meets the requirements set forth in this Indenture.

 

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Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer or the Trustee.

Participant ” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).

Permitted Holders ” means any Sponsor and its Affiliates.

Permitted Investments ” means:

(1) any Investment in the Issuer, any of its Wholly-Owned Restricted Subsidiaries or any of the Subsidiary Guarantors;

(2) any Investment in Cash Equivalents;

(3) any Investment by the Issuer or any of its Restricted Subsidiaries in a Person that is engaged in a Similar Business so long as, (a) no Event of Default shall have occurred or be continuing or will result therefrom, and (b) as the result of such Investment (i) such Person becomes a Wholly-Owned Restricted Subsidiary of the Issuer or a Subsidiary Guarantor, or (ii) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Issuer, one of its Wholly-Owned Restricted Subsidiaries or one of the Subsidiary Guarantors, and, in each case, 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 by the Issuer or any of its Restricted Subsidiaries in a Restricted Subsidiary that is not a Wholly-Owned Subsidiary or in any Permitted Joint Venture, provided that the aggregate amount of such Investment, taken together with all other Investments made pursuant to this clause (4) that are at that time outstanding, does not exceed $50,0000,000;

(5) any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to Section 4.10 hereof or any other disposition of assets not constituting an Asset Sale;

(6) any Investment existing on the Closing Date or made pursuant to a binding commitment in effect on the Closing Date, in each case as reflected on Schedule 6.6 to the Credit Agreement on the Closing Date, or an Investment consisting of any extension, modification, replacement or renewal of any such Investment or binding commitment existing on the Closing Date;

(7) any Investment acquired by the Issuer or any of its Restricted Subsidiaries:

(a) in exchange for any other Investment or accounts receivable held by the Issuer 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 (including any trade creditor or customer); or

(b) in satisfaction of judgments against other Persons; or

(c) as a result of a foreclosure by the Issuer 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;

 

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(8) Hedging Obligations permitted under clause (10) of Section 4.09(b) hereof;

(9) any guarantee of Indebtedness (including any Guarantee) permitted under Section 4.09 hereof and any performance guarantees and Contingent Obligations in the ordinary course of business and any liens on the assets of the Issuer or any Restricted Subsidiary incurred in compliance with Section 4.12 hereof;

(10) any Investment consisting of a purchase or other acquisition of inventory, supplies, material, equipment, or intellectual property, or the licensing or contribution of intellectual property to another Person pursuant to any distribution, service, joint marketing, co-branding, co-distribution or other similar arrangements with other Persons, however denominated;

(11) additional Investments in an aggregate amount, taken together with all other Investments made pursuant to this clause (11) that are at that time outstanding, not to exceed $150,000,000;

(12) loans and advances to officers, directors and employees of any direct or indirect parent of the Issuer, the Issuer or any of its Restricted Subsidiaries (i) to finance the purchase of Capital Stock of any direct or indirect parent of the Issuer (provided, that the amount of such loans and advances used to acquire such Capital Stock shall be contributed to the Issuer in cash as common equity), (ii) for reasonable and customary business related travel expenses, moving expenses and similar expenses, in each case incurred in the ordinary course of business, and (iii) for additional purposes not contemplated by subclause (i) or (ii) above, in an aggregate principal amount at any time outstanding with respect to this clause (iii) not exceeding $10,000,000;

(13) Investments relating to a Receivables Subsidiary that, in the good faith determination of the Issuer are necessary or advisable to effect any Receivables Facility;

(14) any Investment the payment for which consists of Equity Interests (exclusive of Disqualified Stock) of the Issuer or any of its direct or indirect parent companies; provided that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of Section 4.07(a) hereof;

(15) any Investments in prepaid expenses, checks or other similar negotiable instruments held for collection and lease, utility and workers compensation, performance and similar deposits entered into as a result of the operations of the business, in each of the foregoing cases of this clause (15), in the ordinary course of business; and

(16) any purchase or repurchase of any Notes.

Permitted Joint Ventures ” means a corporation, partnership or other entity (other than a Subsidiary) engaged in one or more Similar Businesses in respect of which the Issuer or a Restricted Subsidiary (a) beneficially owns at least 20% of the Equity Interests of such entity and (b) either is a party to an agreement empowering one or more parties to such agreement (which may or may not be the Issuer or a Subsidiary), or is a member of a group that, pursuant to the constituent documents of the applicable corporation, partnership or other entity, has the power, to direct the policies, management and affairs of such entity.

 

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Permitted Liens ” means, with respect to any Person:

(1) pledges, deposits or security by such Person under workers’ compensation laws, unemployment insurance, employers’ health tax and other social security laws or similar legislation (including in respect of deductibles, self insured retention amounts and premium and adjustments thereto), or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal 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 applicable law, such as landlords’, carriers’, warehousemen’s, materialmen’s, repairmen’s and mechanics’ Liens, in each case for sums not yet overdue for a period of more than 30 days or being contested in good faith by appropriate actions 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 maintained on the books of such Person in accordance with GAAP;

(3) Liens for taxes, assessments or other governmental charges not yet overdue for a period of more than 30 days or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate actions diligently pursued, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(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, issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

(5) survey exceptions, encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights-of-way, servitudes, sewers, electric lines, drains, telegraph and telephone and cable television lines, gas and oil pipelines and other similar purposes, or other restrictions (including minor defects and 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 do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(6) Liens securing Obligations relating to any Indebtedness permitted to be incurred pursuant to clauses (4) and (13) of Section 4.09(b) hereof; provided that (a) Liens securing Obligations relating to any Indebtedness, Disqualified Stock or Preferred Stock permitted to be incurred pursuant to clause (13) of Section 4.09(b) hereof relate only to Obligations relating to Refinancing Indebtedness that serves to extend, replace, refund, refinance, renew or defease Indebtedness incurred or Disqualified Stock or Preferred Stock issued under clause (3) or (4) of Section 4.09(b) hereof;

(7) Liens existing on the Closing Date;

(8) Liens on property or shares of stock of a Person at the time such Person becomes a Restricted Subsidiary; provided , however , that (i) such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; (ii) such

 

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Liens may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries, and (iii) immediately after giving effect to such Person becoming a Restricted Subsidiary the Consolidated Secured Leverage Ratio on a consolidated basis for the Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available is either (x) not greater than 3.00 to 1.00 or (y) lower than such Consolidated Secured Leverage Ratio immediately prior to such transaction (the “ Secured Leverage Ratio Test ”) ;

(9) Liens existing on property or other assets at the time the Issuer or a Restricted Subsidiary acquired the property or such other assets, including any acquisition by means of an amalgamation, merger or consolidation with or into the Issuer or any of its Restricted Subsidiaries; provided , however , that (i) such Liens are not created or incurred in connection with, or in contemplation of, such acquisition, amalgamation, merger or consolidation, and (ii) such Liens may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries and (iii) after giving effect to such acquisition, the Secured Leverage Ratio Test is satisfied;

(10) Liens securing Obligations relating to any Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or a Subsidiary Guarantor permitted to be incurred in accordance with Section 4.09 hereof;

(11) Liens securing Hedging Obligations (and guarantees thereof) that are interest rate swap agreements, interest rate cap agreements or interest rate collar agreements, foreign exchange contracts, currency swap agreements or similar agreements;

(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 or commercial 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;

(13) leases, subleases, licenses or sublicenses, covenants not to sue, releases, consents and other forms of license granted to others in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of the Issuer or any of its Restricted Subsidiaries and do not secure any Indebtedness;

(14) Liens arising from Uniform Commercial Code (or equivalent statutes) financing statement filings regarding operating leases, consignments or accounts entered into by the Issuer and its Restricted Subsidiaries in the ordinary course of business;

(15) Liens on accounts receivable and related assets incurred in connection with a Receivables Facility;

(16) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8) and (9); provided , however , that (a) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (b) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8) and (9) at the time the original Lien became a Permitted Lien under this Indenture, and (ii) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

 

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(17) deposits made or other security provided in the ordinary course of business to secure liability to insurance carriers;

(18) other Liens securing obligations (including Indebtedness) that do not exceed $50,000,000 in the aggregate at any one time outstanding;

(19) Liens securing judgments for the payment of money not constituting an Event of Default under clause (5) under Section 6.01 hereof so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

(20) Liens 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;

(21) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code or any comparable or successor provision on items in the course of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business, and (iii) in favor of banking institutions arising in the ordinary course of business 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;

(22) 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;

(23) 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 the Issuer or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Issuer and its Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Issuer or any of its Restricted Subsidiaries, in each case, under this clause (23), arising in the ordinary course of business;

(24) Liens arising in the ordinary course of business to secure accounts payable or similar trade obligations not constituting Indebtedness;

(25) Liens deemed to exist in connection with Investments in repurchase obligations constituting Cash Equivalents contemplated by clause (5) of the definition of “Cash Equivalents” permitted under this Indenture; provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;

(26) Liens securing Cash Management Obligations which are secured on a pari passu basis with the liens securing the Credit Facilities in respect of any overdraft and related liabilities arising from treasury, depository and cash management services or any automated clearing house transfers of funds;

(27) Liens deemed to exist by reason of the rights reserved or vested in any Person by the terms of any lease, license, franchise, grant or permit held by the Issuer or any Restricted Subsidiary thereof or by a statutory provision, to terminate any such lease, license, franchise, grant or permit, or to require annual or periodic payments as a condition to the continuance thereof;

 

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(28) Liens deemed to exist by reason of (x) any encumbrance or restriction (including put and call arrangements) with respect to capital stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement or (y) any encumbrance or restriction imposed under any contract for the sale by the Issuer or any of its Restricted Subsidiaries of the Capital Stock of any Restricted Subsidiary, or any business unit or division of the Issuer or any Restricted Subsidiary permitted under this Indenture;

(29) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into by the Issuer or any Restricted Subsidiary in the ordinary course of business;

(30) Liens solely on any cash earnest money deposits made by the Issuer or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement in connection with a proposed acquisition of another Person, or any asset, business unit or division of another Person;

(31) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

(32) Liens on Capital Stock of an Unrestricted Subsidiary that secure Indebtedness or other obligations of such Unrestricted Subsidiary;

(33) security given to a public utility or any municipality or governmental authority when required by such utility or authority in connection with the operations of that Person in the ordinary course of business;

(34) zoning, building codes or similar laws or rights reserved to or vested in any governmental office or agency to control or regulate the use of any real property;

(35) any interest or title or a lessor or sublessor under any lease of real estate permitted hereunder and any restriction or encumbrance to which the interest or title of such lessor or sublessor may be subject; and

(36) any proxy agreement relating to IMS Government Solutions, Inc. and its Equity Interests entered into with the Defense Security Service.

Person ” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

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

Private Placement Legend ” means the legend set forth in Section 2.06(g)(i) hereof to be placed on all Notes issued under this Indenture, except where otherwise permitted by the provisions of this Indenture.

 

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Qualified Public Offering ” means the initial underwritten public offering of common Equity Interests of Holdings or any of Holdings’ direct or indirect parent companies, in each case, pursuant to an effective registration statement filed with the SEC in accordance with the Securities Act (other than a registration statement on Form S-8 or any successor form) generating gross proceeds to the Issuer of not less than $150,000,000.

QIB ” means a “qualified institutional buyer” as defined in Rule 144A.

Rating Agencies ” means Moody’s and S&P or if Moody’s or S&P or both shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Issuer which shall be substituted for Moody’s or S&P or both, as the case may be.

Receivables Facility ” means any of one or more receivables financing facilities as amended, supplemented, modified, extended, renewed, restated or refunded from time to time, the Obligations of which are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities) to the Issuer or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) pursuant to which the Issuer or any of its Restricted Subsidiaries sells its accounts receivable to either (a) a Person that is not a Restricted Subsidiary or (b) a Receivables Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.

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

Receivables Subsidiary ” means any Subsidiary of the Issuer formed for the purpose of, and that solely engages only in one or more Receivables Facilities and other activities reasonably related thereto.

Record Date ” for the interest payable on any applicable Interest Payment Date means February 15, May 15, August 15 or November 15 (whether or not a Business Day) next preceding such Interest Payment Date.

Registration Rights Agreement ” means the Exchange and Registration Rights Agreement, dated as of the Closing Date, by and among the Issuer and the other parties named on the signature pages thereof, and with respect to any Additional Notes, one or more registration rights agreements between the Issuer and the other parties thereto, as such agreements may be amended, modified or supplemented from time to time relating to rights given by the Issuer to the purchasers of Notes or Additional Notes, as applicable, to register such Notes, or Additional Notes, as applicable, under the Securities Act.

Regulation S ” means Regulation S promulgated under the Securities Act.

Regulation S Global Note ” means a Regulation S Temporary Global Note or Regulation S Permanent Global Note, as applicable.

Regulation S Permanent Global Note ” means a permanent Global Note in the form of Exhibit A hereto, bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Temporary Global Note upon expiration of the Restricted Period.

 

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Regulation S Temporary Global Note ” means a temporary Global Note in the form of Exhibit A hereto, bearing the Global Note Legend, the Private Placement Legend and the Regulation S Temporary Global Note Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903.

Regulation S Temporary Global Note Legend ” means the legend set forth in Section 2.06(g)(iii) hereof.

Required Holders ” means Holders of at least a majority in aggregate principal amount of the then outstanding Notes. Sections 2.08 and 2.09 hereof shall determine which Notes are considered to be “outstanding” for purposes of this definition.

Responsible Officer ” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

Restricted Definitive Note ” means a Definitive Note bearing the Private Placement Legend.

Restricted Global Note ” means a Global Note bearing the Private Placement Legend.

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

Restricted Period ” means the 40-day distribution compliance period as defined in Regulation S.

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

Rule 144 ” means Rule 144 promulgated under the Securities Act.

Rule 144A ” means Rule 144A promulgated under the Securities Act.

Rule 903 ” means Rule 903 promulgated under the Securities Act.

Rule 904 ” means Rule 904 promulgated under the Securities Act.

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

Sale and Lease-Back Transaction ” means any arrangement providing for the leasing by the Issuer or any of its Restricted Subsidiaries of any real or tangible personal property, which property has been or is to be sold or transferred by the Issuer or such Restricted Subsidiary to a third Person in contemplation of such leasing.

 

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

Secured Indebtedness ” means any Indebtedness of the Issuer or any of its Restricted Subsidiaries in respect of borrowed money, Capitalized Lease Obligations and debt obligations evidenced by promissory notes and similar instruments secured by a Lien (including the credit facilities under the Credit Agreement).

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Shelf Registration Statement ” means the Shelf Registration Statement as defined in the Registration Rights Agreement.

Significant Subsidiary ” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the Closing Date.

Similar Business ” means any business conducted or proposed to be conducted by the Issuer and its Restricted Subsidiaries on the Closing Date and any business or other activities that are complementary, similar, reasonably related, incidental or ancillary thereto.

Special Interest ” means Special Interest, as such term is defined in Section 2(c) of the Registration Rights Agreement.

Specified Transaction ” means (x) any Investment that results in a Person becoming a Restricted Subsidiary, (y) any purchase or other acquisition of a business of any Person or of assets constituting a business unit, line of business or division of such Person or (z) any Asset Sale (i) that results in a Restricted Subsidiary ceasing to be a Subsidiary of the Issuer or (ii) of a business, business unit, line of business or division of the Issuer or a Restricted Subsidiary, in each case whether by merger, consolidation, amalgamation or otherwise.

Sponsors ” means each of (1) TPG Group, (2) CPP Group and (3) LGP Group and their respective Affiliates, including for the avoidance of doubt, any co-investment vehicle controlled by any of the foregoing (but excluding any portfolio company or other operating company which is an Affiliate of any of the Sponsors).

Stated Maturity ” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

Subordinated Indebtedness ” means, with respect to the Notes,

(1) any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the Notes, and

(2) any Indebtedness of any Guarantor which is by its terms subordinated in right of payment to the Guarantee of such entity of the Notes.

 

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Subsequent Issue Date ” means the date of issuance of Additional Notes.

Subsidiary ” means, with respect to any Person:

(1) any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof; and

(2) any partnership, joint venture, limited liability company or similar entity of which

(x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or 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 or otherwise, and

(y) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

Subsidiary Guarantor ” means each Restricted Subsidiary that Guarantees the Notes in accordance with the terms of this Indenture.

TPG ” means TPG Capital, L.P.

TPG Group ” means TPG and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt their portfolio companies or other operating companies affiliated with TPG).

Transaction ” means the transactions consummated on the Closing Date pursuant to the Acquisition Agreement, the issuance of the Notes under this Indenture, and the borrowings under the Credit Agreement and the other transactions contemplated thereby.

Transaction Expenses ” means any fees or expenses incurred or paid by the Issuer or any Restricted Subsidiary in connection with the Transaction, including payments to officers, employees and directors as change of control payments, severance payments, special or retention bonuses and charges for repurchase or rollover of, or modifications to, stock options.

Treasury Rate ” means, as of any Redemption Date, the yield to maturity as of such Redemption Date 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 the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to March 1, 2014; provided , however , that if the period from the Redemption Date to March 1, 2014 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.

 

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

Trustee ” means U.S. Bank National Association, as trustee, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

Unrestricted Definitive Note ” means a Definitive Note that does not bear and is not required to bear the Private Placement Legend.

Unrestricted Global Note ” means a Global Note that does not bear and is not required to bear the Private Placement Legend.

Unrestricted Subsidiary ” means:

(1) any Subsidiary of the Issuer which at the time of determination is an Unrestricted Subsidiary (as designated by the Issuer, as provided below); and

(2) any Subsidiary of an Unrestricted Subsidiary.

The Issuer may designate any Subsidiary of the Issuer (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) 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, the Issuer or any Subsidiary of the Issuer (other than solely any Subsidiary of the Subsidiary to be so designated); provided that

(1) any Unrestricted Subsidiary must be an entity of which the Equity Interests entitled to cast at least a majority of the votes that may be cast by all Equity Interests having ordinary voting power for the election of directors or Persons performing a similar function are owned, directly or indirectly, by the Issuer;

(2) such designation complies with Section 4.07 hereof; and

(3) each of: (a) the Subsidiary to be so designated; and (b) its Subsidiaries, has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any Restricted Subsidiary

The Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such designation, (x) no Default shall have occurred and be continuing and treating any Indebtedness of such Unrestricted Subsidiary as having been incurred upon such redesignation, and (y) either (1) the Issuer could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio Test set forth in Section 4.09(a) hereof, or (2) the Fixed Charge Coverage Ratio for the Issuer and its Restricted Subsidiaries would be equal to or greater than such ratio for the Issuer and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation.

Any such designation by the Issuer shall be notified by the Issuer to the Trustee by promptly filing with the Trustee a copy of the resolution of the board of directors of the Issuer or any committee thereof giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions.

 

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U.S. Person ” means a U.S. person as defined in Rule 902(k) under the Securities Act.

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, 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.

Wholly-Owned Restricted Subsidiary ” of any Person means a Wholly-Owned Subsidiary of such Person that is also a Restricted Subsidiary of such Person.

Wholly-Owned Subsidiary ” of any Person means a Subsidiary of such Person, 100% of the outstanding Equity Interests of which (other than directors’ qualifying shares and shares issued to foreign nationals as required under applicable law) shall at the time be owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person or by such Person and one or more Wholly-Owned Subsidiaries of such Person.

 

Section 1.02 Other Definitions .

 

Term

  

Defined in
Section

“Affiliate Transaction”    4.11
“Asset Sale Offer”    4.10
“Authentication Order”    2.02
“Change of Control Offer”    4.14
“Change of Control Payment”    4.14
“Change of Control Payment Date”    4.14
“Covenant Defeasance”    8.03
“DTC”    2.03
“Event of Default”    6.01

“Excess Proceeds”

“Fixed Charge Coverage Ratio Test”

  

4.10

4.09

“incur”    4.09
“Legal Defeasance”    8.02
“Note Register”    2.03
“Offer Amount”    3.09
“Offer Period”    3.09
“Pari Passu Indebtedness”    4.10
“Paying Agent”    2.03

“Priority Debt”

“Purchase Date”

  

4.09

3.09

“Redemption Date”    3.07
“Refinancing Indebtedness”    4.09

 

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Term

  

Defined in
Section

“Refunding Capital Stock”    4.07
“Registrar”    2.03

“Restricted Payments”

“Secured Leverage Ratio Test”

  

4.07

1.01

“Senior Unsecured Note Cap”

“Successor Company”

  

2.01

5.01

“Successor Person”    5.01
“Treasury Capital Stock”    4.07

 

Section 1.03 Incorporation by Reference of Trust Indenture Act .

At all times after the effectiveness of a registration statement under the Registration Rights Agreement, this Indenture will be subject to the mandatory provisions of the Trust Indenture Act, which are incorporated by reference in and made a part of this Indenture effective upon the effectiveness of any such registration statement. Whenever this Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Indenture.

The following Trust Indenture Act terms used in this Indenture have the following meanings:

“indenture securities” means the Notes;

“indenture security Holder” means a Holder of a Note;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and

“obligor” on the Notes and the Guarantees means the Issuer and the Guarantors, respectively, and any successor obligor upon the Notes and the Guarantees, respectively.

All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by SEC rule under the Trust Indenture Act have the meanings so assigned to them.

 

Section 1.04 Rules of Construction .

Unless the context otherwise requires:

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

(e) “will” shall be interpreted to express a command;

 

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(f) provisions apply to successive events and transactions;

(g) references to sections of, or rules under, the Securities Act or Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

(h) unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Indenture;

(i) words used herein implying any gender shall apply to both genders;

(j) the words “including,” “includes” and similar words shall be deemed to be followed by “without limitation”;

(k) 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 the Issuer dated such date prepared in accordance with GAAP;

(l) the principal amount of any Disqualified Stock or Preferred Stock at any time shall be (i) the maximum liquidation value of such Disqualified Stock or Preferred Stock at such time or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Disqualified Stock or Preferred Stock at such time, whichever is greater; and

(m) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not any particular Article, Section, clause or other subdivision.

 

Section 1.05 Acts of Holders .

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01 hereof) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 1.05.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

(c) The ownership of Notes shall be proved by the Note Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future Holder of the same Note and the Holder of every

 

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Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

(e) The Issuer may, in the circumstances permitted by the Trust Indenture Act, set a record date for purposes of determining the identity of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders. Unless otherwise specified, if not set by the Issuer prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such vote, prior to such vote, any such record date shall be the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation.

(f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this Section 1.05(f) shall have the same effect as if given or taken by separate Holders of each such different part.

(g) Without limiting the generality of the foregoing, a Holder, including DTC that is the Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and any Person that is the Holder of a Global Note, including DTC, may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through such depositary’s standing instructions and customary practices.

(h) The Issuer may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note held by DTC entitled under the procedures of such depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action shall be valid or effective if made, given or taken more than 90 days after such record date.

 

Section 1.06 Predecessor to the Issuer.

Notwithstanding anything to the contrary elsewhere in this Indenture, to the extent for periods including, or relating to, any period ending on or prior to the Closing Date, EBITDA and Consolidated Net Income, or any other financial calculations, in each case with respect to the Issuer for any periods that include any periods prior to the Closing Date shall be determined on the basis of the consolidated audited financial statements of IMS Health Incorporated and its subsidiaries for the relevant periods.

 

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ARTICLE 2

THE NOTES

 

Section 2.01 Form and Dating; Terms .

(a) General . The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rules or usage. Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(b) Global Notes . Notes issued in global form shall be substantially in the form of Exhibit A attached hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified in the “Schedule of Exchanges of Interests in the Global Note” attached thereto and each shall provide that it shall represent up to the aggregate principal amount of Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as applicable, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.

(c) Temporary Global Notes . Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, as custodian for the Depositary, and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. The Restricted Period shall be terminated upon the receipt by the Trustee of a written certificate from the Issuer.

Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in the Regulation S Permanent Global Note pursuant to the Applicable Procedures. Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.

(d) Terms . The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture may not exceed $1,000,000,000, except as provided in Section 2.07 hereof.

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Issuer, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

 

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The Notes shall be subject to repurchase by the Issuer pursuant to an Asset Sale Offer as provided in Section 4.10 hereof or a Change of Control Offer as provided in Section 4.14 hereof. The Notes shall not be redeemable, other than as provided in Article 3.

Additional Notes ranking pari passu with the Initial Notes may be created and issued under this Indenture from time to time by the Issuer in a principal amount that, together with the principal amount of all Initial Notes then outstanding, does not exceed $1,000,000,000, less the principal amount of all Notes as may be acquired, owned or held at any time by Holdings, the Issuer or any of their respective Subsidiaries whether or not retired (the “ Senior Unsecured Note Cap ”), and in any such case, without notice to or consent of the Holders and shall be consolidated with and form a single class with the Initial Notes and shall have the same terms as to status, redemption or otherwise as the Initial Notes, subject to the limitations described in Sections 4.09 and 4.12 hereof. The terms of the Initial Notes and any Additional Notes may have different issuance dates and dates from which interest accrues and shall be part of the same series. Such Additional Notes will be consolidated and form a single series with the Initial Notes, vote together with the Initial Notes and have the same terms as to status, redemption or otherwise as the Initial Notes. References to the Notes under this Indenture include the Additional Notes, unless the context requires otherwise.

(e) Euroclear and Clearstream Procedures Applicable . The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes that are held by Participants through Euroclear or Clearstream.

 

Section 2.02 Execution and Authentication .

At least one Officer shall execute the Notes on behalf of the Issuer by manual or facsimile signature.

If an Officer whose signature is on a Note no longer holds that office at the time such Note is authenticated, such Note shall nevertheless be valid.

A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated substantially in the form of Exhibit A attached hereto, as the case may be, by the manual or facsimile signature of the Trustee. The signature shall be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.

On the Closing Date, the Trustee shall, upon receipt of an Issuer Order (an “ Authentication Order ”), authenticate and deliver the Initial Notes. On any Subsequent Issue Date, the Trustee shall, upon receipt of an Authentication Order, authenticate and deliver any Additional Notes; provided that the Trustee may not (i) authenticate and deliver the Initial Notes if, as the result of such authentication and delivery, the aggregate principal amount of the Initial Notes exceeds $1,000,000,000 or (ii) authenticate and deliver any Notes (including any Additional Notes) if, as the result of such authentication and delivery, the aggregate principal amount of Notes (including any Additional Notes) exceeds $1,000,000,000 (except as provided in Section 2.07 hereof).

The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Notes. An authenticating agent may authenticate Notes 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 an Agent to deal with Holders or an Affiliate of the Issuer.

 

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Section 2.03 Registrar and Paying Agent .

The Issuer shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“ Registrar ”) and an office or agency where Notes may be presented for payment (“ Paying Agent ”). The Registrar shall keep a register of the Notes (“ Note Register ”) and of their transfer and exchange. The Issuer may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Issuer may change any Paying Agent or Registrar without prior notice to any Holder. The Issuer shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Issuer or any of its Subsidiaries may act as Paying Agent or Registrar.

The Issuer initially appoints The Depository Trust Company (“ DTC ”) to act as Depositary with respect to the Global Notes.

The Issuer initially appoints the Trustee to act as the Paying Agent and Registrar for the Notes and to act as Custodian with respect to the Global Notes.

 

Section 2.04 Paying Agent to Hold Money in Trust .

The Issuer shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and shall notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary) shall have no further liability for the money. If the Issuer or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the Notes.

 

Section 2.05 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 all Holders and shall otherwise comply with Trust Indenture Act Section 312(a). If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least two 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 the Holders of Notes and the Issuer shall otherwise comply with Trust Indenture Act Section 312(a).

 

Section 2.06 Transfer and Exchange .

(a) Transfer and Exchange of Global Notes . Except as otherwise set forth in this Section 2.06, a Global Note may be transferred, in whole and not in part, only to another nominee of the Depositary or to a successor Depositary or a nominee of such successor Depositary. A beneficial interest in a Global Note may not be exchanged for a Definitive Note unless (i) the Depositary (x) notifies the Issuer that it is unwilling or unable to continue as Depositary for such Global Note or (y) has ceased to be a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Issuer within 120 days, (ii) the Issuer, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Definitive Notes or (iii) there shall have occurred and be continuing an

 

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Event of Default with respect to the Notes. Upon the occurrence of any of the events in clause (i), (ii) or (iii) above, Definitive Notes delivered in exchange for any Global Note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note, except for Definitive Notes issued subsequent to any of the events in clause (i), (ii) or (iii) above and pursuant to Section 2.06(c) hereof. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); provided , however , beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.

(b) Transfer and Exchange of Beneficial Interests in the Global Notes . The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

(i) Transfer of Beneficial Interests in the Same Global Note . Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided , however , that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Temporary Global Note 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). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i).

(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes . In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) hereof, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; provided that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903 under the Securities Act. Upon consummation of an Exchange Offer by the Issuer in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by Holder of such beneficial interests

 

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in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.

(iii) Transfer of Beneficial Interests to Another Restricted Global Note . A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) hereof and the Registrar receives the following:

(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; or

(C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, a certificate in the form of Exhibit B hereto, including the certifications and certificates and opinion of counsel required by item (3) thereof, if applicable.

(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note . A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) hereof and:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;

(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

(D) the Registrar receives the following:

(1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or

 

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(2) if the holder of such beneficial interest in a Restricted Global Note 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 Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar or the Issuer so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above.

Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

(c) Transfer or Exchange of Beneficial Interests for Definitive Notes .

(i) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes . If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon the occurrence of any of the events in clause (i), (ii) or (iii) of Section 2.06(a) hereof and receipt by the Registrar of the following documentation:

(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;

(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;

(D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(a) thereof;

 

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(E) if such beneficial interest is being transferred to the Issuer or any of its Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(b) thereof;

(F) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(c) thereof; or

(G) if such beneficial interest is being transferred to an Institutional Accredited Investor 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 substantially in the form of Exhibit B hereto, including the certifications, certificates and opinion of counsel required by item (3) thereof, if applicable.

the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

(ii) Beneficial Interests in Regulation S Temporary Global Note to Definitive Notes . Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) of the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.

(iii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only upon the occurrence of any of the events in clauses (i), (ii) or (iii) of Section 2.06(a) hereof and if:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;

(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

 

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(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

(D) if the Registrar receives the following:

(1) If the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

(2) If the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D) if the Registrar or the Issuer so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

The Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered.

(iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes . If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon the occurrence of any of the events in clause (i), (ii) or (iii) of Section 2.06(a) hereof and satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer shall execute and the Trustee shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from or through the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall not bear the Private Placement Legend.

 

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(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.

(i) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes . If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;

(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;

(D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(a) thereof;

(E) if such Restricted Definitive Note is being transferred to the Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (A) through (D) above, certificate substantially in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;

(F) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(c) thereof; or

(G) if such Restricted Definitive Note is being transferred to the Issuer or any of its Restricted Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(b) thereof.

the Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the applicable Restricted Global Note, in the case of clause (B) above, the applicable 144A Global Note, and in the case of clause (C) above, the applicable Regulation S Global Note, and in the case of clause (E) above, the applicable IAI Global Note.

(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (x) a Broker-Dealer, (y) a Person participating in the distribution of the Exchange Notes or (z) a Person who is an affiliate (as defined in Rule 144) of the Issuer;

 

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(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

(D) the Registrar receives the following:

(1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or

(2) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar or the Issuer so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.

If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.

 

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(e) Transfer and Exchange of Definitive Notes for Definitive Notes . Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer or exchange 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 2.06(e):

(i) Restricted Definitive Notes to Restricted Definitive Notes . Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:

(A) if the transfer will be made to a QIB in accordance with Rule 144A, then the transferor must deliver a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; or

(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications required by item (3) thereof, if applicable.

(ii) Restricted Definitive Notes to Unrestricted Definitive Notes . Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;

(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement;

(D) if the Registrar receives the following:

(1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or

 

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(2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar or the Issuer so requests, an Opinion of Counsel in form reasonably acceptable to 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes . A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

(f) Exchange Offer . Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate:

(A) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that certify that (x) they are not Broker-Dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Issuer, and accepted for exchange in the Exchange Offer, and

(B) Unrestricted Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer by Persons that certify that they are not (x) Broker-Dealers, (y) participating in a distribution of the Exchange Notes or (z) affiliates (as defined in Rule 144) of the Issuer.

Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Issuer shall execute and the Trustee shall authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Unrestricted Definitive Notes in the appropriate principal amount.

(g) Legends . The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture:

(i) Private Placement Legend . (A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

“THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), AND

 

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THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (V) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENT OF THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.”

(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.

(ii) Global Note Legend . Each Global Note shall bear a legend in substantially the following form:

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(h) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER. UNLESS AND UNTIL IT IS

 

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EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”) 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 MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.”

(iii) Regulation S Temporary Global Note Legend . The Regulation S Temporary Global Note shall bear a legend in substantially the following form:

“THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.”

(iv) Original Issue Discount Legend .

“THIS NOTE (OR ITS PREDECESSOR) WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT. BEGINNING NO LATER THAN TEN (10) DAYS AFTER THE ISSUE DATE OF THIS NOTE (OR ITS PREDECESSOR) THE HOLDER MAY REQUEST, AND WILL PROMPTLY BE MADE AVAILABLE UPON REQUEST, THE FOLLOWING INFORMATION: ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY. SUCH INFORMATION WILL BE PROVIDED UPON WRITTEN REQUEST TO THE ATTENTION OF THE TREASURER, AT: IMS HEALTH INCORPORATED, 901 MAIN AVENUE, NORWALK, CONNECTICUT 06851.”

(h) Cancellation and/or Adjustment of Global Notes . At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned

 

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to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary 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 Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

(i) General Provisions Relating to Transfers and Exchanges .

(i) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

(ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuer shall require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).

(iii) Neither the Registrar nor the Issuer shall be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(v) The Issuer shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part, (C) to register the transfer of or to exchange a Note between a Record Date and the next succeeding Interest Payment Date or (D) to register the transfer of or to exchange any Notes selected for redemption or tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer or an Asset Sale Offer.

(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.

(vii) Upon surrender for registration of transfer of any Note at the office or agency of the Issuer designated pursuant to Section 4.02 hereof, the Issuer shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.

 

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(viii) At the option of the Holder, subject to Section 2.06(a) hereof, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and deliver, the replacement Global Notes and Definitive Notes to which the Holder making the exchange is entitled in accordance with the provisions of Section 2.02 hereof.

(ix) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

 

Section 2.07 Replacement Notes .

If either (x) any mutilated Note is surrendered to the Trustee, the Registrar or the Issuer, or (y) if the Issuer and the Trustee receive evidence to their satisfaction of the ownership and destruction, loss or theft of any Note, then the Issuer shall issue and the Trustee, upon receipt of an Authentication Order and satisfaction of any other requirements of the Trustee, shall authenticate a replacement Note. If required by the Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer may charge for its expenses in replacing a Note.

Every replacement Note is a contractual obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

 

Section 2.08 Outstanding Notes .

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds such Note.

If a Note is replaced pursuant to Section 2.07 hereof, such Note shall cease to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.

If the principal amount of any Note is considered paid under Section 4.01 hereof, such Note shall cease to be outstanding and interest thereon shall cease to accrue.

If the Paying Agent (other than the Issuer, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay any Notes payable on such date, then on and after such date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

 

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Section 2.09 Treasury Notes .

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer, or by any Affiliate of the Issuer, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right to deliver any such direction, waiver or consent with respect to such pledged Notes and that the pledgee is not the Issuer or any obligor upon the Notes or any Affiliate of the Issuer or of such other obligor.

 

Section 2.10 Temporary Notes .

Until certificates representing Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Issuer considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.

Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this Indenture.

 

Section 2.11 Cancellation .

The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee or, at the direction of the Trustee, the Registrar or the Paying Agent and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy cancelled Notes (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all cancelled Notes shall be delivered to the Issuer. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.

 

Section 2.12 Defaulted Interest .

If the Issuer defaults in a payment of interest or Special Interest, if any, on the Notes, it shall pay the defaulted interest and Special Interest, if any, in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 6.03 hereof. The Issuer shall notify the Trustee in writing of the amount of defaulted interest and Special Interest, if any, proposed to be paid on each Note and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest and Special Interest, if any, or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or cause to be fixed each such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. The Trustee shall notify the Issuer of such special record date promptly, and in any event at least

 

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20 days before such special record date. At least 15 days before the special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) shall deliver or cause to be delivered, to each Holder a notice at his or her address as it appears in the Note Register that states the special record date, the related payment date and the amount of such interest and such Special Interest, if any, to be paid.

 

Section 2.13 CUSIP Numbers .

The Issuer in issuing the Notes may use CUSIP numbers (if then generally in use) and, if so, the Trustee shall use CUSIP numbers in notices of redemption as a convenience to Holders; provided , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer shall as promptly as practicable notify the Trustee of any change in the CUSIP numbers.

ARTICLE 3

REDEMPTION

 

Section 3.01 Notices to Trustee .

If the Issuer elects to redeem Notes pursuant to Section 3.07 hereof, it shall furnish to the Trustee, at least 35 days (unless a shorter notice shall be satisfactory to the Trustee) but not more than 60 days before a redemption date (or longer if such redemption notice will be issued in connection with Article 8 or Article 13 hereof), an Officer’s Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price.

 

Section 3.02 Selection of Notes to Be Redeemed or Purchased .

If less than all of the Notes are to be redeemed at any time pursuant to Section 3.07 hereof or purchased in an Asset Sale Offer pursuant to Section 4.10 hereof or a Change of Control Offer pursuant to Section 4.14 hereof at any time, the Trustee shall select the Notes to be redeemed or purchased (a) if such Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed or (b) on a pro rata basis or, to the extent that selection on a pro rata basis is not practicable, by lot or by such other method the Trustee considers fair and appropriate or as required by the rules of the Depositary. In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased shall be selected, unless otherwise provided herein, not less than 30 days nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption or purchase.

The Trustee shall promptly notify the Issuer in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected shall be in an integral multiple of $1,000 (but in a minimum amount of $2,000); no Notes of $2,000 or less can be redeemed in part, except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000 (or a minimum amount of $2,000), shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.

 

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Section 3.03 Notice of Redemption .

Subject to Section 3.09 hereof, the Issuer shall mail or cause to be delivered by electronic transmission or mailed by first-class mail notices of redemption at least 30 days but not more than 60 days before the purchase or redemption date to each Holder of Notes to be redeemed at such Holder’s registered address, or to the Trustee to forward to each Holder of Notes at such Holder’s registered address, or shall otherwise mail on such timeframe such notice in accordance with the procedures of DTC, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 hereof. Except as set forth in Section 3.07(b) hereof, notices of redemption may not be conditional.

The notice shall identify the Notes to be redeemed and shall state:

(a) the redemption date;

(b) the redemption price;

(c) that if any Note is to be redeemed in part only, the portion of the principal amount of that Note that is to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion of the original Note representing the same indebtedness to the extent not redeemed will be issued in the name of the Holder of the Notes upon cancellation of the original Note;

(d) the name and address of the Paying Agent;

(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(f) that, unless the Issuer defaults in making such redemption payment, interest and Special Interest, if any, on Notes called for redemption ceases to accrue on and after the redemption date;

(g) the paragraph or subparagraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

(h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes; and

(i) if in connection with a redemption pursuant to Section 3.07(b) hereof, any condition to such redemption.

At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at its expense; provided that the Issuer shall have mailed to the Trustee, at least 5 Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

 

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Section 3.04 Effect of Notice of Redemption .

Once notice of redemption is mailed or delivered in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price (except as provided for in Section 3.07(b) hereof). The notice, if delivered in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice by electronic transmission or by mail or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Subject to Section 3.05 hereof, on and after the redemption date, interest shall cease to accrue on Notes or portions of Notes called for redemption.

 

Section 3.05 Deposit of Redemption or Purchase Price .

Prior to 10:00 a.m. (New York City time) on the redemption or purchase date, the Issuer shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued and unpaid interest and Special Interest, if any, on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest and Special Interest, if any, on, all Notes to be redeemed or purchased.

If the Issuer complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest and Special Interest, if any, shall cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest and Special Interest, if any, to the redemption or purchase date shall be paid to the Person in whose name such Note was registered at the close of business on such Record Date. If any Note called for redemption or purchase shall not be so paid upon surrender for redemption or purchase because of the failure of the Issuer to comply with the preceding paragraph, interest and Special Interest, if any, shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest accrued to the redemption or purchase date not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

 

Section 3.06 Notes Redeemed or Purchased in Part .

Upon surrender of a Note that is redeemed or purchased in part, the Issuer shall issue and the Trustee shall authenticate for the Holder at the expense of the Issuer a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered representing the same indebtedness to the extent not redeemed or purchased; provided that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. It is understood that, notwithstanding anything in this Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.

 

Section 3.07 Optional Redemption .

(a) At any time prior to March 1, 2014, the Issuer may redeem all or part of the Notes, upon notice as provided in Section 3.03 hereof, at a redemption price equal to 100% of the principal amount of such Notes redeemed, plus the Applicable Premium as of the date of redemption (the “ Redemption Date ”), plus accrued and unpaid interest and Special Interest, if any, thereon to, the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

 

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(b) Until March 1, 2013, the Issuer may redeem up to 40.0% of the aggregate principal amount of Notes (including any Additional Notes issued after the Closing Date) issued by the Issuer, and on a pro rata basis as between the principal amount of the Notes then outstanding, at a redemption price equal to 112.50% of the aggregate principal amount thereof, plus accrued and unpaid interest and Special Interest, if any, thereon to the applicable Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, solely with the net cash proceeds received by the Issuer from one or more Equity Offerings; provided that at least 60% of the sum of the aggregate principal amount of Notes issued on the Closing Date and Additional Notes issued after the Closing Date remains outstanding immediately after the occurrence of each such redemption; provided further that each such redemption occurs within 60 days of the date of closing of each such Equity Offering. Notice of any redemption upon any such Equity Offering may be given prior to the redemption thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to the completion of the related Equity Offering.

(c) Except pursuant to clause (a) or (b) of this Section 3.07, the Notes will not be redeemable at the Issuer’s option prior to March 1, 2014.

(d) On and after March 1, 2014, the Issuer may redeem the Notes, in whole or in part, upon notice provided as described in Section 3.03 hereof, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest and Special Interest, if any, thereon to the applicable Redemption Date, subject to the right of Holders of record of such Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on March 1 of each of the years indicated below:

 

Year    Percentage  

2014

     110.000

2015

     106.250

2016

     103.125

2017 and thereafter

     100.000

(e) Any redemption of the Notes pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. In addition, each redemption pursuant to this Section 3.07 shall relate to an aggregate principal amount of Notes of at least the lesser of (a) $5,000,000 and (b) the remaining outstanding principal amount of the Notes.

 

Section 3.08 Mandatory Redemption .

The Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

 

Section 3.09 Offers to Repurchase by Application of Excess Proceeds .

(a) In the event that, pursuant to Section 4.10 hereof, the Issuer shall be required to commence an Asset Sale Offer, it shall follow the procedures specified below.

(b) The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “ Offer Period ”). No later than 5 Business Days after the termination of the Offer Period (the “ Purchase Date ”), the Issuer shall apply all Excess Proceeds (the “ Offer Amount ”) to the purchase of Notes and, if required, Pari Passu Indebtedness (on a pro rata basis, if applicable), or, if less than the

 

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Offer Amount has been tendered, all Notes and Pari Passu Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

(c) If the Purchase Date is on or after a Record Date and on or before the related Interest Payment Date, any accrued and unpaid interest and Special Interest, if any, up to but excluding the Purchase Date, shall be paid to the Person in whose name a tendered Note accepted for purchase is registered at the close of business on such Record Date, and no Special Interest shall be payable to Holders who tender a Note pursuant to the Asset Sale Offer.

(d) Upon the commencement of an Asset Sale Offer, the Issuer shall deliver electronically or by first-class mail, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The notice, which shall govern the terms of the Asset Sale Offer, shall state:

(i) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open;

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

(iii) that any Note not tendered or accepted for payment shall continue to accrue interest and Special Interest, if any;

(iv) that, unless the Issuer defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest and Special Interest, if any, after the Purchase Date;

(v) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in integral multiples of $1,000 only (but in a minimum amount of $2,000);

(vi) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Note completed, or transfer such Note by book-entry transfer, to the Issuer, the Depositary, if appointed by the Issuer, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

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

(viii) that, if the aggregate principal amount of Notes and Pari Passu Indebtedness surrendered by the holders thereof exceeds the Offer Amount, the Trustee shall, through the facilities of the Depositary (in the case of Global Notes), select the Notes and, at the direction of the Issuer, such Pari Passu Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Pari Passu Indebtedness tendered (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $2,000, or integral multiples of $1,000 in excess thereof, shall be purchased); and

(ix) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) representing the same indebtedness to the extent not repurchased.

 

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(e) On or before the Purchase Date, the Issuer shall, to the extent lawful, (1) accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof so tendered.

(f) The Issuer, the Depositary or the Paying Agent, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes properly tendered by such Holder and accepted by the Issuer for purchase, and the Issuer shall promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and mail or deliver (or cause to be transferred by book-entry) such new Note to such Holder (it being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate and mail or deliver such new Note) in a principal amount equal to any unpurchased portion of the Note surrendered representing the same indebtedness to the extent not repurchased; provided , that each such new Note shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. Any Note not so accepted for purchase shall be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer shall publicly announce the results of the Asset Sale Offer on or as soon as practicable after the Purchase Date.

Other than as specifically provided in this Section 3.09 or Section 4.10 hereof, any purchase pursuant to this Section 3.09 shall be made pursuant to the applicable provisions of Sections 3.01 through 3.06 hereof.

ARTICLE 4

COVENANTS

 

Section 4.01 Payment of Notes .

The Issuer shall pay or cause to be paid the principal of, premium, if any, and interest and Special Interest, if any, on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Issuer or a Subsidiary, holds as of noon Eastern Time on the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest and Special Interest, if any, then due.

The Issuer shall pay Special Interest, if any, in the same manner and on the dates and in the amounts set forth in the Registration Rights Agreement.

The Issuer shall pay interest on overdue principal (including post-petition interest in any proceeding under any Bankruptcy Law) and on overdue installments of interest and Special Interest, if any, to the extent lawful, as provided in Section 6.03 hereof.

 

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Section 4.02 Maintenance of Office or Agency .

The Issuer shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange or presented for payment and where notices and demands to or upon the Issuer in respect of the Notes 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.

The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency for such purposes. 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.

The Issuer hereby initially designates the Corporate Trust Office of the Trustee as one such office or agency of the Issuer in accordance with Section 2.03 hereof.

 

Section 4.03 Reports and Other Information .

(a) Notwithstanding that the Issuer may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Issuer shall furnish to the Trustee and Holders of the Notes (without exhibits) or post on its website (which may be password protected so long as the password is made promptly available by the Issuer to Holders, prospective investors, broker dealers and securities analysts upon request),

(1) within 90 days after the end of each fiscal year, annual reports of the Issuer containing substantially all of the information that would have been required to be contained in an Annual Report on Form 10-K under the Exchange Act (“ Form 10-K ”)if the Issuer had been a reporting company under the Exchange Act, including (A) “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” (B) audited financial statements prepared in accordance with GAAP as then in effect, and (C) a presentation of EBITDA of the Issuer and its Subsidiaries consistent with the presentation thereof in the final offering memorandum relating to the Notes and derived from such financial statements; provided , that the Issuer shall not be required to provide the information otherwise required to be presented by reporting companies under the Exchange Act pursuant to Part III of Form 10-K except for such information as would be required by Item 401 of Regulation S-K (other than the information required by subsections (c) and (g) of such item), Item 403(a) of Regulation S-K and Item 404 of Regulation S-K (assuming a transaction threshold of $2,000,000 rather than $120,000 and other than information with respect to employment and compensation arrangements and the information required by Item 404(b)).

(2) within 45 days (or in the case of the first three fiscal quarters ending after the Closing Date, 60 days) after the end of each of the first three fiscal quarters of each fiscal year, quarterly reports of the Issuer containing substantially all of the information that would have been required to be contained in a Quarterly Report on Form 10-Q under the Exchange Act if the Issuer had been a reporting company under the Exchange Act, including (A) “Management’s Discussion

 

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and Analysis of Financial Condition and Results of Operations,” (B) unaudited quarterly financial statements prepared in accordance with GAAP as then in effect and reviewed pursuant to Statement on Auditing Standards No. 100 (or any successor provision), and (C) a presentation of EBITDA of the Issuer and its Subsidiaries consistent with the presentation thereof in the final offering memorandum relating to the Notes and derived from such financial statements; and

(3) information substantially similar to the information that would be required to be included in a Current Report on Form 8-K (as in effect on the Closing Date) filed with the SEC by the Issuer (if the Issuer were required to prepare and file such form) pursuant to Items 1.01 (Entry into a Material Definitive Agreement), 1.02 (Termination of a Material Definitive Agreement), 1.03 (Bankruptcy or Receivership), 2.01 (Completion of Acquisition or Disposition of Assets), 2.04 (Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement), 2.06 (Material Impairment), 4.01 (Changes in Registrant’s Certifying Accountants), 4.02 (Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review), 5.01 (Changes in Control of Registrant) 5.02(a),(b),(c) (Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensation Arrangements of Certain Officers) (other than any information relating to compensation arrangements with any directors or officers) and 9.01(a) (Financial Statements and Exhibits but only with respect to historical financial statements relating to transactions required to be reported pursuant to Item 2.01 and involving acquisitions of Persons that had revenues in excess of $200,000,000 for the last four completed fiscal quarters prior to the consummation of the acquisition) of such form, within the later of 15 days after the occurrence of the specified event or such longer timeframe that would have been required for a current report on Form 8-K; provided that (i) unless otherwise required to be provided to Holders, no such current report will be required to be furnished if the Issuer determines in its good faith judgment that such event is not material to Holders or the business, assets, operations, financial position or prospects of the Issuer and its Restricted Subsidiaries, taken as a whole and (ii) trade secrets and other confidential information that is competitively sensitive in the good faith and reasonable determination of the Issuer may be excluded from disclosures.

(4) following the consummation of the Exchange Offer or the effectiveness of the Shelf Registration Statement contemplated by the Registration Rights Agreement, whether or not required by the SEC, in lieu of the requirements set forth in clauses (1), (2) and (3) above, the Issuer will file a copy of all of the information and reports referred to in clause (1) and (2) above (provided that any presentation of EBITDA need not be consistent with the presentation thereof in the final offering memorandum to the extent an alternative formulation is then required under the SEC’s rules and regulations) and all current reports on Form 8-K required to be filed with the SEC for public availability within the time periods specified in the SEC’s rules and regulations (unless the SEC will not accept such a filing) and make such information available to prospective investors upon request.

The reports required pursuant to clauses (1), (2) and (3) above will not be required to comply with (i) Section 302, Section 404 or Section 906 of the Sarbanes-Oxley Act of 2002, (ii) related Items 307 and 308 of Regulation S-K promulgated by the SEC, (iii) Item 10(e) of Regulation S-K (with respect to any non-GAAP financial measures contained therein) or any comparable successor provision and (iv) Regulation S-X Rule 3-10; provided that if non-Guarantor Subsidiaries (on a consolidated basis) constitute more than 10% of the Issuer’s consolidated revenues, operating income, assets or debt for the last four quarters ended on, or as of, as the case may be, the date of any reports required pursuant to clauses (1) or (2) above, then the Issuer must provide supplemental unaudited disclosure of its operating results by geographic region on a basis substantially similar to the manner in which such information (including the notes thereto) is included in the Form 10-K filed by

 

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the Issuer for the year ending December 31, 2008, provided that such operating results shall also include disclosure of United States operating income and indebtedness for borrowed money payable to Persons (other than the Issuer and its Restricted Subsidiaries).

No report required pursuant to clauses (1), (2) and (3) above provided prior to the annual report for the fiscal year ending December 31, 2010 shall be required to contain the purchase accounting adjustments relating to the Transaction.

At any time that any of the Issuer’s Subsidiaries are Unrestricted Subsidiaries, then the quarterly and annual reports required by clauses (1) and (2) above will include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” or other comparable section, of the financial condition and results of operations of the Issuer and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Issuer.

(b) So long as any Notes are outstanding, the Issuer will also:

(1) issue a press release to an internationally recognized wire service no fewer than three Business Days prior to the delivery or posting of the annual and quarterly reports required by Sections 4.03(a)(1) and (2) announcing the date on which such reports will be made available to the Holders and directing Holders, prospective investors, broker-dealers and securities analysts to contact the investor relations office of the Issuer to obtain copies of such reports;

(2) within 10 Business Days after furnishing to the Trustee the annual and quarterly reports required by Sections 4.03(a)(1) and (2), hold a conference call to discuss such reports and the results of operations for the relevant reporting period;

(3) issue a press release to an internationally recognized wire service no fewer than three Business Days prior to the date of the conference call required by Section 4.03(b)(2), announcing the time and date of such conference call and either including all information necessary to access the call or directing Holders, prospective investors, broker dealers and securities analysts to contact the appropriate person at the Issuer to obtain such information; and

(4) maintain a website (which may be password protected so long as the password is made promptly available by the Issuer to Holders, prospective investors, broker dealers and securities analysts) to which all of the reports and press releases required by this Section 4.03 are posted.

(c) In the event that any direct or indirect parent company of the Issuer becomes a guarantor of the Notes, the Issuer may satisfy its obligations in this Section 4.03 with respect to financial information relating to the Issuer by furnishing financial information relating to such parent; provided that the same is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such parent, on the one hand, and the information relating to the Issuer and its Restricted Subsidiaries on a standalone basis, on the other hand.

(d) In addition, to the extent not satisfied by the foregoing, the Issuer shall, for so long as any Notes are outstanding, furnish to Holders and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144(A)(d)(4) under the Securities Act.

 

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Section 4.04 Compliance Certificate .

(a) The Issuer and each Guarantor (to the extent that such Guarantor is so required under the Trust Indenture Act) shall deliver to the Trustee, within 90 days after the end of each fiscal year ending after the Closing Date, a certificate from the principal executive officer, principal financial officer or principal accounting officer stating that a review of the activities of Holdings, the Issuer and its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether the Issuer has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to such Officer signing such certificate, that to the best of his or her knowledge the Issuer has kept, observed, performed and fulfilled each and every condition and covenant contained in this Indenture during such fiscal year and is not in default in the performance or observance of any of the terms, provisions, covenants and conditions of this Indenture (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action the Issuer is taking or proposes to take with respect thereto).

(b) When any Default has occurred and is continuing under this Indenture, or if the Trustee or the Holder of any Note gives any notice or takes any other action with respect to a claimed Default, the Issuer shall promptly (which shall be no more than five (5) Business Days) after an Officer obtains actual knowledge thereof deliver to the Trustee, by registered or certified mail or by electronic transmission an Officer’s Certificate specifying such event and what action the Issuer proposes to take with respect thereto.

 

Section 4.05 Taxes .

The Issuer shall pay or discharge, and shall cause Holdings and each of the Restricted Subsidiaries of the Issuer to pay or discharge, prior to delinquency, all material taxes, lawful assessments, and governmental levies except such as are contested in good faith and by appropriate actions or where the failure to effect such payment or discharge is not adverse in any material respect to the Holders of the Notes.

 

Section 4.06 Stay, Extension and Usury Laws .

The Issuer and each of the Guarantors covenant (to the extent that they may lawfully do so) that they shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer and each of the Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant (to the extent they may lawfully do so) that they shall not, by resort to any such law, 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 has been enacted.

 

Section 4.07 Limitation on Restricted Payments .

(a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

(1) declare or pay any dividend or make any payment or distribution on account of the Issuer’s, or any of its Restricted Subsidiaries’ Equity Interests, including any dividend or distribution payable in connection with any merger or consolidation other than:

(A) any dividend or distribution by the Issuer payable solely in Equity Interests (other than Disqualified Stock) of the Issuer; or

(B) any dividend or distribution by a Restricted Subsidiary of the Issuer 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 Subsidiary, the Issuer 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;

 

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(2) purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Issuer or any direct or indirect parent of the Issuer, including in connection with any merger or consolidation;

(3) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment, sinking fund payment or maturity, any Subordinated Indebtedness, other than:

(A) Indebtedness permitted under clauses (7), (8) or (9) of Section 4.09(b) hereof; or

(B) the purchase, repurchase or other acquisition of Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition; or

(4) make any Restricted Investment,

(each such payment and other action set forth in clauses (1) through (4) above being referred to as a “ Restricted Payment ” and collectively as “ Restricted Payments ”) unless, at the time of any such Restricted Payment:

(1) no 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 under the Fixed Charge Coverage Ratio Test; and

(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and its Restricted Subsidiaries after the Closing Date (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6), (7), (9), (10), (11), (13) and (14) of Section 4.07(b) hereof), is less than the sum of (without duplication):

(A) 50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period) from the beginning of the first full fiscal quarter following the Closing Date to the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the event such Consolidated Net Income for such period is a deficit, then minus 100% of such deficit); plus

 

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(B) 100% of (x) the aggregate net cash proceeds and (y) the fair market value of other property, in any such case, received by the Issuer after the Closing Date and not in connection with the consummation of the Transactions from the issue or sale of:

(i)(a) Equity Interests of the Issuer, including Treasury Capital Stock, but excluding cash proceeds and the fair market value of marketable securities or other property received from the sale of:

(x) Equity Interests to any future, present or former employees, directors, officers or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any direct or indirect parent of the Issuer or any of the Issuer’s Subsidiaries after the Closing Date to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of Section 4.07(b) hereof; and

(y) Designated Preferred Stock; and

(b) to the extent such net cash proceeds are actually contributed to the Issuer, Equity Interests of any of the Issuer’s direct or indirect parent companies (excluding contributions of the proceeds from the sale of Designated Preferred Stock of any such companies or contributions to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of Section 4.07(b) hereof); or

(ii) debt securities of the Issuer that have been converted by their terms into or exchanged for such Equity Interests of the Issuer;

provided , however , that this clause (B) shall not include the proceeds from (w) the issuance of Refunding Capital Stock applied in accordance with clause (2) of Section 4.07(b) hereof, (x) the issuance of Equity Interests or convertible debt securities of the Issuer sold to a Restricted Subsidiary of the Issuer, (y) the issuance of Disqualified Stock or debt securities that have been converted into Disqualified Stock or (z) Excluded Contributions; plus

(C) 100% of (x) the aggregate net cash proceeds and (y) the fair market value of other property, in any such case, contributed to the capital of the Issuer following the Closing Date and not in connection with the consummation of the Transactions (other than proceeds received from (i) contributions in respect of Disqualified Stock, (ii) contributions by a Restricted Subsidiary of the Issuer to the Issuer, or (iii) Excluded Contributions); plus

(D) 100% of (x) the aggregate net cash proceeds and (y) the fair market value of other property, in any such case, received by means of:

(i) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of Restricted Investments made by the Issuer or its Restricted Subsidiaries and repurchases and redemptions of such Restricted Investments from the Issuer or its Restricted Subsidiaries and repayments of loans or advances, and releases of guarantees, which constitute Restricted Investments made by the Issuer or its Restricted Subsidiaries, in each case after the Closing Date; or

 

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(ii) the sale (other than to the Issuer or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary or a distribution from an Unrestricted Subsidiary (other than in each case to the extent the Investment in such Unrestricted Subsidiary constituted a Permitted Investment) or a dividend from an Unrestricted Subsidiary after the Closing Date; plus

(E) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary or the merger, amalgamation or consolidation of an Unrestricted Subsidiary into the Issuer or a Restricted Subsidiary or the transfer of all or substantially all of the assets of an Unrestricted Subsidiary to the Issuer or a Restricted Subsidiary after the Closing Date, the fair market value of the Investment in such Unrestricted Subsidiary or the assets transferred at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary or at the time of such merger, amalgamation, consolidation or transfer of assets (other than to the extent such Investment constituted a Permitted Investment);

(b) The foregoing provisions of Section 4.07(a) hereof shall not prohibit:

(1) the payment of any dividend or other distribution or the consummation of any irrevocable redemption or repurchase within 60 days after the date of declaration thereof or the giving of the irrevocable redemption or repurchase notice, as applicable, if at the date of declaration or notice such dividend, distribution, redemption or repurchase payment would have complied with the provisions of this Indenture;

(2) (a) the redemption, repurchase, retirement or other acquisition of any Equity Interests, including any accrued and unpaid dividends thereon (“ Treasury Capital Stock ”), or Subordinated Indebtedness of the Issuer or any Equity Interests of any direct or indirect parent company of the Issuer, in exchange for, or out of the proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary) of, Equity Interests of the Issuer or any direct or indirect parent company of the Issuer to the extent contributed to the Issuer (in each case, other than any Disqualified Stock) (“ Refunding Capital Stock ”) and (b) if immediately prior to the retirement of Treasury Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this Section 4.07(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, retire or otherwise acquire any Equity Interests of any direct or indirect parent company of the Issuer) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Treasury Capital Stock immediately prior to such retirement;

(3) the redemption, repurchase, exchange, defeasance or other acquisition or retirement of (i) Subordinated Indebtedness of the Issuer or a Subsidiary Guarantor made in exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of the Issuer or a Subsidiary Guarantor, (ii) Disqualified Stock of the Issuer made by exchange for, or out of the proceeds of the substantially concurrent sale of, Disqualified Stock of the Issuer or (iii) Preferred Stock of a Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Preferred Stock of a Subsidiary Guarantor; that, in each case, is incurred in compliance with Section 4.09 hereof, so long as:

(a) the principal amount (or accreted value, if applicable) of such new Indebtedness or the liquidation preference of such new Disqualified Stock or Preferred Stock does not exceed the principal amount of (or accreted value, if applicable), plus any

 

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accrued and unpaid interest on, the Subordinated Indebtedness or the liquidation preference of, plus any accrued and unpaid dividends on, the Disqualified Stock or Preferred Stock being so defeased, redeemed, repurchased, exchanged, acquired or retired for value, plus the amount of any reasonable premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness or Disqualified Stock or Preferred Stock being so redeemed, repurchased, exchanged, defeased, acquired or retired, defeasance costs and any reasonable fees and expenses incurred in connection with such redemption, repurchase, exchange, acquisition or retirement and the issuance of such new Indebtedness, Disqualified Stock or Preferred Stock;

(b) such new Indebtedness (and any related Guarantee by a Subsidiary Guarantor) is subordinated to the Notes or the applicable Guarantee of the Notes at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, acquired, defeased or retired for value;

(c) such new Indebtedness, Disqualified Stock or Preferred Stock has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness, Disqualified Stock or Preferred Stock being so redeemed, repurchased, defeased, exchanged, acquired or retired; and

(d) such new Indebtedness, Disqualified Stock or Preferred Stock has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness, Disqualified Stock or Preferred Stock being so redeemed, repurchased, defeased, exchanged acquired or retired;

(4) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of the Issuer or any of its direct or indirect parent companies held by any future, present or former employee, director, officer or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer or any of its Restricted Subsidiaries or any direct or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement (including, for the avoidance of doubt, any principal and interest payable on any notes issued by the Issuer or any direct or indirect parent company of the Issuer in connection with any such repurchase, retirement or other acquisition), or any stock subscription or shareholder agreement, including any Equity Interest rolled over by management of the Issuer or any direct or indirect parent company of the Issuer in connection with the Transactions; provided , however , that the aggregate amount of Restricted Payments made under this clause (4) shall not exceed in any calendar year $20,000,000 (which shall increase to $40,000,000 subsequent to the consummation of a Qualified Public Offering and which shall be reduced to $10,000,000 during the continuance of any Event of Default) (with unused amounts for any year being carried over to the succeeding year); provided further that such amount in any calendar year may be increased by an amount not to exceed:

(a) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock) of the Issuer and, to the extent contributed to the Issuer, the cash proceeds from the sale of Equity Interests of any of the Issuer’s direct or indirect parent companies, in each case to any future, present or former employees, directors, officers or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer or any of its Restricted Subsidiaries that occurs after the Closing Date and not in connection with the consummation of the Transactions, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clause (3) of Section 4.07(a) hereof; plus

 

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(b) the cash proceeds of key man life insurance policies received by the Issuer or its Restricted Subsidiaries (or any direct or indirect parent company to the extent contributed to common equity of the Issuer) after the Closing Date; less

(c) the amount of any Restricted Payments previously made with the cash proceeds described in clauses (a) and (b) of this clause (4);

and provided further that cancellation of Indebtedness owing to the Issuer or any of its Restricted Subsidiaries from any future, present or former employees, directors, officers or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any direct or indirect parent company, or any of the Issuer’s Restricted Subsidiaries in connection with a repurchase of Equity Interests of the Issuer or any of its direct or indirect parent companies will not be deemed to constitute a Restricted Payment for purposes of this Section 4.07 or any other provision of this Indenture;

(5) the declaration and payment by the Issuer of dividends to holders of any class or series of Disqualified Stock of the Issuer or by any Restricted Subsidiary of the Issuer of dividends to holders of any class or series of Preferred Stock of any of the Issuer’s Restricted Subsidiaries, in any such case, issued in accordance with Section 4.09 hereof and to the extent such dividends are included in the definition of “Fixed Charges”;

(6) (a) the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued by the Issuer or any Restricted Subsidiary after the Closing Date;

(b) the declaration and payment of dividends to a direct or indirect parent company of the Issuer, 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 such parent company issued after the Closing Date; provided that the amount of dividends paid pursuant to this clause (b) shall not exceed the aggregate amount of cash actually contributed to the Issuer from the sale of such Designated Preferred Stock; or

(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 (2) of this Section 4.07(b);

provided , however , in the case of each of (a), (b) and (c) of this clause (6), that 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 or declaration on a pro forma basis, the Issuer could incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio Test set forth in Section 4.09(a) hereof;

(7) cashless 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;

 

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(8) the declaration and payment of dividends on the Issuer’s common stock (or the payment of dividends to any direct or indirect parent entity to fund a payment of dividends on such entity’s common stock), following the first public offering of the Issuer’s common stock or the common stock of any of its direct or indirect parent companies, in each case, after the Closing Date, of up to 6%  per annum of the net cash proceeds received by or contributed to the Issuer in or from any such public offering, other than public offerings with respect to the Issuer’s common stock registered on Form S-8 and other than any public sale constituting an Excluded Contribution;

(9) Restricted Investments that are made with Excluded Contributions;

(10) other Restricted Payments in an aggregate amount taken together with all other Restricted Payments made pursuant to this clause (10) not to exceed $100,000,000 at any one time outstanding;

(11) any Restricted Payment used to fund (or otherwise made in connection with) the Transactions to the extent permitted by Section 4.11 hereof;

(12) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions similar to those set forth in Section 4.10 and Section 4.14 hereof; provided that all Notes validly tendered by Holders in connection with the related Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed, retired or acquired for value;

(13) cash payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests of the Issuer or any direct or indirect parent company of the Issuer;

(14) the declaration and payment of dividends or distributions by the Issuer to, or the making of loans to, Holdings (or any direct or indirect parent entities the sole direct or indirect assets of which consist of the Capital Stock of Holdings and cash) in amounts required for Holdings or any such direct or indirect parent companies to pay, in each case without duplication,

(a) franchise and excise taxes and other fees, taxes and expenses required to maintain their legal existence;

(b) foreign, federal, state and local income and similar taxes, to the extent such income taxes are attributable to the income of the Issuer and its Restricted Subsidiaries and, to the extent of the amount actually received from its Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries; provided that in each case the amount of such payments in any fiscal year does not exceed (i) the amount of such taxes actually paid by Holdings or such direct or indirect parent companies on account of such taxes, and (ii) the amount that the Issuer and its Restricted Subsidiaries would be required to pay in respect of foreign, federal, state and local taxes for such fiscal year were the Issuer, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such parent entity;

(c) customary salary, bonus and other benefits payable to officers and employees of Holdings or any such direct or indirect parent company of the Issuer to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of the Issuer and its Restricted Subsidiaries;

 

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(d) general operating and overhead costs and expenses of Holdings or any such direct or indirect parent company to the extent such costs and expenses are attributable to the ownership, operations or business of the Issuer and its Restricted Subsidiaries; and

(e) reasonable fees and expenses of Holdings or any such direct or indirect parent company to the extent related to any unsuccessful equity or debt offering of Holdings or such parent entity.

provided , however , that, at the time of and after giving effect to, any Restricted Payment permitted under clauses (10) and (12) of this Section 4.07(b), no Event of Default shall have occurred and be continuing or would occur as a consequence thereof.

(c) At the Closing Date, all of the Issuer’s Subsidiaries will be Restricted Subsidiaries. The Issuer shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the second to last paragraph of the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an amount determined as set forth in the definition of “Investments.” Such designation shall be permitted only if a Restricted Payment in such amount would be permitted at such time, whether pursuant to Section 4.07(a) hereof or under clause (9), (10) or (13) of Section 4.07(b) hereof, or pursuant to the definition of “Permitted Investments,” and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries shall not be subject to any of the restrictive covenants set forth in this Indenture.

 

Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries .

(a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries that are not Guarantors to, directly or indirectly, create or otherwise cause to exist or become effective any consensual encumbrance or consensual restriction on the ability of any such Restricted Subsidiary to:

(1) (A) pay dividends or make any other distributions to the Issuer or any of its Restricted Subsidiaries on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or (B) pay any Indebtedness owed to the Issuer or any Subsidiary Guarantor;

(2) make loans or advances to the Issuer or any Subsidiary Guarantor; or

(3) sell, lease or transfer any of its properties or assets to the Issuer or any Subsidiary Guarantor.

(b) The restrictions in Section 4.08(a) hereof shall not apply to encumbrances or restrictions existing under or by reason of:

(1) contractual encumbrances, licenses or restrictions in effect on the Closing Date, including pursuant to the Credit Agreement and the related documentation and Hedging Obligations and related documentation;

 

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(2) contractual restrictions contained in this Indenture, the Notes and Guarantees;

(3) purchase money obligations for property acquired in the ordinary course of business and Capitalized Lease Obligations that impose restrictions of the nature discussed in clause (3) of Section 4.08(a) hereof on the property so acquired;

(4) applicable law or any applicable rule, regulation or order;

(5) any agreement, license or other instrument of a Person acquired by or merged, consolidated or amalgamated with or into the Issuer or any of its Restricted Subsidiaries in existence at the time of such acquisition, merger, consolidation or amalgamation (but in any such case not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;

(6) contracts for the sale of assets, including customary restrictions with respect to a Subsidiary of the Issuer pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary;

(7) Secured Indebtedness otherwise permitted to be incurred pursuant to Section 4.09 hereof and Section 4.12 hereof that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(8) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

(9) customary provisions in any joint venture agreement or other similar agreement;

(10) customary provisions contained in any covenant not to sue, release, consent, transfer, lease, sublease, license or sublicense of intellectual property and other assets, in each case, entered into in the ordinary course of business;

(11) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which the Issuer 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 the Issuer or such Restricted Subsidiary that are subject to such agreement, the payment rights arising hereunder or the proceeds thereof and not any other asset or property of the Issuer or such Restricted Subsidiary or the assets or property of any other Restricted Subsidiary;

(12) Indebtedness of Foreign Subsidiaries incurred subsequent to the Closing Date in compliance with Section 4.09 hereof; provided that, the Issuer has determined in its good faith judgment that the incurrence of such Indebtedness and the terms thereof are on commercially reasonable terms and reasonably necessary to the business of such Foreign Subsidiary and will not materially impair the Issuer’s ability to make payments under the Notes when due;

(13) any encumbrances or restrictions of the type referred to in clauses (1), (2) and (3) of Section 4.08(a) hereof 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 (12) of this Section 4.08(b); provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings,

 

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replacements or refinancings are, in the good faith judgment of the Issuer, no more restrictive with respect to such encumbrance and other restrictions taken as a whole than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing; and

(14) restrictions created in connection with any Receivables Facility that, in the good faith determination of the Issuer are necessary or advisable to effect the transactions contemplated under such Receivables Facility.

 

Section 4.09 Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock .

(a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “ incur ” and collectively, an “ incurrence ”) any Indebtedness (including Acquired Indebtedness or Attributable Debt) and the Issuer shall not issue any shares of Disqualified Stock and shall not permit any Restricted Subsidiary to issue any shares of Preferred Stock; provided , however , that (i) the Issuer may incur Indebtedness (including Acquired Indebtedness or Attributable Debt) or issue shares of Disqualified Stock and (ii) any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness or Attributable Debt), and issue shares of Preferred Stock, if, in case of each of clauses (i) and (ii), the Fixed Charge Coverage Ratio of the Issuer for the Issuer’s most recently ended four 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 more than 2.25 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) (the “ Fixed Charge Coverage Ratio Test ”); provided , further , that the amount of Indebtedness (including Acquired Indebtedness or Attributable Debt), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed $125,000,000 at any one time outstanding.

(b) The provisions of Section 4.09(a) hereof shall not apply to:

(1) the incurrence of Indebtedness under Credit Facilities by the Issuer and, subject to the proviso in this clause (1) below, any Restricted Subsidiary of the Issuer, 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 that, together with the aggregate amount of Receivables Facilities incurred pursuant to Section 4.09(b)(12) below, does not exceed at any one time outstanding (i) the sum of (x) $2,275,000,000 plus (y) the aggregate principal amount of Incremental Facilities issued after the Closing Date under the Credit Facilities (but not in excess of $150,000,000), less (ii) the aggregate amount of mandatory principal payments actually made by the Issuer from the proceeds of Asset Sales consummated after the Closing Date; provided , however that the amount of Indebtedness that may be incurred pursuant to this clause (b)(1) by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed $200,000,000 at any one time outstanding;

(2) the incurrence by (a) the Issuer of Indebtedness represented by the Notes in an aggregate principal amount not exceeding the Senior Unsecured Note Cap, and (b) any Subsidiary Guarantor of any Guarantee of debt referred to in the foregoing clause (2)(a);

 

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(3) Indebtedness of the Issuer and its Restricted Subsidiaries in existence on the Closing Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));

(4) (x) Attributable Debt in connection with any Designated Sale and Leaseback Transaction so long as the total Attributable Debt permitted under this clause 4.09(b)(4)(x) does not exceed $75,000,000 outstanding at any time, and (y) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Issuer or any of its Restricted Subsidiaries within 270 days of the related purchase, lease or improvement, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful 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 (together with any Refinancing Indebtedness in respect thereof) not to exceed, together with all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4)(y), $75,000,000 at any time outstanding;

(5) Indebtedness incurred by the Issuer or any of its Restricted Subsidiaries in the ordinary course of business constituting reimbursement obligations with respect to letters of credit, including letters of credit issued in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; 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 or incurrence;

(6) Indebtedness arising from agreements of the Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided , however , that

(A) such Indebtedness is not reflected on the balance sheet of the Issuer, or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6)(A)); and

(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and its Restricted Subsidiaries in connection with such disposition;

(7) Indebtedness of the Issuer to a Wholly-Owned Restricted Subsidiary or a Subsidiary Guarantor; provided that (i) any such Indebtedness to a Wholly-Owned Restricted Subsidiary that is not a Guarantor is expressly subordinated in right of payment to the Notes and (ii) any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Wholly-Owned Restricted Subsidiary or a Subsidiary Guarantor or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Wholly-Owned Restricted Subsidiary or a Subsidiary Guarantor, or any collateral agent under the Credit Facilities) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (7);

 

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(8) Indebtedness of a Wholly-Owned Restricted Subsidiary or a Subsidiary Guarantor to the Issuer or another Wholly-Owned Restricted Subsidiary or a Subsidiary Guarantor; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Subsidiary Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Issuer or another Wholly-Owned Restricted Subsidiary or a Subsidiary Guarantor, or any collateral agent under the Credit Facilities) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (8);

(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Wholly-Owned Restricted Subsidiary or a Subsidiary Guarantor, provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock not permitted by this clause (9);

(10) Hedging Obligations (and guarantees thereof) other than those entered into for speculative purposes;

(11) obligations incurred in the ordinary course of business in respect of self insurance and performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Issuer or any of its Restricted Subsidiaries;

(12) the incurrence by a Receivables Subsidiary of Indebtedness under the Receivables Facilities, subject to the limitations contained in Section 4.09(b)(1);

(13) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness, Disqualified Stock or Preferred Stock which serves to extend, replace, refund, renew, defease or refinance any Indebtedness (including Attributable Debt), Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) and clauses (2), (3), (4), (13) and (19) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so extend, replace, refund, renew, defease or refinance such Indebtedness, Disqualified Stock or Preferred Stock or any Indebtedness, Disqualified Stock or Preferred Stock, including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including tender premiums), defeasance costs and fees and expenses in connection therewith (the “ Refinancing Indebtedness ”); provided , however , that such Refinancing Indebtedness:

(A) has a final maturity date later than the final maturity date of, and 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 Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, renewed, defeased, refunded or refinanced,

(B) to the extent such Refinancing Indebtedness extends, replaces, refunds, renews, defeases or refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being extended,

 

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replaced, renewed, defeased, refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively, and

(C) shall not include:

(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Issuer that is not a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Guarantor; or

(ii) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;

and provided further that subclause (A) of this clause (13) shall not apply to any extension, replacement, renewal, defeasance, refunding or refinancing of any Indebtedness outstanding under any Credit Facilities and Obligations secured by Permitted Liens;

(14) the incurrence or issuance by any Foreign Subsidiary of the Issuer of Indebtedness, Disqualified Stock or Preferred Stock for working capital purposes in an aggregate principal amount for all Foreign Subsidiaries under this clause (14) not to exceed $50,000,000 at any one time outstanding;

(15) Indebtedness arising in the ordinary course of business from 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 such Indebtedness either (x) is extinguished within two Business Days of its incurrence, or (y) arises in respect of one or more accounts of any Restricted Subsidiary that is a Foreign Subsidiary with any bank or other financial institution subject to a pooling or similar arrangement with one or more accounts of any other Restricted Subsidiaries that are Foreign Subsidiaries with such bank or other financial institution to the extent the net aggregate amount of funds in all such accounts subject to such pooling or similar arrangement with such bank or other financial institution is positive;

(16) (a) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or (b) any guarantee by a Restricted Subsidiary of Indebtedness of the Issuer; provided that such guarantee is incurred in accordance with Section 4.15 hereof;

(17) Indebtedness of the Issuer or any of its Restricted Subsidiaries incurred in the ordinary course of business consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements;

(18) Indebtedness of the Issuer or any of its Restricted Subsidiaries to future, current or former officers, consultants, directors and employees thereof, and their respective Controlled Investment Affiliates or Immediate Family Members, 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 described in clause (4) of Section 4.07(b) hereof;

(19) Indebtedness (including Acquired Indebtedness), Disqualified Stock or Preferred Stock of (a) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged or

 

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amalgamated with or into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture, or (b) the Issuer or any Subsidiary Guarantor incurred in connection with or in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, the acquisition by the Issuer or a Restricted Subsidiary of all of the Capital Stock of any Person engaged in a Similar Business or of any division, line of business or business unit engaged in a Similar Business (whether through the direct purchase of assets or the purchase of Capital Stock of, or merger, amalgamation or consolidation with, any Person owning such assets); provided that (in case of each clause (a) and (b) above), (A) immediately after giving pro forma effect to such acquisition and the incurrence of such Indebtedness, the Issuer would have had, for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred, a Fixed Charge Coverage Ratio of not less than the greater of (x) 2.00 to 1.00 and (y) the Fixed Charge Coverage Ratio immediately prior to acquisition and the incurrence of such Indebtedness, (B) all such Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity at the time such Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Notes, (C) such Indebtedness is issued, acquired or guaranteed by the Issuer and/or one or more of the Subsidiary Guarantors and is subordinated (or such guarantee is subordinated) to the Notes (and any such Subsidiary Guarantor’s guarantee thereof) on terms customary for senior subordinated notes issued in Rule 144A offerings (as reasonably determined in good faith pursuant to an Officer’s Certificate), and (D) the aggregate principal amount of all such Indebtedness, Disqualified Stock or Preferred Stock under this clause (19) shall not exceed $500,000,000 at any one time outstanding;

(20) incurrence by the Issuer or any of the Subsidiary Guarantors of additional Indebtedness in an aggregate principal amount not to exceed $150,000,000 at any time outstanding;

(21) Indebtedness of the Issuer or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to any Credit Facility, in a principal amount not in excess of the stated amount of such letter of credit;

(22) Indebtedness incurred by a Restricted Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business; and

(23) Indebtedness of the Issuer or any of its Restricted Subsidiaries in respect of Cash Management Obligations incurred in the ordinary course of business.

(c) For purposes of determining compliance with this Section 4.09:

(1) 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 Indebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through (23) of Section 4.09(b) hereof or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Issuer, in its sole discretion, shall classify or reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) and shall only be required to include the amount and type of such Indebtedness, Disqualified Stock or Preferred Stock in one of the above clauses (and, for the avoidance of doubt, the Issuer, in its sole discretion, may reclassify any Attributable Debt incurred pursuant to clause (4) of Section 4.09(b) as incurred pursuant to Section 4.09(a) at any time such incurrence is permitted); provided that all Indebtedness outstanding under the Credit Facilities on the Closing Date shall be treated as incurred on the Closing Date under clause (1) of Section 4.09(b) hereof; and

(2) the Issuer shall be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Section 4.09(a) and Section 4.09(b) hereof.

 

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(d) Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount, and the payment of interest in the form of additional Indebtedness and the payment of dividends in the form of additional Disqualified Stock or Preferred Stock, as applicable, shall in each case not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.09.

(e) Notwithstanding anything to the contrary, until the Disposition Date, the Issuer shall not, and shall not permit any Subsidiary Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is contractually subordinated in right of payment to any other Indebtedness of the Issuer or such Subsidiary Guarantor, as the case may be, unless such Indebtedness is expressly contractually subordinated in right of payment to the Notes or such Subsidiary Guarantor’s Guarantee of the Notes, as the case may be. In addition to the foregoing, until the Disposition Date, any Secured Indebtedness which is, by its express terms, subordinated as to rights to receive payments or proceeds of collateral to any other Secured Indebtedness of the Issuer or a Guarantor secured in whole or in part by the same collateral (including any “second-lien” debt or “first-loss” or “last-out” tranche) shall not be permitted.

(f) For purposes of (x) 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 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, in the case of revolving credit debt and (y) computing the Consolidated Secured Leverage Ratio at any time, the U.S. 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; provided that, in the case of clause (x) above, if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, 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. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

(g) Until the Disposition Date, (i) no Permitted Holder (including Holdings and its Subsidiaries) shall be permitted to, directly or indirectly, acquire or hold (including through participation or other derivative transactions), whether acquired in primary or secondary transactions, any Secured Indebtedness of Holdings or any of its direct or indirect Restricted Subsidiaries or any indebtedness of any non-Guarantor Restricted Subsidiaries (collectively, “ Priority Debt ”), and (ii) neither Holdings nor its direct or indirect Restricted Subsidiaries shall issue, directly or indirectly, or permit or suffer to remain outstanding, any Priority Debt to any Permitted Holder (including Holdings and its Subsidiaries); provided that, notwithstanding the foregoing, the Permitted Holders may acquire in the secondary market term loans outstanding under the Credit Agreement so long as (x) such term loans held by the Permitted Holders shall not exceed, in the aggregate, 10% of the term loans then outstanding under the Credit Agreement, and (y) all term loans owned by the Permitted Holders are excluded in any required lender votes (but not, for avoidance of doubt, any votes requiring all lenders or each affected lender) under the Credit Agreement.

 

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Section 4.10 Asset Sales .

(a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale, unless:

(1) the Issuer or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets sold or otherwise disposed of; and

(2) at least 75.0% of the consideration therefor received by the Issuer or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that the amount of:

(A) any liabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most recent balance sheet or in the footnotes thereto) of the Issuer or such Restricted Subsidiary, other than liabilities that are by their terms subordinated to the Notes, that are assumed by the transferee of any such assets and for which the Issuer and all of its Restricted Subsidiaries have been validly released by all creditors in writing,

(B) any securities, notes or other obligations or assets received by the Issuer or such Restricted Subsidiary from such transferee that are converted by the Issuer or such Restricted Subsidiary into Cash Equivalents (to the extent of the Cash Equivalents received) within 180 days following the closing of such Asset Sale, and

(C) any Designated Non-cash Consideration received by the Issuer or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received since the Closing Date pursuant to this clause (C) that is at that time outstanding, not to exceed the greater of $75,000,000 and 3% of Net Tangible Assets at the time of the receipt of such Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value,

shall be deemed to be cash for purposes of this provision and for no other purpose.

(b) Within 365 days after the receipt of any Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale.

(1) to permanently reduce:

(A) Obligations under the Credit Agreement or other Secured Indebtedness, (and, in the case of revolving Obligations, to correspondingly reduce commitments with respect thereto);

(B) Obligations under other unsecured Pari Passu Indebtedness (and, in the case of revolving Obligations, to correspondingly reduce commitments with respect thereto); provided that the Issuer shall equally and ratably reduce Obligations under the Notes or as provided under Section 3.07 hereof by making an offer (in accordance with

 

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the procedures set forth in Section 3.09 hereof under Section 4.10(c) hereof) to all Holders of Notes to purchase their Notes at 100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid, or

(C) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor, other than Indebtedness owed to the Issuer or another Restricted Subsidiary, or

(2) (A) to acquire long term productive assets (including Capital Stock of any Person or any Investment otherwise permitted hereunder) used or useful in the business of the Issuer and its Restricted Subsidiaries or in a Similar Business, (B) to make an Investment in any one or more businesses, provided that such Investment in any business is in the form of the acquisition of Capital Stock and results in the Issuer or another of its Restricted Subsidiaries, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, or (C) to acquire properties or other assets that replace the businesses, properties and/or assets that are the subject of such Asset Sale.

(c) Any Net Proceeds from the Asset Sale that are not invested or applied as provided and within the time period set forth in Section 4.10(b) hereof shall be deemed to constitute “ Excess Proceeds .” When the aggregate amount of Excess Proceeds exceeds $25,000,000, the Issuer shall make an offer to all Holders of the Notes and, if required by the terms of any Indebtedness that is pari passu with the Notes (“ Pari Passu Indebtedness ”), to the holders of such Pari Passu Indebtedness (an “ Asset Sale Offer ”), to purchase the maximum aggregate principal amount of the Notes and such Pari Passu Indebtedness that is an integral multiple of $1,000 (but in a minimum amount of $2,000) 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 accreted value, if less), plus accrued and unpaid interest and Special Interest, if any, thereon to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture. The Issuer shall commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceed $25,000,000 by delivering the notice required pursuant to the terms of this Indenture, with a copy to the Trustee or otherwise in accordance with the procedures of DTC. The Issuer, in its sole discretion, may satisfy the foregoing obligations with respect to any Net Proceeds from an Asset Sale by making an Asset Sale Offer with respect to such Net Proceeds prior to the expiration of the relevant 365 days or with respect to Excess Proceeds of $25,000,000 or less.

To the extent that the aggregate amount of Notes and such Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes, subject to compliance with other covenants contained in this Indenture. If the aggregate principal amount of Notes or the Pari Passu Indebtedness surrendered in an Asset Sale Offer by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and the Issuer shall select such Pari Passu Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Pari Passu Indebtedness tendered in accordance with Section 3.09. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds that resulted in the Asset Sale Offer shall be reset to zero (regardless of whether there are any remaining Excess Proceeds upon such completion).

(d) Pending the final application of any Net Proceeds pursuant to this Section 4.10, the holder of such Net Proceeds may apply such Net Proceeds temporarily to reduce Indebtedness outstanding under a revolving credit facility or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.

 

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(e) The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of the Notes 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 shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations in this Indenture by virtue thereof.

 

Section 4.11 Transactions with Affiliates .

(a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, make any payment to, or sell, convey, transfer or otherwise dispose of (including by way of a lease, assignment or otherwise) any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an “ Affiliate Transaction ”) involving aggregate payments or consideration in excess of $2,000,000, unless:

(1) such Affiliate Transaction is on terms that are not materially less favorable to the Issuer or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis; and

(2) the Issuer delivers to the Trustee:

(A) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $15,000,000, a resolution adopted by the majority of the board of directors of the Issuer approving such Affiliate Transaction and set forth in an Officer’s Certificate delivered to the Trustee, certifying that such Affiliate Transaction complies with clause (1) of this Section 4.11(a); and

(B) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $50,000,000, a letter from an Independent Financial Advisor delivered to the Trustee and stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view.

(b) Section 4.11(a) hereof shall not apply to the following:

(1) transactions between or among the Issuer or any of its Restricted Subsidiaries;

(2) Restricted Payments permitted by Section 4.07 hereof and Investments constituting Permitted Investments;

(3) the payment of reasonable and customary fees and compensation paid to, and indemnities and reimbursements provided on behalf of, for the benefit of, current or former officers, directors, employees or consultants of the Issuer, any of its direct or indirect parent companies or any of its Restricted Subsidiaries;

(4) the Transaction and the payment of all reasonable fees and expenses related to the Transaction, including Transaction Expenses;

 

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(5) transactions with customers, clients, suppliers, contractors, joint venture partners 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 the Issuer and its Restricted Subsidiaries, in the reasonable determination of the board of directors of the Issuer or the senior management thereof, or are on terms at least as favorable as would reasonably have been obtained at such time from an unaffiliated party;

(6) the issuance of Equity Interests (other than Disqualified Stock) of the Issuer to any direct or indirect parent company of the Issuer or to any Permitted Holder or to any director, officer, employee or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any of its direct or indirect parent companies or any of its Restricted Subsidiaries;

(7) payments by the Issuer or any of its Restricted Subsidiaries to the Sponsors or any of their Affiliates 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 approved by a majority of the board of directors of the Issuer in good faith;

(8) payments by or Indebtedness (and cancellation thereof), Disqualified Stock and Preferred Stock of the Issuer and its Restricted Subsidiaries to any future, current or former employee, director, officer or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any of its Subsidiaries or any of its direct or indirect parent companies 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 distributor equity plan or agreement; and any employment agreements, stock option plans and other compensatory arrangements (and any successor plans thereto) and any supplemental executive retirement benefit plans or arrangements with any such employees, directors, officers, distributors or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) that are, in each case, approved by the board of directors of the Issuer in good faith;

(9) investments by Permitted Holders in securities of the Issuer or any of its Restricted Subsidiaries (and payment of reasonable out of pocket expenses incurred by such Persons in connection therewith) so long as the investment is being offered generally to other investors on the same or more favorable terms;

(10) (x) so long as no Event of Default shall have occurred and is continuing or shall result therefrom, (i) the payment of management, consulting, monitoring and advisory fees pursuant to the Management Agreement as in effect on the Closing Date not to exceed $7,500,000 in any fiscal year of the Issuer, and (ii) payment of all customary termination and transaction fees up to the amounts set forth in such Management Agreement and (y) payment of all indemnities and reimbursement of expenses under such Management Agreement;

(11) sales of accounts receivable, or participation therein, in connection with any Receivables Facility;

(12) the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Closing Date; provided that the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries

 

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of obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Closing Date shall only be permitted by this clause (12) to the extent that the terms of any such amendment or new agreement are not otherwise disadvantageous in any material respect in the good faith judgment of the board of directors of the Issuer to the Holders when taken as a whole as compared to the original agreement in effect on the Closing Date;

(13) payments on the Notes in accordance with this Indenture and payments in respect of Obligations under the Credit Agreement; provided that such Obligations were acquired by an Affiliate of the Issuer in compliance with this Indenture;

(14) transactions in which the Issuer or any of its 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 the Issuer or such Restricted Subsidiary from a financial point of view or stating that the terms are not materially less favorable to the Issuer or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis;

(15) any agreement as in effect as of the Closing Date and set forth on Schedule 6.11 to the Credit Agreement on the Closing Date, or any amendment thereto (so long as any such amendment is not disadvantageous in any material respect in the good faith judgment of the board of directors of the Issuer to the Holders when taken as a whole as compared to the applicable agreement as in effect on the Closing Date); and

(16) payments by the Issuer (and any direct or indirect parent company thereof) and its Subsidiaries pursuant to tax sharing agreements among the Issuer (and any such parent company) and its Subsidiaries; provided that in each case the amount of such payments in any fiscal year does not exceed the amount that the Issuer, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent of the amount received from Unrestricted Subsidiaries) would be required to pay in respect of foreign, federal, state and local taxes for such fiscal year were the Issuer, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such parent entity.

 

Section 4.12 Liens .

The Issuer shall not, and shall not permit any Guarantor to, directly or indirectly, create, incur, assume or suffer to exist any Lien (except any Permitted Lien) that secures any Indebtedness or any related Guarantee of any such entity, on any asset or property of the Issuer or any Guarantor, or any income or profits therefrom, or assign or convey any right to receive income therefrom; unless:

(1) in the case of Liens securing Subordinated Indebtedness, the Notes and related Guarantees are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens; or

(2) in all other cases, the Notes or the Guarantees are equally and ratably secured,

except that the foregoing shall not apply to (A) Liens securing the Notes and the related Guarantees, (B) Liens securing Indebtedness under the Credit Facilities incurred in compliance with Section 4.09(b)(1) hereof, and (C) Liens securing any Obligations in respect of other Indebtedness of the Issuer or a Guarantor incurred in compliance with Section 4.09 hereof, in the case of this clause (C), so long as the Consolidated Secured Leverage Ratio of the Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which the Indebtedness secured by such Lien is incurred would have been no more than 3.00 to 1.00.

 

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Any Lien created for the benefit of the Holders of the Notes pursuant to this Section 4.12 shall be deemed automatically and unconditionally released and discharged upon the release and discharge of the applicable Lien described in clauses (1) and (2) of this Section 4.12.

 

Section 4.13 Corporate Existence .

Subject to Article 5 hereof, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Issuer or any such Restricted Subsidiary; provided that the Issuer shall not be required to preserve the corporate, partnership or other existence of any of its Restricted Subsidiaries, if the Issuer in good faith shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and its Restricted Subsidiaries, taken as a whole.

 

Section 4.14 Offer to Repurchase Upon Change of Control .

(a) If a Change of Control occurs, unless the Issuer has previously or concurrently mailed a redemption notice with respect to all the outstanding Notes as set forth in Section 3.07 hereof, the Issuer shall make an offer to purchase all of the Notes pursuant to the offer described below (the “ Change of Control Offer ”) at a price in cash (the “ Change of Control Payment ”) equal to 101.0% of the aggregate principal amount thereof, plus accrued and unpaid interest and Special Interest, if any, to the date of purchase, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date. Within 30 days following any Change of Control, the Issuer shall deliver notice of such Change of Control Offer, with a copy to the Trustee, to each Holder to the registered address of such Holder (or otherwise delivered in accordance with the procedures of DTC) with the following information:

(1) that a Change of Control Offer is being made pursuant to this Section 4.14 and that all Notes properly tendered pursuant to such Change of Control Offer will be accepted for payment by the Issuer;

(2) the purchase price and the purchase date, which will be no earlier than 30 days nor later than 60 days from the date such notice is delivered (the “ Change of Control Payment Date ”);

(3) that any Note not properly tendered will remain outstanding and continue to accrue interest and Special Interest, if any;

(4) that unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest and Special Interest, if any, on the Change of Control Payment Date;

(5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to the paying agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

 

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(6) that Holders shall be entitled to withdraw their tendered Notes and their election to require the Issuer to purchase such Notes, provided that the paying agent receives, not later than the close of business on the second Business Day prior to the date of the Change of Control Payment Date, a telegram, facsimile transmission or letter setting forth the name of the Holder of the Notes, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;

(7) that if the Issuer is redeeming less than all of the Notes, the Holders of the remaining Notes will be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered (which must be equal to $2,000 or an integral multiple of $1,000 in excess thereof);

(8) if such notice is mailed prior to the occurrence of a Change of Control, that the Change of Control Offer is conditional on the occurrence of such Change of Control; and

(9) the other instructions, as determined by the Issuer, consistent with this Section 4.14, that a Holder must follow.

The notice, if delivered in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. If (a) the notice is delivered in a manner herein provided and (b) any Holder fails to receive such notice or a Holder receives such notice but it is defective, such Holder’s failure to receive such notice or such defect shall not affect the validity of the proceedings for the purchase of the Notes as to all other Holders that properly received such notice without defect.

The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase by the Issuer of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.14, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations in this Section 4.14 by virtue thereof.

(b) On the Change of Control Payment Date, the Issuer shall, to the extent permitted by law,

(1) accept for payment all Notes issued by it or portions thereof properly tendered pursuant to the Change of Control Offer,

(2) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered, and

(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuer.

(c) In the event a Change of Control occurs at a time when the Issuer is prohibited by the terms of any Secured Indebtedness from purchasing Notes, then prior to the delivery of the notice of a Change of Control to holders of Notes but in any event within 45 days following any Change of Control, the Issuer shall either (1) repay in full all Obligations, and terminate all commitments, under the Credit Facilities and all such other Secured Indebtedness, the terms of which require repayment and/or termination of commitments upon a Change of Control or offer to repay in full all Obligations, and terminate all

 

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commitments, under the Credit Facilities and all such other Secured Indebtedness and to repay the Obligations owed to (and terminate all commitments of) each lender which has accepted such offer or (2) obtain the requisite consents under the agreements governing all such Secured Indebtedness to permit the repurchase of the Notes.

(d) The Issuer shall not be required to make a Change of Control Offer following 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 this Section 4.14 applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

(e) The provisions of this Section 4.14 relative to the Issuer’s obligation to make an offer to repurchase the Notes as a result of a Change of Control may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes.

(f) Other than as specifically provided in this Section 4.14, any purchase pursuant to this Section 4.14 shall be made pursuant to the provisions of Sections 3.02, 3.05 and 3.06 hereof.

 

Section 4.15 Limitation on Guarantees of Indebtedness by Restricted Subsidiaries .

The Issuer shall not permit any of its Wholly-Owned Restricted Subsidiaries (and non-Wholly-Owned Subsidiaries if such non-Wholly-Owned Subsidiaries guarantee other capital markets debt securities of the Issuer or any Guarantor), other than a Subsidiary Guarantor, to guarantee the payment of any Indebtedness of the Issuer or any other Subsidiary Guarantor unless:

(1) such Restricted Subsidiary within 30 days executes and delivers a supplemental indenture to this Indenture, the form of which is attached as Exhibit D hereto, providing for a Guarantee by such Restricted Subsidiary, except that with respect to a guarantee of Indebtedness of the Issuer or any Subsidiary Guarantor, if such Indebtedness is by its express terms subordinated in right of payment to the Notes or such Guarantor’s Guarantee, any such guarantee by such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Guarantee substantially to the same extent as such Indebtedness is subordinated to the Notes:

(2) such Restricted Subsidiary waives and shall not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other rights against the Issuer or any other Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Guarantee; and

(3) such Restricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to the effect that:

(a) such Guarantee has been duly executed and authorized; and

(b) such Guarantee constitutes a valid, binding and enforceable obligation of such Restricted Subsidiary, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity;

 

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provided that this Section 4.15 shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary.

Notwithstanding the foregoing and the other provisions of this Indenture, any Guarantee by a Restricted Subsidiary shall provide by its terms that it shall be automatically and unconditionally released and discharged under the circumstances set forth in Section 11.06 hereof. The Issuer may elect, in its sole discretion, to cause any Subsidiary that is not otherwise required to be a Guarantor to become a Guarantor, in which case such Subsidiary shall not be required to comply with the 30 day period described in clause (1) of this Section 4.15.

 

Section 4.16 Activities of Holdings .

Holdings shall maintain direct ownership of 100% of Capital Stock of the Issuer. Holdings shall not engage in any business or operations other than (i) the ownership of all the outstanding shares of the Capital Stock of the Issuer, (ii) performance of its obligations under and in connection with the Credit Facilities, this Indenture, the Note Purchase Agreement and the Notes and the other agreements contemplated hereby and thereby, (iii) actions incidental to the consummation of the Transactions, (iv) actions required by law to maintain its existence, (v) any public offering of its common stock or any other issuance of its Equity Interests, or the incurrence of any Indebtedness, and performance of its obligations under any agreements related thereto, (vi) the entry into, and the performance of its obligations under and in connection with (x) contracts and agreements with officers, directors and employees of it or the Issuer or any Subsidiary thereof relating to their employment or directorships, (y) insurance policies and related contracts and agreements and (z) equity subscription agreements, registration rights agreements, voting and other stockholder agreements and other agreements in respect of its Equity Interests, (vii) the payment of operating and business expenses and taxes incidental to its ownership of the Issuer, (viii) the performance of obligations under and compliance with its certificate of incorporation and by-laws, or any applicable law, ordinance, regulation, rule, order, judgment, decree or permit, including, without limitation, as a result of or in connection with the activities of the Issuer or its Subsidiaries, and (ix) activities incidental to the foregoing.

 

Section 4.17 Business Activities .

The Issuer shall not, and shall not permit any Restricted Subsidiary, to engage in any business other than a Similar Business.

 

Section 4.18 Limitations on Sale and Leaseback Transactions .

The Issuer will not, and will not permit any of its Restricted Subsidiaries to, enter into any Sale and Leaseback Transaction; provided , however , that the Issuer and any Restricted Subsidiary may enter into a Sale and Leaseback Transaction if (a) either (1) the Attributable Debt arising from such Sale and Leaseback Transaction is permitted by Section 4.09(b)(4)(x) or (2) the Issuer or the relevant Restricted Subsidiary, as the case may be, could have incurred Indebtedness pursuant to the Fixed Charge Coverage Ratio Test described in Section 4.09(a) hereof and (b) to the extent constituting an Asset Sale, the proceeds of such transaction are applied in accordance with Section 4.10 hereof.

 

Section 4.19 Maintenance of Properties .

The Issuer will, and will cause each of the Restricted Subsidiaries of the Issuer to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all tangible properties necessary in the operation of the business of the Issuer and its Restricted

 

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Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof, except to the extent that the failure to do any of the foregoing could not reasonably be expected to have a material adverse effect on the business of the Issuer and its Restricted Subsidiaries taken as a whole.

 

Section 4.20 Insurance .

The Issuer will maintain or cause to be maintained, with financially sound and reputable insurers, such public liability insurance, third party property damage insurance, business interruption insurance and casualty insurance with respect to liabilities, losses or damage in respect of the material assets, properties and businesses of the Issuer and its Restricted Subsidiaries as may customarily be carried or maintained under similar circumstances by Persons of established reputation engaged in Similar Businesses of similar sizes, in each case in such amounts (giving effect to self-insurance), with such deductibles, covering such risks and otherwise on such terms and conditions as shall be customary for such Persons, except to the extent that the failure to do any of the foregoing could not reasonably be expected to have a material adverse effect on the business of the Issuer and its Restricted Subsidiaries taken as a whole.

 

Section 4.21 Books and Records .

The Issuer will, and will cause each of Holdings and the Restricted Subsidiaries of the Issuer to, keep adequate books of record and accounts to allow preparation of financial statements in accordance with GAAP as then in effect.

 

Section 4.22 Compliance with Laws .

The Issuer will, and will cause each of Holdings and the Restricted Subsidiaries of the Issuer to comply, in all material respects with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority (including all environmental laws), except to the extent that the failure to do any of the foregoing could not reasonably be expected to have a material adverse effect on the business of the Issuer and its Restricted Subsidiaries taken as a whole.

ARTICLE 5

SUCCESSORS

 

Section 5.01 Merger, Consolidation or Sale of All or Substantially All Assets .

(a) The Issuer shall not consolidate or merge with or into or wind up into (whether or not the Issuer is the surviving entity), or sell, transfer, convey or otherwise dispose (including by way of a lease, assignment or otherwise) of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:

(1) either: (x) the Issuer is the surviving corporation; or (y) 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 will have been made is a Person organized or existing under the laws of the jurisdiction of organization of the Issuer or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Issuer or such Person, as the case may be, being herein called the “ Successor Company ”); provided, that prior to the Disposition Date, the Successor Company shall be a corporation, and after the Disposition Date if the Successor Company is not a corporation, a co-obligor of the Notes is a corporation;

 

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(2) the Successor Company, if other than the Issuer, expressly assumes all the obligations of the Issuer under the Notes pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(3) immediately after such transaction, no Default exists;

(4) immediately after giving pro forma effect to such transaction and any related financing transactions, either (x) the Successor Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof, or (y) the Fixed Charge Coverage Ratio for the Successor Company and its Restricted Subsidiaries would be equal to or greater than the Fixed Charge Coverage Ratio for the Issuer and its Restricted Subsidiaries immediately prior to such transaction;

(5) each Guarantor, unless it is the other party to the transactions described above, in which case Section 5.01(c)(1)(B) hereof shall apply, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Person’s obligations under this Indenture and the Notes; and

(6) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with this Indenture.

(b) The Successor Company shall succeed to, and be substituted for the Issuer, as the case may be, under this Indenture, the Guarantees and the Notes, as applicable. Section 5.01(a) hereof shall not apply to the merger contemplated by the Acquisition Agreement. Notwithstanding clauses (3) and (4) of Section 5.01(a) hereof,

(1) any Restricted Subsidiary may consolidate with or merge into or transfer all or part of its properties and assets to the Issuer, and

(2) the Issuer may merge with an Affiliate of the Issuer, as the case may be, solely for the purpose of reincorporating the Issuer in the United States, any state thereof, the District of Columbia or any territory thereof so long as the amount of Indebtedness of the Issuer and its Restricted Subsidiaries is not increased thereby.

(c) Subject to certain limitations described in this Indenture governing release of a Guarantee upon the sale, disposition or transfer of a Guarantor, no Guarantor shall, and the Issuer shall not permit any Guarantor to, consolidate or merge with or into or wind up into (whether or not the Issuer or Guarantor is the surviving entity), 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 unless:

(1) (A) such Guarantor is the surviving entity or the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of such Guarantor, as the case may be, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Guarantor or such Person, as the case may be, being herein called the “ Successor Person ”);

 

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(B) the Successor Person, if other than such Guarantor, expressly assumes all the obligations of such Guarantor under this Indenture and such Guarantor’s related Guarantee pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(C) immediately after such transaction, no Default exists; and

(D) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with this Indenture; or

(2) the transaction is made in compliance with clauses (1) and (2) of Section 4.10(a) hereof.

(d) In the case of clause (1) of Section 5.01(c) hereof, the Successor Person shall succeed to, and be substituted for, such Guarantor under this Indenture and such Guarantor’s Guarantee. Notwithstanding the foregoing, any Guarantor may (1) merge or consolidate with or into or wind up into or transfer all or part of its properties and assets to another Guarantor or the Issuer, (2) merge with a Restricted Subsidiary of the Issuer solely for the purpose of reincorporating the Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof or (3) 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 Guarantor, in each case without complying with clauses (a) through (c) of this Section 5.01 and in the case of clauses (2) and (3) subject to the Successor Person being a Guarantor.

 

Section 5.02 Successor Company Substituted .

Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Issuer in accordance with Section 5.01 hereof, the successor entity formed by such consolidation or into or with which the Issuer is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture referring to the Issuer shall refer instead to the successor entity and not to the Issuer), and may exercise every right and power of the Issuer under this Indenture with the same effect as if such successor Person had been named as the Issuer herein; provided that the predecessor Issuer shall not be relieved from the obligation to pay the principal of and interest on the Notes except in the case of a sale, assignment, transfer, conveyance or other disposition of all or substantially all of the Issuer’s assets that meets the requirements of Section 5.01 hereof.

ARTICLE 6

DEFAULTS AND REMEDIES

 

Section 6.01 Events of Default .

(a) An “ Event of Default ” wherever used herein, means any one of the following events:

(1) default in payment when due and payable, upon redemption, acceleration or otherwise, of principal of, or premium, if any, on the Notes;

 

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(2) default for 30 days (or, until the Disposition Date, 5 days unless the GSMP Group consents to a longer grace period not to exceed 30 days) or more in the payment when due of interest or Special Interest, if any, on or with respect to the Notes;

(3) (A) failure by the Issuer or any Guarantor to comply with any of its obligations, covenants or agreements contained in Article 5 (with respect to the Issuer only) hereof or (B) failure by the Issuer or any Guarantor for 60 days after receipt of written notice given by the Trustee or the Holders of not less than 25.0% in principal amount of the then outstanding Notes to comply with any of its obligations, covenants or agreements (other than a default referred to in clauses (1), (2) and (3)(A)) contained in this Indenture or the Notes; provided that, notwithstanding anything to the contrary in this clause (B), until the Disposition Date (unless the GSMP Group consents to longer grace periods not to exceed the period provided in the foregoing clause (B)), failure by the Issuer or any Guarantor to comply with their respective obligations (x) under Sections 4.07 through 4.12, inclusive, 4.14, 4.15, 4.16 and Article 5 (other than with respect to the Issuer) shall result in an Event of Default upon the occurrence of such failure and (y) under any other provision of this Indenture or the Notes (to the extent such failure does not otherwise constitute a Default under clause (1), (2) or (3)(A)) shall result in an Event of Default after such failure continues for 30 days after receipt of written notice given by the Trustee or the Holders of not less than 25.0% in principal amount of the Notes;

(4) (x) until the Disposition Date, the occurrence of any event of default under any Indebtedness (other than (A) Indebtedness under the Credit Facilities or (B) Indebtedness under the Existing Notes, so long as, in the case of this clause (B), (i) on the Closing Date, the Existing Notes have irrevocably been called for redemption within 30 days after the Closing Date, (ii) cash has been set aside for the benefit of the holders of the Existing Notes on the Closing Date in an amount equal to the redemption price, including all principal of, and interest and premium on, the Existing Notes (the “Redemption Price”) (provided, that the Redemption Price shall be deposited in escrow for the benefit of such holders of the Existing Notes if such redemption does not occur within 2 Business Days of the Closing Date pursuant to a waiver, amendment or other agreement entered into with such holders of the Existing Notes on or prior to the Closing Date permitting or requiring such redemption within 2 Business Days of the Closing Date), and (iii) the Existing Notes are redeemed and satisfied in full within 35 days after the Closing Date (such event of default, with respect to the Existing Notes, a “Qualified Default”)) of the Issuer or any Significant Subsidiary or (y) the Issuer or any Significant Subsidiary fails to pay any Indebtedness (other than (A) Indebtedness owing to the Issuer or a Restricted Subsidiary of the Issuer or (B) Indebtedness under the Existing Notes, other than, in the case of this clause (B), pursuant to a Qualified Default with respect to the Existing Notes) 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 of the foregoing clauses (x) or (y), if the total amount of such Indebtedness as to which a default or event of default has occurred or that is unpaid or accelerated exceeds $35,000,000,

(5) failure by the Issuer or any Significant Subsidiary to pay final judgments aggregating in excess of $35,000,000 (net of amounts covered by insurance policies issued by reputable and creditworthy insurance companies), which final judgments remain unpaid, undischarged and unstayed for a period of more than 60 days after such judgment becomes final, 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;

(6) the Issuer or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of the Issuer), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:

(i) commences proceedings to be adjudicated bankrupt or insolvent;

 

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(ii) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy Law;

(iii) consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;

(iv) makes a general assignment for the benefit of its creditors; or

(v) generally is not paying its debts as they become due;

(7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against the Issuer or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements for the Issuer), would constitute a Significant Subsidiary, in a proceeding in which the Issuer or any such Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements for the Issuer), would constitute a Significant Subsidiary, is to be adjudicated bankrupt or insolvent;

(ii) appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements for the Issuer), would constitute a Significant Subsidiary, or for all or substantially all of the property of the Issuer or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements for the Issuer), would constitute a Significant Subsidiary; or

(iii) orders the liquidation of the Issuer or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements for the Issuer), would constitute a Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days;

(8) the Guarantee of any Significant Subsidiary shall for any reason cease to be in full force and effect or be declared null and void in a final non-appealable judgment of a court of competent jurisdiction or any responsible officer of any Guarantor that is a Significant Subsidiary, as the case may be, denies in writing that it has any further liability under its Guarantee or gives written notice to such effect, other than by reason of the termination of this Indenture or the release of any such Guarantee in accordance with this Indenture;

 

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(9) until the Disposition Date (unless waived by the GSMP Group), (A) failure by the Issuer for 30 days after receipt of written notice given by the GSMP Group to comply with any of its covenants and other agreements in the GSMP Agreement or (B) failure of any representation, warranty, certification or statement made or deemed to have been made by or on behalf of the Issuer or by any of its officers or employees in any statement or certificate at any time given by or on behalf of the Issuer in writing pursuant to the GSMP Agreement to be true and correct in any material respect on the date as of which made; or

(10) Holdings ceases to own 100% of the issued and outstanding Equity Interests of the Issuer.

(b) In the event of any Event of Default specified in clause (4) of Section 6.01(a), such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) 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:

(1) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged; or

(2) holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or

(3) the default that is the basis for such Event of Default has been cured.

 

Section 6.02 Acceleration .

(a) If any Event of Default (other than an Event of Default specified in clause (6) or (7) of Section 6.01(a) hereof with respect to the Issuer) occurs and is continuing under this Indenture, the Trustee or the Holders of at least 25.0% in principal amount of the then total outstanding Notes may declare the principal, premium, if any, interest and Special Interest, if any, and any other monetary obligations on all the then outstanding Notes to be due and payable immediately.

Notwithstanding the foregoing, in the case of an Event of Default arising under clause (6) or (7) of Section 6.01(a) hereof with respect to the Issuer, all outstanding Notes shall be due and payable immediately without further action or notice.

The Trustee may withhold from the Holders notice of any continuing Default, except a Default relating to the payment of principal, premium, if any, or interest, if it determines that withholding notice is in their interest. In addition, the Trustee shall have no obligation to accelerate the Notes if in the best judgment of the Trustee acceleration is not in the best interests of the Holders of the Notes.

The Required Holders by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest, or premium that has become due solely because of the acceleration) have been cured or waived.

(b) Notwithstanding the preceding paragraph, in the event of a declaration of acceleration in respect of the Notes because of an Event of Default specified in Section 6.01(a)(4) shall have occurred and be continuing, such declaration of acceleration shall be automatically annulled if the Indebtedness that is the subject of such Event of Default has been discharged or the Holders thereof have rescinded

 

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their declaration of acceleration in respect of such Indebtedness, and written notice of such discharge or rescission, as the case may be, shall have been given to the Trustee by the Issuer and countersigned by the Holders of such Indebtedness or a trustee, fiduciary or agent for such Holders, within 30 days after such declaration of acceleration in respect of the Notes, and no other Event of Default has occurred during such 30 day period which has not been cured or waived during such period.

 

Section 6.03 Other Remedies .

If, at any time prior to the Disposition Date, a Default in the payment when due of interest or Special Interest, if any, on, principal of, or premium, if any, on, the Notes or an Event of Default has occurred and is continuing, then in each case the Notes will accrue interest at the stated interest rate on the Notes plus the Default Interest Rate until the earlier of such time as no such Default or such Event of Default shall be continuing (to the extent that the payment of such interest shall be legally enforceable) or the Disposition Date. On and after the Disposition Date, any amounts payable under or in respect of the Notes not paid when due will accrue interest at the stated interest rate on the Notes plus the Default Interest Rate until such time as such amounts are paid in full, including any interest thereon (to the extent that the payment of such overdue interest shall be legally enforceable). Default interest shall be payable in cash on demand and, to the extent applicable, in accordance with Section 2.12 hereof.

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note 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. All remedies are cumulative to the extent permitted by law.

 

Section 6.04 Waiver of Past Defaults .

The Required Holders by written notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences except a continuing Default in the payment of interest on, premium, if any, or the principal of any Note held by a non-consenting Holder (including in connection with an Asset Sale Offer or a Change of Control Offer); provided , subject to Section 6.02 hereof, that the Required Holders may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. Upon any such waiver, 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 right consequent thereon.

 

Section 6.05 Control by Majority .

Holders of a majority in aggregate principal amount of the then total outstanding Notes 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 this Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee in personal liability.

 

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Section 6.06 Limitation on Suits .

Subject to Section 6.07 hereof, no Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:

(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;

(2) Holders of at least 25.0% in principal amount of the total outstanding Notes have requested the Trustee to pursue the remedy;

(3) Holders of the Notes have offered the Trustee reasonable security or indemnity against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5) the Required Holders have not given the Trustee a direction inconsistent with such request within such 60-day period.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

 

Section 6.07 Rights of Holders of Notes to Receive Payment .

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and interest and Special Interest, if any, on the Note, on or after the respective due dates expressed in the Note (including in connection with an Asset Sale Offer or a Change of Control Offer), 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.

 

Section 6.08 Collection Suit by Trustee .

If an Event of Default specified in Section 6.01(a)(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal of, premium, if any, and interest and Special Interest, if any, remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

Section 6.09 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 proceedings, the Issuer, 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 has been instituted.

 

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Section 6.10 Rights and Remedies Cumulative .

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07 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 6.11 Delay or Omission Not Waiver .

No delay or omission of the Trustee or of any Holder of any Note 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 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.

 

Section 6.12 Trustee May File Proofs of Claim .

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes including the Guarantors), its creditors or its property and shall be entitled and empowered to participate as a member in any official committee of creditors appointed in such matter and to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such 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 to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained 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 Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

Section 6.13 Priorities .

If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:

(i) to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

 

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(ii) to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and interest and Special Interest, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and

(iii) to the Issuer or to such party as a court of competent jurisdiction shall direct including a Guarantor, if applicable.

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.13.

 

Section 6.14 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 a 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 6.14 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10.0% in principal amount of the then outstanding Notes.

ARTICLE 7

TRUSTEE

 

Section 7.01 Duties of Trustee .

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of 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 duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, 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 any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(i) this paragraph (c) does not limit the effect of paragraph (b) of this Section 7.01;

 

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(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved in a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and

(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 hereof.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to this Section 7.01.

(e) The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders of the Notes unless the Holders have offered to the Trustee indemnity or security reasonably satisfactory to it against any loss, liability or expense.

(f) 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. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

Section 7.02 Rights of Trustee .

(a) The Trustee may conclusively rely upon 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, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(b) 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 such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by an Officer of the Issuer.

(f) None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

 

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(g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.

(h) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(j) [reserved]

(k) The Trustee shall not be deemed to owe any fiduciary duty to the holders of Pari Passu Indebtedness of the Issuer and shall not be liable to any such holder for any action it takes or omits to take within the rights or powers conferred upon it by this Indenture.

(l) Except with respect to Section 4.01, the Trustee shall have no duty to inquire as to the performance of the Company with respect to the covenants contained in Article 4.

(m) Delivery of reports, information and documents to the Trustee under Section 4.03 is for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

 

Section 7.03 Individual Rights of Trustee .

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

 

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 or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

 

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Section 7.05 Notice of Defaults .

If a Default occurs and is continuing and if it is known to the Trustee, the Trustee shall deliver to Holders of Notes a notice of the Default within 90 days after it occurs. Except in the case of a Default relating to the payment of principal, premium, if any, or interest on any Note, the Trustee may withhold from the Holders notice of any continuing Default if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. The Trustee shall not be deemed to know of any Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is such a Default is received by the Trustee at the Corporate Trust Office of the Trustee.

 

Section 7.06 Reports by Trustee to Holders of the Notes .

Within 60 days after each May 15, beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with Trust Indenture Act Section 313(a) (but if no event described in Trust Indenture Act Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with Trust Indenture Act Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by Trust Indenture Act Section 313(c).

A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Issuer and filed with the SEC and each stock exchange on which the Notes are listed in accordance with Trust Indenture Act Section 313(d). The Issuer shall promptly notify the Trustee when the Notes are listed on any stock exchange.

 

Section 7.07 Compensation and Indemnity .

The Issuer shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the parties shall agree in writing from time to time. 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 promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

The Issuer and the Guarantors, jointly and severally, shall indemnify the Trustee for, and hold the Trustee harmless against, any and all loss, damage, claims, liability or expense (including attorneys’ fees) incurred by it in connection with the acceptance or administration of this trust and the performance of its duties hereunder (including the costs and expenses of enforcing this Indenture against the Issuer or any of the Guarantors (including this Section 7.07) or defending itself against any claim whether asserted by any Holder, the Issuer or any Guarantor, or liability in connection with the acceptance, exercise or performance of any of its powers or duties hereunder). The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee may have separate counsel and the Issuer shall pay the fees and expenses of such counsel. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad faith.

The obligations of the Issuer under this Section 7.07 shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee.

 

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To secure the payment obligations of the Issuer and the Guarantors in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except money or property held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(a)(6) or (7) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

The Trustee shall comply with the provisions of Trust Indenture Act Section 313(b)(2) to the extent applicable.

 

Section 7.08 Replacement of Trustee .

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Required Holders may remove the Trustee by so notifying the Trustee and the Issuer in writing. The Issuer may remove the Trustee if:

(a) the Trustee fails to comply with Section 7.10 hereof;

(b) the Trustee is adjudged a bankrupt or an insolvent Person or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

(c) a custodian or public officer takes charge of the Trustee or its property; or

(d) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Required Holders may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the Issuer’s expense), the Issuer or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

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 deliver a notice of its succession to 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 have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

 

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Section 7.09 Successor Trustee by Merger, etc .

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.

 

Section 7.10 Eligibility; Disqualification .

There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.

This Indenture shall always have a Trustee who satisfies the requirements of Trust Indenture Act Sections 310(a)(1), (2) and (5). The Trustee is subject to Trust Indenture Act Section 310(b).

 

Section 7.11 Preferential Collection of Claims Against Issuer .

The Trustee is subject to Trust Indenture Act Section 311(a), excluding any creditor relationship listed in Trust Indenture Act Section 311(b). A Trustee who has resigned or been removed shall be subject to Trust Indenture Act Section 311(a) to the extent indicated therein.

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance .

The Issuer may, at its option and at any time, elect to have either Section 8.02 or 8.03 hereof applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.

 

Section 8.02 Legal Defeasance and Discharge .

Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Issuer and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes and Guarantees on the date the conditions set forth below are satisfied (“ Legal Defeasance ”). For this purpose, Legal Defeasance means that the Issuer shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (a) and (b) below, to have satisfied all its other obligations under such Notes and this Indenture including that of the Guarantors (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same), and to have cured all then existing Events of Default, except for the following provisions which shall survive until otherwise terminated or discharged hereunder:

(a) the rights of Holders of Notes to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due solely out of the trust created pursuant to this Indenture referred to in Section 8.04 hereof;

 

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(b) the Issuer’s obligations with respect to Notes concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(c) the rights, powers, trusts, duties and immunities of the Trustee, and the Issuer’s obligations in connection therewith; and

(d) this Section 8.02.

Subject to compliance with this Article 8, the Issuer may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

 

Section 8.03 Covenant Defeasance .

Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuer and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants (each, a “ Defeased Covenant ” and collectively, the “ Defeased Covenants ”) contained in Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21 and 4.22 hereof and clauses (3) and (4) of Section 5.01(a), Sections 5.01(c) and 5.01(d) hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 hereof are satisfied (“ Covenant Defeasance ”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such Defeased Covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such Defeased Covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such Defeased Covenant or by reason of any reference in any such Defeased Covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(a)(3), 6.01(a)(4), 6.01(a)(5), 6.01(a)(6) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of the Issuer) would constitute a Significant Subsidiary), 6.01(a)(7) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of the Issuer) would constitute a Significant Subsidiaryiaries), 6.01(a)(8) and 6.01(a)(9) hereof shall not constitute Events of Default.

 

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Section 8.04 Conditions to Legal or Covenant Defeasance .

The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes:

In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes:

(1) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest due on the Notes on the date of Stated Maturity or on the redemption date, as the case may be, of such principal, premium, if any, or interest on such Notes ( provided , that if such redemption is made pursuant to Section 3.07(a) hereof, (x) the amount of cash in U.S. dollars or Government Securities, or a combination thereof, that the Issuer must irrevocably deposit or cause to be deposited will be determined using an assumed Applicable Premium calculated as of the date of such deposit, and (y) the Issuer must irrevocably deposit or cause to be deposited additional money in trust on the redemption date as necessary to pay the Applicable Premium as determined on such date) and the Issuer must specify whether such Notes are being defeased to maturity or to a particular redemption date;

(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions,

(a) the Issuer has received from, or there has been published by, the United States Internal Revenue Service a ruling, or

(b) since the issuance of the Notes, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal 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 Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default (other than that 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 other Indebtedness, and in each case the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under the Credit Agreement or any other material agreement or instrument (other than this Indenture) to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound (other than that resulting from any borrowing of 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 other Indebtedness, and the granting of Liens in connection therewith);

 

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(6) the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that, as of the date of such opinion and subject to customary assumptions and exclusions following the deposit, the trust funds will not be subject to the effect of Section 547 of Title 11 of the United States Code;

(7) the Issuer shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Issuer with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuer or any Guarantor or others; and

(8) the Issuer shall have delivered 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 provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.

 

Section 8.05 Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions .

Subject to Section 8.06 hereof, all money and Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “ Trustee ”) pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer or a Guarantor acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.

The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon the request of the Issuer any money or Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

Section 8.06 Repayment to Issuer .

Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Issuer on its request or (if then held by the Issuer) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease.

 

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Section 8.07 Reinstatement .

If the Trustee or Paying Agent is unable to apply any United States dollars or Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuer’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided that, if the Issuer makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.01 Without Consent of Holders of Notes .

Notwithstanding Section 9.02 hereof, the Issuer, any Guarantor (with respect to a Guarantee to which it is a party or this Indenture) and the Trustee may amend or supplement this Indenture and any Guarantee or Notes without the consent of any Holder:

(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

(2) to provide for uncertificated Notes of such series in addition to or in place of certificated Notes;

(3) to comply with Section 5.01 hereof;

(4) to provide for the assumption of the Issuer’s or any Guarantor’s obligations to the Holders;

(5) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under this Indenture of any such Holder;

(6) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuer or any Guarantor;

(7) to provide for the issuance of Additional Notes in accordance with this Indenture;

(8) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee thereunder pursuant to the requirements thereof;

(9) to provide for the issuance of exchange notes or private exchange notes, which are identical to exchange notes except that they are not freely transferable;

(10) to add a Guarantor under this Indenture or to release a Guarantee in accordance with the terms of Section 11.06 of this Indenture;

 

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(11) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including, without limitation to facilitate the issuance and administration of the Notes; provided , however , that (i) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not adversely affect the rights of Holders to transfer Notes; or

(12) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.02(b) hereof (to the extent requested by the Trustee), the Trustee shall join with the Issuer and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into any such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise. Notwithstanding the foregoing, no Opinion of Counsel shall be required in connection with the addition of a Guarantor under this Indenture upon execution and delivery by such Guarantor and the Trustee of a supplemental indenture to this Indenture, the form of which is attached as Exhibit D hereto, and delivery of an Officer’s Certificate.

 

Section 9.02 With Consent of Holders of Notes .

Except as provided below in this Section 9.02, the Issuer and the Trustee may amend or supplement this Indenture, the Notes and the Guarantees with the consent of the Required Holders (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Guarantees or the Notes may be waived with the consent of the Required Holders (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). Section 2.08 hereof and Section 2.09 hereof shall determine which Notes are considered to be “outstanding” for the purposes of this Section 9.02.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02(b) hereof (to the extent requested by the Trustee), the Trustee shall join with the Issuer in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall deliver to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to deliver such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

 

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Without the consent of each affected Holder of Notes, an amendment or waiver under this Section 9.02 may not:

(1) reduce the principal amount of such Notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the principal of or change the fixed final maturity of any such Note or alter or waive the provisions with respect to the redemption of such Notes (other than provisions relating to Section 3.09, Section 4.10 and Section 4.14 hereof);

(3) reduce the rate of or change the time for payment of interest or Special Interest, if any, on any Note;

(4) waive a Default in the payment of principal of or premium, if any, or interest or Special Interest, if any, on the Notes, except a rescission of acceleration of the Notes by the Required Holders and a waiver of the payment default that resulted from such acceleration, or in respect of a covenant or provision contained in this Indenture or any Guarantee which cannot be amended or modified without the consent of all Holders;

(5) make any Note payable in money other than that stated therein;

(6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of or premium, if any, or interest or Special Interest, if any, on the Notes;

(7) make any change to this paragraph of this Section 9.02;

(8) impair the right of any Holder to receive payment of principal of, or interest or Special Interest, if any, on such Holder’s Notes 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 Notes; or

(9) except as expressly permitted by this Indenture, modify the Guarantees of any Significant Subsidiary in any manner adverse to the Holders of the Notes.

 

Section 9.03 Compliance with Trust Indenture Act .

Any amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the Trust Indenture Act as then in effect.

 

Section 9.04 Revocation and Effect of Consents .

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

 

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The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, 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 unless the consent of the requisite number of Holders has been obtained.

 

Section 9.05 Notation on or Exchange of Notes .

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

 

Section 9.06 Trustee to Sign Amendments, etc .

The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Issuer may not sign an amendment, supplement or waiver until its board of directors approves it. In executing any amendment, supplement or waiver, the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 14.04 hereof, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer and any Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03 hereof). Notwithstanding the foregoing, no Opinion of Counsel will be required for the Trustee to execute any amendment or supplement adding a new Guarantor under this Indenture.

 

Section 9.07 Payment for Consent .

Neither the Issuer nor any Subsidiary of the Issuer shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to all Holders and is paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.

ARTICLE 10

[RESERVED]

 

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ARTICLE 11

GUARANTEES

 

Section 11.01 Guarantee .

Subject to this Article 11, from and after the consummation of the Transaction, each of the Guarantors hereby, jointly and severally, unconditionally guarantees (as to each of the Guarantors and as to all Guarantors collectively, “ this Guarantee ”) to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that: (a) the principal of, interest and Special Interest, if any, and premium, if any, on the Notes shall be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest and Special Interest, if any, on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or under the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment by the Issuer when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this Guarantee is a guarantee of payment and not a guarantee of collection.

The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than payment in full of all of the Obligations of the Issuer hereunder and under the Notes). Each Guarantor hereby waives (to the fullest extent permitted by law) diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture or by release in accordance with the provisions of this Indenture.

Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under this Section 11.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, any amount paid either to the Trustee or such Holder, then this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6

 

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hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Guarantee.

This Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer for liquidation, reorganization, should the Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes or this Guarantee, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of this Guarantee 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.

This Guarantee shall be a general unsecured senior obligation of each Guarantor.

Each payment to be made by a Guarantor in respect of this Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

 

Section 11.02 Limitation on Guarantor Liability .

Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent any of the foregoing are applicable to any Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 11, result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law. Each Guarantor that makes a payment under its Guarantee shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.

 

Section 11.03 Execution and Delivery .

To evidence its Guarantee set forth in Section 11.01 hereof, each Guarantor hereby agrees that this Indenture (or a supplemental indenture pursuant to Section 4.15 hereof) shall be executed on behalf of such Guarantor by its President, one of its Vice Presidents or one of its Assistant Vice Presidents.

 

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Each Guarantor hereby agrees that its Guarantee set forth in Section 11.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

If an officer of a Guarantor whose signature is on this Indenture (or a supplemental indenture pursuant to Section 4.15 hereof) no longer holds that office at the time the Trustee authenticates the Note, the Guarantee of such Guarantor shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantors.

If required by Section 4.15 hereof, the Issuer shall cause any newly created or acquired Restricted Subsidiary to comply with the provisions of Section 4.15 hereof and this Article 11, to the extent applicable.

 

Section 11.04 Subrogation .

Each Guarantor shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by any Guarantor pursuant to the provisions of Section 11.01 hereof; provided that, if an Event of Default has occurred and is continuing, no Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.

 

Section 11.05 Benefits Acknowledged .

Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Guarantee are knowingly made in contemplation of such benefits.

 

Section 11.06 Release of Guarantees .

A Guarantee by a Guarantor shall be automatically and unconditionally released and discharged, and no further action by such Guarantor, the Issuer or the Trustee is required for the release of such Guarantor’s Guarantee, upon:

(1) (A) any sale, exchange, disposition or transfer (by merger, consolidation, amalgamation or otherwise) of the Capital Stock of such Guarantor, after which the applicable Guarantor is no longer a Restricted Subsidiary or of all or substantially all the assets of such Guarantor which sale, exchange, disposition or transfer is made in compliance with Sections 4.10(a)(1) and (2) hereof;

(B) the release or discharge of the guarantee by such Guarantor of Indebtedness under the Credit Agreement or such other guarantee which resulted in the creation of such Guarantee, except a discharge or release by or as a result of payment under such guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that if any such guarantee is so reinstated, such Guarantee shall also be reinstated to the extent that such Guarantor would then be required to provide a Guarantee pursuant to Section 4.15 hereof);

(C) the designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in compliance with Section 4.07 hereof; or

(D) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 hereof or the Issuer’s obligations under this Indenture being discharged in accordance with Article 13 hereof; and

(2) delivery by such Guarantor to the Trustee of an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in this Indenture relating to such transaction have been complied with.

 

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ARTICLE 12

[RESERVED]

ARTICLE 13

SATISFACTION AND DISCHARGE

 

Section 13.01 Satisfaction and Discharge .

This Indenture shall be discharged and shall cease to be of further effect as to all Notes, when either:

(1) all Notes theretofore authenticated and delivered, except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or

(2) (A) all Notes not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, shall become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption 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 as trust funds in trust solely for the benefit of the Holders of the Notes, cash in U.S. dollars, Government Securities, or a combination thereof , in such amounts as will be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption thereof, as the case may be ( provided , that if such redemption is made pursuant to Section 3.07(a) hereof, (x) the amount of cash in U.S. dollars or Government Securities, or a combination thereof, that the Issuer must irrevocably deposit or cause to be deposited will be determined using an assumed Applicable Premium calculated as of the date of such deposit, and (y) the Issuer must irrevocably deposit or cause to be deposited additional money in trust on the redemption date as necessary to pay the Applicable Premium as determined on such date);

(B) no Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness, and the granting of Liens in connection therewith) with respect to this Indenture or the Notes shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under the Credit Agreement or any other material agreement or instrument (other than this Indenture) to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound (other than

 

—112—


that resulting from any borrowing of funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness, and the granting of Liens in connection therewith);

(C) the Issuer has paid or caused to be paid all sums payable by it under this Indenture; and

(D) the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be.

In addition, the Issuer must deliver an Officer’s Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

Notwithstanding the satisfaction and discharge of this Indenture, if money shall have been deposited with the Trustee pursuant to subclause (A) of clause (2) of this Section 13.01, the provisions of Section 13.02 and Section 8.06 hereof shall survive such satisfaction and discharge.

 

Section 13.02 Application of Trust Money .

Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 13.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 13.01 hereof 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 and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 13.01 hereof; provided that if the Issuer has made any payment of principal of, premium, if any, or interest and Special Interest, if any, on any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

ARTICLE 14

MISCELLANEOUS

 

Section 14.01 Trust Indenture Act Controls .

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Trust Indenture Act Section 318(c), the imposed duties shall control at all times after the effectiveness of a registration statement under the Registration Rights Agreement.

 

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Section 14.02 Notices .

Any notice or communication by the Issuer, any Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), facsimile or overnight air courier guaranteeing next day delivery, to the others’ address:

If to the Issuer and/or any Guarantor:

IMS Health Incorporated (formerly known as Healthcare Technology Acquisition, Inc.)

901 Main Avenue

Norwalk, Connecticut 06851

Attention: General Counsel

with a copy (which copy shall not constitute notice) to:

TPG Capital, L.P.

345 California Street

Suite 3300

San Francisco, California 94104

Attention: Jack Weingart

CPP Investment Board Private Holdings Inc. and its affiliates

1 Queen Street East

Suite 1500

Toronto, Ontario M5C 2W5

Canada

Attention: Andre Bourbonnais

Ropes & Gray LLP

One International Place

Boston, Massachusetts 02110

Attention: Michael Lee, Esq.

If to the Trustee:

U.S. Bank National Association

60 Livingston Avenue

EP-MN-WS3C

St. Paul, MN 55107-2292

Attention: IMS Health Incorporated Administrator

The Issuer, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five calendar days after being deposited in the mail, postage prepaid, if mailed by first-class mail; when receipt is acknowledged, if faxed; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; provided that any notice or communication delivered to the Trustee shall be deemed effective upon actual receipt thereof.

 

—114—


Any notice or communication to a Holder shall be mailed by first-class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in Trust Indenture Act Section 313(c), to the extent required by the Trust Indenture Act. 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 or otherwise delivered in the manner provided above within the time prescribed, such notice or communication shall be deemed duly given, whether or not the addressee receives it.

If the Issuer mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.

 

Section 14.03 Communication by Holders of Notes with Other Holders of Notes .

Holders may communicate pursuant to Trust Indenture Act Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and anyone else shall have the protection of Trust Indenture Act Section 312(c).

 

Section 14.04 Certificate and Opinion as to Conditions Precedent .

Upon any request or application by the Issuer or any of the Guarantors to the Trustee to take any action under this Indenture, the Issuer or such Guarantor, as the case may be, shall furnish to the Trustee:

(a) An Officer’s Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 14.05 hereof) stating that, in the opinion of the signer, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(b) An Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 14.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

 

Section 14.05 Statements Required in Certificate or Opinion .

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to Section 4.04 hereof or Trust Indenture Act Section 314(a)(4)) shall comply with the provisions of Trust Indenture Act Section 314(e) and 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 or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officer’s Certificate as to matters of fact); and

(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant 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.

 

—115—


Section 14.06 Rules by Trustee and Agents .

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

 

Section 14.07 No Personal Liability of Directors, Officers, Employees and Stockholders .

No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Issuer or any Guarantor or any of their direct or indirect parent companies shall have any liability for any obligations of the Issuer or the Guarantors under the Notes, 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 by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

 

Section 14.08 Governing Law .

THIS INDENTURE, THE NOTES AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

Section 14.09 Waiver of Jury Trial .

EACH OF THE ISSUER, THE GUARANTORS AND THE TRUSTEE 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 NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 14.10 Force Majeure .

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable 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 or hardware) services.

 

Section 14.11 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 Restricted Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

—116—


Section 14.12 Successors .

All agreements of the Issuer in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of each Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 11.06 hereof.

 

Section 14.13 Severability .

In case any provision in this Indenture or in the Notes 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.

 

Section 14.14 Counterpart 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.

 

Section 14.15 Table of Contents, Headings, etc .

The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

 

Section 14.16 Qualification of Indenture .

The Issuer and the Guarantors shall qualify this Indenture under the Trust Indenture Act in accordance with the terms and conditions of the Registration Rights Agreement and shall pay all reasonable costs and expenses (including attorneys’ fees and expenses for the Issuer, the Guarantors and the Trustee) incurred in connection therewith, including, but not limited to, costs and expenses of qualification of this Indenture and the Notes and printing this Indenture and the Notes. The Trustee shall be entitled to receive from the Issuer and the Guarantors any such Officer’s Certificates, Opinions of Counsel or other documentation as it may reasonably request in connection with any such qualification of this Indenture under the Trust Indenture Act.

[Signatures on following page]

 

—117—


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:  

/s/ Richard Prokosch

Name: Richard Prokosch
Title: Vice President
HEALTHCARE TECHNOLOGY ACQUISITION, INC.
By:  

/s/ John E. Viola

Name: John E. Viola
Title: Vice President and Treasurer
IMS HEALTH INCORPORATED
By:  

/s/ Leslye G. Katz

Name: Leslye G. Katz
Title: Senior Vice President and Chief Financial Officer
HEALTHCARE TECHNOLOGY INTERMEDIATE HOLDINGS, INC.
By:  

/s/ Leslye G. Katz

Name: Leslye G. Katz
Title: Senior Vice President and Chief Financial Officer

[Indenture]


ENTERPRISE ASSOCIATES L.L.C.
By:  

/s/ Jeffrey J. Ford

Name: Jeffrey J. Ford
Title: Vice President

[Indenture]

 


IMS TRADING MANAGEMENT, INC.
By:  

/s/ Jeffrey J. Ford

Name: Jeffrey J. Ford
Title: President

[Indenture]

 


IMS HEALTH LICENSING ASSOCIATES, L.L.C.
By:  

/s/ Jeffrey J. Ford

Name: Jeffrey J. Ford
Title: President

[Indenture]

 


IMS HEALTH TRANSPORTATION SERVICES CORPORATION
By:  

/s/ Leslye G. Katz

Name: Leslye G. Katz
Title: Vice President

[Indenture]

 


SPARTAN LEASING CORPORATION
By:  

/s/ Margaret F. Cupp

Name: Margaret F. Cupp
Title: President

[Indenture]

 


COORDINATED MANAGEMENT SYSTEMS, INC.
By:  

/s/ Margaret F. Cupp

Name: Margaret F. Cupp
Title: President

[Indenture]

 


ARSENAL HOLDING COMPANY

ARSENAL HOLDING (II) COMPANY

DATA NICHE ASSOCIATES, INC.

IMS HEALTH INDIA HOLDING CORPORATION

IMS HEALTH TRADING CORPORATION

RX INDIA CORPORATION

VALUEMEDICS RESEARCH, LLC

IMS HEALTH HOLDING CORPORATION

IMS HEALTH INVESTING CORPORATION

IMS HEALTH INVESTMENTS, INC.

IMS HEALTH PURCHASING, INC.

By:  

/s/ Jeffrey J. Ford

Name: Jeffrey J. Ford
Title: President
IMS SERVICES, LLC
By:  

/s/ Jeffrey J. Ford

Name: Jeffrey J. Ford
Title: Vice President and Treasurer

[Indenture]


COORDINATED MANAGEMENT HOLDINGS, L.L.C.
By:  

/s/ Margaret F. Cupp

Name: Margaret F. Cupp
Title: President

[Indenture]

 


IMS CHINAMETRIK INCORPORATED
By:  

/s/ Margaret F. Cupp

Name: Margaret F. Cupp
Title: Vice President

[Indenture]

 


IMS HOLDING INC.
By:  

/s/ Margaret F. Cupp

Name: Margaret F. Cupp
Title: Vice President

[Indenture]

 


IMS SOFTWARE SERVICES LTD
By:  

/s/ John R. Walsh

Name: John R. Walsh
Title: President
INTERCONTINENTAL MEDICAL STATISTICS INTERNATIONAL, LTD.
By:  

/s/ John R. Walsh

Name: John R. Walsh
Title: Vice President and Treasurer
MARKET RESEARCH MANAGEMENT, INC.
By:  

/s/ John R. Walsh

Name: John R. Walsh
Title: Vice President

[Indenture]


IMS CONTRACTING & COMPLIANCE, INC.
By:  

/s/ Alex Guizetti

Name: Alex Guizetti
Title: President

[Indenture]

 


IMS GOVERNMENT SOLUTIONS INC.
By:  

/s/ George Rollins

Name: George Rollins
Title: President

[Indenture]

 


PHARMETRICS, INC.
By:  

/s/ Daniel Molloy

Name: Daniel Molloy
Title: President

[Indenture]

 


HEALTH BENCHMARKS, INC.

HEALTH VANGUARD, INC.

By:  

/s/ Hossam Sadek

Name: Hossam Sadek
Title: President

[Indenture]

 


IMS HEALTH FINANCE, INC.

By:  

/s/ Jeffrey J. Ford

Name: Jeffrey J. Ford
Title: President

[Indenture]

 


EXHIBIT A

[Face of Note]

[ ]

12  1 2 % SENIOR NOTES DUE 2018

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Regulation S Temporary Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the OID legend, if applicable]

 

A-1


CUSIP [ ]

ISIN [ ] 1

[RULE 144A][REGULATION S] [GLOBAL] NOTE

[ for Global Notes insert: representing initially up to]

$[ ]

12  1 2 % Senior Notes due 2018

 

No. [ ]    $[ ]

HEALTHCARE TECHNOLOGY ACQUISITION, INC. (to be merged with and into IMS Health Incorporated, with IMS Health Incorporated as the surviving entity) promises to pay to [for Global Notes insert: CEDE & CO.] [for Definitive Notes insert: Name of Holder] or registered assigns, the principal sum [set forth on the Schedule of Exchanges of Interests in the Global Note attached hereto] of [ United States Dollars] on March 1, 2018.

Interest Payment Dates: March 1, June 1, September 1 and December 1

Record Dates: February 15, May 15, August 15 and November 15

 

1   Rule 144A Note CUSIP: [ ]

Rule 144A Note ISIN: [ ]

IAI Note CUSIP: [ ]

IAI Note ISIN: [ ]

Regulation S Note CUSIP: [ ]

Regulation S Note ISIN: [ ]

 

A-2


IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed.

Dated: [February 26, 2010]

 

HEALTHCARE TECHNOLOGY ACQUISITION, INC., as Issuer
By:  

 

  Name:
  Title:
IMS HEALTH INCORPORATED (as successor by operation of law following consummation of the merger with Healthcare Technology Acquisition, Inc.)
By:  

 

  Name:
 

Title:

 

A-3


This is one of the Notes referred to in the within-mentioned Indenture:

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:  

 

  Authorized Signatory

 

A-4


[Back of Note]

12  1 2 % Senior Notes due 2018

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. The Issuer promises to pay interest on the principal amount of this Note at 12  1 2 % per annum from February 26, 2010 until maturity and shall pay the Special Interest payable pursuant to Section 2(c) of the Exchange and Registration Rights Agreement referred to below, if any. 2 The Issuer will pay interest quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “ Interest Payment Date ”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that the first Interest Payment Date shall be June 1, 2010. If, at any time prior to the Disposition Date, a default in the payment when due of interest or Special Interest, if any, or on principal of, or premium, if any, on the Notes or an Event of Default has occurred and is continuing, then in each case this Note will accrue interest at the stated interest rate on this Note plus the Default Interest Rate until the earlier of such time as no such Default or such Event of Default shall be continuing (to the extent that the payment of such interest shall be legally enforceable) or the Disposition Date. On and after the Disposition Date, any amounts payable under or in respect of this Note not paid when due will accrue interest at the stated interest rate on this Note plus the Default Interest Rate until such time as such overdue amounts are paid in full, including any interest thereon (to the extent that the payment of such interest shall be legally enforceable). Default interest shall be payable by the Issuer in cash on demand in accordance with Section 2.12 of the Indenture. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes to the Persons who are registered Holders of Notes at the close of business on February 15, May 15, August 15 and November 15 (whether or not a Business Day), as the case may be, next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Payment of interest and Special Interest, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of, and interest [and Special Interest, if any,] and premium on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Issuer or the Paying Agent at least five Business Days in advance of the applicable Interest Payment Date. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. The Issuer shall pay all Special Interest, if any, in the manner, on the dates and in the amounts set forth in the Exchange and Registration Rights Agreement.

3. PAYING AGENT AND REGISTRAR. Initially, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuer may change any Paying Agent or Registrar without notice to the Holders. The Issuer or any of its Subsidiaries may act in any such capacity. So long as any series of Notes is listed on an exchange and the rules of such exchange

 

2  

Bracketed references to Special Interest in this Exhibit A should be inserted only in Restricted Definitive Notes and Restricted Global Notes.

 

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so require, the Issuer shall satisfy any requirement of such exchange as to paying agents and registrars and shall comply with any notice requirements required by such exchange in connection with any change of paying agent or registrar.

4. INDENTURE. The Issuer issued the Notes under an Indenture, dated as of February 26, 2010 (the “ Indenture ”), among IMS Health Incorporated, Healthcare Technology Acquisition, Inc., the Guarantors named therein and the Trustee. This Note is one of a duly authorized issue of Notes of the Issuer designated as its 12  1 2 % Senior Notes due 2018. The Issuer shall be entitled to issue Additional Notes pursuant to Section 2.01 of the Indenture. The Notes are limited in the maximum aggregate principal amount to $1,000,000,000, except as otherwise permitted by Section 2.07. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “ Trust Indenture Act ”). The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION.

(a) Except as described below under clauses 5(b) and 5(c) hereof, the Notes will not be redeemable at the Issuer’s option before March 1, 2014.

(b) At any time prior to March 1, 2014, the Issuer may redeem all or a part of the Notes, upon notice provided as described in Section 3.03, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of the date of redemption (the “ Redemption Date ”), plus accrued and unpaid interest and Special Interest, if any, thereon to, the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(c) Until March 1, 2013, the Issuer may redeem up to 40% of the aggregate principal amount of Notes (including any Additional Notes issued after the Closing Date) issued by it at a redemption price equal to 112.50% of the aggregate principal amount thereof, plus accrued and unpaid interest and Special Interest, if any, thereon to the applicable Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest and Special Interest, if any, due on the relevant Interest Payment Date, solely with the net cash proceeds received by it from one or more Equity Offerings; provided that at least 60% of the sum of the aggregate principal amount of Notes originally issued under the Indenture and Additional Notes issued after the Closing Date remains outstanding immediately after the occurrence of each such redemption; provided further that each such redemption occurs within 60 days of the date of closing of each such Equity Offering. Notice of any redemption upon any such Equity Offering may be given prior to the redemption thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

(d) On and after March 1, 2014, the Issuer may redeem the Notes, in whole or in part, upon notice provided as described in Section 3.03, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest and Special Interest, if any, thereon to the applicable Redemption Date, subject to the right of Holders of record of such Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on March 1 of each of the years indicated below:

 

Year

   Percentage  

2014

     110.000

2015

     106.250

2016

     103.125

2017 and thereafter

     100.000

(e) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.

 

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6. MANDATORY REDEMPTION. The Issuer shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.

7. NOTICE OF REDEMPTION. Subject to Section 3.03 of the Indenture, the Issuer shall mail or cause to be delivered by electronic transmission or mailed by first-class mail at least 30 days but not more than 60 days before the redemption date (except that redemption notices may be delivered more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 of the Indenture) to each Holder whose Notes are to be redeemed at its registered address, or to the Trustee to forward to each Holder of Notes at such Holder’s registered address, or shall otherwise mail on such timeframe such notice in accordance with the procedures of DTC. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. Subject to Section 3.05 of the Indenture, on and after the redemption date interest and Special Interest, if any, shall cease to accrue on Notes or portions thereof called for redemption.

8. OFFERS TO REPURCHASE.

(a) If a Change of Control occurs, unless the Issuer has previously or concurrently mailed a redemption notice with respect to all the outstanding Notes as set forth in Section 3.07, the Issuer shall make an offer to each Holder to repurchase all of each Holder’s Notes (a “ Change of Control Offer ”) at a price in cash (the “ Change of Control Payment ”) equal to 101.0% of the aggregate principal amount thereof, plus accrued and unpaid interest and Special Interest, if any, to the date of purchase. The Change of Control Offer shall be made in accordance with Section 4.14 of the Indenture.

(b) If the Issuer or any of its Restricted Subsidiaries consummates an Asset Sale, within 10 Business Days of each date that Excess Proceeds exceed $25,000,000, the Issuer shall commence, an offer to all Holders of the Notes and, if required by the terms of any unsecured Indebtedness that is pari passu with the Notes (“ Pari Passu Indebtedness ”), to the holders of such Pari Passu Indebtedness (an “ Asset Sale Offer ”), to purchase the maximum principal amount of Notes and such other Pari Passu Indebtedness that is an integral multiple of $1,000 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 accreted value, if less) plus accrued and unpaid interest and Special Interest, if any, thereon to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes and such Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes, subject to compliance with other covenants contained in the Indenture. If the aggregate principal amount of Notes or the Pari Passu Indebtedness surrendered in an Asset Sale Offer by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and the Issuer shall select such Pari Passu Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Pari Passu Indebtedness tendered in accordance with Section 3.09.

 

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Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds that resulted in the Asset Sale Offer shall be reset at zero (regardless of whether there are remaining Excess Proceeds upon such completion). Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Issuer prior to any related purchase date and may elect to have such Notes purchased by surrendering the Note with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer such Note by book-entry transfer, to the Issuer, the Depositary, if appointed by the Issuer, or a Paying Agent at the address specified in the notice at least three days before the purchase date.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed.

10. [RESERVED].

11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.

12. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes may be amended or supplemented as provided in the Indenture.

13. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default (other than an Event of Default specified in clause (6) or (7) of Section 6.01(a) of the Indenture with respect to the Issuer) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then total outstanding Notes may declare the principal, premium, if any, interest and Special Interest, if any, and any other monetary obligations on all of the then outstanding Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture, the Notes or the Guarantees except as provided in the Indenture. Subject to certain limitations, the Required Holders may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default (except a Default relating to the payment of principal, premium, if any, or interest and Special Interest, if any) if it determines that withholding notice is in their interest. The Required Holders by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture except a continuing Default in payment of the principal of, premium, if any, or interest and Special Interest, if any, on, any of the Notes held by a non-consenting Holder. The Issuer and each Guarantor (to the extent that such Guarantor is so required under the Trust Indenture Act) is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required within five (5) Business Days after becoming aware of any Default, to deliver to the Trustee a statement specifying such Default and what action the Issuer proposes to take with respect thereto.

14. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual or facsimile signature of the Trustee.

 

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15. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE GUARANTEES.

16. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes 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 upon written request and without charge a copy of the Indenture. Requests may be made to the Issuer at the following address:

IMS Health Incorporated (formerly known as Healthcare Technology Acquisition, Inc.)

901 Main Avenue

Norwalk, Connecticut 06851

Attention: General Counsel

 

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ASSIGNMENT FORM

To assign this Note, fill in the form below:

 

(I) or (we) assign and transfer this Note to:  

 

  (Insert assignee’ legal name)

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

 

and irrevocably appoint  

 

to transfer this Note 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 face of this Note)

 

Signature Guarantee*:

 

 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). [Signature guarantee is not required for Definitive Notes.]

 

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OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

[    ] Section 4.10            [    ] Section 4.14

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:

$        

 

Date:  

 

 

Your Signature:  

 

  (Sign exactly as your name appears on the face of this Note)

 

Tax Identification No.:

 

 

 

Signature Guarantee*:

 

 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). [Signature guarantee is not required for Definitive Notes.]

 

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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $        . The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

Date of Exchange

   Amount of
decrease
in Principal
Amount of this
Global Note
   Amount of increase
in Principal
Amount of this
Global Note
   Principal Amount
of
this Global Note
following such
decrease or
increase
   Signature of
authorized officer
of Trustee or
Note Custodian
           
           
           
           
           
           
           

 

* This schedule should be included only if the Note is issued in global form.

 

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EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

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Attention: [ ]

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[ ]Attention: [ ]

Re: 12  1 2 % Senior Notes due 2018

Reference is hereby made to the Indenture, dated as of February 26, 2010 (the “ Indenture ”), among IMS Health Incorporated, Healthcare Technology Acquisition, Inc., the Guarantors named therein and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                     (the “ Transferor ”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $        in such Note[s] or interests (the “ Transfer ”), to                      (the “ Transferee ”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. [    ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “ Securities Act ”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States.

2. [    ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor

 

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nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Indenture and the Securities Act.

3. [    ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR THE DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S OR THE DEFINITIVE NOTE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

(a) [    ] such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;

or

(b) [    ] such Transfer is being effected to the Issuer or a subsidiary thereof;

or

(c) [    ] such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;

or

(d) [    ] such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit B to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Restricted Definitive Notes and in the Indenture and the Securities Act.

 

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4. [    ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

(a) [    ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(b) [    ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(c) [    ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer.

 

[Insert Name of Transferor]
By:  

 

  Name:
  Title:

 

Dated:  

 

 

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ANNEX A TO CERTIFICATE OF TRANSFER

 

1. The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

 

(a) [    ] a beneficial interest in the:

 

(i) [    ] 144A Global Note (CUSIP [            ]), or

 

(ii) [    ] Regulation S Global Note (CUSIP [            ]), or

 

(iii) [    ]IAI Global Note (CUSIP [            ]), or

 

(b) [    ] a Restricted Definitive Note.

 

2. After the Transfer the Transferee will hold:

[CHECK ONE]

 

(a) [    ] a beneficial interest in the:

 

(i) [    ] 144A Global Note (CUSIP [            ]), or

 

(ii) [    ] Regulation S Global Note (CUSIP [            ]), or

 

(iii) [    ] IAI Global Note (CUSIP [            ]), or

 

(iv) [    ] Unrestricted Global Note (CUSIP [            ]), or

 

(b) [    ] a Restricted Definitive Note; or

 

(c) [    ] an Unrestricted Definitive Note;

in each case, in accordance with the terms of the Indenture.

 

Annex A-1


EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

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Attention: [ ]

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Attention: [ ]

Re: 12  1 2 % Senior Notes due 2018

Reference is hereby made to the Indenture, dated as of February 26, 2010 (the “ Indenture ”), among IMS Health Incorporated, Healthcare Technology Acquisition, Inc., the Guarantors named therein and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                     (the “ Owner ”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $        in such Note[s] or interests (the “ Exchange ”). In connection with the Exchange, the Owner hereby certifies that:

1) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE

a) ¨ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

b) ¨ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive

 

D-1


Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

c) ¨ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

d) ¨ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

2) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES

a) ¨ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.

b) ¨ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] [    ] 144A Global Note [    ] Regulation S Global Note [    ] IAI Global Note, with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

 

D-2


This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and are dated [                    ].

 

[Insert Name of Transferor]
By:  

 

  Name:
  Title:

 

Dated:  

 

 

D-3


ANNEX A TO CERTIFICATE OF EXCHANGE

 

1. The Owner owns and proposes to exchange the following:

[CHECK ONE OF (a) OR (b)]

 

(a) ¨         a beneficial interest in a Restricted Global Note, or

 

(b) ¨         a Restricted Definitive Note.

 

2. After the Exchange the Owner will hold:

[CHECK ONE]

 

(a) ¨         a beneficial interest in an Unrestricted Global Note, or

 

(b) ¨         an Unrestricted Definitive Note, or

 

(c) ¨         a Restricted Definitive Note, or

 

(d) ¨         a beneficial interest in 144A Global Note (CUSIP [            ]), or

 

(e) ¨         a beneficial interest in IAI Global Note (CUSIP [            ]), or

 

(e) ¨         a beneficial interest in Regulation S Global Note (CUSIP [            ]).

 

Annex A-1


EXHIBIT D

[FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS]

Supplemental Indenture (this “ Supplemental Indenture ”), dated as of                     , among                      (the “ Guaranteeing Subsidiary ”), a subsidiary of IMS Health Incorporated (formerly known as Healthcare Technology Acquisition, Inc.), a Delaware corporation (the “ Issuer ”), and U.S. Bank National Association, as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, each of [ ], and the Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture (the “ Indenture ”), dated as of February 26, 2010, providing for the issuance of up to $1,000,000,000 aggregate principal amount of 12  1 2 % Senior Notes due 2018(the “ Notes ”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . The Guaranteeing Subsidiary hereby agrees as follows:

(a) Along with all Guarantors named in the Indenture, subject to Article 11, to jointly and severally unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Issuer hereunder or under the Indenture, that:

(i) the principal of and interest and Special Interest, if any, premium, if any, on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment by the Issuer when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors and the Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same immediately. This is a guarantee of payment and not a guarantee of collection.

 

E-1


(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than payment in full of all of the Obligations of the Issuer hereunder and under the Indenture).

(c) The following is hereby waived to the fullest extent permitted by law: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever.

(d) This Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, the Indenture and this Supplemental Indenture or by release in accordance with the provisions of this Indenture, and the Guaranteeing Subsidiary accepts all obligations of a Guarantor under the Indenture.

(e) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors (including the Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, any amount paid either to the Trustee or such Holder, then this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(g) As between the Guaranteeing Subsidiary, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guaranteeing Subsidiary for the purpose of this Guarantee.

(h) The Guaranteeing Subsidiary shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Guarantee.

 

E-2


(i) Pursuant to Section 11.02 of the Indenture, after giving effect to all other contingent and fixed liabilities that are relevant under any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent that any of the foregoing are applicable to this Guarantee, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under Article 11 of the Indenture, this new Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guaranteeing Subsidiary under this Guarantee will not constitute a fraudulent transfer or conveyance for purposes of such laws.

(j) This Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer for liquidation, reorganization, should the Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes and Guarantee, whether as a “voidable preference”, “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Note shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(k) In case any provision of this Guarantee 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.

(l) This Guarantee shall be a general unsecured senior obligation of such Guaranteeing Subsidiary.

(m) Each payment to be made by the Guaranteeing Subsidiary in respect of this Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

(3) Execution and Delivery . The Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

(4) Merger, Consolidation or Sale of All or Substantially All Assets .

(a) Except as otherwise provided in Section 5.01(c) of the Indenture, the Guaranteeing Subsidiary may not consolidate or merge with or into or wind up into (whether or not the Issuer or Guaranteeing Subsidiary 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 unless:

(i) (A) the Guaranteeing Subsidiary is the surviving entity or the Person formed by or surviving any such consolidation or merger (if other than the Guaranteeing Subsidiary) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of the Guaranteeing

 

E-3


Subsidiary, as the case may be, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Guaranteeing Subsidiary or such Person, as the case may be, being herein called the “ Successor Person ”);

(B) the Successor Person, if other than the Guaranteeing Subsidiary, expressly assumes all the obligations of the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s related Guarantee pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(C) immediately after such transaction, no Default exists; and

(D) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with the Indenture; or

(ii) the transaction is made in compliance with clauses (1) and (2) of Section 4.10(a) of the Indenture;

(b) In the case of section (a)(i) of this Section 4, the Successor Person will succeed to, and be substituted for, the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s Guarantee. Notwithstanding the foregoing, the Guaranteeing Subsidiary may (1) merge or consolidate with or into or wind up into or transfer all or part of its properties and assets to another Guarantor or the Issuer, (2) merge with a Restricted Subsidiary of the Issuer solely for the purpose of reincorporating the Guaranteeing Subsidiary in the United States, any state thereof, the District of Columbia or any territory thereof or (3) convert into a corporation, partnership, limited partnership, limited liability corporation or trust organized or existing under the laws of the jurisdiction of organization of the Guaranteeing Subsidiary, in each case without complying with section (a) of this Section 4.

(5) Releases . The Guarantee of the Guaranteeing Subsidiary shall be automatically and unconditionally released and discharged, and no further action by the Guaranteeing Subsidiary, the Issuer or the Trustee is required for the release of the Guaranteeing Subsidiary’s Guarantee, upon:

(1) (A) any sale, exchange, disposition or transfer (by merger, consolidation, amalgamation or otherwise) of the Capital Stock of the Guaranteeing Subsidiary, after which the Guaranteeing Subsidiary is no longer a Restricted Subsidiary or all or substantially all the assets of the Guaranteeing Subsidiary which sale, exchange, disposition or transfer is made in compliance with Sections 4.10(a)(1) and (2) of the Indenture;

(B) the release or discharge of the guarantee by the Guaranteeing Subsidiary of Indebtedness under the Credit Agreement or such other guarantee which resulted in the creation of the Guarantee, except a discharge or release by or as a result of payment under such guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that if any such guarantee is so reinstated, this Guarantee shall also be reinstated to the extent that such Guaranteeing Subsidiary would then be required to provide a Guarantee pursuant to Section 4.15 of the Indenture);

(C) the designation of the Guaranteeing Subsidiary as an Unrestricted Subsidiary in compliance with Section 4.07(c) of the Indenture; or

(D) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 of the Indenture or the Issuer’s obligations under the Indenture being discharged in accordance with Article 13 of the Indenture; and

(2) delivery by the Guaranteeing Subsidiary to the Trustee of an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture relating to such transaction have been complied with.

 

E-4


(6) No Recourse Against Others . No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Guaranteeing Subsidiary or any of its direct or indirect parent companies shall have any liability for any obligations of the Issuer or the Guarantors (including the Guaranteeing Subsidiary) under the Notes, any Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(7) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(8) 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.

(9) Effect of Headings . The Section headings herein are for convenience only, are not to be considered part of this Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

(10) The Trustee . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Supplemental Indenture and it shall not be responsible for any the recitals contained herein.

(11) Subrogation . The Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by the Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof and Section 11.01 of the Indenture; provided that, if an Event of Default has occurred and is continuing, the Guaranteeing Subsidiary shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under the Indenture or the Notes shall have been paid in full.

(12) Benefits Acknowledged . The Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. The Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Guarantee are knowingly made in contemplation of such benefits.

(13) Successors . All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in Sections 2(k) and 12 hereof or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

 

E-5


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

 

U.S. BANK NATIONAL ASSOCIATION

as Trustee

By:  

 

Name:  
Title:  

[ ]

as [Subsidiary Guarantor]

By:  

 

Name:  
Title:  

 

E-6

Exhibit 4.2

FIRST SUPPLEMENTAL INDENTURE

This First Supplemental Indenture (the “ Supplemental Indenture ”) is dated as of March 14, 2011 among IMS Health Incorporated, a Delaware corporation (the “ Issuer ”), the Guarantors listed on the signature pages hereto and U.S. Bank National Association, as Trustee (the “ Trustee ”). Capitalized terms not defined herein shall have the meanings assigned to them in the Indenture (as defined below).

W I T N E S S E T H

WHEREAS, the Issuer and the Trustee have previously become parties to an Indenture, dated as of February 26, 2010 (the “ Indenture ”), providing for the issuance of the Issuer’s 12  1 2 % Senior Notes due 2018;

WHEREAS, the Issuer proposes to amend the Indenture as contemplated by this Supplemental Indenture (such amendments, collectively, the “ Amendments ”);

WHEREAS, pursuant to Section 9.02 of the Indenture, the Issuer and the Trustee may amend or supplement the Indenture as contemplated by this Supplemental Indenture with the consent of the Holders of at least a majority in aggregate principal amount of the outstanding Notes;

WHEREAS, the Issuer has obtained the consent of the Holders of at least a majority in aggregate principal amount of the outstanding Notes, pursuant to the Consent Solicitation Statement, dated March 3, 2011, to the Amendments upon the terms and subject to the conditions set forth therein;

WHEREAS, the Issuer has done all things necessary to make this Supplemental Indenture a valid agreement of the Issuer in accordance with the terms of the Indenture and has satisfied all other conditions required under Article 9 of the Indenture; and

WHEREAS, pursuant to Section 9.06, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, in order to effect the Amendments, the parties hereto agree as follows:

Section 1. Amendments . Effective as of the date hereof, the Indenture is hereby amended as follows:

(a) The definition of “Incremental Facilities” is hereby deleted in its entirety and replaced with the following:

““ Incremental Facilities ” means any secured incremental credit facilities pursuant to the Credit Agreement on the terms of such incremental facility as in effect on March 16, 2011.”


(b) Section 4.09(a) of the Indenture is hereby amended by replacing “2.25 to 1.00” with “2.00 to 1.00”.

(c) Section 4.09(b)(1) of the Indenture is hereby deleted in its entirety and replaced with the following:

“the incurrence of Indebtedness under Credit Facilities by the Issuer and, subject to the proviso in this clause (1) below, any Restricted Subsidiary of the Issuer, 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 that, together with the aggregate amount of Receivables Facilities incurred pursuant to Section 4.09(b)(12) below, does not exceed at any one time outstanding (i) the sum of (x) $2,475,000,000 plus (y) an aggregate principal amount of Incremental Facilities issued under the Credit Facilities equal to the sum of (A) $150,000,000 plus (B) an additional amount not to exceed $150,000,000, in the case of this clause (B), to the extent the Consolidated Secured Leverage Ratio of the Issuer and its Restricted Subsidiaries as of the date of such incurrence and after giving pro forma effect thereto (including a pro forma application of the net proceeds therefrom) would be no greater than 3.75 to 1.00, less (ii) the aggregate amount of mandatory principal payments actually made by the Issuer from the proceeds of Asset Sales consummated after the Closing Date; provided , however that the amount of Indebtedness that may be incurred pursuant to this clause (b)(1) by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed $200,000,000 at any one time outstanding;”

(d) Section 4.09(b)(19) of the Indenture is hereby deleted in its entirety and replaced with the following:

“Indebtedness (including Acquired Indebtedness), Disqualified Stock or Preferred Stock of (a) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged or amalgamated with or into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture, or (b) the Issuer or any Subsidiary Guarantor incurred in connection with or in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, the acquisition by the Issuer or a Restricted Subsidiary of all of the Capital Stock of any Person engaged in a Similar Business or of any division, line of business or business unit engaged in a Similar Business (whether through the direct purchase of assets or the purchase of Capital Stock of, or merger, amalgamation or consolidation with, any Person owning such assets); provided that (in case of each clause (a) and (b) above), (A) immediately after giving pro forma effect to such acquisition and the incurrence of such Indebtedness, the Issuer would have had, for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred, a Fixed Charge Coverage Ratio of not less than either (x) 2.00 to 1.00 or (y) both (i) the Fixed Charge Coverage Ratio immediately prior to acquisition and the incurrence of such Indebtedness and (ii) 1.75 to 1.00, (B) all such Indebtedness has a final maturity date later


than the final maturity date of, and has a Weighted Average Life to Maturity at the time such Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Notes and (C) such Indebtedness is issued, acquired or guaranteed by the Issuer and/or one or more of the Subsidiary Guarantors and is subordinated (or such guarantee is subordinated) to the Notes (and any such Subsidiary Guarantor’s guarantee thereof) on terms customary for senior subordinated notes issued in Rule 144A offerings (as reasonably determined in good faith pursuant to an Officer’s Certificate);”

(e) Section 4.09(b)(20) of the Indenture is hereby amended by replacing “$150,000,000” with “$250,000,000”.

(f) Section 4.12 of the Indenture is hereby amended by replacing “3.00 to 1.00” with “3.25 to 1.00”.

Section 2. Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Section 3. Successors. All agreements of the Issuer in this Supplemental Indenture shall bind its successors. All agreements of the Trustee in this Supplemental Indenture shall bind its successors. All agreements of each Guarantor in this Supplemental Indenture shall bind its successors, except as otherwise provided in Section 11.06 of the Indenture.

Section 4. Severability. In case any provision in this Supplemental 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.

Section 5. Counterpart Originals. 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.

Section 6. Indenture Continues In Force and Effect . Except as specifically amended hereby, the Indenture shall continue in full force and effect, and from and after the date hereof, the Indenture and this Supplemental Indenture shall constitute one instrument.

Section7. Effect of Headings . The Section headings herein are for convenience only, are not to be considered part of this Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 8. Trustee . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Supplemental Indenture and it shall not be responsible for any the recitals contained herein.

[ Signature pages to follow. ]


IN WITNESS WHEREOF, the Issuer, the Guarantors and the Trustee have caused this Supplemental Indenture to be executed in their respective names as of the date first above written.

 

IMS HEALTH INCORPORATED,
as Issuer
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Vice President and Treasurer

HEALTHCARE TECHNOLOGY INTERMEDIATE HOLDINGS, INC.,

as Holdings

By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Vice President and Treasurer

 

Signature Page to Supplemental Indenture


IMS HEALTH TRANSPORTATION SERVICES CORPORATION
IMS SOFTWARE SERVICES LTD.
By:  

/s/ Sean Ascher

  Name:   Sean Ascher
  Title:   President
INTERCONTINENTAL MEDICAL STATISTICS INTERNATIONAL, LTD.
By:  

/s/ Sean Ascher

  Name:   Sean Ascher
  Title:   Vice President and Treasurer
MARKET RESEARCH MANAGEMENT, INC.
By:  

/s/ Sean Ascher

  Name:   Sean Ascher
  Title:   Vice President
IMS HEALTH LICENSING ASSOCIATES, L.L.C.
By:  

/s/ Sean Ascher

  Name:   Sean Ascher
  Title:   Responsible Officer

 

Signature Page to Supplemental Indenture


ARSENAL HOLDING COMPANY
ARSENAL HOLDING (II) COMPANY
DATA NICHE ASSOCIATES, INC.
IMS HEALTH INDIA HOLDING CORPORATION
IMS HEALTH TRADING CORPORATION
RX INDIA CORPORATION
VALUEMEDICS RESEARCH, LLC
IMS HEALTH HOLDING CORPORATION
IMS HEALTH INVESTING CORPORATION
IMS HEALTH INVESTMENTS, INC.
IMS HEALTH PURCHASING, INC.
IMS HEALTH FINANCE, INC.
IMS SERVICES, LLC
IMS TRADING MANAGEMENT, INC.
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   President
ENTERPRISE ASSOCIATES L.L.C.
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Vice President

 

Signature Page to Supplemental Indenture


COORDINATED MANAGEMENT HOLDINGS, L.L.C.
COORDINATED MANAGEMENT SYSTEMS, INC.
SPARTAN LEASING CORPORATION
By:  

/s/ Margaret F. Cupp

  Name:   Margaret F. Cupp
  Title:   President
IMS CHINAMETRIK INCORPORATED
By:  

/s/ Margaret F. Cupp

  Name:   Margaret F. Cupp
  Title:   Vice President
IMS HOLDING INC.
By:  

/s/ Margaret F. Cupp

  Name:   Margaret F. Cupp
  Title:   Vice President and Secretary

 

Signature Page to Supplemental Indenture


IMS CONTRACTING & COMPLIANCE, INC.
By:  

/s/ Alex Guizzetti

  Name:   Alex Guizzetti
  Title:   President

 

Signature Page to Supplemental Indenture


IMS GOVERNMENT SOLUTIONS, INC.
By:  

/s/ George Rollins

  Name:   George Rollins
  Title:   President

 

Signature Page to Supplemental Indenture


PHARMETRICS, INC.
By:  

/s/ Daniel Malloy

  Name:   Daniel Malloy
  Title:   President

 

Signature Page to Supplemental Indenture


HEALTH BENCHMARKS, INC.
HEALTH VANGUARD, INC.
By:  

/s/ Hossam Sadek

  Name:   Hossam Sadek
  Title:   President

 

Signature Page to Supplemental Indenture


 

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

By:  

/s/ Donald T. Hurrelbrink

  Name:   Donald T. Hurrelbrink
  Title:   Vice President

 

Signature Page to Supplemental Indenture

Exhibit 4.3

Execution Version

SECOND SUPPLEMENTAL INDENTURE

This Second Supplemental Indenture (the “ Supplemental Indenture ”) is dated as of July 8, 2011 among Med-Vantage, Inc. (the “ Guaranteeing Subsidiary ”), a subsidiary of IMS Health Incorporated, a Delaware corporation (the “ Issuer ”), and U.S. Bank National Association, as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, each of the Issuer and the Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture (the “ Indenture ”), dated as of February 26, 2010, providing for the issuance of up to $1,000,000,000 aggregate principal amount of 12  1 2 % Senior Notes due 2018 (the “ Notes ”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . The Guaranteeing Subsidiary hereby agrees as follows:

(a) Along with all Guarantors named in the Indenture, subject to Article 11, to jointly and severally unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Issuer hereunder or under the Indenture, that:

(i) the principal of and interest and Special Interest, if any, premium, if any, on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment by the Issuer when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors and the Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same immediately. This is a guarantee of payment and not a guarantee of collection.


(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than payment in full of all of the Obligations of the Issuer hereunder and under the Indenture).

(c) The following is hereby waived to the fullest extent permitted by law: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever.

(d) This Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, the Indenture and this Supplemental Indenture or by release in accordance with the provisions of this Indenture, and the Guaranteeing Subsidiary accepts all obligations of a Guarantor under the Indenture.

(e) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors (including the Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, any amount paid either to the Trustee or such Holder, then this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(g) As between the Guaranteeing Subsidiary, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guaranteeing Subsidiary for the purpose of this Guarantee.

(h) The Guaranteeing Subsidiary shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Guarantee.

(i) Pursuant to Section 11.02 of the Indenture, after giving effect to all other contingent and fixed liabilities that are relevant under any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent that any of the foregoing are applicable to this Guarantee, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under Article 11 of the Indenture, this new Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guaranteeing Subsidiary under this Guarantee will not constitute a fraudulent transfer or conveyance for purposes of such laws.


(j) This Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer for liquidation, reorganization, should the Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes and Guarantee, whether as a “voidable preference”, “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Note shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(k) In case any provision of this Guarantee 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.

(l) This Guarantee shall be a general unsecured senior obligation of such Guaranteeing Subsidiary.

(m) Each payment to be made by the Guaranteeing Subsidiary in respect of this Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

(3) Execution and Delivery . The Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

(4) Merger, Consolidation or Sale of All or Substantially All Assets .

(a) Except as otherwise provided in Section 5.01(c) of the Indenture, the Guaranteeing Subsidiary may not consolidate or merge with or into or wind up into (whether or not the Issuer or Guaranteeing Subsidiary 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 unless:

(i) (A) the Guaranteeing Subsidiary is the surviving entity or the Person formed by or surviving any such consolidation or merger (if other than the Guaranteeing Subsidiary) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of the Guaranteeing Subsidiary, as the case may be, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Guaranteeing Subsidiary or such Person, as the case may be, being herein called the “ Successor Person ”);

(B) the Successor Person, if other than the Guaranteeing Subsidiary, expressly assumes all the obligations of the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s related Guarantee pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(C) immediately after such transaction, no Default exists; and


(D) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with the Indenture; or

(ii) the transaction is made in compliance with clauses (1) and (2) of Section 4.10(a) of the Indenture;

(b) In the case of section (a)(i) of this Section 4, the Successor Person will succeed to, and be substituted for, the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s Guarantee. Notwithstanding the foregoing, the Guaranteeing Subsidiary may (1) merge or consolidate with or into or wind up into or transfer all or part of its properties and assets to another Guarantor or the Issuer, (2) merge with a Restricted Subsidiary of the Issuer solely for the purpose of reincorporating the Guaranteeing Subsidiary in the United States, any state thereof, the District of Columbia or any territory thereof or (3) convert into a corporation, partnership, limited partnership, limited liability corporation or trust organized or existing under the laws of the jurisdiction of organization of the Guaranteeing Subsidiary, in each case without complying with section (a) of this Section 4.

(5) Releases . The Guarantee of the Guaranteeing Subsidiary shall be automatically and unconditionally released and discharged, and no further action by the Guaranteeing Subsidiary, the Issuer or the Trustee is required for the release of the Guaranteeing Subsidiary’s Guarantee, upon:

(1) (A) any sale, exchange, disposition or transfer (by merger, consolidation, amalgamation or otherwise) of the Capital Stock of the Guaranteeing Subsidiary, after which the Guaranteeing Subsidiary is no longer a Restricted Subsidiary or all or substantially all the assets of the Guaranteeing Subsidiary which sale, exchange, disposition or transfer is made in compliance with Sections 4.10(a)(1) and (2) of the Indenture;

(B) the release or discharge of the guarantee by the Guaranteeing Subsidiary of Indebtedness under the Credit Agreement or such other guarantee which resulted in the creation of the Guarantee, except a discharge or release by or as a result of payment under such guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that if any such guarantee is so reinstated, this Guarantee shall also be reinstated to the extent that such Guaranteeing Subsidiary would then be required to provide a Guarantee pursuant to Section 4.15 of the Indenture);

(C) the designation of the Guaranteeing Subsidiary as an Unrestricted Subsidiary in compliance with Section 4.07(c) of the Indenture; or

(D) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 of the Indenture or the Issuer’s obligations under the Indenture being discharged in accordance with Article 13 of the Indenture; and

(2) delivery by the Guaranteeing Subsidiary to the Trustee of an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture relating to such transaction have been complied with.

(6) No Recourse Against Others . No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Guaranteeing Subsidiary or any of its direct or indirect parent companies shall have any liability for any obligations of the Issuer or the Guarantors (including the Guaranteeing Subsidiary) under the Notes, any Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.


(7) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(8) 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.

(9) Effect of Headings . The Section headings herein are for convenience only, are not to be considered part of this Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

(10) The Trustee . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Supplemental Indenture and it shall not be responsible for any the recitals contained herein.

(11) Subrogation . The Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by the Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof and Section 11.01 of the Indenture; provided that, if an Event of Default has occurred and is continuing, the Guaranteeing Subsidiary shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under the Indenture or the Notes shall have been paid in full.

(12) Benefits Acknowledged . The Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. The Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Guarantee are knowingly made in contemplation of such benefits.

(13) Successors . All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in Section 2(k) or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

 

U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:  

/s/ Donald T. Hurrelbrink

Name:   Donald T. Hurrelbrink
Title:   Vice President

MED-VANTAGE, INC.,

as Subsidiary Guarantor

By:  

/s/ Stefan C. Linn

Name:   Stefan C. Linn
Title:   President

[Second Supplemental Indenture]

Exhibit 4.4

THIRD SUPPLEMENTAL INDENTURE

This Third Supplemental Indenture (the “ Supplemental Indenture ”), is dated as of September 28, 2012, among TTC Acquisition Corporation and The Tar Heel Trading Company, LLC (each a “ Guaranteeing Subsidiary ” and collectively, the “ Guaranteeing Subsidiaries ”), each a subsidiary of IMS Health Incorporated, a Delaware corporation (the “ Issuer ”), and U.S. Bank National Association, as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, each of the Issuer, and the Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture (the “ Indenture ”), dated as of February 26, 2010, providing for the issuance of up to $1,000,000,000 aggregate principal amount of 12  1 2 % Senior Notes due 2018 (the “ Notes ”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiaries shall execute and deliver to the Trustee a supplemental indenture pursuant to which each Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . Each Guaranteeing Subsidiary hereby agrees as follows:

(a) Along with all Guarantors named in the Indenture, subject to Article 11, to jointly and severally unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Issuer hereunder or under the Indenture, that:

(i) the principal of and interest and Special Interest, if any, premium, if any, on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment by the Issuer when due of any amount


so guaranteed or any performance so guaranteed for whatever reason, the Guarantors and each Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same immediately. This is a guarantee of payment and not a guarantee of collection.

(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than payment in full of all of the Obligations of the Issuer hereunder and under the Indenture).

(c) The following is hereby waived to the fullest extent permitted by law: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever.

(d) This Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, the Indenture and this Supplemental Indenture or by release in accordance with the provisions of this Indenture, and each Guaranteeing Subsidiary accepts all obligations of a Guarantor under the Indenture.

(e) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors (including each Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, any amount paid either to the Trustee or such Holder, then this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(f) The Guaranteeing Subsidiaries shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(g) As between each Guaranteeing Subsidiary, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guaranteeing Subsidiaries for the purpose of this Guarantee.

(h) The Guaranteeing Subsidiaries shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Guarantee.

(i) Pursuant to Section 11.02 of the Indenture, after giving effect to all other contingent and fixed liabilities that are relevant under any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent that any of the foregoing are applicable to this Guarantee, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under Article 11 of the Indenture,


this new Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guaranteeing Subsidiaries under this Guarantee will not constitute a fraudulent transfer or conveyance for purposes of such laws.

(j) This Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer for liquidation, reorganization, should the Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes and Guarantee, whether as a “voidable preference”, “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Note shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(k) In case any provision of this Guarantee 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.

(l) This Guarantee shall be a general unsecured senior obligation of such Guaranteeing Subsidiaries.

(m) Each payment to be made by each Guaranteeing Subsidiary in respect of this Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

(3) Execution and Delivery . Each Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

(4) Merger, Consolidation or Sale of All or Substantially All Assets .

(a) Except as otherwise provided in Section 5.01(c) of the Indenture, the Guaranteeing Subsidiaries may not consolidate or merge with or into or wind up into (whether or not the Issuer or such Guaranteeing Subsidiary 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 unless:

(i) (A) such Guaranteeing Subsidiary is the surviving entity or the Person formed by or surviving any such consolidation or merger (if other than such Guaranteeing Subsidiary) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of such Guaranteeing Subsidiary, as the case may be, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Guaranteeing Subsidiary or such Person, as the case may be, being herein called the “ Successor Person ”);

(B) the Successor Person, if other than such Guaranteeing Subsidiary, expressly assumes all the obligations of such Guaranteeing Subsidiary under the Indenture and such Guaranteeing Subsidiary’s related Guarantee pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;


(C) immediately after such transaction, no Default exists; and

(D) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with the Indenture; or

(ii) the transaction is made in compliance with clauses (1) and (2) of Section 4.10(a) of the Indenture;

(b) In the case of section (a)(i) of this Section 4, the Successor Person will succeed to, and be substituted for, such Guaranteeing Subsidiary under the Indenture and such Guaranteeing Subsidiary’s Guarantee. Notwithstanding the foregoing, such Guaranteeing Subsidiary may (1) merge or consolidate with or into or wind up into or transfer all or part of its properties and assets to another Guarantor or the Issuer, (2) merge with a Restricted Subsidiary of the Issuer solely for the purpose of reincorporating such Guaranteeing Subsidiary in the United States, any state thereof, the District of Columbia or any territory thereof or (3) 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 Guaranteeing Subsidiary, in each case without complying with section (a) of this Section 4.

(5) Releases . The Guarantee of a Guaranteeing Subsidiary shall be automatically and unconditionally released and discharged, and no further action by such Guaranteeing Subsidiary, the Issuer or the Trustee is required for the release of such Guaranteeing Subsidiary’s Guarantee, upon:

(1) (A) any sale, exchange, disposition or transfer (by merger, consolidation, amalgamation or otherwise) of the Capital Stock of such Guaranteeing Subsidiary, after which such Guaranteeing Subsidiary is no longer a Restricted Subsidiary or all or substantially all the assets of such Guaranteeing Subsidiary which sale, exchange, disposition or transfer is made in compliance with Sections 4.10(a)(1) and (2) of the Indenture;

(B) the release or discharge of the guarantee by such Guaranteeing Subsidiary of Indebtedness under the Credit Agreement or such other guarantee which resulted in the creation of the Guarantee, except a discharge or release by or as a result of payment under such guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that if any such guarantee is so reinstated, this Guarantee shall also be reinstated to the extent that such Guaranteeing Subsidiary would then be required to provide a Guarantee pursuant to Section 4.15 of the Indenture);

(C) the designation of such Guaranteeing Subsidiary as an Unrestricted Subsidiary in compliance with Section 4.07(c) of the Indenture; or

(D) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 of the Indenture or the Issuer’s obligations under the Indenture being discharged in accordance with Article 13 of the Indenture; and

(2) delivery by such Guaranteeing Subsidiary to the Trustee of an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture relating to such transaction have been complied with.


(6) No Recourse Against Others . No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Guaranteeing Subsidiaries or any of their direct or indirect parent companies shall have any liability for any obligations of the Issuer or the Guarantors (including the Guaranteeing Subsidiaries) under the Notes, any Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(7) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(8) 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.

(9) Effect of Headings . The Section headings herein are for convenience only, are not to be considered part of this Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

(10) The Trustee . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Supplemental Indenture and it shall not be responsible for any the recitals contained herein.

(11) Subrogation . Each Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by the Guaranteeing Subsidiaries pursuant to the provisions of Section 2 hereof and Section 11.01 of the Indenture; provided that, if an Event of Default has occurred and is continuing, the Guaranteeing Subsidiaries shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under the Indenture or the Notes shall have been paid in full.

(12) Benefits Acknowledged . Each Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. Each Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Guarantee are knowingly made in contemplation of such benefits.

(13) Successors . All agreements of each Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in Section 2(k) or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

 

U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:  

/s/ Donald T. Hurrelbrink

Name:   Donald T. Hurrelbrink
Title:   Vice President

TTC ACQUISITION CORPORATION

as Subsidiary Guarantor

By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   President and Treasurer

THE TAR HEEL TRADING COMPANY, LLC

as Subsidiary Guarantor

By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   Vice President and Treasurer

[Third Supplemental Indenture]

Exhibit 4.5

FOURTH SUPPLEMENTAL INDENTURE

This Fourth Supplemental Indenture (the “ Supplemental Indenture ”) is dated as of October 24, 2012 among IMS Health Incorporated, a Delaware corporation (the “ Issuer ”), the Guarantors listed on the signature pages hereto and U.S. Bank National Association, as Trustee (the “ Trustee ”). Capitalized terms not defined herein shall have the meanings assigned to them in the Indenture (as defined below).

W I T N E S S E T H

WHEREAS, the Issuer and the Trustee have previously become parties to an Indenture, dated as of February 26, 2010 (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “ Indenture ”), providing for the issuance of the Issuer’s 12  1 2 % Senior Notes due 2018;

WHEREAS, the Issuer proposes to amend the Indenture and Notes as contemplated by this Supplemental Indenture (such amendments, collectively, the “ Amendments ”);

WHEREAS, pursuant to Section 9.02 of the Indenture, the Issuer and the Trustee may amend or supplement the Indenture as contemplated by this Supplemental Indenture with the consent of the Holders of at least a majority in aggregate principal amount of the outstanding Notes;

WHEREAS, the Issuer has obtained the consent of the Holders of at least a majority in aggregate principal amount of the outstanding Notes, pursuant to the Offering Circular and Consent Solicitation Statement, dated October 10, 2012 (as amended, supplemented or modified from time to time, the “ Offering Circular ”), to the Amendments upon the terms and subject to the conditions set forth therein;

WHEREAS, each Holder who has validly tendered, or will validly tender, Notes for exchange in the Senior Notes Exchange Offer contemplated by the Offering Circular has agreed, or will agree upon such valid tender, to waive its right to receive payment of all interest that has accrued from September 1, 2012 on such validly tendered Notes;

WHEREAS, the Issuer has done all things necessary to make this Supplemental Indenture a valid agreement of the Issuer in accordance with the terms of the Indenture and has satisfied all other conditions required under Article 9 of the Indenture; and

WHEREAS, pursuant to Section 9.06, the Trustee is authorized to execute and deliver this Supplemental Indenture.


NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, in order to effect the Amendments, the parties hereto agree as follows:

Section 1. Amendments to the Indenture . Following the execution and delivery by the Issuer, the Guarantors and the Trustee of this Supplemental Indenture, the Amendments shall become operative upon the initial acceptance for exchange by the Issuer of Notes validly tendered in the Senior Notes Exchange Offer contemplated by the Offering Circular and the Issuer’s payment of the Participation Payment (as defined in the Offering Circular) on the Early Settlement Date (as defined in the Offering Circular) to the exchange agent for distribution in respect of such tendered Notes in accordance with the terms of the Senior Notes Exchange Offer (the “ Operative Time ”). Effective as of the Operative Time, the Supplemental Indenture hereby amends the Indenture and the Notes as follows:

 

  (a) The following definitions are hereby added to Section 1.01 of the Indenture:

2012 Transaction Expenses ” means any fees or expenses incurred or paid by the Issuer or any Restricted Subsidiary in connection with the 2012 Transactions, including payments to officers, employees and directors as change of control payments, severance payments, special or retention bonuses, if any, charges for repurchase or rollover of, or modifications to, stock options and/or restricted stock and charges related to the crediting of additional restricted stock units.

2012 Transactions ” means the transactions related or incidental to, consisting of or in connection with (i) the issuance of the Senior Exchange Notes in the Senior Notes Exchange Offer, (ii) the borrowings under, and amendments to, the Credit Facilities and the issuance of the 2020 Notes, in each case, on the Initial Exchange Date, (iii) the retirement of the Notes tendered in the Senior Notes Exchange Offer, (iv) the amendments to this Indenture on the Initial Exchange Date, (v) a one-time cash dividend in an amount up to $1,250.0 million made on or about the Initial Exchange Date by the Issuer to Holdings (and by Holdings to its direct or indirect parents) and (vi) the payment of all fees and expenses associated with the foregoing, in each case, substantially as described in the Offering Circular.

2020 Notes ” means the $500.0 million in aggregate principal amount of the Issuer’s Senior Unsecured Notes due 2020.

2020 Notes Indenture ” means the Indenture for the 2020 Notes, dated on or about the Initial Exchange Date among the Issuer, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee, as amended, supplemented or modified from time to time.

Initial Exchange Date ” means the “Early Settlement Date” as defined in the Offering Circular.

Offering Circular ” means the Offering Circular and Consent Solicitation Statement of the Issuer dated as of October 10, 2012, as amended, supplemented or modified from time to time.


Senior Exchange Notes ” means the up to $1,000.0 million in aggregate principal amount of the Issuer’s 12  1 2 % Senior Unsecured Exchange Notes due 2018 issued in exchange for the Notes pursuant to the Senior Notes Exchange Offer.

Senior Exchange Notes Indenture ” means the Indenture for the Senior Exchange Notes, dated on or about the Initial Exchange Date, among the Issuer, the guarantors party thereto and U.S. Bank National Association, as trustee, as amended, supplemented or modified from time to time.

Senior Notes Exchange Offer ” means the offer to issue the Senior Exchange Notes in exchange for the Notes as described in the Offering Circular.

Total Assets ” means the total assets of the Issuer and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as shown on the most recent balance sheet of the Issuer or such other Person as may be expressly stated (and, in the case of any determination relating to any incurrence of Indebtedness or any Investment or other acquisition, on a pro forma basis including any property or assets being acquired in connection therewith).”

Total Net Leverage Ratio ” means, with respect to any specified Person on any Calculation Date, the ratio of (1) the sum of (without duplication) (x) any Indebtedness of the Issuer or any of its Restricted Subsidiaries in respect of borrowed money, Capitalized Lease Obligations and debt obligations evidenced by promissory notes and similar instruments less (y) the aggregate amount of unrestricted Cash Equivalents, in each case as of the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the Calculation Date, to (2) EBITDA of such Person and its Restricted Subsidiaries for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the Calculation Date, in each case on a pro forma basis with such pro forma adjustments as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Consolidated Secured Net Leverage Ratio.

 

  (b) Clause (d) of the definition of “Asset Sale” is hereby amended by replacing “$10,000,000” with “the greater of $75,000,000 and 1.0% of Total Assets”.

 

  (c) The definition of “Calculation Date” is hereby deleted in its entirety and replaced with the following:

““ Calculation Date ” means the date on which the event for which the calculation of the Consolidated Secured Net Leverage Ratio, the Total Net Leverage Ratio or the Fixed Charge Coverage Ratio, as applicable, shall occur.”

 

  (d) Clause (1) of the definition of “Consolidated Net Income” is hereby deleted in its entirety and replaced with the following:

“any net after tax effect of extraordinary, nonrecurring or unusual gains or losses, costs, charges or expenses, Transaction Expenses and 2012 Transaction Expenses shall be excluded,”.


  (e) The definition of “Consolidated Secured Leverage Ratio” is hereby deleted in its entirety and replaced with the following:

““ Consolidated Secured Net Leverage Ratio ” means, with respect to any specified Person on any Calculation Date, the ratio of (1) the sum of (without duplication) (w) the aggregate outstanding amount of Secured Indebtedness of such Person and its Restricted Subsidiaries (other than any Indebtedness of a Restricted Subsidiary which is not a Guarantor which is not secured by any assets of the Issuer or a Guarantor), plus (x) the aggregate liquidation preference of all outstanding Disqualified Stock and Preferred Stock (except Disqualified Stock and Preferred Stock issued to the Issuer or a Restricted Subsidiary) of such Person and its Restricted Subsidiaries secured by a Lien, plus (y) the aggregate outstanding amount of all Receivables Facilities established by or for such Person and its Restricted Subsidiaries (and without regard to whether such facilities would be reflected on the consolidated balance sheet of such Person and its Restricted Subsidiaries) less (z) the aggregate amount of unrestricted Cash Equivalents, in each case as of the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the Calculation Date to (2) the EBITDA of such Person and its Restricted Subsidiaries for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the Calculation Date.

In the event that the Issuer or any Restricted Subsidiary incurs, assumes, guarantees, redeems, repays, retires or extinguishes any Indebtedness or issues or redeems Disqualified Stock or Preferred Stock during the period (the “ Stub Period ”) subsequent to the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the Calculation Date, then the Consolidated Secured Net Leverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, repayment, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable period; provided that Indebtedness incurred or repaid under any revolving credit facility in the ordinary course of business for working capital purposes during the Stub Period shall be only be treated as having been incurred or repaid during such period if the average daily balances of such Indebtedness during the Stub Period exceeds or is less than the amount of such Indebtedness outstanding as of the last day of the applicable period.

For purposes of making the computation referred to above, Specified Transactions that have been made by the Issuer or any Restricted Subsidiary during the four-quarter period ending on the last day of the reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date (a) shall be calculated in good faith by the Chief Financial Officer of the Issuer on


a pro forma basis assuming that all such Specified Transactions had occurred on the first day of the reference period and (b) in connection with any such Specified Transaction (other than, for avoidance of doubt, the Transactions), there shall be given pro forma effect to (A) expected cost savings resulting therefrom permitted to be reflected in pro forma financial information with respect to any such Specified Transaction under Rule 11.02 of Regulation S-X under the Securities Act and (B) additional cost savings that result or are expected to result from actions taken, committed to be taken or planned to be taken pursuant to a factually supported plan in connection with any such Specified Transaction prior to the Calculation Date; provided, that such cost savings referred to in this clause (B) (x) are factually supportable and determined in good faith by the Issuer, as certified in an Officer’s Certificate executed by the Chief Financial Officer of the Issuer to the Trustee and, prior to the Disposition Date, the GSMP Group, and (y) do not exceed the actual cost savings expected in good faith to be realized by the Issuer and its Restricted Subsidiaries over such 12 month period commencing with the Calculation Date (as opposed, for the avoidance of doubt, to the annualized impact of such cost savings). If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Specified Transaction that would have required adjustment pursuant to this definition, then the Consolidated Secured Net Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Specified Transaction had occurred at the beginning of the reference period.

Any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period, and any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period.”

 

  (f) All references in the Indenture to “Consolidated Secured Leverage Ratio” are hereby replaced with “Consolidated Secured Net Leverage Ratio”.

 

  (g) The definition of “Credit Agreement” is hereby deleted in its entirety and replaced with the following:

““ Credit Agreement ” means that certain Second Amended and Restated Credit Agreement, dated on or about the Initial Exchange Date, among IMS Health Incorporated, Holdings, the Restricted Subsidiaries party thereto, Bank of America, N.A., as Administrative Agent, and each other agent and lender from time to time party thereto, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings or refinancings thereof.”


  (h) The definition of “Designated Preferred Stock” is hereby deleted in its entirety and replaced with the following:

““ Designated Preferred Stock ” means Preferred Stock of the Issuer, any of its Restricted Subsidiaries or any direct or indirect parent company thereof (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate delivered to the Trustee on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (3) of Section 4.07(a) hereof.”

 

  (i) The definition of “fair market value” is hereby deleted in its entirety and replaced with the following:

““ fair market value ” means, with respect to any asset or liability, the fair market value of such asset or liability as determined by the Issuer in good faith.”

 

  (j) The definition of “Incremental Facilities” is hereby deleted in its entirety.

 

  (k) Clause (1) of the definition of “Permitted Investments” is hereby deleted in its entirety and replaced with the following:

“any Investment in the Issuer or any of its Restricted Subsidiaries;”.

 

  (l) Clause (3) of the definition of “Permitted Investments” is hereby deleted in its entirety and replaced with the following:

“any Investment by the Issuer or any of its Restricted Subsidiaries in a Person that is engaged (directly or through entities that will be Restricted Subsidiaries) in a Similar Business 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 amalgamated, merged or consolidated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary,

and, in each case, any Investment held by such Person; provided, that such Investment was not acquired by such Person in contemplation of such acquisition, merger, amalgamation, consolidation or transfer;”.

 

  (m) Clause (11) of the definition of “Permitted Investments” is hereby amended by replacing “$150,000,000” with “the greater of $225,000,000 and 3.00% of Total Assets”.

 

  (n) Clause (12) of the definition of “Permitted Investments” is hereby amended by replacing “$10,000,000” with “$25,000,000”.

 

  (o) Clause (15) of the definition of “Permitted Investments” is hereby amended by replacing “; and” with “;”.


  (p) Clause (16) of the definition of “Permitted Investments” is hereby amended by replacing “.” with “;”.

 

  (q) The definition of “Permitted Investments” is hereby amended by adding the following new clauses after clause (16):

(17) any Investment in a Similar Business taken together with all other Investments made pursuant to this clause (17) that are at that time outstanding, not to exceed the greater of (a) $200,000,000 and (b) 2.5% of Total Assets (with the amount of each Investment being measured at the time made and without giving effect to subsequent changes in value, but subject to adjustment as set forth in the definition of Investment); and

(18) Investments in Unrestricted Subsidiaries, taken together with all other Permitted Investments made pursuant to this clause (18) that are at the time outstanding, without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of, or have not been subsequently sold or transferred for, Cash Equivalents or marketable securities, not to exceed the greater of (a) $150,000,000 and (b) 2.0% of Total Assets (with the amount of each Investment being measured at the time made and without giving effect to subsequent changes in value, but subject to adjustment as set forth in the definition of Investment).

 

  (r) Clause (8) of the definition of “Permitted Liens” is hereby deleted in its entirety and replaced with the following:

“Liens on property or shares of stock of a Person at the time such Person becomes a Restricted Subsidiary; provided, however, that (i) such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; (ii) such Liens may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries, and (iii) immediately after giving effect to such Person becoming a Restricted Subsidiary the Consolidated Secured Net Leverage Ratio on a consolidated basis for the Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available is either (x) not greater than 3.50 to 1.00 or (y) lower than such Consolidated Secured Net Leverage Ratio immediately prior to such transaction (the “ Secured Net Leverage Ratio Test ”);”

 

  (s) Clause (9) of the definition of “Permitted Liens” is hereby amended by replacing “Secured Leverage Ratio Test” with “Secured Net Leverage Ratio Test”.

 

  (t) Clause (18) of the definition of “Permitted Liens” is hereby amended by replacing “$50,000,000” with “the greater of $125,000,000 and 1.75% of Total Assets”.

 

  (u) The definition of “Registration Rights Agreement” is hereby deleted in its entirety and replaced with the following:

““ Registration Rights Agreement ” means the Amended and Restated Exchange and Registration Rights Agreement, dated as of the Initial Exchange Date,


by and among the Issuer and the other parties named on the signature pages thereof, and with respect to any Additional Notes, one or more registration rights agreements between the Issuer and the other parties thereto, as such agreements may be amended, modified or supplemented from time to time relating to rights given by the Issuer to the purchasers of Notes or Additional Notes, as applicable, to register such Notes or Additional Notes, as applicable, under the Securities Act.”

 

  (v) Section 4.07(a)(3) of the Indenture is hereby amended by replacing “clauses (2), (3), (4), (5), (6), (7), (9), (10), (11), (13) and (14)” with “clauses (2), (3), (4), (5), (6), (7), (9), (10), (11), (12), (13), (14) and (15)”.

 

  (w) The first paragraph of Section 4.07(b)(4) of the Indenture is hereby deleted in its entirety and replaced with the following:

“a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of the Issuer or any of its direct or indirect parent companies held by any future, present or former employee, director, officer or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer or any of its Restricted Subsidiaries or any direct or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement (including, for the avoidance of doubt, any principal and interest payable on any notes issued by the Issuer or any direct or indirect parent company of the Issuer in connection with any such repurchase, retirement or other acquisition), or any stock subscription or shareholder agreement, including any Equity Interest rolled over by management of the Issuer or any direct or indirect parent company of the Issuer in connection with the Transactions; provided , however , that the aggregate amount of Restricted Payments made under this clause (4) shall not exceed in any calendar year $50,000,000 (which shall increase to $75,000,000 subsequent to the consummation of a Qualified Public Offering) (with unused amounts for any year being carried over to the succeeding two years); provided further that such amount in any calendar year may be increased by an amount not to exceed:”

 

  (x) Section 4.07(b)(10) of the Indenture is hereby amended by replacing “not to exceed $100,000,000” with “not to exceed the greater of $150,000,000 and 2.0% of Total Assets”.

 

  (y) Section 4.07(b)(11) of the Indenture is hereby deleted in its entirety and replaced with the following:

“any Restricted Payment used to fund (or otherwise made in connection with) the Transactions or the 2012 Transactions, in each case, to the extent permitted by Section 4.11 hereof;”

 

  (z) Section 4.07(b)(14)(e) of the Indenture is hereby amended by replacing “.” with “; and”.


  (aa) Section 4.07(b) of the Indenture is hereby amended by adding the following new clause (15):

“(15) Restricted Payments, provided that, after giving pro forma effect thereto and the application of the net proceeds therefrom, the Total Net Leverage Ratio for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding such Restricted Payment would be no greater than 4.00 to 1.00;”

 

  (bb) The proviso at the end of Section 4.07(b) of the Indenture is hereby amended by replacing “clauses (10) and (12)” with “clauses (10), (12) and (15)”.

 

  (cc) Section 4.08(b)(2) of the Indenture is hereby deleted in its entirety and replaced with the following:

“contractual restrictions contained in (A) the Indenture, the Notes and Guarantees, (B) the Senior Exchange Notes Indenture, the Senior Exchange Notes and guarantees thereof and (C) the 2020 Notes Indenture, the 2020 Notes and guarantees thereof;”

 

  (dd) Section 4.09(a) of the Indenture is hereby amended by (1) replacing “$125,000,000” with “the greater of $175,000,000 and 2.25% of Total Assets” and (2) deleting each reference to “or Attributable Debt” therein.

 

  (ee) Section 4.09(b)(1) of the Indenture is hereby deleted in its entirety and replaced with the following:

“the incurrence of Indebtedness under Credit Facilities by the Issuer and, subject to the proviso in this clause (1) below, any Restricted Subsidiary of the Issuer, 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 that, together with the aggregate amount of Receivables Facilities incurred pursuant to clause 4.09(b)(12) below, does not exceed at any one time outstanding the sum of $3,525,000,000 plus, in the event of any extension, replacement, refinancing, renewal or defeasance of any such Credit Facility an amount equal to the amount of any penalty or premium required to be paid under the terms of the instrument or documents governing such Credit Facility and any defeasance costs and any fees and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such Credit Facility;”

 

  (ff) Section 4.09(b)(2) of the Indenture is hereby deleted in its entirety and replaced with the following:

“the incurrence by (a) the Issuer of Indebtedness represented by the Notes in an aggregate principal amount not exceeding the Senior Unsecured Note Cap and any exchange notes to be issued in exchange for the Notes, (b) the Issuer of Indebtedness represented by the Senior Exchange Notes and any exchange notes


to be issued in exchange for the Senior Exchange Notes, (c) the Issuer of Indebtedness represented by the 2020 Notes, and (d) any Subsidiary Guarantor of any guarantee of any Indebtedness referred to in the foregoing clauses (2)(a), (b) or (c);

 

  (gg) Section 4.09(b)(4) of the Indenture is hereby deleted in its entirety and replaced with the following:

“Indebtedness (including Capitalized Lease Obligations) and Disqualified Stock incurred or issued by the Issuer or any Restricted Subsidiary and Preferred Stock issued by any Restricted Subsidiary, to finance the purchase, lease, replacement or improvement of property (real or personal), equipment or other assets, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock incurred or issued and outstanding under this clause (4) at such time, not to exceed the greater of (x) $150,000,000 and (y) 2.0% of Total Assets (in each case, determined at the date of incurrence or issuance), so long as such Indebtedness, Disqualified Stock or Preferred Stock is incurred or issued at the date of such purchase, lease, replacement or improvement or within 270 days thereafter;”

 

  (hh) Section 4.09(b)(7) of the Indenture is hereby deleted in its entirety and replaced with the following:

“Indebtedness of the Issuer to a Restricted Subsidiary; provided that (i) any such Indebtedness to a Restricted Subsidiary that is not a Guarantor is expressly subordinated in right of payment to the Notes and (ii) any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary, or any collateral agent under the Credit Facilities) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (7);”

 

  (ii) Section 4.09(b)(8) of the Indenture is hereby deleted in its entirety and replaced with the following:

“Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Subsidiary Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary, or any collateral agent under the Credit Facilities) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (8);”


  (jj) Section 4.09(b)(9) of the Indenture is hereby deleted in its entirety and replaced with the following:

“shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary, provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock not permitted by this clause (9);”

 

  (kk) The first paragraph of Section 4.09(b)(13) is hereby amended by (1) replacing “clauses (2), (3), (4), (13) and (19)” with “clauses (2), (3), (4), (13), (19) and (24)” and (2) deleting “(including Attributable Debt)” in its entirety.

 

  (ll) Section 4.09(b)(13)(A) of the Indenture is hereby deleted in its entirety and replaced with the following:

“has a final maturity date equal to or later than the final maturity date of, and 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 Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, renewed, defeased, refunded or refinanced; provided that such Refinancing Indebtedness may be incurred in the form of a customary “bridge” or other interim credit facility intended to be refinanced or replaced with long-term Indebtedness which does not satisfy the requirements of this clause (A) so long as, subject to customary conditions, such Refinancing Indebtedness would either be automatically converted into or required to be exchanged for permanent financing which satisfies the requirements of this clause (A),”

 

  (mm) Section 4.09(b)(14) of the Indenture is hereby amended by replacing “$50,000,000” with “the greater of $125,000,000 and 1.75% of Total Assets”.

 

  (nn) Section 4.09(b)(19) of the Indenture is hereby deleted in its entirety and replaced with the following:

“(a) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary, incurred or issued to finance an acquisition (or other purchase of assets) or that is assumed by the Issuer or any Restricted Subsidiary in connection with such acquisition or (b) Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into, amalgamated or consolidated with the Issuer or a Restricted Subsidiary in accordance with the terms of the Indenture; provided, that after giving effect to such acquisition, amalgamation, consolidation or merger, either:

(i) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio Test, or

(ii) the Fixed Charge Coverage Ratio for the Issuer is equal to or greater than immediately prior to such acquisition, amalgamation, consolidation or merger;”


  (oo) Section 4.09(b)(20) of the Indenture is hereby amended by replacing (1) “the Subsidiary Guarantors” with “its Restricted Subsidiaries” and (2) “$250,000,000” with “the greater of $300,000,000 and 3.75% of Total Assets”.

 

  (pp) Section 4.09(b)(22) hereby amended by replacing “; and” with “;”.

 

  (qq) Section 4.09(b)(23) hereby amended by replacing “.” with “; and”.

 

  (rr) Section 4.09(b) hereby amended by adding the following new clause after clause (23):

“(24) Indebtedness or Disqualified Stock of the Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any Restricted Subsidiary in an aggregate principal amount or liquidation preference up to 100.0% of the net cash proceeds received by the Issuer since immediately after the Issue Date from the issue or sale of Equity Interests of the Issuer or cash contributed to the capital of the Issuer (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments pursuant to Section 4.07(b) or to make Permitted Investments (other than Permitted Investments specified in clause (1), (2) or (3) of the definition thereof).”

 

  (ss) Section 4.09(c)(1) is hereby amended by (1) replacing “clauses (1) through (23)” with “clauses (1) through (24)” and (2) deleting “(and, for the avoidance of doubt, the Issuer, in its sole discretion, may reclassify any Attributable Debt incurred pursuant to clause (4) of Section 4.09(b) as incurred pursuant to Section 4.09(a) at any time such incurrence is permitted)” in its entirety.

 

  (tt) Section 4.10(a)(2)(C) of the Indenture is hereby amended by replacing “$75,000,000 and 3% of Net Tangible Assets” with “$175,000,000 and 2.25% of Total Assets”.

 

  (uu) Section 4.10(c) of the Indenture is hereby amended by replacing each occurrence of “$25,000,000” with “$125,000,000”.

 

  (vv) Section 4.11(a) of the Indenture is hereby amended by replacing “$2,000,000” with “$25,000,000”.

 

  (ww) Section 4.11(a)(2)(A) of the Indenture is hereby amended by replacing “$15,000,000” with “$75,000,000”.

 

  (xx) Section 4.11(a)(2)(B) of the Indenture is hereby deleted in its entirety and replaced with “[Reserved].”.


  (yy) Section 4.11(b)(4) of the Indenture is hereby deleted in its entirety and replaced with the following:

“(A) the Transaction and the payment of all reasonable fees and expenses related to the Transaction, including Transaction Expenses and (B) the 2012 Transactions and the payment of all reasonable fees and expenses related to the 2012 Transactions, including 2012 Transaction Expenses;”

 

  (zz) Section 4.11(b)(13) of the Indenture is hereby deleted in its entirety and replaced with the following:

“payments on the Notes (and any exchange notes to be issued in exchange therefor) in accordance with this Indenture, payments on the Senior Exchange Notes (and any exchange notes to be issued in exchange therefor) in accordance with the Senior Exchange Notes Indenture, payments on the 2020 Notes in accordance with the 2020 Notes Indenture and payments in respect of Obligations under the Credit Agreement; provided that such Obligations were acquired by an Affiliate of the Issuer in compliance with this Indenture;”

 

  (aaa) Section 4.12(C) of the Indenture is hereby deleted in its entirety and replaced with the following:

“Liens securing any Obligations in respect of other Indebtedness of the Issuer or a Guarantor incurred in compliance with Section 4.09 hereof, in the case of this clause (C), so long as the Consolidated Secured Net Leverage Ratio of the Issuer and its Restricted Subsidiaries for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which the Indebtedness secured by such Lien is incurred would have been no more than 3.50 to 1.00.”

 

  (bbb) Clauses (ii) and (iii) of Section 4.16 of the Indenture are hereby deleted in their entirety and replaced with the following:

“(ii) performance of its obligations under and in connection with the Credit Facilities, this Indenture, the Notes (and any exchange notes to be issued in exchange therefor), the Senior Exchange Notes Indenture, the Senior Exchange Notes (and any exchange notes to be issued in exchange therefor), the 2020 Notes Indenture, the 2020 Notes and the other agreements contemplated hereby and thereby, (iii) actions incidental to the consummation of the Transactions or the 2012 Transactions,”

 

  (ccc) Section 4.18 of the Indenture is hereby deleted in its entirety and replaced with “[Reserved].”.

 

  (ddd) Section 6.01(a)(4) of the Indenture is hereby amended by replacing “$35,000,000” with “$100,000,000”.

 

  (eee) Section 6.01(a)(5) of the Indenture is hereby amended by replacing “$35,000,000” with “$100,000,000”.


Section 2. Amendments to the Notes. The Notes include certain of the foregoing provisions from the Indenture to be deleted, amended or added pursuant to Section 1 hereof. Effective as of the Operative Time, such provisions from the Notes shall be deemed deleted, amended or added, as applicable.

Section 3. Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Section 4. Successors. All agreements of the Issuer in this Supplemental Indenture shall bind its successors. All agreements of the Trustee in this Supplemental Indenture shall bind its successors. All agreements of each Guarantor in this Supplemental Indenture shall bind its successors, except as otherwise provided in Section 11.06 of the Indenture.

Section 5. Severability. In case any provision in this Supplemental 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.

Section 6. Counterpart Originals. 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.

Section 7. Indenture Continues In Force and Effect . Except as specifically amended hereby, the Indenture shall continue in full force and effect, and from and after the date hereof, the Indenture and this Supplemental Indenture shall constitute one instrument.

Section 8. Effect of Headings . The Section headings herein are for convenience only, are not to be considered part of this Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

Section 9. Trustee . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Supplemental Indenture and it shall not be responsible for any the recitals contained herein.

Section 10. Waiver of Interest By Holders . Each Holder who has validly tendered, or will validly tender, Notes for exchange in the Senior Notes Exchange Offer contemplated by the Offering Circular has agreed, or will agree upon such valid tender, to waive its right to receive payment of all interest that has accrued from September 1, 2012 on such validly tendered Notes.

[ Signature pages to follow. ]


IN WITNESS WHEREOF, the Issuer, the Guarantors and the Trustee have caused this Supplemental Indenture to be executed in their respective names as of the date first above written.

 

U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:  

/s/ Donald T. Hurrelbrink

Name:   Donald T. Hurrelbrink
Title:   Vice President

 

[ Supplemental Indenture Signature Pages ]


IMS HEALTH INCORPORATED
as Issuer
By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   Vice President and Treasurer

HEALTHCARE TECHNOLOGY INTERMEDIATE HOLDINGS, INC.

as Holdings

By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   Vice President and Treasurer

 

[ Supplemental Indenture Signature Pages ]


ARSENAL HOLDING COMPANY
ARSENAL HOLDING (II) COMPANY
DATA NICHE ASSOCIATES, INC.
IMS HEALTH FINANCE, INC.
IMS HEALTH HOLDING CORPORATION
IMS HEALTH INDIA HOLDING CORPORATION
IMS HEALTH INVESTING CORPORATION
IMS HEALTH INVESTMENTS, INC.
IMS HEALTH PURCHASING, INC.
IMS HEALTH TRADING CORPORATION
IMS HOLDING INC.
IMS SERVICES, LLC
IMS TRADING MANAGEMENT, INC.
RX INDIA CORPORATION
TTC ACQUISITION CORPORATION

VALUEMEDICS RESEARCH, LLC

as Guarantors

By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   President

 

[ Supplemental Indenture Signature Pages ]


IMS CONTRACTING & COMPLIANCE, INC.
IMS GOVERNMENT SOLUTIONS, INC.
IMS HEALTH TRANSPORTATION SERVICES CORPORATION
IMS SOFTWARE SERVICES LTD.
MED-VANTAGE, INC.

PHARMETRICS, INC.

as Guarantors

By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   Treasurer

 

[ Supplemental Indenture Signature Pages ]


IMS HEALTH LICENSING ASSOCIATES, L.L.C.
as Guarantor
By:  

/s/ Maryanne Piorek

Name:   Maryanne Piorek
Title:   Responsible Officer

 

[ Supplemental Indenture Signature Pages ]


COORDINATED MANAGEMENT HOLDINGS, L.L.C.
COORDINATED MANAGEMENT SYSTEMS, INC.
MARKET RESEARCH MANAGEMENT, INC.

SPARTAN LEASING CORPORATION

as Guarantors

By:  

/s/ Margaret F. Cupp

Name:   Margaret F. Cupp
Title:   President

 

[ Supplemental Indenture Signature Pages ]


IMS CHINAMETRIK INCORPORATED

as Guarantor

By:  

/s/ Margaret F. Cupp

Name:   Margaret F. Cupp
Title:   Vice President

 

[ Supplemental Indenture Signature Pages ]


INTERCONTINENTAL MEDICAL STATISTICS INTERNATIONAL, LTD.

as Guarantor

By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   Secretary

 

[ Supplemental Indenture Signature Pages ]


ENTERPRISE ASSOCIATES L.L.C.

as Guarantor

By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   Vice President

 

[ Supplemental Indenture Signature Pages ]


THE TAR HEEL TRADING COMPANY, LLC

as Guarantor

By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   Vice President and Treasurer

 

[ Supplemental Indenture Signature Pages ]

Exhibit 4.6

This Fifth Supplemental Indenture (this “ Supplemental Indenture ”), dated as of May 28, 2013, is entered into between Appature Inc., a Washington corporation (the “ Guaranteeing Subsidiary ”), a subsidiary of IMS Health Incorporated (formerly known as Healthcare Technology Acquisition, Inc.), a Delaware corporation (the “ Issuer ”), and U.S. Bank National Association, as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, each of IMS Health Incorporated, and the Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture (the “ Indenture ”), dated as of February 26, 2010, providing for the issuance of up to $1,000,000,000 aggregate principal amount of 12  1 2 % Senior Notes due 2018 (the “ Notes ”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . The Guaranteeing Subsidiary hereby agrees as follows:

(a) Along with all Guarantors named in the Indenture, subject to Article 11, to jointly and severally unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Issuer hereunder or under the Indenture, that:

(i) the principal of and interest and Special Interest, if any, premium, if any, on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment by the Issuer when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors and the Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same immediately. This is a guarantee of payment and not a guarantee of collection.


(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than payment in full of all of the Obligations of the Issuer hereunder and under the Indenture).

(c) The following is hereby waived to the fullest extent permitted by law: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever.

(d) This Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, the Indenture and this Supplemental Indenture or by release in accordance with the provisions of this Indenture, and the Guaranteeing Subsidiary accepts all obligations of a Guarantor under the Indenture.

(e) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors (including the Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, any amount paid either to the Trustee or such Holder, then this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(g) As between the Guaranteeing Subsidiary, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guaranteeing Subsidiary for the purpose of this Guarantee.

(h) The Guaranteeing Subsidiary shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Guarantee.

(i) Pursuant to Section 11.02 of the Indenture, after giving effect to all other contingent and fixed liabilities that are relevant under any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent that any of the foregoing are applicable to this Guarantee, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under Article 11 of the Indenture, this new Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guaranteeing Subsidiary under this Guarantee will not constitute a fraudulent transfer or conveyance for purposes of such laws.

 

-2-


(j) This Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer for liquidation, reorganization, should the Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes and Guarantee, whether as a “voidable preference”, “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Note shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(k) In case any provision of this Guarantee 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.

(l) This Guarantee shall be a general unsecured senior obligation of such Guaranteeing Subsidiary.

(m) Each payment to be made by the Guaranteeing Subsidiary in respect of this Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

(3) Execution and Delivery . The Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

(4) Merger, Consolidation or Sale of All or Substantially All Assets .

(a) Except as otherwise provided in Section 5.01(c) of the Indenture, the Guaranteeing Subsidiary may not consolidate or merge with or into or wind up into (whether or not the Issuer or Guaranteeing Subsidiary 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 unless:

(i) (A) the Guaranteeing Subsidiary is the surviving entity or the Person formed by or surviving any such consolidation or merger (if other than the Guaranteeing Subsidiary) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of the Guaranteeing Subsidiary, as the case may be, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Guaranteeing Subsidiary or such Person, as the case may be, being herein called the “ Successor Person ”);

(B) the Successor Person, if other than the Guaranteeing Subsidiary, expressly assumes all the obligations of the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s related Guarantee pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(C) immediately after such transaction, no Default exists; and

 

-3-


(D) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with the Indenture; or

(ii) the transaction is made in compliance with clauses (1) and (2) of Section 4.10(a) of the Indenture;

(b) In the case of section (a)(i) of this Section 4, the Successor Person will succeed to, and be substituted for, the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s Guarantee. Notwithstanding the foregoing, the Guaranteeing Subsidiary may (1) merge or consolidate with or into or wind up into or transfer all or part of its properties and assets to another Guarantor or the Issuer, (2) merge with a Restricted Subsidiary of the Issuer solely for the purpose of reincorporating the Guaranteeing Subsidiary in the United States, any state thereof, the District of Columbia or any territory thereof or (3) convert into a corporation, partnership, limited partnership, limited liability corporation or trust organized or existing under the laws of the jurisdiction of organization of the Guaranteeing Subsidiary, in each case without complying with section (a) of this Section 4.

(5) Releases . The Guarantee of the Guaranteeing Subsidiary shall be automatically and unconditionally released and discharged, and no further action by the Guaranteeing Subsidiary, the Issuer or the Trustee is required for the release of the Guaranteeing Subsidiary’s Guarantee, upon:

(1) (A) any sale, exchange, disposition or transfer (by merger, consolidation, amalgamation or otherwise) of the Capital Stock of the Guaranteeing Subsidiary, after which the Guaranteeing Subsidiary is no longer a Restricted Subsidiary or all or substantially all the assets of the Guaranteeing Subsidiary which sale, exchange, disposition or transfer is made in compliance with Sections 4.10(a)(1) and (2) of the Indenture;

(B) the release or discharge of the guarantee by the Guaranteeing Subsidiary of Indebtedness under the Credit Agreement or such other guarantee which resulted in the creation of the Guarantee, except a discharge or release by or as a result of payment under such guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that if any such guarantee is so reinstated, this Guarantee shall also be reinstated to the extent that such Guaranteeing Subsidiary would then be required to provide a Guarantee pursuant to Section 4.15 of the Indenture);

(C) the designation of the Guaranteeing Subsidiary as an Unrestricted Subsidiary in compliance with Section 4.07(c) of the Indenture; or

(D) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 of the Indenture or the Issuer’s obligations under the Indenture being discharged in accordance with Article 13 of the Indenture; and

(2) delivery by the Guaranteeing Subsidiary to the Trustee of an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture relating to such transaction have been complied with.

(6) No Recourse Against Others . No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Guaranteeing Subsidiary or any of its direct or indirect parent companies shall have any liability for any obligations of the Issuer or the Guarantors (including the Guaranteeing Subsidiary) under the Notes, any Guarantees, the Indenture or

 

-4-


this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(7) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(8) 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.

(9) Effect of Headings . The Section headings herein are for convenience only, are not to be considered part of this Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

(10) The Trustee . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Supplemental Indenture and it shall not be responsible for any the recitals contained herein.

(11) Subrogation . The Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by the Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof and Section 11.01 of the Indenture; provided that, if an Event of Default has occurred and is continuing, the Guaranteeing Subsidiary shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under the Indenture or the Notes shall have been paid in full.

(12) Benefits Acknowledged . The Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. The Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Guarantee are knowingly made in contemplation of such benefits.

(13) Successors . All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in Sections 2(k) and 12 hereof or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

 

-5-


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

 

U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:  

/s/ Donald T. Hurrelbrink

Name:   Donald T. Hurrelbrink
Title:   Vice President

APPATURE INC.

as Subsidiary Guarantor

By:  

/s/ Jeffrey Ford

Name:   Jeffrey Ford
Title:   President

 

-6-

Exhibit 4.7

Execution Version

 

 

 

INDENTURE

Dated as of October 24, 2012

Among

IMS HEALTH INCORPORATED,

as Issuer

THE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO

and

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

12  1 2 % SENIOR UNSECURED EXCHANGE NOTES DUE 2018

 

 

 


CROSS-REFERENCE TABLE*

 

Trust Indenture Act Section

  

Indenture Section

310(a)(1)

   7.10

(a)(2)

   7.10

(a)(3)

   N.A.

(a)(4)

   N.A.

(a)(5)

   7.10

(b)

   7.10

(c)

   N.A.

311(a)

   7.11

(b)

   7.11

(c)

   N.A.

312(a)

   2.05

(b)

   14.03

(c)

   14.03

313(a)

   7.06

(b)(1)

   N.A.

(b)(2)

   7.06; 7.07

(c)

   7.06; 14.02

(d)

   7.06

314(a)

   4.03; 14.02; 14.05

(b)

   N.A.

(c)(1)

   14.04

(c)(2)

   14.04

(c)(3)

   N.A.

(d)

   N.A.

(e)

   14.05

(f)

   N.A.

315(a)

   7.01

(b)

   7.05; 14.02

(c)

   7.01

(d)

   7.01

(e)

   6.14

316(a)(last sentence)

   2.09

(a)(1)(A)

   6.05

(a)(1)(B)

   6.04

(a)(2)

   N.A.

(b)

   6.07

(c)

   2.12; 9.04

317(a)(1)

   6.08

(a)(2)

   6.12

(b)

   2.04

318(a)

   14.01

(b)

   N.A.

(c)

   14.01

N.A. means not applicable.

* This Cross-Reference Table is not part of the Indenture.

 

—i—


TABLE OF CONTENTS

 

         Page  
ARTICLE 1   
DEFINITIONS AND INCORPORATION BY REFERENCE   

Section 1.01

 

Definitions

     1   

Section 1.02

 

Other Definitions

     34   

Section 1.03

 

Incorporation by Reference of Trust Indenture Act

     35   

Section 1.04

 

Rules of Construction

     35   

Section 1.05

 

Acts of Holders

     36   

Section 1.06

 

Predecessor to the Issuer

  
ARTICLE 2   
THE NOTES   

Section 2.01

 

Form and Dating; Terms

     37   

Section 2.02

 

Execution and Authentication

     39   

Section 2.03

 

Registrar and Paying Agent

     39   

Section 2.04

 

Paying Agent to Hold Money in Trust

     40   

Section 2.05

 

Holder Lists

     40   

Section 2.06

 

Transfer and Exchange

     40   

Section 2.07

 

Replacement Notes

     53   

Section 2.08

 

Outstanding Notes

     53   

Section 2.09

 

Treasury Notes

     53   

Section 2.10

 

Temporary Notes

     54   

Section 2.11

 

Cancellation

     54   

Section 2.12

 

Defaulted Interest

     54   

Section 2.13

 

CUSIP Numbers

     54   
ARTICLE 3   
REDEMPTION   

Section 3.01

 

Notices to Trustee

     55   

Section 3.02

 

Selection of Notes to Be Redeemed or Purchased

     55   

Section 3.03

 

Notice of Redemption

     55   

Section 3.04

 

Effect of Notice of Redemption

     56   

Section 3.05

 

Deposit of Redemption or Purchase Price

     57   

Section 3.06

 

Notes Redeemed or Purchased in Part

     57   

Section 3.07

 

Optional Redemption

     57   

Section 3.08

 

Mandatory Redemption

     58   

Section 3.09

 

Offers to Repurchase by Application of Excess Proceeds

     58   

 

—i—


         Page  
ARTICLE 4   
COVENANTS   

Section 4.01

 

Payment of Notes

     60   

Section 4.02

 

Maintenance of Office or Agency

     60   

Section 4.03

 

Reports and Other Information

     61   

Section 4.04

 

Compliance Certificate

     63   

Section 4.05

 

Taxes

     64   

Section 4.06

 

Stay, Extension and Usury Laws

     64   

Section 4.07

 

Limitation on Restricted Payments

     64   

Section 4.08

 

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

     71   

Section 4.09

 

Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock

     73   

Section 4.10

 

Asset Sales

     79   

Section 4.11

 

Transactions with Affiliates

     81   

Section 4.12

 

Liens

     83   

Section 4.13

 

Corporate Existence

     84   

Section 4.14

 

Offer to Repurchase Upon Change of Control

     84   

Section 4.15

 

Limitation on Guarantees of Indebtedness by Restricted Subsidiaries

     86   

Section 4.16

 

Activities of Holdings

     87   

Section 4.17

 

Business Activities

     87   

Section 4.18

 

Limitations on Sale and Leaseback Transactions

     87   

Section 4.19

 

Maintenance of Properties

     88   

Section 4.20

 

Insurance

     88   

Section 4.21

 

Books and Records

     88   

Section 4.22

 

Compliance with Laws

     88   
ARTICLE 5   
SUCCESSORS   

Section 5.01

 

Merger, Consolidation or Sale of All or Substantially All Assets

     89   

Section 5.02

 

Successor Company Substituted

     90   
ARTICLE 6   
DEFAULTS AND REMEDIES   

Section 6.01

 

Events of Default

     91   

Section 6.02

 

Acceleration

     93   

Section 6.03

 

Other Remedies

     94   

Section 6.04

 

Waiver of Past Defaults

     94   

Section 6.05

 

Control by Majority

     94   

Section 6.06

 

Limitation on Suits

     94   

Section 6.07

 

Rights of Holders of Notes to Receive Payment

     95   

Section 6.08

 

Collection Suit by Trustee

     95   

Section 6.09

 

Restoration of Rights and Remedies

     95   

Section 6.10

 

Rights and Remedies Cumulative

     95   

Section 6.11

 

Delay or Omission Not Waiver

     96   

 

—ii—


         Page  

Section 6.12

 

Trustee May File Proofs of Claim

     96   

Section 6.13

 

Priorities

     96   

Section 6.14

 

Undertaking for Costs

     97   
ARTICLE 7   
TRUSTEE   

Section 7.01

 

Duties of Trustee

     97   

Section 7.02

 

Rights of Trustee

     98   

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

 

Reports by Trustee to Holders of the Notes

     100   

Section 7.07

 

Compensation and Indemnity

     100   

Section 7.08

 

Replacement of Trustee

     101   

Section 7.09

 

Successor Trustee by Merger, etc.

     101   

Section 7.10

 

Eligibility; Disqualification

     102   

Section 7.11

 

Preferential Collection of Claims Against Issuer

     102   
ARTICLE 8   
LEGAL DEFEASANCE AND COVENANT DEFEASANCE   

Section 8.01

 

Option to Effect Legal Defeasance or Covenant Defeasance

     102   

Section 8.02

 

Legal Defeasance and Discharge

     102   

Section 8.03

 

Covenant Defeasance

     103   

Section 8.04

 

Conditions to Legal or Covenant Defeasance

     103   

Section 8.05

 

Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions

     105   

Section 8.06

 

Repayment to Issuer

     105   

Section 8.07

 

Reinstatement

     105   
ARTICLE 9   
AMENDMENT, SUPPLEMENT AND WAIVER   

Section 9.01

 

Without Consent of Holders of Notes

     106   

Section 9.02

 

With Consent of Holders of Notes

     107   

Section 9.03

 

Compliance with Trust Indenture Act

     108   

Section 9.04

 

Revocation and Effect of Consents

     108   

Section 9.05

 

Notation on or Exchange of Notes

     109   

Section 9.06

 

Trustee to Sign Amendments, etc.

     109   

Section 9.07

 

Payment for Consent

     109   

 

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         Page  
ARTICLE 10   
[RESERVED]   
ARTICLE 11   
GUARANTEES   

Section 11.01

 

Guarantee

     109   

Section 11.02

 

Limitation on Guarantor Liability

     111   

Section 11.03

 

Execution and Delivery

     111   

Section 11.04

 

Subrogation

     112   

Section 11.05

 

Benefits Acknowledged

     112   

Section 11.06

 

Release of Guarantees

     112   
ARTICLE 12   
[RESERVED]   
ARTICLE 13   
SATISFACTION AND DISCHARGE   

Section 13.01

 

Satisfaction and Discharge

     113   

Section 13.02

 

Application of Trust Money

     114   
ARTICLE 14   
MISCELLANEOUS   

Section 14.01

 

Trust Indenture Act Controls

     114   

Section 14.02

 

Notices

     114   

Section 14.03

 

Communication by Holders of Notes with Other Holders of Notes

     116   

Section 14.04

 

Certificate and Opinion as to Conditions Precedent

     116   

Section 14.05

 

Statements Required in Certificate or Opinion

     116   

Section 14.06

 

Rules by Trustee and Agents

     117   

Section 14.07

 

No Personal Liability of Directors, Officers, Employees and Stockholders

     117   

Section 14.08

 

Governing Law

     117   

Section 14.09

 

Waiver of Jury Trial

     117   

Section 14.10

 

Force Majeure

     117   

Section 14.11

 

No Adverse Interpretation of Other Agreements

     117   

Section 14.12

 

Successors

     117   

Section 14.13

 

Severability

     118   

Section 14.14

 

Counterpart Originals

     118   

Section 14.15

 

Table of Contents, Headings, etc.

     118   

Section 14.16

 

Qualification of Indenture

     118   

 

—iv—


EXHIBITS

 

Exhibit A    Form of Note
Exhibit B    Form of Certificate of Transfer
Exhibit C    Form of Certificate of Exchange
Exhibit D    Form of Supplemental Indenture to Be Delivered by Subsequent Guarantors

 

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INDENTURE, dated as of October 24, 2012, among IMS Health Incorporated, a Delaware corporation, as the Issuer (as defined herein), the Guarantors (as defined herein) listed on the signature pages hereto and U.S. Bank National Association, as Trustee.

W I T N E S S E T H

WHEREAS, the Issuer has issued $1,000,000,000 in aggregate principal amount of the Existing Senior Notes (as defined below) pursuant to the Existing Senior Notes Indenture;

WHEREAS, the Issuer has duly authorized the creation of an issue of up to $1,000,000,000 in aggregate principal amount of 12  1 2 % Senior Unsecured Exchange Notes due 2018 (the “ Initial Notes ”) to be issued on the Initial Exchange Date and the Final Exchange Date pursuant to the terms of the Offering Circular.

WHEREAS, the Issuer may authorize the creation of one or more issues of Additional Notes (as defined below), as more particularly, described herein; and

WHEREAS, the Issuer and each of the Guarantors has duly authorized the execution and delivery of this Indenture.

NOW, THEREFORE, each of the Issuer, the Guarantors and the Trustee agrees as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Notes.

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01 Definitions .

144A Global Note ” means a Global Note substantially in the form of Exhibit A hereto, bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.

2012 Transaction Expenses ” means any fees or expenses incurred or paid by the Issuer or any Restricted Subsidiary in connection with the 2012 Transactions, including payments to officers, employees and directors as special or retention bonuses, if any, charges for modifications to stock options and/or restricted stock and charges related to the crediting of additional restricted stock units.

2012 Transactions ” means the transactions related or incidental to, consisting of or in connection with (i) the issuance of the Notes in the Senior Notes Exchange Offer, (ii) the borrowings under, and amendments to, the Credit Facilities and the issuance of the 2020 Notes, in each case, on the Initial Exchange Date, (iii) the retirement of the Existing Senior Notes tendered in the Senior Notes Exchange Offer, (iv) the amendments to the Existing Senior Notes Indenture on the Initial Exchange Date, (v) a one-time cash dividend (paid in one installment) in an amount up to $1,250,000,000 made on or about the Initial Exchange Date by the Issuer to Holdings (and by Holdings to its direct or indirect parents) and (vi) the payment of all fees and expenses associated with the foregoing, in each case, substantially as described in the Offering Circular.

2020 Notes ” means the $500,000,000 in aggregate principal amount of the Issuer’s Senior Unsecured Notes due 2020.


2020 Notes Indenture ” means the Indenture for the 2020 Notes, dated on or about the Initial Exchange Date between the Issuer and Wells Fargo Bank, National Association, as trustee, as amended, supplemented or modified from time to time.

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, including Indebtedness 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.

Acquisition Agreement ” means the Agreement and Plan of Merger, dated as of November 5, 2009, among IMS Health Incorporated, Holdings and Healthcare Technology Acquisition, Inc., together with all exhibits, schedules, documents, agreements, and instruments executed and delivered in connection therewith, as the same may be amended prior to February 26, 2010.

Additional Notes ” means the Notes (other than the Initial Notes) issued under this Indenture in accordance with the terms of this Indenture, including Sections 2.01 and 2.02 hereof, as part of the same series as the Initial Notes ranking equally with the Initial Notes in all respects (other than the issuance dates). The Initial Notes and any Additional Notes subsequently issued under this Indenture shall be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions, and offers to purchase.

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.

Agent ” means any Registrar or Paying Agent.

Applicable Premium ” means, with respect to any Note on any Redemption Date, the excess, if any, of (a) the present value at such Redemption Date of (i) the redemption price of such Note at March 1, 2015 (each such redemption price being set forth in Section 3.07(d) hereof), plus (ii) all required remaining scheduled interest payments due on such Note through March 1, 2015 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over (b) the then outstanding principal amount of such Note.

Applicable Procedures ” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and/or Clearstream that apply to such transfer or exchange.

Asset Sale ” means:

(1) the sale, conveyance, transfer, assignment, lease (other than operating leases entered into in the ordinary course of business) or other disposition, whether in a single transaction

 

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or a series of related transactions, of property or assets (including by way of a Sale and Lease-Back Transaction) of the Issuer or any of its Restricted Subsidiaries (each referred to in this definition as a “disposition”); or

(2) the issuance or sale of Equity Interests of any Restricted Subsidiary, whether in a single transaction or a series of related transactions (other than Disqualified Stock or Preferred Stock issued in compliance with Section 4.09 hereof);

in each case, other than:

(a) any disposition of Cash Equivalents or obsolete or worn out equipment, vehicles or other similar assets in the ordinary course of business 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 disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to Section 5.01 hereof or any disposition that constitutes a Change of Control pursuant to this Indenture;

(c) the making of any Restricted Payment that is permitted to be made, and is made, under Section 4.07 hereof or the making of any Permitted Investment;

(d) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of related transactions with an aggregate Fair Market Value of less than $10,000,000;

(e) any (i) disposition of property or assets by the Issuer or a Restricted Subsidiary or (ii) issuance of securities by a Restricted Subsidiary of the Issuer, in each case, to the Issuer, any of its Wholly-Owned Restricted Subsidiaries or any Subsidiary Guarantor;

(f) to the extent allowable under Section 1031 of the Code, any exchange of like property (excluding any boot thereon) for use in a Similar Business between the Issuer or any of its Restricted Subsidiaries and another Person with a Fair Market Value in an aggregate amount for all such exchanges from February 26, 2010 not to exceed $25,000,000;

(g) any leases, subleases, assignments, licenses or sublicenses of any real or personal property, including any intellectual property, in the ordinary course of business ;

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

(i) the granting of Liens not prohibited by this Indenture or foreclosures, expropriations, condemnations or similar actions with respect to assets;

(j) any financing transaction with respect to property built or acquired by the Issuer or any Restricted Subsidiary after February 26, 2010 including Sale and Leaseback Transactions, in each case, permitted by this Indenture;

(k) dispositions of accounts receivable in connection with the collection or compromise thereof in the ordinary course of business and sales of accounts receivable, or participations therein, in connection with any Receivables Facility to the extent permitted by Section 4.09(b)(12) hereof;

 

—3—


(l) any surrender or waiver of contract rights or the settlement, release or surrender of contract rights or other litigation claims in the ordinary course of business; and

(m) the voluntary unwinding of any Hedging Obligations.

Attributable Debt ” in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended); provided, however that if such Sale and Leaseback Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby shall be determined in accordance with the definition of “Capitalized Lease Obligation”.

Bankruptcy Law ” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

Broker-Dealer ” has the meaning set forth in the Registration Rights Agreement.

Business Day ” means each day which is not a Legal Holiday.

Calculation Date ” means the date on which the event for which the calculation of the Consolidated Secured Leverage Ratio or the Fixed Charge Coverage Ratio, as applicable, shall occur.

Capital Stock ” means:

(1) in the case of a corporation, corporate stock or shares in the capital of such corporation;

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital 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) prepared in accordance with GAAP.

 

—4—


Capitalized Software Expenditures ” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Restricted Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of a Person and its Restricted Subsidiaries.

Cash Equivalents ” means:

(1) United States dollars;

(2) (a) sterling, yen, Swiss francs, euros, or any national currency of any participating member state of the EMU;

(b) such local currencies held by the Issuer or any Restricted Subsidiary from time to time in the ordinary course of business;

(3) securities issued or directly and fully and unconditionally guaranteed or insured by the U.S. government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of the U.S. government with maturities of 24 months or less from the date of acquisition;

(4) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus of not less than $500,000,000 in the case of U.S. banks and $100,000,000 (or the U.S. dollar equivalent as of the date of determination) in the case of non-U.S. banks;

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

(6) commercial paper rated at least P-1 by Moody’s or at least A-1 by S&P (or, if at any time neither Moody’s or S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 24 months after the date of creation thereof;

(7) marketable short-term money market and similar securities having a rating of at least P-1 or A-1 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 24 months after the date of creation thereof;

(8) readily marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof having an Investment Grade Rating from either Moody’s or S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) with maturities of 24 months or less from the date of acquisition;

(9) Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency);

 

—5—


(10) readily marketable direct obligations issued by any foreign government or any political subdivision or public instrumentality thereof having an Investment Grade Rating from either Moody’s or S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) with maturities of 24 months or less from the date of acquisition; and

(11) investment funds investing substantially all of their assets in securities of the types described in clauses (1) through (10) above.

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (1) and (2) above, provided that such amounts are converted into any currency listed in clauses (1) and (2) as promptly as practicable and in any event within ten Business Days following the receipt of such amounts. In the case of Investments by any Foreign Subsidiary that is a Restricted Subsidiary or Investments made in a country outside the United States of America, Cash Equivalents shall also include (i) investments of the type and maturity described in clauses (1) through (11) above of foreign obligors, which Investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies and (ii) other short-term investments utilized by Foreign Subsidiaries that are Restricted Subsidiaries in accordance with normal investment practices for cash management in investments analogous to the foregoing investments in clauses (1) through (11) above.

Cash Management Obligations ” shall mean obligations of the Issuer or any Restricted Subsidiary under any agreement or arrangement with a lender under the Credit Facilities or an affiliate of such lender at the time such agreement or arrangement is entered into and pursuant to which such lender or affiliate provides treasury, depository, overdraft, credit or debit card, purchase card, electronic funds transfer (including automated clearing house fund transfer services) and other cash management services to the Issuer or its Restricted Subsidiaries in the ordinary course of their businesses.

Change of Control ” means the occurrence of any of the following after the Initial Exchange Date:

(1) the sale, lease, transfer or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Issuer and its Subsidiaries, taken as a whole (other than by way of merger, amalgamation or consolidation), to any Person other than to any Permitted Holder made in compliance with Article 5 hereof; or

(2) prior to the first Qualified Public Offering to occur after the Initial Exchange Date, (x) Permitted Holders directly or indirectly cease to beneficially own (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) Capital Stock of Holdings representing more than 50% of the total voting power and economic power of all of the outstanding Capital Stock of Holdings (for avoidance of doubt, exclusive of debt securities which are convertible into Capital Stock until converted), or (y) TPG Group directly or indirectly ceases to beneficially own (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) Capital Stock of Holdings representing 33.33% or more of the total voting power and economic power of all of the outstanding Capital Stock of Holdings (for avoidance of doubt, exclusive of debt securities which are convertible into Capital Stock until converted); or

(3) at any time on or after the first Qualified Public Offering to occur after the Initial Exchange Date, the Issuer becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) that both (x) any Person (other than any Permitted Holder) or Persons (other than any Permitted Holder) that are

 

—6—


together a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any such 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), has acquired, directly or indirectly, 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) 40% or more of the total voting power or economic power of all of the outstanding Capital Stock of Holdings (for avoidance of doubt, exclusive of debt securities which are convertible into Capital Stock until converted) and (y) the Permitted Holders do not directly or indirectly beneficially own (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) a greater percentage of both the voting and economic power of all of such outstanding Capital Stock of Holdings than the Person or group referred to in the foregoing clause (3)(x).

Clearstream ” means Clearstream Banking, Société Anonyme.

Code ” means the Internal Revenue Code of 1986, as amended from time to time and the rules and regulations promulgated thereunder from time to time.

Consolidated Depreciation and Amortization Expense ” means with respect to any Person for any period, the total amount of depreciation and amortization expense of such Person and its Restricted Subsidiaries including the amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and Capitalized Software Expenditures of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

Consolidated Interest Expense ” means, with respect to any Person for any period, without duplication, the sum of:

(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) all commissions, discounts, yield and other fees and charges (including any interest expense) related to any Receivables Facility, (d) 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), (e) the interest component of Capitalized Lease Obligations, and (f) net payments, if any, made (less net payments, if any received), pursuant to interest rate Hedging Obligations with respect to Indebtedness and excluding (x) any expense resulting from the discounting of any Indebtedness in connection with the application of recapitalization accounting or purchase accounting, as the case may be, in connection with the Transaction or any acquisition, (y) the amortization of deferred financing fees, debt issuance costs and similar fees and expenses (other than, for avoidance of doubt, the amortization of original issue discount referred to in clause (a) above), and (z) the expensing of bridge, commitment and other financing fees; 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.

 

—7—


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

Consolidated Net Income ” means, with respect to any Person for any period, the aggregate of the Net Income, of such Person 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 net after tax effect of extraordinary, nonrecurring or unusual gains or losses, costs, charges or expenses, Transaction Expenses and 2012 Transaction Expenses shall be excluded,

(2) any net after tax effect of gains or losses (less all fees, expenses and charges) attributable to asset dispositions other than in the ordinary course of business, as determined in good faith by the Issuer, shall be excluded,

(3) 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 shall be excluded,

(4) 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, shall be excluded; provided that Consolidated Net Income of the Issuer shall be increased by the amount of dividends or distributions or other payments that are actually paid in Cash Equivalents (or to the extent converted into Cash Equivalents) to the referent Person or a Restricted Subsidiary thereof in respect of such period,

(5) effects of all non-cash adjustments (including the effects of such adjustments pushed down to the Issuer and the Restricted Subsidiaries) in such Person’s consolidated financial statements pursuant to GAAP (including in the inventory, property and equipment, software, goodwill, intangible assets, in-process research and development, deferred revenue and debt line items thereof) resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded,

(6) solely for the purpose of determining the amount available for Restricted Payments under clause (3)(A) of Section 4.07(a) hereof, the Net Income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent 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 the Issuer will be increased by the amount of dividends or other distributions or other payments actually paid in Cash Equivalents (or to the extent converted into Cash Equivalents) to the Issuer or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein,

(7) any after-tax effect of income (loss) from the early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments shall be excluded,

 

—8—


(8) any impairment charge or asset write-off pursuant to Financial Accounting Standards Board (“ FASB ”) Statement No. 142 “Goodwill and Other Intangible Assets” or FASB Statement No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets”, any impairment charges or asset write offs for equity and debt securities, and the amortization of intangibles arising pursuant to FASB Statement No. 141 “Business Combinations” shall be excluded, and

(9) any non-cash compensation charge or expense, including any such charge or expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights or equity incentive programs for any future, present, or former employee, director, officer or consultant of the Issuer or any of its Restricted Subsidiaries shall be excluded.

Notwithstanding the foregoing, for the purpose of Section 4.07(a) hereof only (other than clause (3)(D) of Section 4.07(a) hereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Issuer and its Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Issuer and its Restricted Subsidiaries, any repayments of loans and advances which constitute Restricted Investments by the Issuer 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 clause (3)(D) of Section 4.07(a) hereof.

Consolidated Secured Leverage Ratio ” means, with respect to any specified Person on any Calculation Date, the ratio of (1) the sum of (without duplication) (x) the aggregate outstanding amount of Secured Indebtedness of such Person and its Restricted Subsidiaries, plus (y) the aggregate liquidation preference of all outstanding Disqualified Stock and Preferred Stock (except Disqualified Stock and Preferred Stock issued to the Issuer or a Restricted Subsidiary) of such Person and its Restricted Subsidiaries secured by a Lien, plus (z) the aggregate outstanding amount of all Receivables Facilities established by or for such Person and its Restricted Subsidiaries (and without regard to whether such facilities would be reflected on the consolidated balance sheet of such Person and its Restricted Subsidiaries), in each case as of the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the Calculation Date to (2) the EBITDA of such Person and its Restricted Subsidiaries for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the Calculation Date.

In the event that the Issuer or any Restricted Subsidiary incurs, assumes, guarantees, redeems, repays, retires or extinguishes any Indebtedness or issues or redeems Disqualified Stock or Preferred Stock during the period (the “ Stub Period ”) subsequent to the end of the most recent fiscal quarter for which internal financial statements are available immediately preceding the Calculation Date, then the Consolidated Secured Leverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, repayment, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable period; provided that Indebtedness incurred or repaid under any revolving credit facility in the ordinary course of business for working capital purposes during the Stub Period shall be only be treated as having been incurred or repaid during such period if the average daily balances of such Indebtedness during the Stub Period exceeds or is less than the amount of such Indebtedness outstanding as of the last day of the applicable period.

For purposes of making the computation referred to above, Specified Transactions that have been made by the Issuer or any Restricted Subsidiary during the four-quarter period ending on the last day of the reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date (a) shall be calculated in good faith by the Chief Financial Officer of the Issuer on a pro forma

 

—9—


basis assuming that all such Specified Transactions had occurred on the first day of the reference period and (b) in connection with any such Specified Transaction (other than, for avoidance of doubt, the Transactions), there shall be given pro forma effect to (A) expected cost savings resulting therefrom permitted to be reflected in pro forma financial information with respect to any such Specified Transaction under Rule 11.02 of Regulation S-X under the Securities Act and (B) additional cost savings that result or are expected to result from actions taken, committed to be taken or planned to be taken pursuant to a factually supported plan in connection with any such Specified Transaction prior to the Calculation Date; provided, that such cost savings referred to in this clause (B) (x) are factually supportable and determined in good faith by the Issuer, as certified in an Officer’s Certificate executed by the Chief Financial Officer of the Issuer to the Trustee and, prior to the Disposition Date, the GSMP Group, and (y) do not exceed the actual cost savings expected in good faith to be realized by the Issuer and its Restricted Subsidiaries over such 12 month period commencing with the Calculation Date (as opposed, for the avoidance of doubt, to the annualized impact of such cost savings). If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Specified Transaction that would have required adjustment pursuant to this definition, then the Consolidated Secured Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Specified Transaction had occurred at the beginning of the reference period.

Any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period, and any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period.

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, without limitation, 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.

Controlled Investment Affiliate ” means, as to any future, present, or former employee, director, officer or consultant of the Issuer and its Restricted Subsidiaries, any other Person, which directly or indirectly is in control of, is controlled by, or is under common control with such Person and is organized by such Person (or any Person controlling such Person) primarily for making direct or indirect equity investments in the Issuer.

 

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Corporate Trust Office of the Trustee ” shall be at the address of the Trustee specified in Section 14.02 hereof or such other address as to which the Trustee may give notice to the Holders and the Issuer.

CPP ” means CPP Investment Board Private Holdings Inc.

CPP Group ” means CPP and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt their portfolio companies or other operating companies affiliated with CPP).

Credit Agreement ” means that certain Second Amended and Restated Credit Agreement, dated on or about the Initial Exchange Date, among IMS Health Incorporated, Holdings, the Restricted Subsidiaries party thereto, Bank of America, N.A., as Administrative Agent, and each other agent and lender from time to time party thereto, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings or refinancings thereof.

Credit Facilities ” means, with respect to the Issuer or any of its Restricted Subsidiaries, one or more debt facilities, including the Credit Agreement, or other financing arrangements (including, without limitation, commercial paper facilities or indentures) providing for revolving credit loans, term loans, letters of credit or other long-term indebtedness, including any notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings or refinancings thereof and any one or more indentures or credit facilities or commercial paper facilities that extend, replace, refund, refinance, renew or defease any part of the loans, notes, other credit facilities or commitments thereunder, including any such extending, replacement, refunding, refinancing, renewing or defeasing facility or indenture that increases the amount permitted to be borrowed thereunder or alters the maturity thereof (provided that such increase is permitted under Section 4.09 hereof) or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, lender or group of lenders or investors.

Custodian ” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.

Default ” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

Default Interest Rate ” means a rate equal to 2% per annum.

Definitive Note ” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06(c) hereof, substantially in the form of Exhibit A hereto, except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

Depositary ” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

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

 

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Designated Preferred Stock ” means Preferred Stock of the Issuer, any of its Restricted Subsidiaries or any direct or indirect parent company thereof (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate delivered to the Trustee on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (3) of Section 4.07(a) hereof.

Designated Sale and Leaseback Transaction ” means a sale and leaseback transaction of any property located at (x) 7 Harewood Avenue, London, United Kingdom and (y) 660 West Germantown Pike, Plymouth Meeting, Pennsylvania.

Disposition Date ” means the first time after any Notes have been issued or sold to the GSMP Group on which the GSMP Group ceases to beneficially own at least 10% of the aggregate principal amount of the Notes then outstanding.

Disqualified Stock ” means any class or series of Capital Stock of any Person that by its terms or otherwise is:

(1) required to be redeemed or is redeemable at the option of the holder of such class or series of Capital Stock at any time prior to the date that is 91 days after the Stated Maturity of the Notes; or

(2) convertible into or exchangeable at the option of the holder thereof at any time prior to the date that is 91 days after the Stated Maturity of the Notes for Capital Stock referred to in clause (1) above or Indebtedness.

Notwithstanding the preceding sentence, (A) if such Capital Stock is issued to any plan for the benefit of employees or by any such plan to such employees, in each case in the ordinary course of business of the Issuer or its Restricted Subsidiaries, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer in order to satisfy applicable statutory or regulatory obligations; (B) any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Issuer to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that the Issuer may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 4.07; and (C) no Capital Stock held by any future, present or former employee, director, officer or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer (or any of its direct or indirect parents or Subsidiaries) shall be considered Disqualified Stock because such stock is redeemable or subject to repurchase pursuant to any management equity subscription agreement, stock option agreement, stock ownership plan, put agreement, stockholder agreement or similar agreement that may be in effect from time to time.

 

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EBITDA ” means, with respect to any Person for any period, the Consolidated Net Income of such Person 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, federal, state, franchise, excise or similar taxes of such Person and its Restricted Subsidiaries paid or accrued during such period, including any penalties and interest related to such taxes or arising from any tax examinations, to the extent the same were deducted (and not added back) in computing Consolidated Net Income; plus

(b) total interest expense of such Person and its Restricted Subsidiaries for such period, net of interest income, plus bank fees and costs of surety bonds in connection with financing activities, to the extent the same was deducted (and not added back) in calculating Consolidated Net Income; plus

(c) Consolidated Depreciation and Amortization Expense of such Person and its Restricted Subsidiaries for such period to the extent the same were deducted (and not added back) in computing Consolidated Net Income; plus

(d) any fees, expenses or charges (other than depreciation or amortization expense) related to any Equity Offering, Permitted Investment, Restricted Investment, Asset Sale, disposition, incurrence or repayment of Indebtedness (including such fees, expenses or charges related to the offering of the Notes or any Credit Facility), or refinancing transaction or amendment or modification of any debt instrument (including any amendment or other modification of the Notes or any Credit Facility), including in each case, any such transaction consummated prior to February 26, 2010 and any such transaction undertaken but not completed, and any nonrecurring charges and costs incurred in connection with acquisitions or mergers after February 26, 2010, in each case, deducted (and not added back) in computing Consolidated Net Income; plus

(e) the amount of any restructuring charges, accruals or reserves, in each case, actually incurred in any period and to the extent deducted (and not added back) in such period in computing Consolidated Net Income; plus

(f) any non-cash charges, including any write offs or write downs, reducing (and not added back in computing) Consolidated Net Income for such period, including (x) any non-cash impairment charge or asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets, investments in debt and equity securities or as a result of a change in law or regulation, in each case, pursuant to GAAP and (y) the amortization of intangibles arising pursuant to GAAP (excluding for purposes of this clause (f) any such non-cash item to the extent that it represents an accrual or reserve for potential cash items in any future period or 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

 

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(h) the amount of management, monitoring, consulting and advisory fees and related expenses paid in cash or accrued in such period to the Sponsors pursuant to the Management Agreement (including termination fees but excluding any indemnities paid in such period under the Management Agreement) to the extent otherwise permitted under Section 4.11(b)(10) hereof and to the extent deducted (and not added back) in computing Consolidated Net Income; plus

(i) in connection with any material restructuring of the business of the Issuer and its Restricted Subsidiaries outside of the ordinary course of business and described in reasonable detail in the Officer’s Certificate referred to below (each a “ Specified Restructuring ”), the amount of expected cost savings that result or are expected to result from actions taken, committed to be taken or planned to be taken pursuant to a factually supported plan in connection with such Specified Restructuring prior to the Calculation Date that (x) are factually supportable and determined in good faith by the Issuer, as certified in an Officer’s Certificate executed by the Chief Financial Officer of the Issuer to the Trustee and, prior to the Disposition Date, the GSMP Group, and (y) do not exceed the actual cost savings expected in good faith to be realized by the Issuer and its Restricted Subsidiaries over such 12 month period commencing with the Calculation Date (as opposed, for the avoidance of doubt, to the annualized impact of such cost savings); provided, that no adjustments to EBITDA shall be made pursuant to this clause (j) in connection with any Calculation Date occurring after February 26, 2012; plus

(j) any costs or expense incurred by the Issuer 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, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of the Issuer or net cash proceeds of an issuance of Equity Interests of the Issuer (other than Disqualified Stock) solely to the extent that such net cash proceeds are excluded from the calculation set forth in clause (3) of Section 4.07(a) hereof and to the extent deducted (and not added back) in computing Consolidated Net Income; plus

(k) any net loss from discontinued operations of the Issuer or any of its Restricted Subsidiaries;

(2) decreased by (without duplication), in each case to the extent included in computing Consolidated Net Income for such period:

(a) any net income from discontinued operations of the Issuer or any of its Restricted Subsidiaries; and

(3) increased (by losses) or decreased (by gains), as applicable, without duplication, in each case, except for the adjustments set forth in the proviso to this clause (3), to the extent included in computing Consolidated Net Income for such period:

(a) any net gain or loss resulting in such period from Hedging Obligations and the application of Statement of Financial Accounting Standards No. 133;

(b) any net gain or loss resulting in such period from a sale of receivables and related assets to a Receivables Subsidiary in connection with a Receivables Facility;

 

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(c) any realized or unrealized gains or losses in such period from (i) balance sheet currency translation, (ii) currency translation of assets or liabilities that are not denominated in the functional currency of a Person into the functional currency of that Person and (iii) Hedging Obligations that are designated by a Person as a hedge of an asset or liability in clause (c)(i) or (ii) ;

(d) any adjustments resulting from the application of FASB Interpretation No. 45 (Guarantees);

provided that, the notwithstanding the foregoing, EBITDA shall include (without duplication) (i) any net realized gain or loss from any Hedging Obligations accounted for as cash flow hedges of intercompany royalties and (ii) any net realized gain or loss from any Hedging Obligations that are designated by the Issuer as EBITDA hedges, except to the extent any such Hedging Obligations are terminated by such Person prior to their scheduled maturity.

EMU ” means economic and monetary union as contemplated in the Treaty on European Union.

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 issuance or sale in a public offering of Capital Stock of Holdings or any of Holdings’ direct or indirect parent companies (excluding, in any such case, Disqualified Stock), other than public offerings with respect to Holdings or any direct or indirect parent company’s common stock registered on Form S-8.

euro ” means the single currency of participating member states of the EMU.

Euroclear ” means Euroclear S.A./N.V., as operator of the Euroclear system.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

Exchange Notes ” means the Notes issued in the Exchange Offer pursuant to Section 2.06(f) hereof.

Exchange Offer ” means the offer that may be made by the Issuer pursuant to the Registration Rights Agreement to exchange Exchange Notes for Notes.

Exchange Offer Registration Statement ” has the meaning set forth in the Registration Rights Agreement.

Excluded Contribution ” means net cash proceeds or Cash Equivalents received by the Issuer from:

(1) contributions to its common equity capital, and

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

 

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in each case designated as Excluded Contributions pursuant to an Officer’s Certificate executed by the Chief Financial Officer of the Issuer to the Trustee on the date such capital contributions are made or the date such Capital Stock is sold, as the case may be, and which are excluded from the calculation set forth in clause (3) of Section 4.07(a) hereof.

Existing Senior Notes means the Issuer’s 12  1 2 % Senior Unsecured Notes due 2018.

Existing Senior Notes Indenture ” means the Indenture for the Existing Senior Notes dated February 26, 2010 between the Issuer and U.S. Bank National Association, as trustee, as amended, supplemented or modified from time to time.

Fair Market Value ” means, with respect to any property, asset or liability, the fair market value of such property, asset or liability as determined by the Issuer in good faith; provided that, solely for purposes of clause (2) within the definition of “Investments” and clauses (B),(C) and (D) of Sections 4.07(a)(3) hereof, the determination of Fair Market Value of property or assets shall be confirmed by (x) in the case of any transaction or series of related transactions exceeding $15,000,000 by a resolution adopted by the majority of the board of directors of the Issuer as certified by an Officer’s Certificate delivered to the Trustee and (y) in the case of any transaction or series of related transactions exceeding $50,000,000, a written opinion from an Independent Financial Advisor delivered to the Trustee.

Final Exchange Date ” means the “Final Settlement Date” as defined in the Offering Circular.

Fixed Charge Coverage Ratio ” means with respect to any specified Person for any period, the ratio of EBITDA of such Person and its Restricted Subsidiaries for such period to the Fixed Charges of such Person and its Restricted Subsidiaries for such period. In the event that the Issuer or any Restricted Subsidiary incurs, assumes, guarantees, redeems, repays, retires or extinguishes any Indebtedness 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 Calculation Date, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, repayment, 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 (the “ reference period ”).

For purposes of making the computation referred to above, Specified Transactions that have been made by the Issuer or any Restricted Subsidiary during the four-quarter period ending on the last day of the reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date (a) shall be calculated in good faith by the Chief Financial Officer of the Issuer on a pro forma basis assuming that all such Specified Transactions had occurred on the first day of the reference period and (b) in connection with any such Specified Transactions (other than, for avoidance of doubt, the Transactions), there shall be given pro forma effect to (A) expected cost savings resulting therefrom permitted to be reflected in pro forma financial information with respect to any such Specified Transactions under Rule 11.02 of Regulation S-X under the Securities Act and (B) additional cost savings that result or are expected to result from actions taken, committed to be taken or planned to be taken pursuant to a factually supported plan in connection with such Specified Transaction prior to the Calculation Date; provided, that such cost savings referred to in this clause (B) (x) are factually supportable and determined in good faith by the Issuer, as certified in an Officer’s Certificate executed by the Chief Financial Officer of the Issuer to the Trustee and, prior to the Disposition Date, the GSMP Group, and (y) do not exceed the actual cost savings expected in good faith to be realized by the Issuer and its Restricted Subsidiaries over such 12 month period commencing with the Calculation Date (as opposed, for the avoidance of doubt, to the annualized impact of such cost savings). If since the beginning of such period

 

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any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Specified Transaction 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 Specified Transaction had occurred at the beginning of 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 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 the Chief Financial Officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of the computation above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed on the average daily balances 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 Issuer may designate.

Any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period, and any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period.

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

(1) Consolidated Interest Expense of such Person for such period;

(2) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Preferred Stock of any Restricted Subsidiary during such period; and

(3) all dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Disqualified Stock during such period.

Foreign Subsidiary ” means, with respect to any Person, any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof and any Restricted Subsidiary of such Foreign Subsidiary.

GAAP ” means generally accepted accounting principles in the United States which are in effect on February 26, 2010.

Global Note Legend ” means the legend set forth in Section 2.06(g)(ii) hereof, which is required to be placed on all Global Notes issued under this Indenture.

Global Notes ” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of Exhibit A hereto, issued in accordance with Section 2.01, 2.06(b), 2.06(d) or 2.06(f) hereof.

Government Securities ” 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,

 

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which, in either case, are not callable or redeemable at the option of the issuers 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 Government Securities or a specific payment of principal of or interest on any such Government Securities 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 Government Securities or the specific payment of principal of or interest on the Government Securities evidenced by such depository receipt.

GSMP Agreement ” means the amended and restated agreement, dated as of the Initial Exchange Date, by and among the Issuer, GS Mezzanine Partners V Onshore Fund, L.P. and other members of the GSMP Group, pursuant to which, among other things, the Issuer has acknowledged that certain representations described therein with respect to the issuance of the Notes are made for the benefit of the GSMP Group.

GSMP Group ” means, collectively, (i) GS Mezzanine Partners V Onshore Fund, L.P., (ii) any other Affiliate thereof or of The Goldman Sachs Group, Inc., and (iii) any Subsidiaries of the foregoing.

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

Guarantee ” means the guarantee by any Guarantor of the Issuer’s Obligations under this Indenture and the Notes.

Guarantor ” means Holdings and each Subsidiary Guarantor.

Hedging Obligations ” means, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar agreement providing for the transfer, modification or mitigation of interest rate, commodity or currency risks either generally or under specific contingencies.

Holder ” means the Person in whose name a Note is registered on the Registrar’s books.

Holdings ” means Healthcare Technology Intermediate Holdings, Inc., a Delaware corporation.

IAI Global Note ” mean the global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued on an issue date or thereafter in a denomination equal to the outstanding principal amount of the Notes sold to Institutional Accredited Investors.

 

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Immediate Family Member ” means with respect to any individual, such individual’s child, stepchild, grandchild or more remote descendant, parent, stepparent, grandparent, spouse, former spouse, qualified domestic partner, sibling, mother-in-law, father-in-law, son-in-law and daughter-in-law (including adoptive relationships) and any trust, partnership or other bona fide estate-planning vehicle the only beneficiaries of which are any of the foregoing individuals or any private foundation or fund that is controlled by any of the foregoing individuals or any donor-advised fund of which any such individual is the donor.

Incremental Facilities ” means any secured incremental credit facilities pursuant to the Credit Agreement on the terms of such incremental facility as in effect on the Initial Exchange Date.

Indebtedness ” means, with respect to any Person, without duplication:

(1) any indebtedness (including principal and premium) 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 balance of the purchase price of any property (including Capitalized Lease Obligations), except (i) any such balance that constitutes an obligation in respect of a commercial letter of credit, a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP; or

(d) representing any Hedging Obligations; provided that the Hedging Obligations shall be subject to netting to the extent such Hedging Obligations are with the same counterparty and are contractually permitted to be netted and enforceable;

if and to the extent that any of the foregoing Indebtedness (other than letters of credit (excluding commercial letters of credit) and Hedging Obligations) would appear as a liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

(2) the outstanding principal amount of any Receivables Facilities established by or for such Person or its Restricted Subsidiaries (whether or not the same would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP);

(3) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clauses (1) or (2) of a third Person (whether or not such items would appear upon the balance sheet of such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business; and

(4) to the extent not otherwise included, the obligations of the type referred to in clauses (1) or (2) of a third Person secured by a Lien on any asset owned by such first Person, whether or not such Indebtedness is assumed by such first Person.

 

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

Independent Financial Advisor ” means any accounting, appraisal, investment banking firm or consultant of nationally recognized standing that is, in the good faith judgment of the Issuer, qualified to perform the task for which it has been engaged. Promptly after receipt thereof, the Company shall deliver to the Trustee a copy of any opinion or letter provided or required to be provided by an Independent Financial Advisor pursuant to the terms of this Indenture.

Indirect Participant ” means a Person who holds a beneficial interest in a Global Note through a Participant.

Initial Exchange Date ” means the “Early Settlement Date” as defined in the Offering Circular.

Institutional Accredited Investor ” means an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs.

Interest Payment Date ” means March 1, June 1, September 1 and December 1 of each year to Stated Maturity.

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.

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, advances to customers and distributors and trade credit 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 (excluding the footnotes) of the Issuer 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 4.07 hereof:

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

(a) the Issuer’s “Investment” in such Subsidiary at the time of such redesignation; less

(b) the portion (proportionate to the Issuer’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.

 

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The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by the aggregate amount of any dividends, distributions, interest payments, returns of capital, repayments or other amounts received in Cash Equivalents by the Issuer or a Restricted Subsidiary in respect of such Investment.

Issuer ” means IMS Health Incorporated, and any successor thereto.

Issuer Order ” means a written request or order signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer, and delivered to the Trustee.

Legal Holiday ” means a Saturday, a Sunday or a day on which commercial banking institutions are not required to be open in the State of New York or the city in which the Corporate Trust Office of the Trustee or Paying Agent is located.

Lien ” means, with respect to any asset, any mortgage, lien (statutory or otherwise), 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 be deemed to constitute a Lien.

LGP ” means Leonard Green & Partners, L.P.

LGP Group ” means LGP and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt their portfolio companies or other operating companies affiliated with LGP).

Management Agreement ” means the management agreement dated as of February 26, 2010 between one or more of the Sponsors or their advisors, if applicable, and Holdings, as amended, restated, supplemented or otherwise modified.

Moody’s ” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

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

Net Proceeds ” means the aggregate cash proceeds received by the Issuer or any of its Restricted Subsidiaries in respect of any Asset Sale, including any cash received upon the sale, other disposition or maturity of any Cash Equivalents or Designated Non-cash Consideration received in any Asset Sale, net of the direct costs relating to such Asset Sale and any such sale, disposition or maturity of such Cash Equivalents or Designated Non-cash Consideration, including legal, accounting and investment banking fees, payments made in order to obtain a necessary consent or required by applicable law to consummate any Asset Sale, and brokerage and sales commissions, any relocation expenses incurred as a result thereof, other fees and expenses, including title and recordation expenses, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of principal, premium, if any, and interest on Secured Indebtedness required (other than required by clause (1) of Section 4.10(b) hereof) to be paid as a result of such transaction and any deduction of appropriate amounts to be provided by the Issuer or

 

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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 the Issuer or any of its Restricted Subsidiaries after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

Net Tangible Assets ” means, as of any date of determination, (i) all assets of the Issuer and its Restricted Subsidiaries less (ii) the stated balance sheet “goodwill” of the Issuer and its Restricted Subsidiaries and less (iii) the stated balance sheet “intangible assets” of the Issuer and its Restricted Subsidiaries, in each case determined on a consolidated basis in accordance with GAAP as of such date.

Non-U.S. Person ” means a Person who is not a U.S. Person.

Notes ” means any Note authenticated and delivered under this Indenture. For all purposes of this Indenture, the term “Notes” shall include the Initial Notes and shall also include any Additional Notes that may be issued under a supplemental indenture. For purposes of this Indenture, all references to Notes to be issued or authenticated upon transfer, replacement or exchange shall be deemed to refer to Notes of the applicable series.

Obligations ” means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), penalties, premiums, if any, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and banker’s acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.

Offering Circular ” means the Offering Circular and Consent Solicitation Statement of the Issuer dated as of October 10, 2012, as amended, supplemented or modified from time to time.

Officer ” means the Chairman of the board of directors, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Issuer.

Officer’s Certificate ” means a certificate signed on behalf of the Issuer by an Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer, that meets the requirements set forth in this Indenture.

Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer or the Trustee.

Participant ” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).

Permitted Holders ” means any Sponsor and its Affiliates.

 

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Permitted Investments ” means:

(1) any Investment in the Issuer, any of its Wholly-Owned Restricted Subsidiaries or any of the Subsidiary Guarantors;

(2) any Investment in Cash Equivalents;

(3) any Investment by the Issuer or any of its Restricted Subsidiaries in a Person that is engaged in a Similar Business so long as, (a) no Event of Default shall have occurred or be continuing or will result therefrom, and (b) as the result of such Investment (i) such Person becomes a Wholly-Owned Restricted Subsidiary of the Issuer or a Subsidiary Guarantor, or (ii) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Issuer, one of its Wholly-Owned Restricted Subsidiaries or one of the Subsidiary Guarantors, and, in each case, 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 by the Issuer or any of its Restricted Subsidiaries in a Restricted Subsidiary that is not a Wholly-Owned Subsidiary or in any Permitted Joint Venture, provided that the aggregate amount of such Investment, taken together with all other Investments made pursuant to this clause (4) that are at that time outstanding, does not exceed $50,0000,000;

(5) any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to Section 4.10 hereof or any other disposition of assets not constituting an Asset Sale;

(6) any Investment existing on February 26, 2010 or made pursuant to a binding commitment in effect on February 26, 2010, in each case as reflected on Schedule 6.6 to the Credit Agreement on February 26, 2010, or an Investment consisting of any extension, modification, replacement or renewal of any such Investment or binding commitment existing on February 26, 2010;

(7) any Investment acquired by the Issuer or any of its Restricted Subsidiaries:

(a) in exchange for any other Investment or accounts receivable held by the Issuer 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 (including any trade creditor or customer); or

(b) in satisfaction of judgments against other Persons; or

(c) as a result of a foreclosure by the Issuer 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 clause (10) of Section 4.09(b) hereof;

(9) any guarantee of Indebtedness (including any Guarantee) permitted under Section 4.09 hereof and any performance guarantees and Contingent Obligations in the ordinary course of business and any liens on the assets of the Issuer or any Restricted Subsidiary incurred in compliance with Section 4.12 hereof;

 

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(10) any Investment consisting of a purchase or other acquisition of inventory, supplies, material, equipment, or intellectual property, or the licensing or contribution of intellectual property to another Person pursuant to any distribution, service, joint marketing, co-branding, co-distribution or other similar arrangements with other Persons, however denominated;

(11) additional Investments in an aggregate amount, taken together with all other Investments made pursuant to this clause (11) that are at that time outstanding, not to exceed $150,000,000;

(12) loans and advances to officers, directors and employees of any direct or indirect parent of the Issuer, the Issuer or any of its Restricted Subsidiaries (i) to finance the purchase of Capital Stock of any direct or indirect parent of the Issuer (provided, that the amount of such loans and advances used to acquire such Capital Stock shall be contributed to the Issuer in cash as common equity), (ii) for reasonable and customary business related travel expenses, moving expenses and similar expenses, in each case incurred in the ordinary course of business, and (iii) for additional purposes not contemplated by subclause (i) or (ii) above, in an aggregate principal amount at any time outstanding with respect to this clause (iii) not exceeding $10,000,000;

(13) Investments relating to a Receivables Subsidiary that, in the good faith determination of the Issuer are necessary or advisable to effect any Receivables Facility;

(14) any Investment the payment for which consists of Equity Interests (exclusive of Disqualified Stock) of the Issuer or any of its direct or indirect parent companies; provided that such Equity Interests will not increase the amount available for Restricted Payments under clause (3) of Section 4.07(a) hereof;

(15) any Investments in prepaid expenses, checks or other similar negotiable instruments held for collection and lease, utility and workers compensation, performance and similar deposits entered into as a result of the operations of the business, in each of the foregoing cases of this clause (15), in the ordinary course of business; and

(16) any purchase or repurchase of any Notes.

Permitted Joint Ventures ” means a corporation, partnership or other entity (other than a Subsidiary) engaged in one or more Similar Businesses in respect of which the Issuer or a Restricted Subsidiary (a) beneficially owns at least 20% of the Equity Interests of such entity and (b) either is a party to an agreement empowering one or more parties to such agreement (which may or may not be the Issuer or a Subsidiary), or is a member of a group that, pursuant to the constituent documents of the applicable corporation, partnership or other entity, has the power, to direct the policies, management and affairs of such entity.

Permitted Liens ” means, with respect to any Person:

(1) pledges, deposits or security by such Person under workers’ compensation laws, unemployment insurance, employers’ health tax and other social security laws or similar legislation (including in respect of deductibles, self insured retention amounts and premium and adjustments thereto), or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal 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;

 

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(2) Liens imposed by applicable law, such as landlords’, carriers’, warehousemen’s, materialmen’s, repairmen’s and mechanics’ Liens, in each case for sums not yet overdue for a period of more than 30 days or being contested in good faith by appropriate actions 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 maintained on the books of such Person in accordance with GAAP;

(3) Liens for taxes, assessments or other governmental charges not yet overdue for a period of more than 30 days or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate actions diligently pursued, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(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, issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

(5) survey exceptions, encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights-of-way, servitudes, sewers, electric lines, drains, telegraph and telephone and cable television lines, gas and oil pipelines and other similar purposes, or other restrictions (including minor defects and 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 do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(6) Liens securing Obligations relating to any Indebtedness permitted to be incurred pursuant to clauses (4) and (13) of Section 4.09(b) hereof; provided that (a) Liens securing Obligations relating to any Indebtedness, Disqualified Stock or Preferred Stock permitted to be incurred pursuant to clause (13) of Section 4.09(b) hereof relate only to Obligations relating to Refinancing Indebtedness that serves to extend, replace, refund, refinance, renew or defease Indebtedness incurred or Disqualified Stock or Preferred Stock issued under clause (3) or (4) of Section 4.09(b) hereof;

(7) Liens existing on February 26, 2010;

(8) Liens on property or shares of stock of a Person at the time such Person becomes a Restricted Subsidiary; provided , however , that (i) such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; (ii) such Liens may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries, and (iii) immediately after giving effect to such Person becoming a Restricted Subsidiary the Consolidated Secured Leverage Ratio on a consolidated basis for the Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available is either (x) not greater than 3.25 to 1.00 or (y) lower than such Consolidated Secured Leverage Ratio immediately prior to such transaction (the “ Secured Leverage Ratio Test ”);

(9) Liens existing on property or other assets at the time the Issuer or a Restricted Subsidiary acquired the property or such other assets, including any acquisition by means of an

 

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amalgamation, merger or consolidation with or into the Issuer or any of its Restricted Subsidiaries; provided , however , that (i) such Liens are not created or incurred in connection with, or in contemplation of, such acquisition, amalgamation, merger or consolidation, and (ii) such Liens may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries and (iii) after giving effect to such acquisition, the Secured Leverage Ratio Test is satisfied;

(10) Liens securing Obligations relating to any Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or a Subsidiary Guarantor permitted to be incurred in accordance with Section 4.09 hereof;

(11) Liens securing Hedging Obligations (and guarantees thereof) that are interest rate swap agreements, interest rate cap agreements or interest rate collar agreements, foreign exchange contracts, currency swap agreements or similar agreements;

(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 or commercial 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;

(13) leases, subleases, licenses or sublicenses, covenants not to sue, releases, consents and other forms of license granted to others in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of the Issuer or any of its Restricted Subsidiaries and do not secure any Indebtedness;

(14) Liens arising from Uniform Commercial Code (or equivalent statutes) financing statement filings regarding operating leases, consignments or accounts entered into by the Issuer and its Restricted Subsidiaries in the ordinary course of business;

(15) Liens on accounts receivable and related assets incurred in connection with a Receivables Facility;

(16) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8) and (9); provided , however , that (a) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (b) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8) and (9) at the time the original Lien became a Permitted Lien under this Indenture, and (ii) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

(17) deposits made or other security provided in the ordinary course of business to secure liability to insurance carriers;

(18) other Liens securing obligations (including Indebtedness) that do not exceed $50,000,000 in the aggregate at any one time outstanding;

(19) Liens securing judgments for the payment of money not constituting an Event of Default under clause (5) under Section 6.01 hereof so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

 

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(20) Liens 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;

(21) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code or any comparable or successor provision on items in the course of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business, and (iii) in favor of banking institutions arising in the ordinary course of business 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;

(22) 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;

(23) 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 the Issuer or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Issuer and its Restricted Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of the Issuer or any of its Restricted Subsidiaries, in each case, under this clause (23), arising in the ordinary course of business;

(24) Liens arising in the ordinary course of business to secure accounts payable or similar trade obligations not constituting Indebtedness;

(25) Liens deemed to exist in connection with Investments in repurchase obligations constituting Cash Equivalents contemplated by clause (5) of the definition of “Cash Equivalents” permitted under this Indenture; provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;

(26) Liens securing Cash Management Obligations which are secured on a pari passu basis with the liens securing the Credit Facilities in respect of any overdraft and related liabilities arising from treasury, depository and cash management services or any automated clearing house transfers of funds;

(27) Liens deemed to exist by reason of the rights reserved or vested in any Person by the terms of any lease, license, franchise, grant or permit held by the Issuer or any Restricted Subsidiary thereof or by a statutory provision, to terminate any such lease, license, franchise, grant or permit, or to require annual or periodic payments as a condition to the continuance thereof;

(28) Liens deemed to exist by reason of (x) any encumbrance or restriction (including put and call arrangements) with respect to capital stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement or (y) any encumbrance or restriction imposed under any contract for the sale by the Issuer or any of its Restricted Subsidiaries of the Capital Stock of any Restricted Subsidiary, or any business unit or division of the Issuer or any Restricted Subsidiary permitted under this Indenture;

 

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(29) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into by the Issuer or any Restricted Subsidiary in the ordinary course of business;

(30) Liens solely on any cash earnest money deposits made by the Issuer or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement in connection with a proposed acquisition of another Person, or any asset, business unit or division of another Person;

(31) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

(32) Liens on Capital Stock of an Unrestricted Subsidiary that secure Indebtedness or other obligations of such Unrestricted Subsidiary;

(33) security given to a public utility or any municipality or governmental authority when required by such utility or authority in connection with the operations of that Person in the ordinary course of business;

(34) zoning, building codes or similar laws or rights reserved to or vested in any governmental office or agency to control or regulate the use of any real property;

(35) any interest or title or a lessor or sublessor under any lease of real estate permitted hereunder and any restriction or encumbrance to which the interest or title of such lessor or sublessor may be subject; and

(36) any proxy agreement relating to IMS Government Solutions, Inc. and its Equity Interests entered into with the Defense Security Service.

Person ” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

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

Private Placement Legend ” means the legend set forth in Section 2.06(g)(i) hereof to be placed on all Notes issued under this Indenture, except where otherwise permitted by the provisions of this Indenture.

Qualified Public Offering ” means the initial underwritten public offering of common Equity Interests of Holdings or any of Holdings’ direct or indirect parent companies, in each case, pursuant to an effective registration statement filed with the SEC in accordance with the Securities Act (other than a registration statement on Form S-8 or any successor form) generating gross proceeds to the Issuer of not less than $150,000,000.

QIB ” means a “qualified institutional buyer” as defined in Rule 144A.

Rating Agencies ” means Moody’s and S&P or if Moody’s or S&P or both shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Issuer which shall be substituted for Moody’s or S&P or both, as the case may be.

 

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Receivables Facility ” means any of one or more receivables financing facilities as amended, supplemented, modified, extended, renewed, restated or refunded from time to time, the Obligations of which are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities) to the Issuer or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) pursuant to which the Issuer or any of its Restricted Subsidiaries sells its accounts receivable to either (a) a Person that is not a Restricted Subsidiary or (b) a Receivables Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.

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

Receivables Subsidiary ” means any Subsidiary of the Issuer formed for the purpose of, and that solely engages only in one or more Receivables Facilities and other activities reasonably related thereto.

Record Date ” for the interest payable on any applicable Interest Payment Date means February 15, May 15, August 15 or November 15 (whether or not a Business Day) next preceding such Interest Payment Date.

Registration Rights Agreement ” means the Amended and Restated Exchange and Registration Rights Agreement, dated as of the Initial Exchange Date, by and among the Issuer and the other parties named on the signature pages thereof, and with respect to any Additional Notes, one or more registration rights agreements between the Issuer and the other parties thereto, as such agreements may be amended, modified or supplemented from time to time relating to rights given by the Issuer to the purchasers of Notes or Additional Notes, as applicable, to register such Notes, or Additional Notes, as applicable, under the Securities Act.

Regulation S ” means Regulation S promulgated under the Securities Act.

Regulation S Global Note ” means a Regulation S Temporary Global Note or Regulation S Permanent Global Note, as applicable.

Regulation S Permanent Global Note ” means a permanent Global Note in the form of Exhibit A hereto, bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Temporary Global Note upon expiration of the Restricted Period.

Regulation S Temporary Global Note ” means a temporary Global Note in the form of Exhibit A hereto, bearing the Global Note Legend, the Private Placement Legend and the Regulation S Temporary Global Note Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903.

Regulation S Temporary Global Note Legend ” means the legend set forth in Section 2.06(g)(iii) hereof.

 

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Required Holders ” means Holders of at least a majority in aggregate principal amount of the then outstanding Notes. Sections 2.08 and 2.09 hereof shall determine which Notes are considered to be “outstanding” for purposes of this definition.

Responsible Officer ” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

Restricted Definitive Note ” means a Definitive Note bearing the Private Placement Legend.

Restricted Global Note ” means a Global Note bearing the Private Placement Legend.

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

Restricted Period ” means the 40-day distribution compliance period as defined in Regulation S.

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

Rule 144 ” means Rule 144 promulgated under the Securities Act.

Rule 144A ” means Rule 144A promulgated under the Securities Act.

Rule 903 ” means Rule 903 promulgated under the Securities Act.

Rule 904 ” means Rule 904 promulgated under the Securities Act.

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

Sale and Lease-Back Transaction ” means any arrangement providing for the leasing by the Issuer or any of its Restricted Subsidiaries of any real or tangible personal property, which property has been or is to be sold or transferred by the Issuer or such Restricted Subsidiary to a third Person in contemplation of such leasing.

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

Secured Indebtedness ” means any Indebtedness of the Issuer or any of its Restricted Subsidiaries in respect of borrowed money, Capitalized Lease Obligations and debt obligations evidenced by promissory notes and similar instruments secured by a Lien (including the credit facilities under the Credit Agreement).

 

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Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Senior Notes Exchange Offer ” means the offer to issue the Notes in exchange for the Existing Senior Notes as described in the Offering Circular.

Shelf Registration Statement ” means the Shelf Registration Statement as defined in the Registration Rights Agreement.

Significant Subsidiary ” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on February 26, 2010.

Similar Business ” means any business conducted or proposed to be conducted by the Issuer and its Restricted Subsidiaries on February 26, 2010 and any business or other activities that are complementary, similar, reasonably related, incidental or ancillary thereto.

Special Interest ” means Special Interest, as such term is defined in Section 2(c) of the Registration Rights Agreement.

Specified Transaction ” means (x) any Investment that results in a Person becoming a Restricted Subsidiary, (y) any purchase or other acquisition of a business of any Person or of assets constituting a business unit, line of business or division of such Person or (z) any Asset Sale (i) that results in a Restricted Subsidiary ceasing to be a Subsidiary of the Issuer or (ii) of a business, business unit, line of business or division of the Issuer or a Restricted Subsidiary, in each case whether by merger, consolidation, amalgamation or otherwise.

Sponsors ” means each of (1) TPG Group, (2) CPP Group and (3) LGP Group and their respective Affiliates, including for the avoidance of doubt, any co-investment vehicle controlled by any of the foregoing (but excluding any portfolio company or other operating company which is an Affiliate of any of the Sponsors).

Stated Maturity ” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

Subordinated Indebtedness ” means, with respect to the Notes,

(1) any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the Notes, and

(2) any Indebtedness of any Guarantor which is by its terms subordinated in right of payment to the Guarantee of such entity of the Notes.

 

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Subsequent Issue Date ” means the date of issuance of Additional Notes.

Subsidiary ” means, with respect to any Person:

(1) any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof; and

(2) any partnership, joint venture, limited liability company or similar entity of which

(x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or 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 or otherwise, and

(y) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

Subsidiary Guarantor ” means each Restricted Subsidiary that Guarantees the Notes in accordance with the terms of this Indenture.

TPG ” means TPG Capital, L.P.

TPG Group ” means TPG and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt their portfolio companies or other operating companies affiliated with TPG).

Transaction ” means the transactions consummated on February 26, 2010 pursuant to the Acquisition Agreement, the issuance of the Existing Senior Notes under the Existing Senior Notes Indenture, and the borrowings under the Credit Agreement and the other transactions contemplated thereby.

Transaction Expenses ” means any fees or expenses incurred or paid by the Issuer or any Restricted Subsidiary in connection with the Transaction, including payments to officers, employees and directors as change of control payments, severance payments, special or retention bonuses and charges for repurchase or rollover of, or modifications to, stock options.

Treasury Rate ” means, as of any Redemption Date, the yield to maturity as of such Redemption Date 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 the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to March 1, 2015; provided , however , that if the period from the Redemption Date to March 1, 2015 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.

 

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

Trustee ” means U.S. Bank National Association, as trustee, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

Unrestricted Definitive Note ” means a Definitive Note that does not bear and is not required to bear the Private Placement Legend.

Unrestricted Global Note ” means a Global Note that does not bear and is not required to bear the Private Placement Legend.

Unrestricted Subsidiary ” means:

(1) any Subsidiary of the Issuer which at the time of determination is an Unrestricted Subsidiary (as designated by the Issuer, as provided below); and

(2) any Subsidiary of an Unrestricted Subsidiary.

The Issuer may designate any Subsidiary of the Issuer (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) 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, the Issuer or any Subsidiary of the Issuer (other than solely any Subsidiary of the Subsidiary to be so designated); provided that

(1) any Unrestricted Subsidiary must be an entity of which the Equity Interests entitled to cast at least a majority of the votes that may be cast by all Equity Interests having ordinary voting power for the election of directors or Persons performing a similar function are owned, directly or indirectly, by the Issuer;

(2) such designation complies with Section 4.07 hereof; and

(3) each of: (a) the Subsidiary to be so designated; and (b) its Subsidiaries, has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any Restricted Subsidiary

The Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such designation, (x) no Default shall have occurred and be continuing and treating any Indebtedness of such Unrestricted Subsidiary as having been incurred upon such redesignation, and (y) either (1) the Issuer could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio Test set forth in Section 4.09(a) hereof, or (2) the Fixed Charge Coverage Ratio for the Issuer and its Restricted Subsidiaries would be equal to or greater than such ratio for the Issuer and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation.

Any such designation by the Issuer shall be notified by the Issuer to the Trustee by promptly filing with the Trustee a copy of the resolution of the board of directors of the Issuer or any committee thereof giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing provisions.

 

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U.S. Person ” means a U.S. person as defined in Rule 902(k) under the Securities Act.

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, 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.

Wholly-Owned Restricted Subsidiary ” of any Person means a Wholly-Owned Subsidiary of such Person that is also a Restricted Subsidiary of such Person.

Wholly-Owned Subsidiary ” of any Person means a Subsidiary of such Person, 100% of the outstanding Equity Interests of which (other than directors’ qualifying shares and shares issued to foreign nationals as required under applicable law) shall at the time be owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person or by such Person and one or more Wholly-Owned Subsidiaries of such Person.

 

Section 1.02 Other Definitions .

 

Term

  

Defined in
Section

“Affiliate Transaction”

   4.11

“Asset Sale Offer”

   4.10

“Authentication Order”

   2.02

“Change of Control Offer”

   4.14

“Change of Control Payment”

   4.14

“Change of Control Payment Date”

   4.14

“Covenant Defeasance”

   8.03

“DTC”

   2.03

“Event of Default”

   6.01

“Excess Proceeds”

“Fixed Charge Coverage Ratio Test”

   4.10

4.09

“incur”

   4.09

“Legal Defeasance”

   8.02

“Note Register”

   2.03

“Offer Amount”

   3.09

“Offer Period”

   3.09

“Pari Passu Indebtedness”

   4.10

“Paying Agent”

   2.03

“Priority Debt”

“Purchase Date”

   4.09

3.09

“Redemption Date”

   3.07

“Refinancing Indebtedness”

   4.09

 

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Term

  

Defined in
Section

“Refunding Capital Stock”

   4.07

“Registrar”

   2.03

“Restricted Payments”

“Secured Leverage Ratio Test”

   4.07

1.01

“Senior Unsecured Note Cap”

“Successor Company”

   2.01

5.01

“Successor Person”

   5.01

“Treasury Capital Stock”

   4.07

 

Section 1.03 Incorporation by Reference of Trust Indenture Act .

At all times after the effectiveness of a registration statement under the Registration Rights Agreement, this Indenture will be subject to the mandatory provisions of the Trust Indenture Act, which are incorporated by reference in and made a part of this Indenture effective upon the effectiveness of any such registration statement. Whenever this Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Indenture.

The following Trust Indenture Act terms used in this Indenture have the following meanings:

“indenture securities” means the Notes;

“indenture security Holder” means a Holder of a Note;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and

“obligor” on the Notes and the Guarantees means the Issuer and the Guarantors, respectively, and any successor obligor upon the Notes and the Guarantees, respectively.

All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by SEC rule under the Trust Indenture Act have the meanings so assigned to them.

 

Section 1.04 Rules of Construction .

Unless the context otherwise requires:

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

(e) “will” shall be interpreted to express a command;

 

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(f) provisions apply to successive events and transactions;

(g) references to sections of, or rules under, the Securities Act or Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

(h) unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Indenture;

(i) words used herein implying any gender shall apply to both genders;

(j) the words “including,” “includes” and similar words shall be deemed to be followed by “without limitation”;

(k) 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 the Issuer dated such date prepared in accordance with GAAP;

(l) the principal amount of any Disqualified Stock or Preferred Stock at any time shall be (i) the maximum liquidation value of such Disqualified Stock or Preferred Stock at such time or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Disqualified Stock or Preferred Stock at such time, whichever is greater; and

(m) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not any particular Article, Section, clause or other subdivision.

 

Section 1.05 Acts of Holders .

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01 hereof) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 1.05.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

(c) The ownership of Notes shall be proved by the Note Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future Holder of the same Note and the Holder of every

 

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Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

(e) The Issuer may, in the circumstances permitted by the Trust Indenture Act, set a record date for purposes of determining the identity of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders. Unless otherwise specified, if not set by the Issuer prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such vote, prior to such vote, any such record date shall be the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation.

(f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this Section 1.05(f) shall have the same effect as if given or taken by separate Holders of each such different part.

(g) Without limiting the generality of the foregoing, a Holder, including DTC that is the Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and any Person that is the Holder of a Global Note, including DTC, may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through such depositary’s standing instructions and customary practices.

(h) The Issuer may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note held by DTC entitled under the procedures of such depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action shall be valid or effective if made, given or taken more than 90 days after such record date.

ARTICLE 2

THE NOTES

 

Section 2.01 Form and Dating; Terms .

(a) General . The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rules or usage. Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(b) Global Notes . Notes issued in global form shall be substantially in the form of Exhibit A attached hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of

 

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Interests in the Global Note” attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified in the “Schedule of Exchanges of Interests in the Global Note” attached thereto and each shall provide that it shall represent up to the aggregate principal amount of Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as applicable, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.

(c) Temporary Global Notes . Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, as custodian for the Depositary, and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. The Restricted Period shall be terminated upon the receipt by the Trustee of a written certificate from the Issuer.

Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in the Regulation S Permanent Global Note pursuant to the Applicable Procedures. Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.

(d) Terms . The aggregate outstanding principal amount of the Notes that may be authenticated and delivered under this Indenture may not exceed $1,000,000,000, except as provided in Section 2.07 hereof.

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Issuer, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

The Notes shall be subject to repurchase by the Issuer pursuant to an Asset Sale Offer as provided in Section 4.10 hereof or a Change of Control Offer as provided in Section 4.14 hereof. The Notes shall not be redeemable, other than as provided in Article 3.

Additional Notes ranking pari passu with the Initial Notes may be created and issued under this Indenture from time to time by the Issuer in a principal amount that, together with the principal amount of all Initial Notes then outstanding, does not exceed $1,000,000,000, less the principal amount of all Notes as may be acquired, owned or held at any time by Holdings, the Issuer or any of their respective Subsidiaries whether or not retired (the “ Senior Unsecured Note Cap ”), and in any such case, without notice to or consent of the Holders and shall be consolidated with and form a single class with the Initial Notes and shall have the same terms as to status, redemption or otherwise as the Initial Notes, subject to the limitations described in Sections 4.09 and 4.12 hereof. The terms of the Initial Notes and any Additional

 

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Notes may have different issuance dates and dates from which interest accrues and shall be part of the same series. Such Additional Notes will be consolidated and form a single series with the Initial Notes, vote together with the Initial Notes and have the same terms as to status, redemption or otherwise as the Initial Notes. References to the Notes under this Indenture include the Additional Notes, unless the context requires otherwise.

(e) Euroclear and Clearstream Procedures Applicable . The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes that are held by Participants through Euroclear or Clearstream.

 

Section 2.02 Execution and Authentication .

At least one Officer shall execute the Notes on behalf of the Issuer by manual or facsimile signature.

If an Officer whose signature is on a Note no longer holds that office at the time such Note is authenticated, such Note shall nevertheless be valid.

A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated substantially in the form of Exhibit A attached hereto, as the case may be, by the manual or facsimile signature of the Trustee. The signature shall be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.

On each of the Initial Exchange Date and the Final Exchange Date, the Trustee shall, upon receipt of an Issuer Order (an “ Authentication Order ”), authenticate and deliver the Initial Notes to be issued on such date in connection with the Senior Notes Exchange Offer. On any Subsequent Issue Date, the Trustee shall, upon receipt of an Authentication Order, authenticate and deliver any Additional Notes; provided that the Trustee may not (i) authenticate and deliver the Initial Notes if, as the result of such authentication and delivery, the aggregate principal amount of the Initial Notes exceeds $1,000,000,000 or (ii) authenticate and deliver any Notes (including any Additional Notes) if, as the result of such authentication and delivery, the aggregate principal amount of Notes (including any Additional Notes) then outstanding exceeds $1,000,000,000 (except as provided in Section 2.07 hereof).

The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Notes. An authenticating agent may authenticate Notes 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 an Agent to deal with Holders or an Affiliate of the Issuer.

 

Section 2.03 Registrar and Paying Agent .

The Issuer shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“ Registrar ”) and an office or agency where Notes may be presented for payment (“ Paying Agent ”). The Registrar shall keep a register of the Notes (“ Note Register ”) and of their transfer and exchange. The Issuer may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Issuer may change any Paying Agent or Registrar without prior notice to any Holder. The Issuer shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Issuer or any of its Subsidiaries may act as Paying Agent or Registrar.

 

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The Issuer initially appoints The Depository Trust Company (“ DTC ”) to act as Depositary with respect to the Global Notes.

The Issuer initially appoints the Trustee to act as the Paying Agent and Registrar for the Notes and to act as Custodian with respect to the Global Notes.

 

Section 2.04 Paying Agent to Hold Money in Trust .

The Issuer shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and shall notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary) shall have no further liability for the money. If the Issuer or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the Notes.

 

Section 2.05 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 all Holders and shall otherwise comply with Trust Indenture Act Section 312(a). If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least two 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 the Holders of Notes and the Issuer shall otherwise comply with Trust Indenture Act Section 312(a).

 

Section 2.06 Transfer and Exchange .

(a) Transfer and Exchange of Global Notes . Except as otherwise set forth in this Section 2.06, a Global Note may be transferred, in whole and not in part, only to another nominee of the Depositary or to a successor Depositary or a nominee of such successor Depositary. A beneficial interest in a Global Note may not be exchanged for a Definitive Note unless (i) the Depositary (x) notifies the Issuer that it is unwilling or unable to continue as Depositary for such Global Note or (y) has ceased to be a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Issuer within 120 days, (ii) the Issuer, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Definitive Notes or (iii) there shall have occurred and be continuing an Event of Default with respect to the Notes. Upon the occurrence of any of the events in clause (i), (ii) or (iii) above, Definitive Notes delivered in exchange for any Global Note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note, except for Definitive Notes issued subsequent to any of the events in clause (i), (ii) or (iii) above and pursuant to Section 2.06(c) hereof. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); provided , however , beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.

 

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(b) Transfer and Exchange of Beneficial Interests in the Global Notes . The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

(i) Transfer of Beneficial Interests in the Same Global Note . Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided , however , that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Temporary Global Note 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). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i).

(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes . In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) hereof, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; provided that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903 under the Securities Act. Upon consummation of an Exchange Offer by the Issuer in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.

 

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(iii) Transfer of Beneficial Interests to Another Restricted Global Note . A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) hereof and the Registrar receives the following:

(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; or

(C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, a certificate in the form of Exhibit B hereto, including the certifications and certificates and opinion of counsel required by item (3) thereof, if applicable.

(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note . A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) hereof and:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;

(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

(D) the Registrar receives the following:

(1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or

(2) if the holder of such beneficial interest in a Restricted Global Note 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 Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar or the Issuer so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

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If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above.

Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

(c) Transfer or Exchange of Beneficial Interests for Definitive Notes .

(i) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes . If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon the occurrence of any of the events in clause (i), (ii) or (iii) of Section 2.06(a) hereof and receipt by the Registrar of the following documentation:

(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;

(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;

(D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(a) thereof;

(E) if such beneficial interest is being transferred to the Issuer or any of its Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(b) thereof;

(F) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(c) thereof; or

(G) if such beneficial interest is being transferred to an Institutional Accredited Investor 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 substantially in the form of Exhibit B hereto, including the certifications, certificates and opinion of counsel required by item (3) thereof, if applicable.

 

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the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

(ii) Beneficial Interests in Regulation S Temporary Global Note to Definitive Notes . Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) of the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.

(iii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only upon the occurrence of any of the events in clauses (i), (ii) or (iii) of Section 2.06(a) hereof and if:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;

(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

(D) if the Registrar receives the following:

(1) If the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

 

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(2) If the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D) if the Registrar or the Issuer so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

The Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered.

(iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes . If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon the occurrence of any of the events in clause (i), (ii) or (iii) of Section 2.06(a) hereof and satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer shall execute and the Trustee shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from or through the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall not bear the Private Placement Legend.

(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.

(i) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes . If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;

 

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(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;

(D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(a) thereof;

(E) if such Restricted Definitive Note is being transferred to the Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (A) through (D) above, certificate substantially in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;

(F) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(c) thereof; or

(G) if such Restricted Definitive Note is being transferred to the Issuer or any of its Restricted Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (3)(b) thereof.

the Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the applicable Restricted Global Note, in the case of clause (B) above, the applicable 144A Global Note, and in the case of clause (C) above, the applicable Regulation S Global Note, and in the case of clause (E) above, the applicable IAI Global Note.

(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (x) a Broker-Dealer, (y) a Person participating in the distribution of the Exchange Notes or (z) a Person who is an affiliate (as defined in Rule 144) of the Issuer;

(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

 

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(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

(D) the Registrar receives the following:

(1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or

(2) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar or the Issuer so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.

If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.

 

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(e) Transfer and Exchange of Definitive Notes for Definitive Notes . Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer or exchange 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 2.06(e):

(i) Restricted Definitive Notes to Restricted Definitive Notes . Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:

(A) if the transfer will be made to a QIB in accordance with Rule 144A, then the transferor must deliver a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; or

(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications required by item (3) thereof, if applicable.

(ii) Restricted Definitive Notes to Unrestricted Definitive Notes . Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

(A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Issuer;

(B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement;

(D) if the Registrar receives the following:

(1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or

(2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar or the Issuer so requests, an Opinion of Counsel in form reasonably acceptable to 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

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(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes . A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

(f) Exchange Offer . Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate:

(A) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that certify that (x) they are not Broker-Dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Issuer, and accepted for exchange in the Exchange Offer, and

(B) Unrestricted Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer by Persons that certify that they are not (x) Broker-Dealers, (y) participating in a distribution of the Exchange Notes or (z) affiliates (as defined in Rule 144) of the Issuer.

Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Issuer shall execute and the Trustee shall authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Unrestricted Definitive Notes in the appropriate principal amount.

(g) Legends . The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture:

(i) Private Placement Legend . (A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION.

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED

 

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OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (V) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENT OF THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.”

(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.

(ii) Global Note Legend . Each Global Note shall bear a legend in substantially the following form:

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(h) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”) TO THE ISSUER OR ITS AGENT FOR

 

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REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.”

(iii) Regulation S Temporary Global Note Legend . The Regulation S Temporary Global Note shall bear a legend in substantially the following form:

“THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.”

(iv) Original Issue Discount Legend .

“THIS NOTE HAS BEEN ISSUED WITH “ORIGINAL ISSUE DISCOUNT” (WITHIN THE MEANING OF SECTION 1272 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED). UPON WRITTEN REQUEST, THE ISSUER WILL PROMPTLY MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE THE FOLLOWING INFORMATION: (1) THE ISSUE PRICE AND DATE OF THE NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE AND (3) THE YIELD TO MATURITY OF THE NOTE. HOLDERS SHOULD CONTACT THE CHIEF FINANCIAL OFFICER AT IMS HEALTH INCORPORATED, 901 MAIN AVENUE, NORWALK, CT 06851, TEL: (203) 319-4700.”

(h) Cancellation and/or Adjustment of Global Notes . At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary 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 Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

 

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(i) General Provisions Relating to Transfers and Exchanges .

(i) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

(ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuer shall require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).

(iii) Neither the Registrar nor the Issuer shall be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(v) The Issuer shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part, (C) to register the transfer of or to exchange a Note between a Record Date and the next succeeding Interest Payment Date or (D) to register the transfer of or to exchange any Notes selected for redemption or tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer or an Asset Sale Offer.

(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.

(vii) Upon surrender for registration of transfer of any Note at the office or agency of the Issuer designated pursuant to Section 4.02 hereof, the Issuer shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.

(viii) At the option of the Holder, subject to Section 2.06(a) hereof, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and deliver, the replacement Global Notes and Definitive Notes to which the Holder making the exchange is entitled in accordance with the provisions of Section 2.02 hereof.

 

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(ix) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

 

Section 2.07 Replacement Notes .

If either (x) any mutilated Note is surrendered to the Trustee, the Registrar or the Issuer, or (y) if the Issuer and the Trustee receive evidence to their satisfaction of the ownership and destruction, loss or theft of any Note, then the Issuer shall issue and the Trustee, upon receipt of an Authentication Order and satisfaction of any other requirements of the Trustee, shall authenticate a replacement Note. If required by the Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer may charge for its expenses in replacing a Note.

Every replacement Note is a contractual obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

 

Section 2.08 Outstanding Notes .

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds such Note.

If a Note is replaced pursuant to Section 2.07 hereof, such Note shall cease to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser.

If the principal amount of any Note is considered paid under Section 4.01 hereof, such Note shall cease to be outstanding and interest thereon shall cease to accrue.

If the Paying Agent (other than the Issuer, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay any Notes payable on such date, then on and after such date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

 

Section 2.09 Treasury Notes .

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer, or by any Affiliate of the Issuer, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right to deliver any such direction, waiver or consent with respect to such pledged Notes and that the pledgee is not the Issuer or any obligor upon the Notes or any Affiliate of the Issuer or of such other obligor.

 

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Section 2.10 Temporary Notes .

Until certificates representing Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Issuer considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.

Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this Indenture.

 

Section 2.11 Cancellation .

The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee or, at the direction of the Trustee, the Registrar or the Paying Agent and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy cancelled Notes (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all cancelled Notes shall be delivered to the Issuer. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.

 

Section 2.12 Defaulted Interest .

If the Issuer defaults in a payment of interest or Special Interest, if any, on the Notes, it shall pay the defaulted interest and Special Interest, if any, in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 6.03 hereof. The Issuer shall notify the Trustee in writing of the amount of defaulted interest and Special Interest, if any, proposed to be paid on each Note and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest and Special Interest, if any, or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or cause to be fixed each such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. The Trustee shall notify the Issuer of such special record date promptly, and in any event at least 20 days before such special record date. At least 15 days before the special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) shall deliver or cause to be delivered, to each Holder a notice at his or her address as it appears in the Note Register that states the special record date, the related payment date and the amount of such interest and such Special Interest, if any, to be paid.

 

Section 2.13 CUSIP Numbers .

The Issuer in issuing the Notes may use CUSIP numbers (if then generally in use) and, if so, the Trustee shall use CUSIP numbers in notices of redemption as a convenience to Holders; provided ,

 

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that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer shall as promptly as practicable notify the Trustee of any change in the CUSIP numbers.

ARTICLE 3

REDEMPTION

 

Section 3.01 Notices to Trustee .

If the Issuer elects to redeem Notes pursuant to Section 3.07 hereof, it shall furnish to the Trustee, at least 35 days (unless a shorter notice shall be satisfactory to the Trustee) but not more than 60 days before a redemption date (or longer if such redemption notice will be issued in connection with Article 8 or Article 13 hereof), an Officer’s Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price.

 

Section 3.02 Selection of Notes to Be Redeemed or Purchased .

If less than all of the Notes are to be redeemed at any time pursuant to Section 3.07 hereof or purchased in an Asset Sale Offer pursuant to Section 4.10 hereof or a Change of Control Offer pursuant to Section 4.14 hereof at any time, the Trustee shall select the Notes to be redeemed or purchased (a) if such Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed or (b) on a pro rata basis or, to the extent that selection on a pro rata basis is not practicable, by lot or by such other method the Trustee considers fair and appropriate or as required by the rules of the Depositary. In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased shall be selected, unless otherwise provided herein, not less than 30 days nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption or purchase.

The Trustee shall promptly notify the Issuer in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected shall be in an integral multiple of $1,000 (but in a minimum amount of $2,000); no Notes of $2,000 or less can be redeemed in part, except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000 (or a minimum amount of $2,000), shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.

 

Section 3.03 Notice of Redemption .

Subject to Section 3.09 hereof, the Issuer shall mail or cause to be delivered by electronic transmission or mailed by first-class mail notices of redemption at least 30 days but not more than 60 days before the purchase or redemption date to each Holder of Notes to be redeemed at such Holder’s registered address, or to the Trustee to forward to each Holder of Notes at such Holder’s registered address, or shall otherwise mail on such timeframe such notice in accordance with the procedures of DTC, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 hereof. Except as set forth in Section 3.07(b) hereof, notices of redemption may not be conditional.

 

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The notice shall identify the Notes to be redeemed and shall state:

(a) the redemption date;

(b) the redemption price;

(c) that if any Note is to be redeemed in part only, the portion of the principal amount of that Note that is to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion of the original Note representing the same indebtedness to the extent not redeemed will be issued in the name of the Holder of the Notes upon cancellation of the original Note;

(d) the name and address of the Paying Agent;

(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(f) that, unless the Issuer defaults in making such redemption payment, interest and Special Interest, if any, on Notes called for redemption ceases to accrue on and after the redemption date;

(g) the paragraph or subparagraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

(h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes; and

(i) if in connection with a redemption pursuant to Section 3.07(b) hereof, any condition to such redemption.

At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at its expense; provided that the Issuer shall have mailed to the Trustee, at least 5 Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

 

Section 3.04 Effect of Notice of Redemption .

Once notice of redemption is mailed or delivered in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price (except as provided for in Section 3.07(b) hereof). The notice, if delivered in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to give such notice by electronic transmission or by mail or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Subject to Section 3.05 hereof, on and after the redemption date, interest shall cease to accrue on Notes or portions of Notes called for redemption.

 

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Section 3.05 Deposit of Redemption or Purchase Price .

Prior to 10:00 a.m. (New York City time) on the redemption or purchase date, the Issuer shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued and unpaid interest and Special Interest, if any, on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest and Special Interest, if any, on, all Notes to be redeemed or purchased.

If the Issuer complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest and Special Interest, if any, shall cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest and Special Interest, if any, to the redemption or purchase date shall be paid to the Person in whose name such Note was registered at the close of business on such Record Date. If any Note called for redemption or purchase shall not be so paid upon surrender for redemption or purchase because of the failure of the Issuer to comply with the preceding paragraph, interest and Special Interest, if any, shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest accrued to the redemption or purchase date not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

 

Section 3.06 Notes Redeemed or Purchased in Part .

Upon surrender of a Note that is redeemed or purchased in part, the Issuer shall issue and the Trustee shall authenticate for the Holder at the expense of the Issuer a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered representing the same indebtedness to the extent not redeemed or purchased; provided that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. It is understood that, notwithstanding anything in this Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.

 

Section 3.07 Optional Redemption .

(a) At any time prior to March 1, 2015, the Issuer may redeem all or part of the Notes, upon notice as provided in Section 3.03 hereof, at a redemption price equal to 100% of the principal amount of such Notes redeemed, plus the Applicable Premium as of the date of redemption (the “ Redemption Date ”), plus accrued and unpaid interest and Special Interest, if any, thereon to, the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(b) Until March 1, 2015, the Issuer may redeem up to 40.0% (increasing to 65.0% on and after March 1, 2013) of the aggregate principal amount of Notes (including any Additional Notes) issued by the Issuer at a redemption price equal to 112.50% of the aggregate principal amount thereof, plus accrued and unpaid interest and Special Interest, if any, thereon to the applicable Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, solely with the net cash proceeds received by the Issuer from one or more Equity Offerings; provided that at least 60.0% (decreasing to 35.0% on and after March 1, 2013) of the aggregate principal amount of the Initial Notes remains outstanding immediately after the occurrence of each such redemption; provided further that each such redemption occurs within 60 days of the date of closing of each such Equity Offering. Notice of any redemption upon any such Equity Offering may be given prior to the redemption thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to the completion of the related Equity Offering.

 

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(c) Except pursuant to clause (a) or (b) of this Section 3.07, the Notes will not be redeemable at the Issuer’s option prior to March 1, 2015.

(d) On and after March 1, 2015, the Issuer may redeem the Notes, in whole or in part, upon notice provided as described in Section 3.03 hereof, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest and Special Interest, if any, thereon to the applicable Redemption Date, subject to the right of Holders of record of such Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on March 1 of each of the years indicated below:

 

Year    Percentage  

2015

     106.250

2016

     103.125

2017 and thereafter

     100.000

(e) Any redemption of the Notes pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. In addition, each redemption pursuant to this Section 3.07 shall relate to an aggregate principal amount of Notes of at least the lesser of (a) $5,000,000 and (b) the remaining outstanding principal amount of the Notes.

 

Section 3.08 Mandatory Redemption .

The Issuer shall not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

 

Section 3.09 Offers to Repurchase by Application of Excess Proceeds .

(a) In the event that, pursuant to Section 4.10 hereof, the Issuer shall be required to commence an Asset Sale Offer, it shall follow the procedures specified below.

(b) The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “ Offer Period ”). No later than 5 Business Days after the termination of the Offer Period (the “ Purchase Date ”), the Issuer shall apply all Excess Proceeds (the “ Offer Amount ”) to the purchase of Notes and, if required, Pari Passu Indebtedness (on a pro rata basis, if applicable), or, if less than the Offer Amount has been tendered, all Notes and Pari Passu Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

(c) If the Purchase Date is on or after a Record Date and on or before the related Interest Payment Date, any accrued and unpaid interest and Special Interest, if any, up to but excluding the Purchase Date, shall be paid to the Person in whose name a tendered Note accepted for purchase is registered at the close of business on such Record Date, and no Special Interest shall be payable to Holders who tender a Note pursuant to the Asset Sale Offer.

 

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(d) Upon the commencement of an Asset Sale Offer, the Issuer shall deliver electronically or by first-class mail, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The notice, which shall govern the terms of the Asset Sale Offer, shall state:

(i) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open;

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

(iii) that any Note not tendered or accepted for payment shall continue to accrue interest and Special Interest, if any;

(iv) that, unless the Issuer defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest and Special Interest, if any, after the Purchase Date;

(v) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in integral multiples of $1,000 only (but in a minimum amount of $2,000);

(vi) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Note completed, or transfer such Note by book-entry transfer, to the Issuer, the Depositary, if appointed by the Issuer, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

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

(viii) that, if the aggregate principal amount of Notes and Pari Passu Indebtedness surrendered by the holders thereof exceeds the Offer Amount, the Trustee shall, through the facilities of the Depositary (in the case of Global Notes), select the Notes and, at the direction of the Issuer, such Pari Passu Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Pari Passu Indebtedness tendered (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $2,000, or integral multiples of $1,000 in excess thereof, shall be purchased); and

(ix) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) representing the same indebtedness to the extent not repurchased.

(e) On or before the Purchase Date, the Issuer shall, to the extent lawful, (1) accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof so tendered.

 

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(f) The Issuer, the Depositary or the Paying Agent, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes properly tendered by such Holder and accepted by the Issuer for purchase, and the Issuer shall promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and mail or deliver (or cause to be transferred by book-entry) such new Note to such Holder (it being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate and mail or deliver such new Note) in a principal amount equal to any unpurchased portion of the Note surrendered representing the same indebtedness to the extent not repurchased; provided , that each such new Note shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. Any Note not so accepted for purchase shall be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer shall publicly announce the results of the Asset Sale Offer on or as soon as practicable after the Purchase Date.

Other than as specifically provided in this Section 3.09 or Section 4.10 hereof, any purchase pursuant to this Section 3.09 shall be made pursuant to the applicable provisions of Sections 3.01 through 3.06 hereof.

ARTICLE 4

COVENANTS

 

Section 4.01 Payment of Notes .

The Issuer shall pay or cause to be paid the principal of, premium, if any, and interest and Special Interest, if any, on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Issuer or a Subsidiary, holds as of noon Eastern Time on the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest and Special Interest, if any, then due.

The Issuer shall pay Special Interest, if any, in the same manner and on the dates and in the amounts set forth in the Registration Rights Agreement.

The Issuer shall pay interest on overdue principal (including post-petition interest in any proceeding under any Bankruptcy Law) and on overdue installments of interest and Special Interest, if any, to the extent lawful, as provided in Section 6.03 hereof.

 

Section 4.02 Maintenance of Office or Agency .

The Issuer shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange or presented for payment and where notices and demands to or upon the Issuer in respect of the Notes 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.

 

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The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency for such purposes. 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.

The Issuer hereby initially designates the Corporate Trust Office of the Trustee as one such office or agency of the Issuer in accordance with Section 2.03 hereof.

 

Section 4.03 Reports and Other Information .

(a) Notwithstanding that the Issuer may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Issuer shall furnish to the Trustee and Holders of the Notes (without exhibits) or post on its website (which may be password protected so long as the password is made promptly available by the Issuer to Holders, prospective investors, broker dealers and securities analysts upon request),

(1) within 90 days after the end of each fiscal year, annual reports of the Issuer containing substantially all of the information that would have been required to be contained in an Annual Report on Form 10-K under the Exchange Act (“ Form 10-K ”) if the Issuer had been a reporting company under the Exchange Act, including (A) “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” (B) audited financial statements prepared in accordance with GAAP as then in effect, and (C) a presentation of EBITDA of the Issuer and its Subsidiaries consistent with the presentation thereof in the Issuer’s periodic reports provided to holders of the Existing Senior Notes pursuant to the Existing Senior Notes Indenture and derived from such financial statements; provided , that the Issuer shall not be required to provide the information otherwise required to be presented by reporting companies under the Exchange Act pursuant to Part III of Form 10-K except for such information as would be required by Item 401 of Regulation S-K (other than the information required by subsections (c) and (g) of such item), Item 403(a) of Regulation S-K and Item 404 of Regulation S-K (assuming a transaction threshold of $2,000,000 rather than $120,000 and other than information with respect to employment and compensation arrangements and the information required by Item 404(b)).

(2) within 45 days after the end of each of the first three fiscal quarters of each fiscal year, quarterly reports of the Issuer containing substantially all of the information that would have been required to be contained in a Quarterly Report on Form 10-Q under the Exchange Act if the Issuer had been a reporting company under the Exchange Act, including (A) “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” (B) unaudited quarterly financial statements prepared in accordance with GAAP as then in effect and reviewed pursuant to Statement on Auditing Standards No. 100 (or any successor provision), and (C) a presentation of EBITDA of the Issuer and its Subsidiaries consistent with the presentation thereof in the Issuer’s periodic reports provided to holders of the Existing Senior Notes pursuant to the Existing Senior Notes Indenture and derived from such financial statements; and

(3) information substantially similar to the information that would be required to be included in a Current Report on Form 8-K (as in effect on February 26, 2010) filed with the SEC by the Issuer (if the Issuer were required to prepare and file such form) pursuant to Items 1.01 (Entry into a Material Definitive Agreement), 1.02 (Termination of a Material Definitive Agreement), 1.03 (Bankruptcy or Receivership), 2.01 (Completion of Acquisition or Disposition of Assets),

 

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2.04 (Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement), 2.06 (Material Impairment), 4.01 (Changes in Registrant’s Certifying Accountants), 4.02 (Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review), 5.01 (Changes in Control of Registrant) 5.02(a),(b),(c) (Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensation Arrangements of Certain Officers) (other than any information relating to compensation arrangements with any directors or officers) and 9.01(a) (Financial Statements and Exhibits but only with respect to historical financial statements relating to transactions required to be reported pursuant to Item 2.01 and involving acquisitions of Persons that had revenues in excess of $200,000,000 for the last four completed fiscal quarters prior to the consummation of the acquisition) of such form, within the later of 15 days after the occurrence of the specified event or such longer timeframe that would have been required for a current report on Form 8-K; provided that (i) unless otherwise required to be provided to Holders, no such current report will be required to be furnished if the Issuer determines in its good faith judgment that such event is not material to Holders or the business, assets, operations, financial position or prospects of the Issuer and its Restricted Subsidiaries, taken as a whole and (ii) trade secrets and other confidential information that is competitively sensitive in the good faith and reasonable determination of the Issuer may be excluded from disclosures.

(4) following the consummation of the Exchange Offer or the effectiveness of the Shelf Registration Statement contemplated by the Registration Rights Agreement, whether or not required by the SEC, in lieu of the requirements set forth in clauses (1), (2) and (3) above, the Issuer will file a copy of all of the information and reports referred to in clause (1) and (2) above (provided that any presentation of EBITDA need not be consistent with the presentation thereof in Issuer’s periodic reports provided to holders of the Existing Senior Notes pursuant to the Existing Senior Notes Indenture to the extent an alternative formulation is then required under the SEC’s rules and regulations) and all current reports on Form 8-K required to be filed with the SEC for public availability within the time periods specified in the SEC’s rules and regulations (unless the SEC will not accept such a filing) and make such information available to prospective investors upon request.

The reports required pursuant to clauses (1), (2) and (3) above will not be required to comply with (i) Section 302, Section 404 or Section 906 of the Sarbanes-Oxley Act of 2002, (ii) related Items 307 and 308 of Regulation S-K promulgated by the SEC, (iii) Item 10(e) of Regulation S-K (with respect to any non-GAAP financial measures contained therein) or any comparable successor provision and (iv) Regulation S-X Rule 3-10; provided that if non-Guarantor Subsidiaries (on a consolidated basis) constitute more than 10% of the Issuer’s consolidated revenues, operating income, assets or debt for the last four quarters ended on, or as of, as the case may be, the date of any reports required pursuant to clauses (1) or (2) above, then the Issuer must provide supplemental unaudited disclosure of its operating results by geographic region on a basis substantially similar to the manner in which such information (including the notes thereto) is included in the Form 10-K filed by the Issuer for the year ending December 31, 2008, provided that such operating results shall also include disclosure of United States operating income and indebtedness for borrowed money payable to Persons (other than the Issuer and its Restricted Subsidiaries).

At any time that any of the Issuer’s Subsidiaries are Unrestricted Subsidiaries, then the quarterly and annual reports required by clauses (1) and (2) above will include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” or other comparable section, of the financial condition and results of operations of the Issuer and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Issuer.

 

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(b) So long as any Notes are outstanding, the Issuer will also:

(1) issue a press release to an internationally recognized wire service no fewer than three Business Days prior to the delivery or posting of the annual and quarterly reports required by Sections 4.03(a)(1) and (2) announcing the date on which such reports will be made available to the Holders and directing Holders, prospective investors, broker-dealers and securities analysts to contact the investor relations office of the Issuer to obtain copies of such reports;

(2) within 10 Business Days after furnishing to the Trustee the annual and quarterly reports required by Sections 4.03(a)(1) and (2), hold a conference call to discuss such reports and the results of operations for the relevant reporting period;

(3) issue a press release to an internationally recognized wire service no fewer than three Business Days prior to the date of the conference call required by Section 4.03(b)(2), announcing the time and date of such conference call and either including all information necessary to access the call or directing Holders, prospective investors, broker dealers and securities analysts to contact the appropriate person at the Issuer to obtain such information; and

(4) maintain a website (which may be password protected so long as the password is made promptly available by the Issuer to Holders, prospective investors, broker dealers and securities analysts) to which all of the reports and press releases required by this Section 4.03 are posted.

(c) In the event that any direct or indirect parent company of the Issuer becomes a guarantor of the Notes, the Issuer may satisfy its obligations in this Section 4.03 with respect to financial information relating to the Issuer by furnishing financial information relating to such parent; provided that the same is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such parent, on the one hand, and the information relating to the Issuer and its Restricted Subsidiaries on a standalone basis, on the other hand.

(d) In addition, to the extent not satisfied by the foregoing, the Issuer shall, for so long as any Notes are outstanding, furnish to Holders and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144(A)(d)(4) under the Securities Act.

 

Section 4.04 Compliance Certificate .

(a) The Issuer and each Guarantor (to the extent that such Guarantor is so required under the Trust Indenture Act) shall deliver to the Trustee, within 90 days after the end of each fiscal year ending after the Initial Exchange Date, a certificate from the principal executive officer, principal financial officer or principal accounting officer stating that a review of the activities of Holdings, the Issuer and its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether the Issuer has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to such Officer signing such certificate, that to the best of his or her knowledge the Issuer has kept, observed, performed and fulfilled each and every condition and covenant contained in this Indenture during such fiscal year and is not in default in the performance or observance of any of the terms, provisions, covenants and conditions of this Indenture (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action the Issuer is taking or proposes to take with respect thereto).

 

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(b) When any Default has occurred and is continuing under this Indenture, or if the Trustee or the Holder of any Note gives any notice or takes any other action with respect to a claimed Default, the Issuer shall promptly (which shall be no more than five (5) Business Days) after an Officer obtains actual knowledge thereof deliver to the Trustee, by registered or certified mail or by electronic transmission an Officer’s Certificate specifying such event and what action the Issuer proposes to take with respect thereto.

 

Section 4.05 Taxes .

The Issuer shall pay or discharge, and shall cause Holdings and each of the Restricted Subsidiaries of the Issuer to pay or discharge, prior to delinquency, all material taxes, lawful assessments, and governmental levies except such as are contested in good faith and by appropriate actions or where the failure to effect such payment or discharge is not adverse in any material respect to the Holders of the Notes.

 

Section 4.06 Stay, Extension and Usury Laws .

The Issuer and each of the Guarantors covenant (to the extent that they may lawfully do so) that they shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer and each of the Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant (to the extent they may lawfully do so) that they shall not, by resort to any such law, 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 has been enacted.

 

Section 4.07 Limitation on Restricted Payments .

(a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

(1) declare or pay any dividend or make any payment or distribution on account of the Issuer’s, or any of its Restricted Subsidiaries’ Equity Interests, including any dividend or distribution payable in connection with any merger or consolidation other than:

(A) any dividend or distribution by the Issuer payable solely in Equity Interests (other than Disqualified Stock) of the Issuer; or

(B) any dividend or distribution by a Restricted Subsidiary of the Issuer 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 Subsidiary, the Issuer 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;

(2) purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Issuer or any direct or indirect parent of the Issuer, including in connection with any merger or consolidation;

 

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(3) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment, sinking fund payment or maturity, any Subordinated Indebtedness, other than:

(A) Indebtedness permitted under clauses (7), (8) or (9) of Section 4.09(b) hereof; or

(B) the purchase, repurchase or other acquisition of Subordinated Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase or acquisition; or

(4) make any Restricted Investment,

(each such payment and other action set forth in clauses (1) through (4) above being referred to as a “ Restricted Payment ” and collectively as “ Restricted Payments ”) unless, at the time of any such Restricted Payment:

(1) no 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 under the Fixed Charge Coverage Ratio Test; and

(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and its Restricted Subsidiaries after the Initial Exchange Date (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6), (7), (9), (10), (11), (13) and (14) of Section 4.07(b) hereof), is less than the sum of (without duplication):

(A) 50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period) from October 1, 2012 to the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the event such Consolidated Net Income for such period is a deficit, then minus 100% of such deficit); plus

(B) 100% of (x) the aggregate net cash proceeds and (y) the Fair Market Value of other property, in any such case, received by the Issuer after the Initial Exchange Date and not in connection with the consummation of the Transactions from the issue or sale of:

(i)(a) Equity Interests of the Issuer, including Treasury Capital Stock, but excluding cash proceeds and the Fair Market Value of marketable securities or other property received from the sale of:

(x) Equity Interests to any future, present or former employees, directors, officers or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any direct or indirect parent of the Issuer or any of the Issuer’s Subsidiaries after the Initial Exchange Date to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of Section 4.07(b) hereof; and

(y) Designated Preferred Stock; and

 

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(b) to the extent such net cash proceeds are actually contributed to the Issuer, Equity Interests of any of the Issuer’s direct or indirect parent companies (excluding contributions of the proceeds from the sale of Designated Preferred Stock of any such companies or contributions to the extent such amounts have been applied to Restricted Payments made in accordance with clause (4) of Section 4.07(b) hereof); or

(ii) debt securities of the Issuer that have been converted by their terms into or exchanged for such Equity Interests of the Issuer;

provided , however , that this clause (B) shall not include the proceeds from (w) the issuance of Refunding Capital Stock applied in accordance with clause (2) of Section 4.07(b) hereof, (x) the issuance of Equity Interests or convertible debt securities of the Issuer sold to a Restricted Subsidiary of the Issuer, (y) the issuance of Disqualified Stock or debt securities that have been converted into Disqualified Stock or (z) Excluded Contributions; plus

(C) 100% of (x) the aggregate net cash proceeds and (y) the Fair Market Value of other property, in any such case, contributed to the capital of the Issuer following the Initial Exchange Date and not in connection with the consummation of the Transactions (other than proceeds received from (i) contributions in respect of Disqualified Stock, (ii) contributions by a Restricted Subsidiary of the Issuer to the Issuer, or (iii) Excluded Contributions); plus

(D) 100% of (x) the aggregate net cash proceeds and (y) the Fair Market Value of other property, in any such case, received by means of:

(i) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of Restricted Investments made by the Issuer or its Restricted Subsidiaries and repurchases and redemptions of such Restricted Investments from the Issuer or its Restricted Subsidiaries and repayments of loans or advances, and releases of guarantees, which constitute Restricted Investments made by the Issuer or its Restricted Subsidiaries, in each case after the Initial Exchange Date; or

(ii) the sale (other than to the Issuer or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary or a distribution from an Unrestricted Subsidiary (other than in each case to the extent the Investment in such Unrestricted Subsidiary constituted a Permitted Investment) or a dividend from an Unrestricted Subsidiary after the Initial Exchange Date; plus

(E) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary or the merger, amalgamation or consolidation of an Unrestricted Subsidiary into the Issuer or a Restricted Subsidiary or the transfer of all or substantially all of the assets of an Unrestricted Subsidiary to the Issuer or a Restricted Subsidiary after the Initial Exchange Date, the Fair Market Value of the Investment in such Unrestricted Subsidiary or the assets transferred at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary or at the time of such merger, amalgamation, consolidation or transfer of assets (other than to the extent such Investment constituted a Permitted Investment);

 

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(b) The foregoing provisions of Section 4.07(a) hereof shall not prohibit:

(1) the payment of any dividend or other distribution or the consummation of any irrevocable redemption or repurchase within 60 days after the date of declaration thereof or the giving of the irrevocable redemption or repurchase notice, as applicable, if at the date of declaration or notice such dividend, distribution, redemption or repurchase payment would have complied with the provisions of this Indenture;

(2) (a) the redemption, repurchase, retirement or other acquisition of any Equity Interests, including any accrued and unpaid dividends thereon (“ Treasury Capital Stock ”), or Subordinated Indebtedness of the Issuer or any Equity Interests of any direct or indirect parent company of the Issuer, in exchange for, or out of the proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary) of, Equity Interests of the Issuer or any direct or indirect parent company of the Issuer to the extent contributed to the Issuer (in each case, other than any Disqualified Stock) (“ Refunding Capital Stock ”) and (b) if immediately prior to the retirement of Treasury Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6) of this Section 4.07(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, retire or otherwise acquire any Equity Interests of any direct or indirect parent company of the Issuer) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Treasury Capital Stock immediately prior to such retirement;

(3) the redemption, repurchase, exchange, defeasance or other acquisition or retirement of (i) Subordinated Indebtedness of the Issuer or a Subsidiary Guarantor made in exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of the Issuer or a Subsidiary Guarantor, (ii) Disqualified Stock of the Issuer made by exchange for, or out of the proceeds of the substantially concurrent sale of, Disqualified Stock of the Issuer or (iii) Preferred Stock of a Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Preferred Stock of a Subsidiary Guarantor; that, in each case, is incurred in compliance with Section 4.09 hereof, so long as:

(a) the principal amount (or accreted value, if applicable) of such new Indebtedness or the liquidation preference of such new Disqualified Stock or Preferred Stock does not exceed the principal amount of (or accreted value, if applicable), plus any accrued and unpaid interest on, the Subordinated Indebtedness or the liquidation preference of, plus any accrued and unpaid dividends on, the Disqualified Stock or Preferred Stock being so defeased, redeemed, repurchased, exchanged, acquired or retired for value, plus the amount of any reasonable premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness or Disqualified Stock or Preferred Stock being so redeemed, repurchased, exchanged, defeased, acquired or retired, defeasance costs and any reasonable fees and expenses incurred in connection with such redemption, repurchase, exchange, acquisition or retirement and the issuance of such new Indebtedness, Disqualified Stock or Preferred Stock;

(b) such new Indebtedness (and any related Guarantee by a Subsidiary Guarantor) is subordinated to the Notes or the applicable Guarantee of the Notes at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, acquired, defeased or retired for value;

 

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(c) such new Indebtedness, Disqualified Stock or Preferred Stock has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness, Disqualified Stock or Preferred Stock being so redeemed, repurchased, defeased, exchanged, acquired or retired; and

(d) such new Indebtedness, Disqualified Stock or Preferred Stock has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness, Disqualified Stock or Preferred Stock being so redeemed, repurchased, defeased, exchanged acquired or retired;

(4) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of the Issuer or any of its direct or indirect parent companies held by any future, present or former employee, director, officer or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer or any of its Restricted Subsidiaries or any direct or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement (including, for the avoidance of doubt, any principal and interest payable on any notes issued by the Issuer or any direct or indirect parent company of the Issuer in connection with any such repurchase, retirement or other acquisition), or any stock subscription or shareholder agreement, including any Equity Interest rolled over by management of the Issuer or any direct or indirect parent company of the Issuer in connection with the Transactions; provided , however , that the aggregate amount of Restricted Payments made under this clause (4) shall not exceed $36,681,361 in any calendar year including the Initial Exchange Date and $20,000,000 in any calendar year thereafter (which shall increase to $40,000,000 subsequent to the consummation of a Qualified Public Offering and which shall be reduced to $10,000,000 during the continuance of any Event of Default) (with up to $20,000,000 in unused amounts in the calendar year including the Initial Exchange Date and any unused amounts for any year thereafter being carried over to the succeeding year); provided further that such amount in any calendar year may be increased by an amount not to exceed:

(a) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock) of the Issuer and, to the extent contributed to the Issuer, the cash proceeds from the sale of Equity Interests of any of the Issuer’s direct or indirect parent companies, in each case to any future, present or former employees, directors, officers or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer or any of its Restricted Subsidiaries that occurs after February 26, 2010 and not in connection with the consummation of the Transactions, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clause (3) of Section 4.07(a) hereof; plus

(b) the cash proceeds of key man life insurance policies received by the Issuer or its Restricted Subsidiaries (or any direct or indirect parent company to the extent contributed to common equity of the Issuer) after February 26, 2010; less

(c) the amount of any Restricted Payments previously made with the cash proceeds described in clauses (a) and (b) of this clause (4);

 

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and provided further that cancellation of Indebtedness owing to the Issuer or any of its Restricted Subsidiaries from any future, present or former employees, directors, officers or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any direct or indirect parent company, or any of the Issuer’s Restricted Subsidiaries in connection with a repurchase of Equity Interests of the Issuer or any of its direct or indirect parent companies will not be deemed to constitute a Restricted Payment for purposes of this Section 4.07 or any other provision of this Indenture;

(5) the declaration and payment by the Issuer of dividends to holders of any class or series of Disqualified Stock of the Issuer or by any Restricted Subsidiary of the Issuer of dividends to holders of any class or series of Preferred Stock of any of the Issuer’s Restricted Subsidiaries, in any such case, issued in accordance with Section 4.09 hereof and to the extent such dividends are included in the definition of “Fixed Charges”;

(6) (a) the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued by the Issuer or any Restricted Subsidiary after February 26, 2010;

(b) the declaration and payment of dividends to a direct or indirect parent company of the Issuer, 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 such parent company issued after February 26, 2010; provided that the amount of dividends paid pursuant to this clause (b) shall not exceed the aggregate amount of cash actually contributed to the Issuer from the sale of such Designated Preferred Stock; or

(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 (2) of this Section 4.07(b);

provided , however , in the case of each of (a), (b) and (c) of this clause (6), that 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 or declaration on a pro forma basis, the Issuer could incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio Test set forth in Section 4.09(a) hereof;

(7) cashless 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;

(8) the declaration and payment of dividends on the Issuer’s common stock (or the payment of dividends to any direct or indirect parent entity to fund a payment of dividends on such entity’s common stock), following the first public offering of the Issuer’s common stock or the common stock of any of its direct or indirect parent companies, in each case, after February 26, 2010, of up to 6%  per annum of the net cash proceeds received by or contributed to the Issuer in or from any such public offering, other than public offerings with respect to the Issuer’s common stock registered on Form S-8 and other than any public sale constituting an Excluded Contribution;

(9) Restricted Investments that are made with Excluded Contributions;

 

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(10) other Restricted Payments in an aggregate amount taken together with all other Restricted Payments made pursuant to this clause (10) not to exceed $150,000,000 at any one time outstanding;

(11) any Restricted Payment used to fund (or otherwise made in connection with) the Transactions or the 2012 Transactions, in each case, to the extent permitted by Section 4.11 hereof;

(12) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions similar to those set forth in Section 4.10 and Section 4.14 hereof; provided that all Notes validly tendered by Holders in connection with the related Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed, retired or acquired for value;

(13) cash payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests of the Issuer or any direct or indirect parent company of the Issuer;

(14) the declaration and payment of dividends or distributions by the Issuer to, or the making of loans to, Holdings (or any direct or indirect parent entities the sole direct or indirect assets of which consist of the Capital Stock of Holdings and cash) in amounts required for Holdings or any such direct or indirect parent companies to pay, in each case without duplication,

(a) franchise and excise taxes and other fees, taxes and expenses required to maintain their legal existence;

(b) foreign, federal, state and local income and similar taxes, to the extent such income taxes are attributable to the income of the Issuer and its Restricted Subsidiaries and, to the extent of the amount actually received from its Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries; provided that in each case the amount of such payments in any fiscal year does not exceed (i) the amount of such taxes actually paid by Holdings or such direct or indirect parent companies on account of such taxes, and (ii) the amount that the Issuer and its Restricted Subsidiaries would be required to pay in respect of foreign, federal, state and local taxes for such fiscal year were the Issuer, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such parent entity;

(c) customary salary, bonus and other benefits payable to officers and employees of Holdings or any such direct or indirect parent company of the Issuer to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of the Issuer and its Restricted Subsidiaries;

(d) general operating and overhead costs and expenses of Holdings or any such direct or indirect parent company to the extent such costs and expenses are attributable to the ownership, operations or business of the Issuer and its Restricted Subsidiaries; and

(e) reasonable fees and expenses of Holdings or any such direct or indirect parent company to the extent related to any unsuccessful equity or debt offering of Holdings or such parent entity.

 

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provided , however , that, at the time of and after giving effect to, any Restricted Payment permitted under clauses (10) and (12) of this Section 4.07(b), no Event of Default shall have occurred and be continuing or would occur as a consequence thereof.

(c) At the Initial Exchange Date, all of the Issuer’s Subsidiaries will be Restricted Subsidiaries. The Issuer shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the second to last paragraph of the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an amount determined as set forth in the definition of “Investments.” Such designation shall be permitted only if a Restricted Payment in such amount would be permitted at such time, whether pursuant to Section 4.07(a) hereof or under clause (9), (10) or (13) of Section 4.07(b) hereof, or pursuant to the definition of “Permitted Investments,” and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries shall not be subject to any of the restrictive covenants set forth in this Indenture.

 

Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries .

(a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries that are not Guarantors to, directly or indirectly, create or otherwise cause to exist or become effective any consensual encumbrance or consensual restriction on the ability of any such Restricted Subsidiary to:

(1) (A) pay dividends or make any other distributions to the Issuer or any of its Restricted Subsidiaries on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or (B) pay any Indebtedness owed to the Issuer or any Subsidiary Guarantor;

(2) make loans or advances to the Issuer or any Subsidiary Guarantor; or

(3) sell, lease or transfer any of its properties or assets to the Issuer or any Subsidiary Guarantor.

(b) The restrictions in Section 4.08(a) hereof shall not apply to encumbrances or restrictions existing under or by reason of:

(1) contractual encumbrances, licenses or restrictions in effect on the Initial Exchange Date, including pursuant to the Credit Agreement and the related documentation and Hedging Obligations and related documentation;

(2) contractual restrictions contained in (A) this Indenture, the Notes and Guarantees, (B) the Existing Senior Notes Indenture, the Existing Senior Notes and guarantees thereof and (C) the 2020 Notes Indenture, the 2020 Notes and guarantees thereof;

(3) purchase money obligations for property acquired in the ordinary course of business and Capitalized Lease Obligations that impose restrictions of the nature discussed in clause (3) of Section 4.08(a) hereof on the property so acquired;

(4) applicable law or any applicable rule, regulation or order;

(5) any agreement, license or other instrument of a Person acquired by or merged, consolidated or amalgamated with or into the Issuer or any of its Restricted Subsidiaries in existence

 

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at the time of such acquisition, merger, consolidation or amalgamation (but in any such case not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired;

(6) contracts for the sale of assets, including customary restrictions with respect to a Subsidiary of the Issuer pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary;

(7) Secured Indebtedness otherwise permitted to be incurred pursuant to Section 4.09 hereof and Section 4.12 hereof that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(8) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

(9) customary provisions in any joint venture agreement or other similar agreement;

(10) customary provisions contained in any covenant not to sue, release, consent, transfer, lease, sublease, license or sublicense of intellectual property and other assets, in each case, entered into in the ordinary course of business;

(11) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which the Issuer 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 the Issuer or such Restricted Subsidiary that are subject to such agreement, the payment rights arising thereunder or the proceeds thereof and not any other asset or property of the Issuer or such Restricted Subsidiary or the assets or property of any other Restricted Subsidiary;

(12) Indebtedness of Foreign Subsidiaries incurred subsequent to February 26, 2010 in compliance with Section 4.09 hereof; provided that, the Issuer has determined in its good faith judgment that the incurrence of such Indebtedness and the terms thereof are on commercially reasonable terms and reasonably necessary to the business of such Foreign Subsidiary and will not materially impair the Issuer’s ability to make payments under the Notes when due;

(13) any encumbrances or restrictions of the type referred to in clauses (1), (2) and (3) of Section 4.08(a) hereof 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 (12) of this Section 4.08(b); provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Issuer, no more restrictive with respect to such encumbrance and other restrictions taken as a whole than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing; and

(14) restrictions created in connection with any Receivables Facility that, in the good faith determination of the Issuer are necessary or advisable to effect the transactions contemplated under such Receivables Facility.

 

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Section 4.09 Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock .

(a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “ incur ” and collectively, an “ incurrence ”) any Indebtedness (including Acquired Indebtedness or Attributable Debt) and the Issuer shall not issue any shares of Disqualified Stock and shall not permit any Restricted Subsidiary to issue any shares of Preferred Stock; provided , however , that (i) the Issuer may incur Indebtedness (including Acquired Indebtedness or Attributable Debt) or issue shares of Disqualified Stock and (ii) any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness or Attributable Debt), and issue shares of Preferred Stock, if, in case of each of clauses (i) and (ii), the Fixed Charge Coverage Ratio of the Issuer for the Issuer’s most recently ended four 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 more than 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) (the “ Fixed Charge Coverage Ratio Test ”); provided , further , that the amount of Indebtedness (including Acquired Indebtedness or Attributable Debt), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed $125,000,000 at any one time outstanding.

(b) The provisions of Section 4.09(a) hereof shall not apply to:

(1) the incurrence of Indebtedness under Credit Facilities by the Issuer and, subject to the proviso in this clause (1) below, any Restricted Subsidiary of the Issuer, 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 that, together with the aggregate amount of Receivables Facilities incurred pursuant to Section 4.09(b)(12) below, does not exceed at any one time outstanding (i) the sum of (x) $3,225,000,000 plus (y) an aggregate principal amount of Incremental Facilities issued under the Credit Facilities equal to the sum of (A) $150,000,000 plus (B) an additional amount not to exceed $150,000,000, in the case of this clause (B), to the extent the Consolidated Secured Leverage Ratio of the Issuer and its Restricted Subsidiaries as of the date of such incurrence and after giving pro forma effect thereto (including a pro forma application of the net proceeds therefrom) would be no greater than 3.75 to 1.00, less (ii) the aggregate amount of mandatory principal payments actually made by the Issuer from the proceeds of Asset Sales consummated after February 26, 2010; provided , however that the amount of Indebtedness that may be incurred pursuant to this clause (b)(1) by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed $200,000,000 at any one time outstanding;

(2) the incurrence by (a) the Issuer of Indebtedness represented by the Notes in an aggregate principal amount not exceeding the Senior Unsecured Note Cap and any exchange notes to be issued in exchange for the Notes, (b) the Issuer of Indebtedness represented by the 2020 Notes and (c) any Subsidiary Guarantor of any guarantee of any Indebtedness referred to in the foregoing clauses (2)(a) or (b);

(3) Indebtedness of the Issuer and its Restricted Subsidiaries in existence on February 26, 2010, including the Existing Senior Notes (including any guarantee thereof) and any exchange notes and related exchange guarantees to be issued in exchange for the Existing Senior Notes;

 

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(4) (x) Attributable Debt in connection with any Designated Sale and Leaseback Transaction so long as the total Attributable Debt permitted under this clause 4.09(b)(4)(x) does not exceed $75,000,000 outstanding at any time, and (y) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Issuer or any of its Restricted Subsidiaries within 270 days of the related purchase, lease or improvement, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful 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 (together with any Refinancing Indebtedness in respect thereof) not to exceed, together with all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4)(y), $75,000,000 at any time outstanding;

(5) Indebtedness incurred by the Issuer or any of its Restricted Subsidiaries in the ordinary course of business constituting reimbursement obligations with respect to letters of credit, including letters of credit issued in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; 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 or incurrence;

(6) Indebtedness arising from agreements of the Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided , however , that

(A) such Indebtedness is not reflected on the balance sheet of the Issuer, or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6)(A)); and

(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and its Restricted Subsidiaries in connection with such disposition;

(7) Indebtedness of the Issuer to a Wholly-Owned Restricted Subsidiary or a Subsidiary Guarantor; provided that (i) any such Indebtedness to a Wholly-Owned Restricted Subsidiary that is not a Guarantor is expressly subordinated in right of payment to the Notes and (ii) any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Wholly-Owned Restricted Subsidiary or a Subsidiary Guarantor or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Wholly-Owned Restricted Subsidiary or a Subsidiary Guarantor, or any collateral agent under the Credit Facilities) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (7);

 

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(8) Indebtedness of a Wholly-Owned Restricted Subsidiary or a Subsidiary Guarantor to the Issuer or another Wholly-Owned Restricted Subsidiary or a Subsidiary Guarantor; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Subsidiary Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Issuer or another Wholly-Owned Restricted Subsidiary or a Subsidiary Guarantor, or any collateral agent under the Credit Facilities) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (8);

(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Wholly-Owned Restricted Subsidiary or a Subsidiary Guarantor, provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock not permitted by this clause (9);

(10) Hedging Obligations (and guarantees thereof) other than those entered into for speculative purposes;

(11) obligations incurred in the ordinary course of business in respect of self insurance and performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Issuer or any of its Restricted Subsidiaries;

(12) the incurrence by a Receivables Subsidiary of Indebtedness under the Receivables Facilities, subject to the limitations contained in Section 4.09(b)(1);

(13) the incurrence or issuance by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness, Disqualified Stock or Preferred Stock which serves to extend, replace, refund, renew, defease or refinance any Indebtedness (including Attributable Debt), Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) and clauses (2), (3), (4), (13) and (19) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so extend, replace, refund, renew, defease or refinance such Indebtedness, Disqualified Stock or Preferred Stock or any Indebtedness, Disqualified Stock or Preferred Stock, including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including tender premiums), defeasance costs and fees and expenses in connection therewith (the “ Refinancing Indebtedness ”); provided , however , that such Refinancing Indebtedness:

(A) has a final maturity date equal to or later than the final maturity date of, and 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 Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, renewed, defeased, refunded or refinanced,

(B) to the extent such Refinancing Indebtedness extends, replaces, refunds, renews, defeases or refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being extended, replaced, renewed, defeased, refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively, and

 

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(C) shall not include:

(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Issuer that is not a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Guarantor; or

(ii) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;

and provided further that subclause (A) of this clause (13) shall not apply to any extension, replacement, renewal, defeasance, refunding or refinancing of any Indebtedness outstanding under any Credit Facilities and Obligations secured by Permitted Liens;

(14) the incurrence or issuance by any Foreign Subsidiary of the Issuer of Indebtedness, Disqualified Stock or Preferred Stock for working capital purposes in an aggregate principal amount for all Foreign Subsidiaries under this clause (14) not to exceed $50,000,000 at any one time outstanding;

(15) Indebtedness arising in the ordinary course of business from 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 such Indebtedness either (x) is extinguished within two Business Days of its incurrence, or (y) arises in respect of one or more accounts of any Restricted Subsidiary that is a Foreign Subsidiary with any bank or other financial institution subject to a pooling or similar arrangement with one or more accounts of any other Restricted Subsidiaries that are Foreign Subsidiaries with such bank or other financial institution to the extent the net aggregate amount of funds in all such accounts subject to such pooling or similar arrangement with such bank or other financial institution is positive;

(16) (a) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or (b) any guarantee by a Restricted Subsidiary of Indebtedness of the Issuer; provided that such guarantee is incurred in accordance with Section 4.15 hereof;

(17) Indebtedness of the Issuer or any of its Restricted Subsidiaries incurred in the ordinary course of business consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements;

(18) Indebtedness of the Issuer or any of its Restricted Subsidiaries to future, current or former officers, consultants, directors and employees thereof, and their respective Controlled Investment Affiliates or Immediate Family Members, 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 described in clause (4) of Section 4.07(b) hereof;

(19) Indebtedness (including Acquired Indebtedness), Disqualified Stock or Preferred Stock of (a) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged or amalgamated with or into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture, or (b) the Issuer or any Subsidiary Guarantor incurred in connection with or in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, the acquisition by the Issuer or a Restricted Subsidiary of all of the Capital Stock of any

 

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Person engaged in a Similar Business or of any division, line of business or business unit engaged in a Similar Business (whether through the direct purchase of assets or the purchase of Capital Stock of, or merger, amalgamation or consolidation with, any Person owning such assets); provided that (in case of each clause (a) and (b) above), (A) immediately after giving pro forma effect to such acquisition and the incurrence of such Indebtedness, the Issuer would have had, for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred, a Fixed Charge Coverage Ratio of not less than either (x) 2.00 to 1.00 or (y) both (i) the Fixed Charge Coverage Ratio immediately prior to such acquisition and the incurrence of such Indebtedness and (ii) 1.75 to 1.00, (B) all such Indebtedness has a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity at the time such Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Notes and (C) such Indebtedness is issued, acquired or guaranteed by the Issuer and/or one or more of the Subsidiary Guarantors and is subordinated (or such guarantee is subordinated) to the Notes (and any such Subsidiary Guarantor’s guarantee thereof) on terms customary for senior subordinated notes issued in Rule 144A offerings (as reasonably determined in good faith pursuant to an Officer’s Certificate); provided that such Indebtedness may be incurred in the form of a customary “bridge” or other interim credit facility which does not satisfy the requirements of clause (B) above so long as the same is committed to be automatically converted into or required to be exchanged for, subject to customary conditions for such facilities, long-term Indebtedness that does satisfy the requirements of clause (B) above;

(20) incurrence by the Issuer or any of the Subsidiary Guarantors of additional Indebtedness in an aggregate principal amount not to exceed $250,000,000 at any time outstanding;

(21) Indebtedness of the Issuer or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to any Credit Facility, in a principal amount not in excess of the stated amount of such letter of credit;

(22) Indebtedness incurred by a Restricted Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business; and

(23) Indebtedness of the Issuer or any of its Restricted Subsidiaries in respect of Cash Management Obligations incurred in the ordinary course of business.

(c) For purposes of determining compliance with this Section 4.09:

(1) 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 Indebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through (23) of Section 4.09(b) hereof or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Issuer, in its sole discretion, shall classify or reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) and shall only be required to include the amount and type of such Indebtedness, Disqualified Stock or Preferred Stock in one of the above clauses (and, for the avoidance of doubt, the Issuer, in its sole discretion, may reclassify any Attributable Debt incurred pursuant to clause (4) of Section 4.09(b) as incurred pursuant to Section 4.09(a) at any time such incurrence is permitted); provided that all Indebtedness outstanding under the Credit Facilities on the Initial Exchange Date shall be treated as incurred on the Initial Exchange Date under clause (1) of Section 4.09(b) hereof; and

(2) the Issuer shall be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Section 4.09(a) and Section 4.09(b) hereof.

 

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(d) Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount, and the payment of interest in the form of additional Indebtedness and the payment of dividends in the form of additional Disqualified Stock or Preferred Stock, as applicable, shall in each case not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.09.

(e) Notwithstanding anything to the contrary, until the Disposition Date, the Issuer shall not, and shall not permit any Subsidiary Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is contractually subordinated in right of payment to any other Indebtedness of the Issuer or such Subsidiary Guarantor, as the case may be, unless such Indebtedness is expressly contractually subordinated in right of payment to the Notes or such Subsidiary Guarantor’s Guarantee of the Notes, as the case may be. In addition to the foregoing, until the Disposition Date, any Secured Indebtedness which is, by its express terms, subordinated as to rights to receive payments or proceeds of collateral to any other Secured Indebtedness of the Issuer or a Guarantor secured in whole or in part by the same collateral (including any “second-lien” debt or “first-loss” or “last-out” tranche) shall not be permitted.

(f) For purposes of (x) 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 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, in the case of revolving credit debt and (y) computing the Consolidated Secured Leverage Ratio at any time, the U.S. 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; provided that, in the case of clause (x) above, if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, 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. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

(g) Until the Disposition Date, (i) no Permitted Holder (including Holdings and its Subsidiaries) shall be permitted to, directly or indirectly, acquire or hold (including through participation or other derivative transactions), whether acquired in primary or secondary transactions, any Secured Indebtedness of Holdings or any of its direct or indirect Restricted Subsidiaries or any indebtedness of any non-Guarantor Restricted Subsidiaries (collectively, “ Priority Debt ”), and (ii) neither Holdings nor its direct or indirect Restricted Subsidiaries shall issue, directly or indirectly, or permit or suffer to remain outstanding, any Priority Debt to any Permitted Holder (including Holdings and its Subsidiaries); provided that, notwithstanding the foregoing, the Permitted Holders may acquire in the secondary market term loans outstanding under the Credit Agreement so long as (x) such term loans held by the Permitted Holders shall not exceed, in the aggregate, 10% of the term loans then outstanding under the Credit Agreement, and (y) all term loans owned by the Permitted Holders are excluded in any required lender votes (but not, for avoidance of doubt, any votes requiring all lenders or each affected lender) under the Credit Agreement.

 

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Section 4.10 Asset Sales .

(a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale, unless:

(1) the Issuer or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets sold or otherwise disposed of; and

(2) at least 75.0% of the consideration therefor received by the Issuer or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that the amount of:

(A) any liabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most recent balance sheet or in the footnotes thereto) of the Issuer or such Restricted Subsidiary, other than liabilities that are by their terms subordinated to the Notes, that are assumed by the transferee of any such assets and for which the Issuer and all of its Restricted Subsidiaries have been validly released by all creditors in writing,

(B) any securities, notes or other obligations or assets received by the Issuer or such Restricted Subsidiary from such transferee that are converted by the Issuer or such Restricted Subsidiary into Cash Equivalents (to the extent of the Cash Equivalents received) within 180 days following the closing of such Asset Sale, and

(C) any Designated Non-cash Consideration received by the Issuer or such Restricted Subsidiary in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Non-cash Consideration received since February 26, 2010 pursuant to this clause (C) that is at that time outstanding, not to exceed the greater of $75,000,000 and 3% of Net Tangible Assets at the time of the receipt of such Designated Non-cash Consideration, with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value,

shall be deemed to be cash for purposes of this provision and for no other purpose.

(b) Within 365 days after the receipt of any Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale.

(1) to permanently reduce:

(A) Obligations under the Credit Agreement or other Secured Indebtedness, (and, in the case of revolving Obligations, to correspondingly reduce commitments with respect thereto);

(B) Obligations under other unsecured Pari Passu Indebtedness (and, in the case of revolving Obligations, to correspondingly reduce commitments with respect thereto); provided that the Issuer shall equally and ratably reduce Obligations under the Notes or as provided under Section 3.07 hereof by making an offer (in accordance with the procedures set forth in Section 3.09 hereof under Section 4.10(c) hereof) to all Holders of Notes to purchase their Notes at 100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid, or

(C) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor, other than Indebtedness owed to the Issuer or another Restricted Subsidiary, or

 

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(2) (A) to acquire long term productive assets (including Capital Stock of any Person or any Investment otherwise permitted hereunder) used or useful in the business of the Issuer and its Restricted Subsidiaries or in a Similar Business, (B) to make an Investment in any one or more businesses, provided that such Investment in any business is in the form of the acquisition of Capital Stock and results in the Issuer or another of its Restricted Subsidiaries, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, or (C) to acquire properties or other assets that replace the businesses, properties and/or assets that are the subject of such Asset Sale.

(c) Any Net Proceeds from the Asset Sale that are not invested or applied as provided and within the time period set forth in Section 4.10(b) hereof shall be deemed to constitute “ Excess Proceeds .” When the aggregate amount of Excess Proceeds exceeds $25,000,000, the Issuer shall make an offer to all Holders of the Notes and, if required by the terms of any Indebtedness that is pari passu with the Notes (“ Pari Passu Indebtedness ”), to the holders of such Pari Passu Indebtedness (an “ Asset Sale Offer ”), to purchase the maximum aggregate principal amount of the Notes and such Pari Passu Indebtedness that is an integral multiple of $1,000 (but in a minimum amount of $2,000) 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 accreted value, if less), plus accrued and unpaid interest and Special Interest, if any, thereon to the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture. The Issuer shall commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceed $25,000,000 by delivering the notice required pursuant to the terms of this Indenture, with a copy to the Trustee or otherwise in accordance with the procedures of DTC. The Issuer, in its sole discretion, may satisfy the foregoing obligations with respect to any Net Proceeds from an Asset Sale by making an Asset Sale Offer with respect to such Net Proceeds prior to the expiration of the relevant 365 days or with respect to Excess Proceeds of $25,000,000 or less.

To the extent that the aggregate amount of Notes and such Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes, subject to compliance with other covenants contained in this Indenture. If the aggregate principal amount of Notes or the Pari Passu Indebtedness surrendered in an Asset Sale Offer by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and the Issuer shall select such Pari Passu Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Pari Passu Indebtedness tendered in accordance with Section 3.09. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds that resulted in the Asset Sale Offer shall be reset to zero (regardless of whether there are any remaining Excess Proceeds upon such completion).

(d) Pending the final application of any Net Proceeds pursuant to this Section 4.10, the holder of such Net Proceeds may apply such Net Proceeds temporarily to reduce Indebtedness outstanding under a revolving credit facility or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.

(e) The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent

 

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that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations in this Indenture by virtue thereof.

 

Section 4.11 Transactions with Affiliates .

(a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, make any payment to, or sell, convey, transfer or otherwise dispose of (including by way of a lease, assignment or otherwise) any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an “ Affiliate Transaction ”) involving aggregate payments or consideration in excess of $2,000,000, unless:

(1) such Affiliate Transaction is on terms that are not materially less favorable to the Issuer or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis; and

(2) the Issuer delivers to the Trustee:

(A) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $15,000,000, a resolution adopted by the majority of the board of directors of the Issuer approving such Affiliate Transaction and set forth in an Officer’s Certificate delivered to the Trustee, certifying that such Affiliate Transaction complies with clause (1) of this Section 4.11(a); and

(B) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $50,000,000, a letter from an Independent Financial Advisor delivered to the Trustee and stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view.

(b) Section 4.11(a) hereof shall not apply to the following:

(1) transactions between or among the Issuer or any of its Restricted Subsidiaries;

(2) Restricted Payments permitted by Section 4.07 hereof and Investments constituting Permitted Investments;

(3) the payment of reasonable and customary fees and compensation paid to, and indemnities and reimbursements provided on behalf of, for the benefit of, current or former officers, directors, employees or consultants of the Issuer, any of its direct or indirect parent companies or any of its Restricted Subsidiaries;

(4) (A) the Transaction and the payment of all reasonable fees and expenses related to the Transaction, including Transaction Expenses; and (B) the 2012 Transactions and the payment of all reasonable fees and expenses related to the 2012 Transactions, including 2012 Transaction Expenses;

 

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(5) transactions with customers, clients, suppliers, contractors, joint venture partners 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 the Issuer and its Restricted Subsidiaries, in the reasonable determination of the board of directors of the Issuer or the senior management thereof, or are on terms at least as favorable as would reasonably have been obtained at such time from an unaffiliated party;

(6) the issuance of Equity Interests (other than Disqualified Stock) of the Issuer to any direct or indirect parent company of the Issuer or to any Permitted Holder or to any director, officer, employee or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any of its direct or indirect parent companies or any of its Restricted Subsidiaries;

(7) payments by the Issuer or any of its Restricted Subsidiaries to the Sponsors or any of their Affiliates 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 approved by a majority of the board of directors of the Issuer in good faith;

(8) payments by or Indebtedness (and cancellation thereof), Disqualified Stock and Preferred Stock of the Issuer and its Restricted Subsidiaries to any future, current or former employee, director, officer or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any of its Subsidiaries or any of its direct or indirect parent companies 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 distributor equity plan or agreement; and any employment agreements, stock option plans and other compensatory arrangements (and any successor plans thereto) and any supplemental executive retirement benefit plans or arrangements with any such employees, directors, officers, distributors or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) that are, in each case, approved by the board of directors of the Issuer in good faith;

(9) investments by Permitted Holders in securities of the Issuer or any of its Restricted Subsidiaries (and payment of reasonable out of pocket expenses incurred by such Persons in connection therewith) so long as the investment is being offered generally to other investors on the same or more favorable terms;

(10) (x) so long as no Event of Default shall have occurred and is continuing or shall result therefrom, (i) the payment of management, consulting, monitoring and advisory fees pursuant to the Management Agreement as in effect on February 26, 2010 not to exceed $7,500,000 in any fiscal year of the Issuer, and (ii) payment of all customary termination and transaction fees up to the amounts set forth in such Management Agreement and (y) payment of all indemnities and reimbursement of expenses under such Management Agreement;

(11) sales of accounts receivable, or participation therein, in connection with any Receivables Facility;

(12) the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Initial Exchange Date; provided that the existence of, or the performance by the Issuer or any of its Restricted

 

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Subsidiaries of obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Initial Exchange Date shall only be permitted by this clause (12) to the extent that the terms of any such amendment or new agreement are not otherwise disadvantageous in any material respect in the good faith judgment of the board of directors of the Issuer to the Holders when taken as a whole as compared to the original agreement in effect on the Initial Exchange Date;

(13) payments on the Notes (and any exchange notes to be issued in exchange therefor) in accordance with this Indenture, payments on the Existing Senior Notes (and any exchange notes to be issued in exchange therefor) in accordance with the Existing Senior Note Indenture, payments on the 2020 Notes in accordance with the 2020 Notes Indenture and payments in respect of Obligations under the Credit Agreement; provided that such Obligations were acquired by an Affiliate of the Issuer in compliance with this Indenture;

(14) transactions in which the Issuer or any of its 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 the Issuer or such Restricted Subsidiary from a financial point of view or stating that the terms are not materially less favorable to the Issuer or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis;

(15) any agreement as in effect as of February 26, 2010 and set forth on Schedule 6.11 to the Credit Agreement on February 26, 2010, or any amendment thereto (so long as any such amendment is not disadvantageous in any material respect in the good faith judgment of the board of directors of the Issuer to the Holders when taken as a whole as compared to the applicable agreement as in effect on February 26, 2010); and

(16) payments by the Issuer (and any direct or indirect parent company thereof) and its Subsidiaries pursuant to tax sharing agreements among the Issuer (and any such parent company) and its Subsidiaries; provided that in each case the amount of such payments in any fiscal year does not exceed the amount that the Issuer, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent of the amount received from Unrestricted Subsidiaries) would be required to pay in respect of foreign, federal, state and local taxes for such fiscal year were the Issuer, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such parent entity.

 

Section 4.12 Liens .

The Issuer shall not, and shall not permit any Guarantor to, directly or indirectly, create, incur, assume or suffer to exist any Lien (except any Permitted Lien) that secures any Indebtedness or any related Guarantee of any such entity, on any asset or property of the Issuer or any Guarantor, or any income or profits therefrom, or assign or convey any right to receive income therefrom; unless:

(1) in the case of Liens securing Subordinated Indebtedness, the Notes and related Guarantees are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens; or

(2) in all other cases, the Notes or the Guarantees are equally and ratably secured,

except that the foregoing shall not apply to (A) Liens securing the Notes and the related Guarantees, (B) Liens securing Indebtedness under the Credit Facilities incurred in compliance with Section 4.09(b)(1)

 

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hereof, and (C) Liens securing any Obligations in respect of other Indebtedness of the Issuer or a Guarantor incurred in compliance with Section 4.09 hereof, in the case of this clause (C), so long as the Consolidated Secured Leverage Ratio of the Issuer and its Restricted Subsidiaries for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which the Indebtedness secured by such Lien is incurred would have been no more than 3.25 to 1.00.

Any Lien created for the benefit of the Holders of the Notes pursuant to this Section 4.12 shall be deemed automatically and unconditionally released and discharged upon the release and discharge of the applicable Lien described in clauses (1) and (2) of this Section 4.12.

 

Section 4.13 Corporate Existence .

Subject to Article 5 hereof, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Issuer or any such Restricted Subsidiary; provided that the Issuer shall not be required to preserve the corporate, partnership or other existence of any of its Restricted Subsidiaries, if the Issuer in good faith shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and its Restricted Subsidiaries, taken as a whole.

 

Section 4.14 Offer to Repurchase Upon Change of Control .

(a) If a Change of Control occurs, unless the Issuer has previously or concurrently mailed a redemption notice with respect to all the outstanding Notes as set forth in Section 3.07 hereof, the Issuer shall make an offer to purchase all of the Notes pursuant to the offer described below (the “ Change of Control Offer ”) at a price in cash (the “ Change of Control Payment ”) equal to 101.0% of the aggregate principal amount thereof, plus accrued and unpaid interest and Special Interest, if any, to the date of purchase, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date. Within 30 days following any Change of Control, the Issuer shall deliver notice of such Change of Control Offer, with a copy to the Trustee, to each Holder to the registered address of such Holder (or otherwise delivered in accordance with the procedures of DTC) with the following information:

(1) that a Change of Control Offer is being made pursuant to this Section 4.14 and that all Notes properly tendered pursuant to such Change of Control Offer will be accepted for payment by the Issuer;

(2) the purchase price and the purchase date, which will be no earlier than 30 days nor later than 60 days from the date such notice is delivered (the “ Change of Control Payment Date ”);

(3) that any Note not properly tendered will remain outstanding and continue to accrue interest and Special Interest, if any;

(4) that unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest and Special Interest, if any, on the Change of Control Payment Date;

(5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled “Option of Holder to

 

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Elect Purchase” on the reverse of such Notes completed, to the paying agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(6) that Holders shall be entitled to withdraw their tendered Notes and their election to require the Issuer to purchase such Notes, provided that the paying agent receives, not later than the close of business on the second Business Day prior to the date of the Change of Control Payment Date, a telegram, facsimile transmission or letter setting forth the name of the Holder of the Notes, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;

(7) that if the Issuer is redeeming less than all of the Notes, the Holders of the remaining Notes will be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered (which must be equal to $2,000 or an integral multiple of $1,000 in excess thereof);

(8) if such notice is mailed prior to the occurrence of a Change of Control, that the Change of Control Offer is conditional on the occurrence of such Change of Control; and

(9) the other instructions, as determined by the Issuer, consistent with this Section 4.14, that a Holder must follow.

The notice, if delivered in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. If (a) the notice is delivered in a manner herein provided and (b) any Holder fails to receive such notice or a Holder receives such notice but it is defective, such Holder’s failure to receive such notice or such defect shall not affect the validity of the proceedings for the purchase of the Notes as to all other Holders that properly received such notice without defect.

The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase by the Issuer of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.14, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations in this Section 4.14 by virtue thereof.

(b) On the Change of Control Payment Date, the Issuer shall, to the extent permitted by law,

(1) accept for payment all Notes issued by it or portions thereof properly tendered pursuant to the Change of Control Offer,

(2) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered, and

(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuer.

(c) In the event a Change of Control occurs at a time when the Issuer is prohibited by the terms of any Secured Indebtedness from purchasing Notes, then prior to the delivery of the notice of a

 

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Change of Control to holders of Notes but in any event within 45 days following any Change of Control, the Issuer shall either (1) repay in full all Obligations, and terminate all commitments, under the Credit Facilities and all such other Secured Indebtedness, the terms of which require repayment and/or termination of commitments upon a Change of Control or offer to repay in full all Obligations, and terminate all commitments, under the Credit Facilities and all such other Secured Indebtedness and to repay the Obligations owed to (and terminate all commitments of) each lender which has accepted such offer or (2) obtain the requisite consents under the agreements governing all such Secured Indebtedness to permit the repurchase of the Notes.

(d) The Issuer shall not be required to make a Change of Control Offer following 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 this Section 4.14 applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

(e) The provisions of this Section 4.14 relative to the Issuer’s obligation to make an offer to repurchase the Notes as a result of a Change of Control may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes.

(f) Other than as specifically provided in this Section 4.14, any purchase pursuant to this Section 4.14 shall be made pursuant to the provisions of Sections 3.02, 3.05 and 3.06 hereof.

 

Section 4.15 Limitation on Guarantees of Indebtedness by Restricted Subsidiaries .

The Issuer shall not permit any of its Wholly-Owned Restricted Subsidiaries (and non-Wholly-Owned Subsidiaries if such non-Wholly-Owned Subsidiaries guarantee other capital markets debt securities of the Issuer or any Guarantor), other than a Subsidiary Guarantor, to guarantee the payment of any Indebtedness of the Issuer or any other Subsidiary Guarantor unless:

(1) such Restricted Subsidiary within 30 days executes and delivers a supplemental indenture to this Indenture, the form of which is attached as Exhibit D hereto, providing for a Guarantee by such Restricted Subsidiary, except that with respect to a guarantee of Indebtedness of the Issuer or any Subsidiary Guarantor, if such Indebtedness is by its express terms subordinated in right of payment to the Notes or such Guarantor’s Guarantee, any such guarantee by such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Guarantee substantially to the same extent as such Indebtedness is subordinated to the Notes:

(2) such Restricted Subsidiary waives and shall not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other rights against the Issuer or any other Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Guarantee; and

(3) such Restricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to the effect that:

(a) such Guarantee has been duly executed and authorized; and

 

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(b) such Guarantee constitutes a valid, binding and enforceable obligation of such Restricted Subsidiary, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity;

provided that this Section 4.15 shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary.

Notwithstanding the foregoing and the other provisions of this Indenture, any Guarantee by a Restricted Subsidiary shall provide by its terms that it shall be automatically and unconditionally released and discharged under the circumstances set forth in Section 11.06 hereof. The Issuer may elect, in its sole discretion, to cause any Subsidiary that is not otherwise required to be a Guarantor to become a Guarantor, in which case such Subsidiary shall not be required to comply with the 30 day period described in clause (1) of this Section 4.15.

 

Section 4.16 Activities of Holdings .

Holdings shall maintain direct ownership of 100% of Capital Stock of the Issuer. Holdings shall not engage in any business or operations other than (i) the ownership of all the outstanding shares of the Capital Stock of the Issuer, (ii) performance of its obligations under and in connection with the Credit Facilities, this Indenture, the Notes (and any exchange notes to be issued in exchange therefor), the Existing Senior Notes Indenture, the Existing Senior Notes (and any exchange notes to be issued in exchange therefor), the GSMP Agreement, the 2020 Notes Indenture, the 2020 Notes and the other agreements contemplated hereby and thereby, (iii) actions incidental to the consummation of the Transactions or the 2012 Transactions, (iv) actions required by law to maintain its existence, (v) any public offering of its common stock or any other issuance of its Equity Interests, or the incurrence of any Indebtedness, and performance of its obligations under any agreements related thereto, (vi) the entry into, and the performance of its obligations under and in connection with (x) contracts and agreements with officers, directors and employees of it or the Issuer or any Subsidiary thereof relating to their employment or directorships, (y) insurance policies and related contracts and agreements and (z) equity subscription agreements, registration rights agreements, voting and other stockholder agreements and other agreements in respect of its Equity Interests, (vii) the payment of operating and business expenses and taxes incidental to its ownership of the Issuer, (viii) the performance of obligations under and compliance with its certificate of incorporation and by-laws, or any applicable law, ordinance, regulation, rule, order, judgment, decree or permit, including, without limitation, as a result of or in connection with the activities of the Issuer or its Subsidiaries, and (ix) activities incidental to the foregoing.

 

Section 4.17 Business Activities .

The Issuer shall not, and shall not permit any Restricted Subsidiary, to engage in any business other than a Similar Business.

 

Section 4.18 Limitations on Sale and Leaseback Transactions .

The Issuer will not, and will not permit any of its Restricted Subsidiaries to, enter into any Sale and Leaseback Transaction; provided , however , that the Issuer and any Restricted Subsidiary may enter into a Sale and Leaseback Transaction if (a) either (1) the Attributable Debt arising from such Sale and Leaseback Transaction is permitted by Section 4.09(b)(4)(x) or (2) the Issuer or the relevant Restricted Subsidiary, as the case may be, could have incurred Indebtedness pursuant to the Fixed Charge Coverage Ratio Test described in Section 4.09(a) hereof and (b) to the extent constituting an Asset Sale, the proceeds of such transaction are applied in accordance with Section 4.10 hereof.

 

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Section 4.19 Maintenance of Properties .

The Issuer will, and will cause each of the Restricted Subsidiaries of the Issuer to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all tangible properties necessary in the operation of the business of the Issuer and its Restricted Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof, except to the extent that the failure to do any of the foregoing could not reasonably be expected to have a material adverse effect on the business of the Issuer and its Restricted Subsidiaries taken as a whole.

 

Section 4.20 Insurance .

The Issuer will maintain or cause to be maintained, with financially sound and reputable insurers, such public liability insurance, third party property damage insurance, business interruption insurance and casualty insurance with respect to liabilities, losses or damage in respect of the material assets, properties and businesses of the Issuer and its Restricted Subsidiaries as may customarily be carried or maintained under similar circumstances by Persons of established reputation engaged in Similar Businesses of similar sizes, in each case in such amounts (giving effect to self-insurance), with such deductibles, covering such risks and otherwise on such terms and conditions as shall be customary for such Persons, except to the extent that the failure to do any of the foregoing could not reasonably be expected to have a material adverse effect on the business of the Issuer and its Restricted Subsidiaries taken as a whole.

 

Section 4.21 Books and Records .

The Issuer will, and will cause each of Holdings and the Restricted Subsidiaries of the Issuer to, keep adequate books of record and accounts to allow preparation of financial statements in accordance with GAAP as then in effect.

 

Section 4.22 Compliance with Laws .

The Issuer will, and will cause each of Holdings and the Restricted Subsidiaries of the Issuer to comply, in all material respects with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority (including all environmental laws), except to the extent that the failure to do any of the foregoing could not reasonably be expected to have a material adverse effect on the business of the Issuer and its Restricted Subsidiaries taken as a whole.

 

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ARTICLE 5

SUCCESSORS

 

Section 5.01 Merger, Consolidation or Sale of All or Substantially All Assets .

(a) The Issuer shall not consolidate or merge with or into or wind up into (whether or not the Issuer is the surviving entity), or sell, transfer, convey or otherwise dispose (including by way of a lease, assignment or otherwise) of all or substantially all of its properties or assets, in one or more related transactions, to any Person unless:

(1) either: (x) the Issuer is the surviving corporation; or (y) 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 will have been made is a Person organized or existing under the laws of the jurisdiction of organization of the Issuer or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Issuer or such Person, as the case may be, being herein called the “ Successor Company ”); provided, that prior to the Disposition Date, the Successor Company shall be a corporation, and after the Disposition Date if the Successor Company is not a corporation, a co-obligor of the Notes is a corporation;

(2) the Successor Company, if other than the Issuer, expressly assumes all the obligations of the Issuer under the Notes pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(3) immediately after such transaction, no Default exists;

(4) immediately after giving pro forma effect to such transaction and any related financing transactions, either (x) the Successor Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof, or (y) the Fixed Charge Coverage Ratio for the Successor Company and its Restricted Subsidiaries would be equal to or greater than the Fixed Charge Coverage Ratio for the Issuer and its Restricted Subsidiaries immediately prior to such transaction;

(5) each Guarantor, unless it is the other party to the transactions described above, in which case Section 5.01(c)(1)(B) hereof shall apply, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Person’s obligations under this Indenture and the Notes; and

(6) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with this Indenture.

(b) The Successor Company shall succeed to, and be substituted for the Issuer, as the case may be, under this Indenture, the Guarantees and the Notes, as applicable. Notwithstanding clauses (3) and (4) of Section 5.01(a) hereof,

(1) any Restricted Subsidiary may consolidate with or merge into or transfer all or part of its properties and assets to the Issuer, and

(2) the Issuer may merge with an Affiliate of the Issuer, as the case may be, solely for the purpose of reincorporating the Issuer in the United States, any state thereof, the District of Columbia or any territory thereof so long as the amount of Indebtedness of the Issuer and its Restricted Subsidiaries is not increased thereby.

 

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(c) Subject to certain limitations described in this Indenture governing release of a Guarantee upon the sale, disposition or transfer of a Guarantor, no Guarantor shall, and the Issuer shall not permit any Guarantor to, consolidate or merge with or into or wind up into (whether or not the Issuer or Guarantor is the surviving entity), 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 unless:

(1) (A) such Guarantor is the surviving entity or the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of such Guarantor, as the case may be, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Guarantor or such Person, as the case may be, being herein called the “ Successor Person ”);

(B) the Successor Person, if other than such Guarantor, expressly assumes all the obligations of such Guarantor under this Indenture and such Guarantor’s related Guarantee pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(C) immediately after such transaction, no Default exists; and

(D) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with this Indenture; or

(2) the transaction is made in compliance with clauses (1) and (2) of Section 4.10(a) hereof.

(d) In the case of clause (1) of Section 5.01(c) hereof, the Successor Person shall succeed to, and be substituted for, such Guarantor under this Indenture and such Guarantor’s Guarantee. Notwithstanding the foregoing, any Guarantor may (1) merge or consolidate with or into or wind up into or transfer all or part of its properties and assets to another Guarantor or the Issuer, (2) merge with a Restricted Subsidiary of the Issuer solely for the purpose of reincorporating the Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof or (3) 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 Guarantor, in each case without complying with clauses (a) through (c) of this Section 5.01 and in the case of clauses (2) and (3) subject to the Successor Person being a Guarantor.

 

Section 5.02 Successor Company Substituted .

Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Issuer in accordance with Section 5.01 hereof, the successor entity formed by such consolidation or into or with which the Issuer is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture referring to the Issuer shall refer instead to the successor entity and not to the Issuer), and may exercise every right and power of the Issuer under this Indenture with the same effect as if such successor Person had been named as the Issuer herein; provided that the predecessor Issuer shall not be relieved from the obligation to pay the principal of and interest on the Notes except in the case of a sale, assignment, transfer, conveyance or other disposition of all or substantially all of the Issuer’s assets that meets the requirements of Section 5.01 hereof.

 

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ARTICLE 6

DEFAULTS AND REMEDIES

 

Section 6.01 Events of Default .

(a) An “ Event of Default ” wherever used herein, means any one of the following events:

(1) default in payment when due and payable, upon redemption, acceleration or otherwise, of principal of, or premium, if any, on the Notes;

(2) default for 30 days (or, until the Disposition Date, 5 days unless the GSMP Group consents to a longer grace period not to exceed 30 days) or more in the payment when due of interest or Special Interest, if any, on or with respect to the Notes;

(3) (A) failure by the Issuer or any Guarantor to comply with any of its obligations, covenants or agreements contained in Article 5 (with respect to the Issuer only) hereof or (B) failure by the Issuer or any Guarantor for 60 days after receipt of written notice given by the Trustee or the Holders of not less than 25.0% in principal amount of the then outstanding Notes to comply with any of its obligations, covenants or agreements (other than a default referred to in clauses (1), (2) and (3)(A)) contained in this Indenture or the Notes; provided that, notwithstanding anything to the contrary in this clause (B), until the Disposition Date (unless the GSMP Group consents to longer grace periods not to exceed the period provided in the foregoing clause (B)), failure by the Issuer or any Guarantor to comply with their respective obligations (x) under Sections 4.07 through 4.12, inclusive, 4.14, 4.15, 4.16 and Article 5 (other than with respect to the Issuer) shall result in an Event of Default upon the occurrence of such failure and (y) under any other provision of this Indenture or the Notes (to the extent such failure does not otherwise constitute a Default under clause (1), (2) or (3)(A)) shall result in an Event of Default after such failure continues for 30 days after receipt of written notice given by the Trustee or the Holders of not less than 25.0% in principal amount of the Notes;

(4) (x) until the Disposition Date, the occurrence of any event of default under any Indebtedness (other than Indebtedness under the Credit Facilities) of the Issuer or any Significant Subsidiary or (y) the Issuer or any Significant Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to the Issuer or a Restricted Subsidiary of the Issuer) 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 of the foregoing clauses (x) or (y), if the total amount of such Indebtedness as to which a default or event of default has occurred or that is unpaid or accelerated exceeds $35,000,000,

(5) failure by the Issuer or any Significant Subsidiary to pay final judgments aggregating in excess of $35,000,000 (net of amounts covered by insurance policies issued by reputable and creditworthy insurance companies), which final judgments remain unpaid, undischarged and unstayed for a period of more than 60 days after such judgment becomes final, 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;

 

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(6) the Issuer or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of the Issuer), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:

(i) commences proceedings to be adjudicated bankrupt or insolvent;

(ii) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy Law;

(iii) consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;

(iv) makes a general assignment for the benefit of its creditors; or

(v) generally is not paying its debts as they become due;

(7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against the Issuer or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements for the Issuer), would constitute a Significant Subsidiary, in a proceeding in which the Issuer or any such Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements for the Issuer), would constitute a Significant Subsidiary, is to be adjudicated bankrupt or insolvent;

(ii) appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements for the Issuer), would constitute a Significant Subsidiary, or for all or substantially all of the property of the Issuer or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements for the Issuer), would constitute a Significant Subsidiary; or

(iii) orders the liquidation of the Issuer or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements for the Issuer), would constitute a Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days;

(8) the Guarantee of any Significant Subsidiary shall for any reason cease to be in full force and effect or be declared null and void in a final non-appealable judgment of a court of competent jurisdiction or any responsible officer of any Guarantor that is a Significant Subsidiary, as the case may be, denies in writing that it has any further liability under its Guarantee or gives written notice to such effect, other than by reason of the termination of this Indenture or the release of any such Guarantee in accordance with this Indenture;

 

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(9) until the Disposition Date (unless waived by the GSMP Group), (A) failure by the Issuer for 30 days after receipt of written notice given by the GSMP Group to comply with any of its covenants and other agreements in the GSMP Agreement or (B) failure of any representation, warranty, certification or statement made or deemed to have been made by or on behalf of the Issuer or by any of its officers or employees in any statement or certificate at any time given by or on behalf of the Issuer in writing pursuant to the GSMP Agreement to be true and correct in any material respect on the date as of which made; or

(10) Holdings ceases to own 100% of the issued and outstanding Equity Interests of the Issuer.

(b) In the event of any Event of Default specified in clause (4) of Section 6.01(a), such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) 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:

(1) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged; or

(2) holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or

(3) the default that is the basis for such Event of Default has been cured.

 

Section 6.02 Acceleration .

If any Event of Default (other than an Event of Default specified in clause (6) or (7) of Section 6.01(a) hereof with respect to the Issuer) occurs and is continuing under this Indenture, the Trustee or the Holders of at least 25.0% in principal amount of the then total outstanding Notes may declare the principal, premium, if any, interest and Special Interest, if any, and any other monetary obligations on all the then outstanding Notes to be due and payable immediately.

Notwithstanding the foregoing, in the case of an Event of Default arising under clause (6) or (7) of Section 6.01(a) hereof with respect to the Issuer, all outstanding Notes shall be due and payable immediately without further action or notice.

The Trustee may withhold from the Holders notice of any continuing Default, except a Default relating to the payment of principal, premium, if any, or interest, if it determines that withholding notice is in their interest. In addition, the Trustee shall have no obligation to accelerate the Notes if in the best judgment of the Trustee acceleration is not in the best interests of the Holders of the Notes.

The Required Holders by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest, or premium that has become due solely because of the acceleration) have been cured or waived.

 

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Section 6.03 Other Remedies .

If, at any time prior to the Disposition Date, a Default in the payment when due of interest or Special Interest, if any, on, principal of, or premium, if any, on, the Notes or an Event of Default has occurred and is continuing, then in each case the Notes will accrue interest at the stated interest rate on the Notes plus the Default Interest Rate until the earlier of such time as no such Default or such Event of Default shall be continuing (to the extent that the payment of such interest shall be legally enforceable) or the Disposition Date. On and after the Disposition Date, any amounts payable under or in respect of the Notes not paid when due will accrue interest at the stated interest rate on the Notes plus the Default Interest Rate until such time as such amounts are paid in full, including any interest thereon (to the extent that the payment of such overdue interest shall be legally enforceable). Default interest shall be payable in cash on demand and, to the extent applicable, in accordance with Section 2.12 hereof.

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note 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. All remedies are cumulative to the extent permitted by law.

 

Section 6.04 Waiver of Past Defaults .

The Required Holders by written notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences except a continuing Default in the payment of interest on, premium, if any, or the principal of any Note held by a non-consenting Holder (including in connection with an Asset Sale Offer or a Change of Control Offer); provided , subject to Section 6.02 hereof, that the Required Holders may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. Upon any such waiver, 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 right consequent thereon.

 

Section 6.05 Control by Majority .

Holders of a majority in aggregate principal amount of the then total outstanding Notes 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 this Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder of a Note or that would involve the Trustee in personal liability.

 

Section 6.06 Limitation on Suits .

Subject to Section 6.07 hereof, no Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:

(1) such Holder has previously given the Trustee notice that an Event of Default is continuing;

 

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(2) Holders of at least 25.0% in principal amount of the total outstanding Notes have requested the Trustee to pursue the remedy;

(3) Holders of the Notes have offered the Trustee reasonable security or indemnity against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5) the Required Holders have not given the Trustee a direction inconsistent with such request within such 60-day period.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

 

Section 6.07 Rights of Holders of Notes to Receive Payment .

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and interest and Special Interest, if any, on the Note, on or after the respective due dates expressed in the Note (including in connection with an Asset Sale Offer or a Change of Control Offer), 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.

 

Section 6.08 Collection Suit by Trustee .

If an Event of Default specified in Section 6.01(a)(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal of, premium, if any, and interest and Special Interest, if any, remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

Section 6.09 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 proceedings, the Issuer, 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 has been instituted.

 

Section 6.10 Rights and Remedies Cumulative .

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07 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.

 

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Section 6.11 Delay or Omission Not Waiver .

No delay or omission of the Trustee or of any Holder of any Note 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 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.

 

Section 6.12 Trustee May File Proofs of Claim .

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes including the Guarantors), its creditors or its property and shall be entitled and empowered to participate as a member in any official committee of creditors appointed in such matter and to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such 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 to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained 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 Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

Section 6.13 Priorities .

If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:

(i) to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

(ii) to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and interest and Special Interest, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and

(iii) to the Issuer or to such party as a court of competent jurisdiction shall direct including a Guarantor, if applicable.

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.13.

 

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Section 6.14 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 a 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 6.14 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10.0% in principal amount of the then outstanding Notes.

ARTICLE 7

TRUSTEE

 

Section 7.01 Duties of Trustee .

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of 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 duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, 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 any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(i) this paragraph (c) does not limit the effect of paragraph (b) of this Section 7.01;

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved in a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and

(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 hereof.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to this Section 7.01.

 

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(e) The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders of the Notes unless the Holders have offered to the Trustee indemnity or security reasonably satisfactory to it against any loss, liability or expense.

(f) 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. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

Section 7.02 Rights of Trustee .

(a) The Trustee may conclusively rely upon 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, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(b) 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 such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by an Officer of the Issuer.

(f) None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

(g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.

(h) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

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(i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(j) [reserved]

(k) The Trustee shall not be deemed to owe any fiduciary duty to the holders of Pari Passu Indebtedness of the Issuer and shall not be liable to any such holder for any action it takes or omits to take within the rights or powers conferred upon it by this Indenture.

(l) Except with respect to Section 4.01, the Trustee shall have no duty to inquire as to the performance of the Company with respect to the covenants contained in Article 4.

(m) Delivery of reports, information and documents to the Trustee under Section 4.03 is for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

 

Section 7.03 Individual Rights of Trustee .

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

 

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 or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

 

Section 7.05 Notice of Defaults .

If a Default occurs and is continuing and if it is known to the Trustee, the Trustee shall deliver to Holders of Notes a notice of the Default within 90 days after it occurs. Except in the case of a Default relating to the payment of principal, premium, if any, or interest on any Note, the Trustee may withhold from the Holders notice of any continuing Default if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. The Trustee shall not be deemed to know of any Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is such a Default is received by the Trustee at the Corporate Trust Office of the Trustee.

 

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Section 7.06 Reports by Trustee to Holders of the Notes .

Within 60 days after each May 15, beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with Trust Indenture Act Section 313(a) (but if no event described in Trust Indenture Act Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with Trust Indenture Act Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by Trust Indenture Act Section 313(c).

A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Issuer and filed with the SEC and each stock exchange on which the Notes are listed in accordance with Trust Indenture Act Section 313(d). The Issuer shall promptly notify the Trustee when the Notes are listed on any stock exchange.

 

Section 7.07 Compensation and Indemnity .

The Issuer shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the parties shall agree in writing from time to time. 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 promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

The Issuer and the Guarantors, jointly and severally, shall indemnify the Trustee for, and hold the Trustee harmless against, any and all loss, damage, claims, liability or expense (including attorneys’ fees) incurred by it in connection with the acceptance or administration of this trust and the performance of its duties hereunder (including the costs and expenses of enforcing this Indenture against the Issuer or any of the Guarantors (including this Section 7.07) or defending itself against any claim whether asserted by any Holder, the Issuer or any Guarantor, or liability in connection with the acceptance, exercise or performance of any of its powers or duties hereunder). The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee may have separate counsel and the Issuer shall pay the fees and expenses of such counsel. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad faith.

The obligations of the Issuer under this Section 7.07 shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee.

To secure the payment obligations of the Issuer and the Guarantors in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except money or property held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(a)(6) or (7) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

 

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The Trustee shall comply with the provisions of Trust Indenture Act Section 313(b)(2) to the extent applicable.

 

Section 7.08 Replacement of Trustee .

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Required Holders may remove the Trustee by so notifying the Trustee and the Issuer in writing. The Issuer may remove the Trustee if:

(a) the Trustee fails to comply with Section 7.10 hereof;

(b) the Trustee is adjudged a bankrupt or an insolvent Person or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

(c) a custodian or public officer takes charge of the Trustee or its property; or

(d) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Required Holders may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the Issuer’s expense), the Issuer or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

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 deliver a notice of its succession to 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 have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

 

Section 7.09 Successor Trustee by Merger, etc .

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.

 

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Section 7.10 Eligibility; Disqualification .

There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.

This Indenture shall always have a Trustee who satisfies the requirements of Trust Indenture Act Sections 310(a)(1), (2) and (5). The Trustee is subject to Trust Indenture Act Section 310(b).

 

Section 7.11 Preferential Collection of Claims Against Issuer .

The Trustee is subject to Trust Indenture Act Section 311(a), excluding any creditor relationship listed in Trust Indenture Act Section 311(b). A Trustee who has resigned or been removed shall be subject to Trust Indenture Act Section 311(a) to the extent indicated therein.

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance .

The Issuer may, at its option and at any time, elect to have either Section 8.02 or 8.03 hereof applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.

 

Section 8.02 Legal Defeasance and Discharge .

Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Issuer and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes and Guarantees on the date the conditions set forth below are satisfied (“ Legal Defeasance ”). For this purpose, Legal Defeasance means that the Issuer shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (a) and (b) below, to have satisfied all its other obligations under such Notes and this Indenture including that of the Guarantors (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same), and to have cured all then existing Events of Default, except for the following provisions which shall survive until otherwise terminated or discharged hereunder:

(a) the rights of Holders of Notes to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due solely out of the trust created pursuant to this Indenture referred to in Section 8.04 hereof;

(b) the Issuer’s obligations with respect to Notes concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

 

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(c) the rights, powers, trusts, duties and immunities of the Trustee, and the Issuer’s obligations in connection therewith; and

(d) this Section 8.02.

Subject to compliance with this Article 8, the Issuer may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

 

Section 8.03 Covenant Defeasance .

Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuer and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants (each, a “ Defeased Covenant ” and collectively, the “ Defeased Covenants ”) contained in Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21 and 4.22 hereof and clauses (3) and (4) of Section 5.01(a), Sections 5.01(c) and 5.01(d) hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 hereof are satisfied (“ Covenant Defeasance ”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such Defeased Covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such Defeased Covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such Defeased Covenant or by reason of any reference in any such Defeased Covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(a)(3), 6.01(a)(4), 6.01(a)(5), 6.01(a)(6) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of the Issuer) would constitute a Significant Subsidiary), 6.01(a)(7) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries or any group of Restricted Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of the Issuer) would constitute a Significant Subsidiary), 6.01(a)(8) and 6.01(a)(9) hereof shall not constitute Events of Default.

 

Section 8.04 Conditions to Legal or Covenant Defeasance .

The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes:

In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes:

(1) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest due on the Notes on the date of Stated Maturity or on the redemption date, as the case may be, of such principal, premium, if any, or interest on such Notes ( provided , that if such redemption is made pursuant to

 

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Section 3.07(a) hereof, (x) the amount of cash in U.S. dollars or Government Securities, or a combination thereof, that the Issuer must irrevocably deposit or cause to be deposited will be determined using an assumed Applicable Premium calculated as of the date of such deposit, and (y) the Issuer must irrevocably deposit or cause to be deposited additional money in trust on the redemption date as necessary to pay the Applicable Premium as determined on such date) and the Issuer must specify whether such Notes are being defeased to maturity or to a particular redemption date;

(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions,

(a) the Issuer has received from, or there has been published by, the United States Internal Revenue Service a ruling, or

(b) since the issuance of the Notes, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal 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 Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default (other than that 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 other Indebtedness, and in each case the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under the Credit Agreement or any other material agreement or instrument (other than this Indenture) to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound (other than that resulting from any borrowing of 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 other Indebtedness, and the granting of Liens in connection therewith);

(6) the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that, as of the date of such opinion and subject to customary assumptions and exclusions following the deposit, the trust funds will not be subject to the effect of Section 547 of Title 11 of the United States Code;

 

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(7) the Issuer shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Issuer with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuer or any Guarantor or others; and

(8) the Issuer shall have delivered 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 provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.

 

Section 8.05 Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions .

Subject to Section 8.06 hereof, all money and Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “ Trustee ”) pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer or a Guarantor acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.

The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon the request of the Issuer any money or Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

Section 8.06 Repayment to Issuer .

Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Issuer on its request or (if then held by the Issuer) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease.

 

Section 8.07 Reinstatement .

If the Trustee or Paying Agent is unable to apply any United States dollars or Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuer’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03

 

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hereof, as the case may be; provided that, if the Issuer makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.01 Without Consent of Holders of Notes .

Notwithstanding Section 9.02 hereof, the Issuer, any Guarantor (with respect to a Guarantee to which it is a party or this Indenture) and the Trustee may amend or supplement this Indenture and any Guarantee or Notes without the consent of any Holder:

(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

(2) to provide for uncertificated Notes of such series in addition to or in place of certificated Notes;

(3) to comply with Section 5.01 hereof;

(4) to provide for the assumption of the Issuer’s or any Guarantor’s obligations to the Holders;

(5) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under this Indenture of any such Holder;

(6) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuer or any Guarantor;

(7) to provide for the issuance of Additional Notes in accordance with this Indenture;

(8) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee thereunder pursuant to the requirements thereof;

(9) to provide for the issuance of exchange notes or private exchange notes, which are identical to exchange notes except that they are not freely transferable;

(10) to add a Guarantor under this Indenture or to release a Guarantee in accordance with the terms of Section 11.06 of this Indenture;

(11) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including, without limitation to facilitate the issuance and administration of the Notes; provided , however , that (i) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not adversely affect the rights of Holders to transfer Notes; or

(12) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act.

 

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Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.02(b) hereof (to the extent requested by the Trustee), the Trustee shall join with the Issuer and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into any such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise. Notwithstanding the foregoing, no Opinion of Counsel shall be required in connection with the addition of a Guarantor under this Indenture upon execution and delivery by such Guarantor and the Trustee of a supplemental indenture to this Indenture, the form of which is attached as Exhibit D hereto, and delivery of an Officer’s Certificate.

 

Section 9.02 With Consent of Holders of Notes .

Except as provided below in this Section 9.02, the Issuer and the Trustee may amend or supplement this Indenture, the Notes and the Guarantees with the consent of the Required Holders (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Guarantees or the Notes may be waived with the consent of the Required Holders (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). Section 2.08 hereof and Section 2.09 hereof shall determine which Notes are considered to be “outstanding” for the purposes of this Section 9.02.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02(b) hereof (to the extent requested by the Trustee), the Trustee shall join with the Issuer in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall deliver to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to deliver such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

Without the consent of each affected Holder of Notes, an amendment or waiver under this Section 9.02 may not:

(1) reduce the principal amount of such Notes whose Holders must consent to an amendment, supplement or waiver;

 

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(2) reduce the principal of or change the fixed final maturity of any such Note or alter or waive the provisions with respect to the redemption of such Notes (other than provisions relating to Section 3.09, Section 4.10 and Section 4.14 hereof);

(3) reduce the rate of or change the time for payment of interest or Special Interest, if any, on any Note;

(4) waive a Default in the payment of principal of or premium, if any, or interest or Special Interest, if any, on the Notes, except a rescission of acceleration of the Notes by the Required Holders and a waiver of the payment default that resulted from such acceleration, or in respect of a covenant or provision contained in this Indenture or any Guarantee which cannot be amended or modified without the consent of all Holders;

(5) make any Note payable in money other than that stated therein;

(6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of or premium, if any, or interest or Special Interest, if any, on the Notes;

(7) make any change to this paragraph of this Section 9.02;

(8) impair the right of any Holder to receive payment of principal of, or interest or Special Interest, if any, on such Holder’s Notes 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 Notes; or

(9) except as expressly permitted by this Indenture, modify the Guarantees of any Significant Subsidiary in any manner adverse to the Holders of the Notes.

 

Section 9.03 Compliance with Trust Indenture Act .

Any amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the Trust Indenture Act as then in effect.

 

Section 9.04 Revocation and Effect of Consents .

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, 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 unless the consent of the requisite number of Holders has been obtained.

 

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Section 9.05 Notation on or Exchange of Notes .

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

 

Section 9.06 Trustee to Sign Amendments, etc .

The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Issuer may not sign an amendment, supplement or waiver until its board of directors approves it. In executing any amendment, supplement or waiver, the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 14.04 hereof, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer and any Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03 hereof). Notwithstanding the foregoing, no Opinion of Counsel will be required for the Trustee to execute any amendment or supplement adding a new Guarantor under this Indenture.

 

Section 9.07 Payment for Consent .

Neither the Issuer nor any Subsidiary of the Issuer shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to all Holders and is paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.

ARTICLE 10

[RESERVED]

ARTICLE 11

GUARANTEES

 

Section 11.01 Guarantee .

Subject to this Article 11, from and after the consummation of the Transaction, each of the Guarantors hereby, jointly and severally, unconditionally guarantees (as to each of the Guarantors and as to all Guarantors collectively, “ this Guarantee ”) to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that: (a) the

 

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principal of, interest and Special Interest, if any, and premium, if any, on the Notes shall be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest and Special Interest, if any, on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or under the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment by the Issuer when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this Guarantee is a guarantee of payment and not a guarantee of collection.

The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than payment in full of all of the Obligations of the Issuer hereunder and under the Notes). Each Guarantor hereby waives (to the fullest extent permitted by law) diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture or by release in accordance with the provisions of this Indenture.

Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under this Section 11.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, any amount paid either to the Trustee or such Holder, then this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Guarantee.

This Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer for liquidation, reorganization, should the Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned

 

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by any obligee on the Notes or this Guarantee, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of this Guarantee 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.

This Guarantee shall be a general unsecured senior obligation of each Guarantor.

Each payment to be made by a Guarantor in respect of this Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

 

Section 11.02 Limitation on Guarantor Liability .

Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent any of the foregoing are applicable to any Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 11, result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law. Each Guarantor that makes a payment under its Guarantee shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.

 

Section 11.03 Execution and Delivery .

To evidence its Guarantee set forth in Section 11.01 hereof, each Guarantor hereby agrees that this Indenture (or a supplemental indenture pursuant to Section 4.15 hereof) shall be executed on behalf of such Guarantor by its President, one of its Vice Presidents or one of its Assistant Vice Presidents.

Each Guarantor hereby agrees that its Guarantee set forth in Section 11.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

If an officer of a Guarantor whose signature is on this Indenture (or a supplemental indenture pursuant to Section 4.15 hereof) no longer holds that office at the time the Trustee authenticates the Note, the Guarantee of such Guarantor shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantors.

 

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If required by Section 4.15 hereof, the Issuer shall cause any newly created or acquired Restricted Subsidiary to comply with the provisions of Section 4.15 hereof and this Article 11, to the extent applicable.

 

Section 11.04 Subrogation .

Each Guarantor shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by any Guarantor pursuant to the provisions of Section 11.01 hereof; provided that, if an Event of Default has occurred and is continuing, no Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.

 

Section 11.05 Benefits Acknowledged .

Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Guarantee are knowingly made in contemplation of such benefits.

 

Section 11.06 Release of Guarantees .

A Guarantee by a Guarantor shall be automatically and unconditionally released and discharged, and no further action by such Guarantor, the Issuer or the Trustee is required for the release of such Guarantor’s Guarantee, upon:

(1) (A) any sale, exchange, disposition or transfer (by merger, consolidation, amalgamation or otherwise) of the Capital Stock of such Guarantor, after which the applicable Guarantor is no longer a Restricted Subsidiary or of all or substantially all the assets of such Guarantor which sale, exchange, disposition or transfer is made in compliance with Sections 4.10(a)(1) and (2) hereof;

(B) the release or discharge of the guarantee by such Guarantor of Indebtedness under the Credit Agreement or such other guarantee which resulted in the creation of such Guarantee, except a discharge or release by or as a result of payment under such guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that if any such guarantee is so reinstated, such Guarantee shall also be reinstated to the extent that such Guarantor would then be required to provide a Guarantee pursuant to Section 4.15 hereof);

(C) the designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in compliance with Section 4.07 hereof; or

(D) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 hereof or the Issuer’s obligations under this Indenture being discharged in accordance with Article 13 hereof; and

(2) delivery by such Guarantor to the Trustee of an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in this Indenture relating to such transaction have been complied with.

 

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ARTICLE 12

[RESERVED]

ARTICLE 13

SATISFACTION AND DISCHARGE

 

Section 13.01 Satisfaction and Discharge .

This Indenture shall be discharged and shall cease to be of further effect as to all Notes, when either:

(1) all Notes theretofore authenticated and delivered, except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or

(2) (A) all Notes not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, shall become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption 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 as trust funds in trust solely for the benefit of the Holders of the Notes, cash in U.S. dollars, Government Securities, or a combination thereof , in such amounts as will be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption thereof, as the case may be ( provided , that if such redemption is made pursuant to Section 3.07(a) hereof, (x) the amount of cash in U.S. dollars or Government Securities, or a combination thereof, that the Issuer must irrevocably deposit or cause to be deposited will be determined using an assumed Applicable Premium calculated as of the date of such deposit, and (y) the Issuer must irrevocably deposit or cause to be deposited additional money in trust on the redemption date as necessary to pay the Applicable Premium as determined on such date);

(B) no Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness, and the granting of Liens in connection therewith) with respect to this Indenture or the Notes shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under the Credit Agreement or any other material agreement or instrument (other than this Indenture) to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound (other than that resulting from any borrowing of funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness, and the granting of Liens in connection therewith);

(C) the Issuer has paid or caused to be paid all sums payable by it under this Indenture; and

(D) the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be.

 

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In addition, the Issuer must deliver an Officer’s Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

Notwithstanding the satisfaction and discharge of this Indenture, if money shall have been deposited with the Trustee pursuant to subclause (A) of clause (2) of this Section 13.01, the provisions of Section 13.02 and Section 8.06 hereof shall survive such satisfaction and discharge.

 

Section 13.02 Application of Trust Money .

Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 13.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 13.01 hereof 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 and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 13.01 hereof; provided that if the Issuer has made any payment of principal of, premium, if any, or interest and Special Interest, if any, on any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

ARTICLE 14

MISCELLANEOUS

 

Section 14.01 Trust Indenture Act Controls .

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Trust Indenture Act Section 318(c), the imposed duties shall control at all times after the effectiveness of a registration statement under the Registration Rights Agreement.

 

Section 14.02 Notices .

Any notice or communication by the Issuer, any Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), facsimile or overnight air courier guaranteeing next day delivery, to the others’ address:

If to the Issuer and/or any Guarantor:

IMS Health Incorporated

83 Wooster Heights Road

Danbury, Connecticut 06810

Attention: General Counsel

 

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with a copy (which copy shall not constitute notice) to:

TPG Capital, L.P.

345 California Street

Suite 3300

San Francisco, California 94104

Attention: Jack Weingart

CPP Investment Board Private Holdings Inc. and its affiliates

1 Queen Street East

Suite 1500

Toronto, Ontario M5C 2W5

Canada

Attention: Andre Bourbonnais

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, Massachusetts 02199

Attention: Michael Lee, Esq.

If to the Trustee:

U.S. Bank National Association

60 Livingston Avenue

EP-MN-WS3C

St. Paul, MN 55107-2292

Attention: IMS Health Incorporated Administrator

The Issuer, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five calendar days after being deposited in the mail, postage prepaid, if mailed by first-class mail; when receipt is acknowledged, if faxed; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; provided that any notice or communication delivered to the Trustee shall be deemed effective upon actual receipt thereof.

Any notice or communication to a Holder shall be mailed by first-class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in Trust Indenture Act Section 313(c), to the extent required by the Trust Indenture Act. 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.

 

—115—


If a notice or communication is mailed or otherwise delivered in the manner provided above within the time prescribed, such notice or communication shall be deemed duly given, whether or not the addressee receives it.

If the Issuer mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.

 

Section 14.03 Communication by Holders of Notes with Other Holders of Notes .

Holders may communicate pursuant to Trust Indenture Act Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and anyone else shall have the protection of Trust Indenture Act Section 312(c).

 

Section 14.04 Certificate and Opinion as to Conditions Precedent .

Upon any request or application by the Issuer or any of the Guarantors to the Trustee to take any action under this Indenture, the Issuer or such Guarantor, as the case may be, shall furnish to the Trustee:

(a) An Officer’s Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 14.05 hereof) stating that, in the opinion of the signer, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(b) An Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 14.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

 

Section 14.05 Statements Required in Certificate or Opinion .

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to Section 4.04 hereof or Trust Indenture Act Section 314(a)(4)) shall comply with the provisions of Trust Indenture Act Section 314(e) and 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 or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officer’s Certificate as to matters of fact); and

(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant 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.

 

—116—


Section 14.06 Rules by Trustee and Agents .

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

 

Section 14.07 No Personal Liability of Directors, Officers, Employees and Stockholders .

No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Issuer or any Guarantor or any of their direct or indirect parent companies shall have any liability for any obligations of the Issuer or the Guarantors under the Notes, 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 by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

 

Section 14.08 Governing Law .

THIS INDENTURE, THE NOTES AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

Section 14.09 Waiver of Jury Trial .

EACH OF THE ISSUER, THE GUARANTORS AND THE TRUSTEE 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 NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 14.10 Force Majeure .

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable 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 or hardware) services.

 

Section 14.11 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 Restricted Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

Section 14.12 Successors .

All agreements of the Issuer in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of each Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 11.06 hereof.

 

—117—


Section 14.13 Severability .

In case any provision in this Indenture or in the Notes 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.

 

Section 14.14 Counterpart 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.

 

Section 14.15 Table of Contents, Headings, etc .

The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

 

Section 14.16 Qualification of Indenture .

The Issuer and the Guarantors shall qualify this Indenture under the Trust Indenture Act in accordance with the terms and conditions of the Registration Rights Agreement and shall pay all reasonable costs and expenses (including attorneys’ fees and expenses for the Issuer, the Guarantors and the Trustee) incurred in connection therewith, including, but not limited to, costs and expenses of qualification of this Indenture and the Notes and printing this Indenture and the Notes. The Trustee shall be entitled to receive from the Issuer and the Guarantors any such Officer’s Certificates, Opinions of Counsel or other documentation as it may reasonably request in connection with any such qualification of this Indenture under the Trust Indenture Act.

[Signatures on following page]

 

—118—


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:  

/s/ Donald T. Hurrelbrink

Name:   Donald T. Hurrelbrink
Title:   Vice President

 

[ Exchange Note Indenture Signature Pages ]


IMS HEALTH INCORPORATED
as Issuer
By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   Vice President and Treasurer

HEALTHCARE TECHNOLOGY INTERMEDIATE HOLDINGS, INC.

as Holdings

By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   Vice President and Treasurer

 

[ Exchange Note Indenture Signature Pages ]


ARSENAL HOLDING COMPANY
ARSENAL HOLDING (II) COMPANY
DATA NICHE ASSOCIATES, INC.
IMS HEALTH FINANCE, INC.
IMS HEALTH HOLDING CORPORATION
IMS HEALTH INDIA HOLDING CORPORATION
IMS HEALTH INVESTING CORPORATION
IMS HEALTH INVESTMENTS, INC.
IMS HEALTH PURCHASING, INC.
IMS HEALTH TRADING CORPORATION
IMS HOLDING INC.
IMS SERVICES, LLC
IMS TRADING MANAGEMENT, INC.
RX INDIA CORPORATION
TTC ACQUISITION CORPORATION

VALUEMEDICS RESEARCH, LLC

as Guarantors

By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   President

 

[ Exchange Note Indenture Signature Pages ]


IMS CONTRACTING & COMPLIANCE, INC.
IMS GOVERNMENT SOLUTIONS, INC.
IMS HEALTH TRANSPORTATION SERVICES CORPORATION
IMS SOFTWARE SERVICES LTD.
MED-VANTAGE, INC.

PHARMETRICS, INC.

as Guarantors

By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   Treasurer

 

[ Exchange Note Indenture Signature Pages ]


IMS HEALTH LICENSING ASSOCIATES, L.L.C.
as Guarantor
By:  

/s/ Maryanne Piorek

Name:   Maryanne Piorek
Title:   Responsible Officer

 

[ Exchange Note Indenture Signature Pages ]


COORDINATED MANAGEMENT HOLDINGS, L.L.C.
COORDINATED MANAGEMENT SYSTEMS, INC.
MARKET RESEARCH MANAGEMENT, INC.

SPARTAN LEASING CORPORATION

as Guarantors

By:  

/s/ Margaret F. Cupp

Name:   Margaret F. Cupp
Title:   President

 

[ Exchange Note Indenture Signature Pages ]


IMS CHINAMETRIK INCORPORATED
as Guarantor
By:  

/s/ Margaret F. Cupp

Name:   Margaret F. Cupp
Title:   Vice President

 

[ Exchange Note Indenture Signature Pages ]


INTERCONTINENTAL MEDICAL STATISTICS INTERNATIONAL, LTD.
as Guarantor
By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   Secretary

 

[ Exchange Note Indenture Signature Pages ]


ENTERPRISE ASSOCIATES L.L.C.
as Guarantor
By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   Vice President

 

[ Exchange Note Indenture Signature Pages ]


THE TAR HEEL TRADING COMPANY, LLC
as Guarantor
By:  

/s/ Jeffrey J. Ford

Name:   Jeffrey J. Ford
Title:   Vice President and Treasurer

 

[ Exchange Note Indenture Signature Pages ]


EXHIBIT A

[Face of Note]

[ ]

12  1 2 % SENIOR UNSECURED EXCHANGE NOTES DUE 2018

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Regulation S Temporary Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the OID legend, if applicable]

 

A-1


CUSIP [ ]

ISIN [ ] 1

[RULE 144A][REGULATION S] [GLOBAL] NOTE

[ for Global Notes insert: representing initially up to]

$[ ]

12  1 2 % Senior Unsecured Exchange Notes due 2018

 

No. [ ]    $[ ]

IMS Health Incorporated promises to pay to [for Global Notes insert: CEDE & CO.] [for Definitive Notes insert: Name of Holder] or registered assigns, the principal sum [set forth on the Schedule of Exchanges of Interests in the Global Note attached hereto] of [ United States Dollars] on March 1, 2018.

Interest Payment Dates: March 1, June 1, September 1 and December 1

Record Dates: February 15, May 15, August 15 and November 15

 

1   Rule 144A Note CUSIP: 449934 AC2
   Rule 144A Note ISIN: US449934AC22
   Regulation S Note CUSIP: U45049 AC4
   Regulation S Note ISIN: USU45049AC49

 

A-2


IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed.

Dated: [ ]

 

IMS HEALTH INCORPORATED, as Issuer
By:  

 

  Name:
  Title:

 

A-3


This is one of the Notes referred to in the within-mentioned Indenture:
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:  

 

  Authorized Signatory

 

A-4


[Back of Note]

12  1 2 % Senior Unsecured Exchange Notes due 2018

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. The Issuer promises to pay interest on the principal amount of this Note at 12  1 2 % per annum from September 1, 2012 until maturity and shall pay the Special Interest payable pursuant to Section 2(c) of the Exchange and Registration Rights Agreement referred to below, if any. 2 The Issuer will pay interest quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “ Interest Payment Date ”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from September 1, 2012; provided that the first Interest Payment Date shall be December 1, 2012. If, at any time prior to the Disposition Date, a default in the payment when due of interest or Special Interest, if any, or on principal of, or premium, if any, on the Notes or an Event of Default has occurred and is continuing, then in each case this Note will accrue interest at the stated interest rate on this Note plus the Default Interest Rate until the earlier of such time as no such Default or such Event of Default shall be continuing (to the extent that the payment of such interest shall be legally enforceable) or the Disposition Date. On and after the Disposition Date, any amounts payable under or in respect of this Note not paid when due will accrue interest at the stated interest rate on this Note plus the Default Interest Rate until such time as such overdue amounts are paid in full, including any interest thereon (to the extent that the payment of such interest shall be legally enforceable). Default interest shall be payable by the Issuer in cash on demand in accordance with Section 2.12 of the Indenture. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes to the Persons who are registered Holders of Notes at the close of business on February 15, May 15, August 15 and November 15 (whether or not a Business Day), as the case may be, next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Payment of interest and Special Interest, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of, and interest [and Special Interest, if any,] and premium on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Issuer or the Paying Agent at least five Business Days in advance of the applicable Interest Payment Date. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. The Issuer shall pay all Special Interest, if any, in the manner, on the dates and in the amounts set forth in the Exchange and Registration Rights Agreement.

3. PAYING AGENT AND REGISTRAR. Initially, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuer may change any Paying Agent or Registrar without notice to the Holders. The Issuer or any of its Subsidiaries may act in any such capacity. So long as any series of Notes is listed on an exchange and the rules of such exchange so require, the Issuer shall satisfy any requirement of such exchange as to paying agents and registrars and shall comply with any notice requirements required by such exchange in connection with any change of paying agent or registrar.

 

2   Bracketed references to Special Interest in this Exhibit A should be inserted only in Restricted Definitive Notes and Restricted Global Notes.

 

A-5


4. INDENTURE. The Issuer issued the Notes under an Indenture, dated as of October 24, 2012 (the “ Indenture ”), among IMS Health Incorporated, the Guarantors named therein and the Trustee. This Note is one of a duly authorized issue of Notes of the Issuer designated as its 12  1 2 % Senior Unsecured Exchange Notes due 2018. The Issuer shall be entitled to issue Additional Notes pursuant to Section 2.01 of the Indenture. The Notes are limited in the maximum aggregate principal amount to $1,000,000,000, except as otherwise permitted by Section 2.07. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “ Trust Indenture Act ”). The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION.

(a) Except as described below under clauses 5(b) and 5(c) hereof, the Notes will not be redeemable at the Issuer’s option before March 1, 2015.

(b) At any time prior to March 1, 2015, the Issuer may redeem all or a part of the Notes, upon notice provided as described in Section 3.03, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of the date of redemption (the “ Redemption Date ”), plus accrued and unpaid interest and Special Interest, if any, thereon to, the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date.

(c) Until March 1, 2015, the Issuer may redeem up to 40% (increasing to 65% on and after March 1, 2013) of the aggregate principal amount of Notes (including any Additional Notes) issued by it at a redemption price equal to 112.50% of the aggregate principal amount thereof, plus accrued and unpaid interest and Special Interest, if any, thereon to the applicable Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest and Special Interest, if any, due on the relevant Interest Payment Date, solely with the net cash proceeds received by it from one or more Equity Offerings; provided that at least 60% (decreasing to 35% on and after March 1, 2013) of the aggregate principal amount of the Initial Notes remains outstanding immediately after the occurrence of each such redemption; provided further that each such redemption occurs within 60 days of the date of closing of each such Equity Offering. Notice of any redemption upon any such Equity Offering may be given prior to the redemption thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

(d) On and after March 1, 2015, the Issuer may redeem the Notes, in whole or in part, upon notice provided as described in Section 3.03, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest and Special Interest, if any, thereon to the applicable Redemption Date, subject to the right of Holders of record of such Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on March 1 of each of the years indicated below:

 

Year

   Percentage  

2015

     106.250

2016

     103.125

2017 and thereafter

     100.000

 

A-6


(e) Any redemption pursuant to this paragraph 5 shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.

6. MANDATORY REDEMPTION. The Issuer shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.

7. NOTICE OF REDEMPTION. Subject to Section 3.03 of the Indenture, the Issuer shall mail or cause to be delivered by electronic transmission or mailed by first-class mail at least 30 days but not more than 60 days before the redemption date (except that redemption notices may be delivered more than 60 days prior to a redemption date if the notice is issued in connection with Article 8 or Article 13 of the Indenture) to each Holder whose Notes are to be redeemed at its registered address, or to the Trustee to forward to each Holder of Notes at such Holder’s registered address, or shall otherwise mail on such timeframe such notice in accordance with the procedures of DTC. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. Subject to Section 3.05 of the Indenture, on and after the redemption date interest and Special Interest, if any, shall cease to accrue on Notes or portions thereof called for redemption.

8. OFFERS TO REPURCHASE.

(a) If a Change of Control occurs, unless the Issuer has previously or concurrently mailed a redemption notice with respect to all the outstanding Notes as set forth in Section 3.07, the Issuer shall make an offer to each Holder to repurchase all of each Holder’s Notes (a “ Change of Control Offer ”) at a price in cash (the “ Change of Control Payment ”) equal to 101.0% of the aggregate principal amount thereof, plus accrued and unpaid interest and Special Interest, if any, to the date of purchase. The Change of Control Offer shall be made in accordance with Section 4.14 of the Indenture.

(b) If the Issuer or any of its Restricted Subsidiaries consummates an Asset Sale, within 10 Business Days of each date that Excess Proceeds exceed $25,000,000, the Issuer shall commence, an offer to all Holders of the Notes and, if required by the terms of any unsecured Indebtedness that is pari passu with the Notes (“ Pari Passu Indebtedness ”), to the holders of such Pari Passu Indebtedness (an “ Asset Sale Offer ”), to purchase the maximum principal amount of Notes and such other Pari Passu Indebtedness that is an integral multiple of $1,000 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 accreted value, if less) plus accrued and unpaid interest and Special Interest, if any, thereon to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes and such Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes, subject to compliance with other covenants contained in the Indenture. If the aggregate principal amount of Notes or the Pari Passu Indebtedness surrendered in an Asset Sale Offer by such holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and the Issuer shall select such Pari Passu Indebtedness to be purchased on a pro rata basis based on the accreted value or principal amount of the Notes or such Pari Passu Indebtedness tendered in accordance with Section 3.09. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds that resulted in the Asset Sale Offer shall be reset at zero (regardless of whether there are remaining Excess Proceeds upon such

 

A-7


completion). Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Issuer prior to any related purchase date and may elect to have such Notes purchased by surrendering the Note with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer such Note by book-entry transfer, to the Issuer, the Depositary, if appointed by the Issuer, or a Paying Agent at the address specified in the notice at least three days before the purchase date.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed.

10. [RESERVED].

11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.

12. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes may be amended or supplemented as provided in the Indenture.

13. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default (other than an Event of Default specified in clause (6) or (7) of Section 6.01(a) of the Indenture with respect to the Issuer) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then total outstanding Notes may declare the principal, premium, if any, interest and Special Interest, if any, and any other monetary obligations on all of the then outstanding Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture, the Notes or the Guarantees except as provided in the Indenture. Subject to certain limitations, the Required Holders may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default (except a Default relating to the payment of principal, premium, if any, or interest and Special Interest, if any) if it determines that withholding notice is in their interest. The Required Holders by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences under the Indenture except a continuing Default in payment of the principal of, premium, if any, or interest and Special Interest, if any, on, any of the Notes held by a non-consenting Holder. The Issuer and each Guarantor (to the extent that such Guarantor is so required under the Trust Indenture Act) is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required within five (5) Business Days after becoming aware of any Default, to deliver to the Trustee a statement specifying such Default and what action the Issuer proposes to take with respect thereto.

14. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual or facsimile signature of the Trustee.

 

A-8


15. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE GUARANTEES.

16. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes 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 upon written request and without charge a copy of the Indenture. Requests may be made to the Issuer at the following address:

IMS Health Incorporated

83 Wooster Heights Road

Danbury, Connecticut 06810

Attention: General Counsel

 

A-9


ASSIGNMENT FORM

To assign this Note, fill in the form below:

 

(I) or (we) assign and transfer this Note to:  

 

  (Insert assignee’ legal name)

 

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

 

and irrevocably appoint  

 

to transfer this Note 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 face of this Note)

 

Signature Guarantee*:  

 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). [Signature guarantee is not required for Definitive Notes.]

 

A-10


OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

[    ] Section 4.10            [    ] Section 4.14

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:

$        

 

Date:  

 

     
      Your Signature:  

 

        (Sign exactly as your name appears on the face of this Note)
      Tax Identification No.:  

 

 

Signature Guarantee*:  

 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). [Signature guarantee is not required for Definitive Notes.]

 

A-11


SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $        . The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

Date of Exchange

   Amount of
decrease
in Principal
Amount of this
Global Note
   Amount of increase
in Principal
Amount of this
Global Note
   Principal Amount
of
this Global Note
following such
decrease or
increase
   Signature of
authorized officer
of Trustee or
Note Custodian
           
           
           
           
           
           
           

 

* This schedule should be included only if the Note is issued in global form.

 

A-12


EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

[ ]

[ ]

[ ]

[ ]

Attention: [ ]

[ ]

[ ]

[ ]

[ ]Attention: [ ]

 

  Re: 12  1 2 % Senior Unsecured Exchange Notes due 2018

Reference is hereby made to the Indenture, dated as of October 24, 2012 (the “ Indenture ”), among IMS Health Incorporated, the Guarantors named therein and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                     (the “ Transferor ”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $         in such Note[s] or interests (the “ Transfer ”), to                     (the “ Transferee ”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. [    ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “ Securities Act ”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States.

2. [    ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule

 

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903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Indenture and the Securities Act.

3. [    ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR THE DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S OR THE DEFINITIVE NOTE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

(a) [    ] such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;

or

(b) [    ] such Transfer is being effected to the Issuer or a subsidiary thereof;

or

(c) [    ] such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;

or

(d) [    ] such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit B to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Restricted Definitive Notes and in the Indenture and the Securities Act.

4. [    ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

 

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(a) [    ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(b) [    ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(c) [    ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer.

 

[Insert Name of Transferor]
By:  

 

  Name:
  Title:

 

Dated:  

 

 

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ANNEX A TO CERTIFICATE OF TRANSFER

 

1. The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

 

(a) [    ] a beneficial interest in the:

 

(i) [    ] 144A Global Note (CUSIP [            ]), or

 

(ii) [    ] Regulation S Global Note (CUSIP [            ]), or

 

(iii) [    ] IAI Global Note (CUSIP [            ]), or

 

(b) [    ] a Restricted Definitive Note.

 

2. After the Transfer the Transferee will hold:

[CHECK ONE]

 

(a) [    ] a beneficial interest in the:

 

(i) [    ] 144A Global Note (CUSIP [            ]), or

 

(ii) [    ] Regulation S Global Note (CUSIP [            ]), or

 

(iii) [    ] IAI Global Note (CUSIP [            ]), or

 

(iv) [    ] Unrestricted Global Note (CUSIP [            ]), or

 

(b) [    ] a Restricted Definitive Note; or

 

(c) [    ] an Unrestricted Definitive Note;

in each case, in accordance with the terms of the Indenture.

 

Annex A-1


EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

[ ]

[ ]

[ ]

[ ]

Attention: [ ]

[ ]

[ ]

[ ]

[ ]

Attention: [ ]

 

  Re: 12  1 2 % Senior Unsecured Exchange Notes due 2018

Reference is hereby made to the Indenture, dated as of October 24, 2012 (the “ Indenture ”), among IMS Health Incorporated, the Guarantors named therein and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                     (the “ Owner ”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $         in such Note[s] or interests (the “ Exchange ”). In connection with the Exchange, the Owner hereby certifies that:

1) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE

a) ¨ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

b) ¨ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable

 

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to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

c) ¨ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

d) ¨ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

2) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES

a) ¨ CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.

b) ¨ CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] [    ] 144A Global Note [    ] Regulation S Global Note [    ] IAI Global Note, with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

 

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This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and are dated [                    ].

 

[Insert Name of Transferor]
By:  

 

  Name:
  Title:

 

Dated:  

 

 

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ANNEX A TO CERTIFICATE OF EXCHANGE

 

1. The Owner owns and proposes to exchange the following:

[CHECK ONE OF (a) OR (b)]

 

(a) ¨         a beneficial interest in a Restricted Global Note, or

 

(b) ¨         a Restricted Definitive Note.

 

2. After the Exchange the Owner will hold:

[CHECK ONE]

 

(a) ¨         a beneficial interest in an Unrestricted Global Note, or

 

(b) ¨         an Unrestricted Definitive Note, or

 

(c) ¨         a Restricted Definitive Note, or

 

(d) ¨         a beneficial interest in 144A Global Note (CUSIP [            ]), or

 

(e) ¨         a beneficial interest in IAI Global Note (CUSIP [            ]), or

 

(e) ¨         a beneficial interest in Regulation S Global Note (CUSIP [            ]).

 

Annex A-1


EXHIBIT D

[FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS]

Supplemental Indenture (this “ Supplemental Indenture ”), dated as of                     , among                      (the “ Guaranteeing Subsidiary ”), a subsidiary of IMS Health Incorporated, a Delaware corporation (the “ Issuer ”), and U.S. Bank National Association, as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, each of [ ], and the Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture (the “ Indenture ”), dated as of October 24, 2012, providing for the issuance of up to $1,000,000,000 aggregate principal amount of 12  1 2 % Senior Unsecured Exchange Notes due 2018 (the “ Notes ”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . The Guaranteeing Subsidiary hereby agrees as follows:

(a) Along with all Guarantors named in the Indenture, subject to Article 11, to jointly and severally unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Issuer hereunder or under the Indenture, that:

(i) the principal of and interest and Special Interest, if any, premium, if any, on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity,

 

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by acceleration or otherwise. Failing payment by the Issuer when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors and the Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same immediately. This is a guarantee of payment and not a guarantee of collection.

(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than payment in full of all of the Obligations of the Issuer hereunder and under the Indenture).

(c) The following is hereby waived to the fullest extent permitted by law: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever.

(d) This Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, the Indenture and this Supplemental Indenture or by release in accordance with the provisions of this Indenture, and the Guaranteeing Subsidiary accepts all obligations of a Guarantor under the Indenture.

(e) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors (including the Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, any amount paid either to the Trustee or such Holder, then this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(g) As between the Guaranteeing Subsidiary, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guaranteeing Subsidiary for the purpose of this Guarantee.

(h) The Guaranteeing Subsidiary shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Guarantee.

(i) Pursuant to Section 11.02 of the Indenture, after giving effect to all other contingent and fixed liabilities that are relevant under any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent that any of the foregoing are applicable to this Guarantee, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any

 

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other Guarantor in respect of the obligations of such other Guarantor under Article 11 of the Indenture, this new Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guaranteeing Subsidiary under this Guarantee will not constitute a fraudulent transfer or conveyance for purposes of such laws.

(j) This Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer for liquidation, reorganization, should the Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes and Guarantee, whether as a “voidable preference”, “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Note shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(k) In case any provision of this Guarantee 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.

(l) This Guarantee shall be a general unsecured senior obligation of such Guaranteeing Subsidiary.

(m) Each payment to be made by the Guaranteeing Subsidiary in respect of this Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

(3) Execution and Delivery . The Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

(4) Merger, Consolidation or Sale of All or Substantially All Assets .

(a) Except as otherwise provided in Section 5.01(c) of the Indenture, the Guaranteeing Subsidiary may not consolidate or merge with or into or wind up into (whether or not the Issuer or Guaranteeing Subsidiary 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 unless:

(i) (A) the Guaranteeing Subsidiary is the surviving entity or the Person formed by or surviving any such consolidation or merger (if other than the Guaranteeing Subsidiary) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of the Guaranteeing Subsidiary, as the case may be, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Guaranteeing Subsidiary or such Person, as the case may be, being herein called the “ Successor Person ”);

(B) the Successor Person, if other than the Guaranteeing Subsidiary, expressly assumes all the obligations of the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s related Guarantee pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

 

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(C) immediately after such transaction, no Default exists; and

(D) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with the Indenture; or

(ii) the transaction is made in compliance with clauses (1) and (2) of Section 4.10(a) of the Indenture;

(b) In the case of section (a)(i) of this Section 4, the Successor Person will succeed to, and be substituted for, the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s Guarantee. Notwithstanding the foregoing, the Guaranteeing Subsidiary may (1) merge or consolidate with or into or wind up into or transfer all or part of its properties and assets to another Guarantor or the Issuer, (2) merge with a Restricted Subsidiary of the Issuer solely for the purpose of reincorporating the Guaranteeing Subsidiary in the United States, any state thereof, the District of Columbia or any territory thereof or (3) convert into a corporation, partnership, limited partnership, limited liability corporation or trust organized or existing under the laws of the jurisdiction of organization of the Guaranteeing Subsidiary, in each case without complying with section (a) of this Section 4.

(5) Releases . The Guarantee of the Guaranteeing Subsidiary shall be automatically and unconditionally released and discharged, and no further action by the Guaranteeing Subsidiary, the Issuer or the Trustee is required for the release of the Guaranteeing Subsidiary’s Guarantee, upon:

(1) (A) any sale, exchange, disposition or transfer (by merger, consolidation, amalgamation or otherwise) of the Capital Stock of the Guaranteeing Subsidiary, after which the Guaranteeing Subsidiary is no longer a Restricted Subsidiary or all or substantially all the assets of the Guaranteeing Subsidiary which sale, exchange, disposition or transfer is made in compliance with Sections 4.10(a)(1) and (2) of the Indenture;

(B) the release or discharge of the guarantee by the Guaranteeing Subsidiary of Indebtedness under the Credit Agreement or such other guarantee which resulted in the creation of the Guarantee, except a discharge or release by or as a result of payment under such guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that if any such guarantee is so reinstated, this Guarantee shall also be reinstated to the extent that such Guaranteeing Subsidiary would then be required to provide a Guarantee pursuant to Section 4.15 of the Indenture);

(C) the designation of the Guaranteeing Subsidiary as an Unrestricted Subsidiary in compliance with Section 4.07(c) of the Indenture; or

(D) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 of the Indenture or the Issuer’s obligations under the Indenture being discharged in accordance with Article 13 of the Indenture; and

(2) delivery by the Guaranteeing Subsidiary to the Trustee of an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture relating to such transaction have been complied with.

 

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(6) No Recourse Against Others . No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Guaranteeing Subsidiary or any of its direct or indirect parent companies shall have any liability for any obligations of the Issuer or the Guarantors (including the Guaranteeing Subsidiary) under the Notes, any Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(7) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(8) 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.

(9) Effect of Headings . The Section headings herein are for convenience only, are not to be considered part of this Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

(10) The Trustee . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Supplemental Indenture and it shall not be responsible for any the recitals contained herein.

(11) Subrogation . The Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by the Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof and Section 11.01 of the Indenture; provided that, if an Event of Default has occurred and is continuing, the Guaranteeing Subsidiary shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under the Indenture or the Notes shall have been paid in full.

(12) Benefits Acknowledged . The Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. The Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Guarantee are knowingly made in contemplation of such benefits.

(13) Successors . All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in Sections 2(k) and 12 hereof or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

 

U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:  

 

Name:  
Title:  

[ ]

as [Subsidiary Guarantor]

By:  

 

Name:  
Title:  

 

E-6

Exhibit 4.8

This First Supplemental Indenture (this “ Supplemental Indenture ”), dated as of May 28, 2013, is entered into between Appature Inc. (the “ Guaranteeing Subsidiary ”), a subsidiary of IMS Health Incorporated, a Delaware corporation (the “ Issuer ”), and U.S. Bank National Association, as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, each of IMS Health Incorporated, and the Guarantors (as defined in the Indenture referred to below) has heretofore executed and delivered to the Trustee an indenture (the “ Indenture ”), dated as of October 24, 2012, providing for the issuance of up to $1,000,000,000 aggregate principal amount of 12  1 2 % Senior Unsecured Exchange Notes due 2018 (the “ Notes ”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . The Guaranteeing Subsidiary hereby agrees as follows:

(a) Along with all Guarantors named in the Indenture, subject to Article 11, to jointly and severally unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Issuer hereunder or under the Indenture, that:

(i) the principal of and interest and Special Interest, if any, premium, if any, on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

(ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment by the Issuer when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors and the Guaranteeing Subsidiary shall be jointly and severally obligated to pay the same immediately. This is a guarantee of payment and not a guarantee of collection.


(b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than payment in full of all of the Obligations of the Issuer hereunder and under the Indenture).

(c) The following is hereby waived to the fullest extent permitted by law: diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever.

(d) This Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, the Indenture and this Supplemental Indenture or by release in accordance with the provisions of this Indenture, and the Guaranteeing Subsidiary accepts all obligations of a Guarantor under the Indenture.

(e) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors (including the Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, any amount paid either to the Trustee or such Holder, then this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(g) As between the Guaranteeing Subsidiary, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guaranteeing Subsidiary for the purpose of this Guarantee.

(h) The Guaranteeing Subsidiary shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under this Guarantee.

(i) Pursuant to Section 11.02 of the Indenture, after giving effect to all other contingent and fixed liabilities that are relevant under any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent that any of the foregoing are applicable to this Guarantee, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under Article 11 of the Indenture, this new Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guaranteeing Subsidiary under this Guarantee will not constitute a fraudulent transfer or conveyance for purposes of such laws.


(j) This Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer for liquidation, reorganization, should the Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes and Guarantee, whether as a “voidable preference”, “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Note shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(k) In case any provision of this Guarantee 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.

(l) This Guarantee shall be a general unsecured senior obligation of such Guaranteeing Subsidiary.

(m) Each payment to be made by the Guaranteeing Subsidiary in respect of this Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

(3) Execution and Delivery . The Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

(4) Merger, Consolidation or Sale of All or Substantially All Assets .

(a) Except as otherwise provided in Section 5.01(c) of the Indenture, the Guaranteeing Subsidiary may not consolidate or merge with or into or wind up into (whether or not the Issuer or Guaranteeing Subsidiary 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 unless:

(i) (A) the Guaranteeing Subsidiary is the surviving entity or the Person formed by or surviving any such consolidation or merger (if other than the Guaranteeing Subsidiary) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of the Guaranteeing Subsidiary, as the case may be, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Guaranteeing Subsidiary or such Person, as the case may be, being herein called the “ Successor Person ”);

(B) the Successor Person, if other than the Guaranteeing Subsidiary, expressly assumes all the obligations of the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s related Guarantee pursuant to supplemental indentures or other documents or instruments in form reasonably satisfactory to the Trustee;

(C) immediately after such transaction, no Default exists; and


(D) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures, if any, comply with the Indenture; or

(ii) the transaction is made in compliance with clauses (1) and (2) of Section 4.10(a) of the Indenture;

(b) In the case of section (a)(i) of this Section 4, the Successor Person will succeed to, and be substituted for, the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s Guarantee. Notwithstanding the foregoing, the Guaranteeing Subsidiary may (1) merge or consolidate with or into or wind up into or transfer all or part of its properties and assets to another Guarantor or the Issuer, (2) merge with a Restricted Subsidiary of the Issuer solely for the purpose of reincorporating the Guaranteeing Subsidiary in the United States, any state thereof, the District of Columbia or any territory thereof or (3) convert into a corporation, partnership, limited partnership, limited liability corporation or trust organized or existing under the laws of the jurisdiction of organization of the Guaranteeing Subsidiary, in each case without complying with section (a) of this Section 4.

(5) Releases . The Guarantee of the Guaranteeing Subsidiary shall be automatically and unconditionally released and discharged, and no further action by the Guaranteeing Subsidiary, the Issuer or the Trustee is required for the release of the Guaranteeing Subsidiary’s Guarantee, upon:

(1) (A) any sale, exchange, disposition or transfer (by merger, consolidation, amalgamation or otherwise) of the Capital Stock of the Guaranteeing Subsidiary, after which the Guaranteeing Subsidiary is no longer a Restricted Subsidiary or all or substantially all the assets of the Guaranteeing Subsidiary which sale, exchange, disposition or transfer is made in compliance with Sections 4.10(a)(1) and (2) of the Indenture;

(B) the release or discharge of the guarantee by the Guaranteeing Subsidiary of Indebtedness under the Credit Agreement or such other guarantee which resulted in the creation of the Guarantee, except a discharge or release by or as a result of payment under such guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that if any such guarantee is so reinstated, this Guarantee shall also be reinstated to the extent that such Guaranteeing Subsidiary would then be required to provide a Guarantee pursuant to Section 4.15 of the Indenture);

(C) the designation of the Guaranteeing Subsidiary as an Unrestricted Subsidiary in compliance with Section 4.07(c) of the Indenture; or

(D) the Issuer exercising its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 of the Indenture or the Issuer’s obligations under the Indenture being discharged in accordance with Article 13 of the Indenture; and

(2) delivery by the Guaranteeing Subsidiary to the Trustee of an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture relating to such transaction have been complied with.

(6) No Recourse Against Others . No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Guaranteeing Subsidiary or any of its direct or indirect parent companies shall have any liability for any obligations of the Issuer or the Guarantors (including the Guaranteeing Subsidiary) under the Notes, any Guarantees, the Indenture or


this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(7) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(8) 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.

(9) Effect of Headings . The Section headings herein are for convenience only, are not to be considered part of this Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

(10) The Trustee . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Supplemental Indenture and it shall not be responsible for any the recitals contained herein.

(11) Subrogation . The Guaranteeing Subsidiary shall be subrogated to all rights of Holders of Notes against the Issuer in respect of any amounts paid by the Guaranteeing Subsidiary pursuant to the provisions of Section 2 hereof and Section 11.01 of the Indenture; provided that, if an Event of Default has occurred and is continuing, the Guaranteeing Subsidiary shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under the Indenture or the Notes shall have been paid in full.

(12) Benefits Acknowledged . The Guaranteeing Subsidiary’s Guarantee is subject to the terms and conditions set forth in the Indenture. The Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to this Guarantee are knowingly made in contemplation of such benefits.

(13) Successors . All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in Sections 2(k) and 12 hereof or elsewhere in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

 

U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:  

/s/ Donald T. Hurrelbrink

Name:   Donald T. Hurrelbrink
Title:   Vice President

APPATURE INC.

as Subsidiary Guarantor

By:  

/s/ Jeffrey Ford

Name:   Jeffrey Ford
Title:   President

Exhibit 4.9

INDENTURE

Dated as of October 24, 2012

Among

IMS Health Incorporated, as Issuer,

the Guarantors party hereto

And

Wells Fargo Bank, National Association,

as Trustee

6% SENIOR NOTES DUE 2020


CROSS-REFERENCE TABLE*

 

Trust Indenture Act Section

   Indenture Section

310(a)(1)

   7.10

      (a)(2)

   7.10

      (a)(3)

   N.A.

      (a)(4)

   N.A.

      (a)(5)

   7.10

      (b)

   7.03; 7.10

      (c)

   N.A.

311(a)

   7.11

      (b)

   7.11

      (c)

   N.A.

312(a)

   N.A.

      (b)

   12.03

      (c)

   12.03

313(a)

   7.06

      (b)(1)

   N.A.

      (b)(2)

   7.06; 7.07

      (c)

   7.06; 12.02

      (d)

   7.06

314(a)

   4.03

      (b)

   N.A.

      (c)(1)

   12.04

      (c)(2)

   12.04

      (c)(3)

   N.A.

      (d)

   N.A.

      (e)

   N.A.

      (f)

   N.A.

315(a)

   7.01

      (b)

   7.05; 12.02

      (c)

   7.01

      (d)

   7.01

      (e)

   6.14

316(a)(last sentence)

   2.09

      (a)(1)(A)

   6.05

      (a)(1)(B)

   6.04

      (a)(2)

   N.A.

      (b)

   6.07

      (c)

   2.12; 9.04

317(a)(1)

   6.08

      (a)(2)

   6.12

      (b)

   2.04

318(a)

   12.01

      (b)

   N.A.

      (c)

   12.01

N.A. means not applicable.

 

* This Cross-Reference Table is not part of this Indenture.


TABLE OF CONTENTS

 

         Page  
ARTICLE I   
DEFINITIONS AND INCORPORATION BY REFERENCE   

SECTION 1.01.

 

Definitions

     1   

SECTION 1.02.

 

Other Definitions

     35   

SECTION 1.03.

 

Incorporation by Reference of Trust Indenture Act

     36   

SECTION 1.04.

 

Rules of Construction

     36   

SECTION 1.05.

 

Acts of Holders

     37   
ARTICLE II   
THE NOTES   

SECTION 2.01.

 

Form and Dating; Terms

     38   

SECTION 2.02.

 

Execution and Authentication

     39   

SECTION 2.03.

 

Registrar, Transfer Agent and Paying Agent

     40   

SECTION 2.04.

 

Paying Agent to Hold Money in Trust

     40   

SECTION 2.05.

 

Holder Lists

     40   

SECTION 2.06.

 

Transfer and Exchange

     40   

SECTION 2.07.

 

Replacement Notes

     50   

SECTION 2.08.

 

Outstanding Notes

     50   

SECTION 2.09.

 

Treasury Notes

     51   

SECTION 2.10.

 

Temporary Notes

     51   

SECTION 2.11.

 

Cancellation

     51   

SECTION 2.12.

 

Defaulted Interest

     51   

SECTION 2.13.

 

CUSIP/ISIN Numbers

     51   
ARTICLE III   
REDEMPTION   

SECTION 3.01.

 

Notices to Trustee

     52   

SECTION 3.02.

 

Selection of Notes to Be Redeemed

     52   

SECTION 3.03.

 

Notice of Redemption

     52   

SECTION 3.04.

 

Effect of Notice of Redemption

     53   

SECTION 3.05.

 

Deposit of Redemption Price

     53   

SECTION 3.06.

 

Notes Redeemed in Part

     53   

SECTION 3.07.

 

Optional Redemption

     54   

SECTION 3.08.

 

Mandatory Redemption

     54   

SECTION 3.09.

 

Offers to Repurchase by Application of Excess Proceeds

     54   
ARTICLE IV   
COVENANTS   

SECTION 4.01.

 

Payment of Notes

     56   

SECTION 4.02.

 

Maintenance of Office or Agency

     56   

SECTION 4.03.

 

Reports and Other Information

     57   

SECTION 4.04.

 

Compliance Certificate

     59   

SECTION 4.05.

 

Taxes

     59   

 

-i-


         Page  

SECTION 4.06.

 

Stay, Extension and Usury Laws

     59   

SECTION 4.07.

 

Limitation on Restricted Payments

     59   

SECTION 4.08.

 

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

     66   

SECTION 4.09.

 

Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock

     68   

SECTION 4.10.

 

Asset Sales

     73   

SECTION 4.11.

 

Transactions with Affiliates

     75   

SECTION 4.12.

 

Liens

     78   

SECTION 4.13.

 

Company Existence

     79   

SECTION 4.14.

 

Offer to Repurchase Upon Change of Control

     79   

SECTION 4.15.

 

Limitation on Guarantees of Indebtedness by Restricted Subsidiaries

     81   

SECTION 4.16.

 

Suspension of Covenants

     81   
ARTICLE V   
SUCCESSORS   

SECTION 5.01.

 

Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets

     82   

SECTION 5.02.

 

Successor Person Substituted

     84   
ARTICLE VI   
DEFAULTS AND REMEDIES   

SECTION 6.01.

 

Events of Default

     84   

SECTION 6.02.

 

Acceleration

     85   

SECTION 6.03.

 

Other Remedies

     86   

SECTION 6.04.

 

Waiver of Past Defaults

     86   

SECTION 6.05.

 

Control by Majority

     86   

SECTION 6.06.

 

Limitation on Suits

     87   

SECTION 6.07.

 

Rights of Holders to Receive Payment

     87   

SECTION 6.08.

 

Collection Suit by Trustee

     87   

SECTION 6.09.

 

Restoration of Rights and Remedies

     87   

SECTION 6.10.

 

Rights and Remedies Cumulative

     87   

SECTION 6.11.

 

Delay or Omission Not Waiver

     87   

SECTION 6.12.

 

Trustee May File Proofs of Claim

     88   

SECTION 6.13.

 

Priorities

     88   

SECTION 6.14.

 

Undertaking for Costs

     88   
ARTICLE VII   
TRUSTEE   

SECTION 7.01.

 

Duties of Trustee

     88   

SECTION 7.02.

 

Rights of Trustee

     89   

SECTION 7.03.

 

Individual Rights of Trustee

     90   

SECTION 7.04.

 

Trustee’s Disclaimer

     91   

SECTION 7.05.

 

Notice of Defaults

     91   

SECTION 7.06.

 

Reports by Trustee to Holders

     91   

SECTION 7.07.

 

Compensation and Indemnity

     91   

SECTION 7.08.

 

Replacement of Trustee

     92   

SECTION 7.09.

 

Successor Trustee by Merger, etc.

     92   

SECTION 7.10.

 

Eligibility; Disqualification

     93   

SECTION 7.11.

 

Preferential Collection of Claims Against Issuer

     93   

 

-ii-


         Page  
ARTICLE VIII   
LEGAL DEFEASANCE AND COVENANT DEFEASANCE   

SECTION 8.01.

 

Option to Effect Legal Defeasance or Covenant Defeasance

     93   

SECTION 8.02.

 

Legal Defeasance and Discharge

     93   

SECTION 8.03.

 

Covenant Defeasance

     93   

SECTION 8.04.

 

Conditions to Legal or Covenant Defeasance

     94   

SECTION 8.05.

 

Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions

     95   

SECTION 8.06.

 

Repayment to Issuer

     95   

SECTION 8.07.

 

Reinstatement

     96   
ARTICLE IX   
AMENDMENT, SUPPLEMENT AND WAIVER   

SECTION 9.01.

 

Without Consent of Holders

     96   

SECTION 9.02.

 

With Consent of Holders

     97   

SECTION 9.03.

 

Compliance with Trust Indenture Act

     98   

SECTION 9.04.

 

Revocation and Effect of Consents

     98   

SECTION 9.05.

 

Notation on or Exchange of Notes

     99   

SECTION 9.06.

 

Trustee to Sign Amendments, etc.

     99   
ARTICLE X   
GUARANTEES   

SECTION 10.01.

 

Guarantee

     99   

SECTION 10.02.

 

Limitation on Guarantor Liability

     100   

SECTION 10.03.

 

Execution and Delivery

     100   

SECTION 10.04.

 

Subrogation

     101   

SECTION 10.05.

 

Benefits Acknowledged

     101   

SECTION 10.06.

 

Release of Guarantees

     101   
ARTICLE XI   
SATISFACTION AND DISCHARGE   

SECTION 11.01.

 

Satisfaction and Discharge

     102   

SECTION 11.02.

 

Application of Trust Money

     102   
ARTICLE XII   
MISCELLANEOUS   

SECTION 12.01.

 

[Reserved]

     103   

SECTION 12.02.

 

Notices

     103   

SECTION 12.03.

 

Communication by Holders with Other Holders

     104   

SECTION 12.04.

 

Certificate and Opinion as to Conditions Precedent

     104   

SECTION 12.05.

 

Statements Required in Certificate or Opinion

     104   

SECTION 12.06.

 

Rules by Trustee and Agents

     105   

SECTION 12.07.

 

No Personal Liability of Directors, Officers, Employees and Stockholders

     105   

SECTION 12.08.

 

Governing Law

     105   

SECTION 12.09.

 

Waiver of Jury Trial

     105   

 

-iii-


         Page  

SECTION 12.10.

 

Force Majeure

     105   

SECTION 12.11.

 

No Adverse Interpretation of Other Agreements

     105   

SECTION 12.12.

 

Successors

     105   

SECTION 12.13.

 

Severability

     105   

SECTION 12.14.

 

Counterpart Originals

     105   

SECTION 12.15.

 

Table of Contents, Headings, etc.

     106   

SECTION 12.16.

 

Qualification of Indenture

     106   

SECTION 12.17.

 

USA PATRIOT Act

     106   

EXHIBITS

 

Exhibit A    Form of Note
Exhibit B    Form of Certificate of Transfer
Exhibit C    Form of Certificate of Exchange
Exhibit D    Form of Supplemental Indenture to Be Delivered by Subsequent Guarantors
Exhibit E    Form of Transferee Letter of Representation

 

-iv-


INDENTURE, dated as of October 24, 2012, among IMS Health Incorporated, a Delaware corporation, each Guarantor (as defined herein) and Wells Fargo Bank, National Association, a national banking association, as Trustee.

W I T N E S S E T H

WHEREAS, the Issuer (as defined herein) has duly authorized the creation of an issue of $500,000,000 aggregate principal amount of the Issuer’s 6% senior notes due 2020 (the “ Notes ”); and

WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture (as defined herein).

NOW, THEREFORE, each party hereto agrees as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined herein).

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions .

144A Global Note ” means a Global Note substantially in the form of Exhibit A attached hereto, bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.

2012 Transaction Expenses ” means any fees or expenses incurred or paid by the Issuer or any Restricted Subsidiary in connection with the 2012 Transactions, including payments to officers, employees and directors as change of control payments, severance payments, special or retention bonuses and charges for repurchase or rollover of, or modifications to, stock options and/or restricted stock and charges related to the crediting of additional restricted stock units.

2012 Transactions ” means the transactions related or incidental to, consisting of or in connection with (i) the issuance of the Notes and the borrowings under, and amendments to, the Senior Credit Facilities, in each case on the Issue Date, (ii) the issuance of the Senior Exchange Notes, (iii) the retirement of the Existing Senior Notes tendered in the Senior Notes Exchange Offer and the amendments to the Existing Senior Notes Indenture on the Issue Date, (iv) a one-time cash dividend in an amount up to $1,250,000,000 made on or about the Issue Date by the Issuer to Holdings (and by Holdings to its direct or indirect parents) and (v) the payment of all fees and expenses associated with the foregoing, in each case, substantially as described in this offering memorandum.

Acquisition Agreement ” means the Agreement and Plan of Merger, dated as of November 5, 2009, among IMS Health Incorporated, Healthcare Technology Holdings, Inc. and Healthcare Technology Acquisition, Inc., as the same may be amended prior to February 26, 2010.

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

(1) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging, amalgamating or consolidating 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.

Additional Notes ” means additional Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the Initial Notes.


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.

Agent ” means any Registrar, co-registrar, Transfer Agent, Paying Agent or additional paying agent.

Applicable Premium ” means, with respect to any Note on any Redemption Date, the greater of:

(1) 1.0% of the principal amount of such Note; and

(2) the excess, if any, of (a) the present value at such Redemption Date of (i) the redemption price of such Note at November 1, 2015 (each such redemption price being set forth in the table appearing in Section 3.07(d) hereof), plus (ii) all required remaining scheduled interest payments due on such Note through November 1, 2015 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over (b) the then outstanding principal amount of such Note on such Redemption Date, as calculated by the Issuer or on behalf of the Issuer by such Person as the Issuer shall designate; provided , that such calculation shall not be the duty or obligation of the Trustee.

Applicable Procedures ” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.

Asset Sale ” means:

(1) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions (including by way of a Sale and Lease-Back Transaction) of property or assets of the Issuer or any of its Restricted Subsidiaries (each referred to in this definition as a “ disposition ”); or

(2) the issuance or sale of Equity Interests of any Restricted Subsidiary (other than Preferred Stock or Disqualified Stock of Restricted Subsidiaries issued in compliance with Section 4.09 hereof), whether in a single transaction or a series of related transactions;

in each case, other than:

(a) any disposition of (i) Cash Equivalents or Investment Grade Securities and (ii) obsolete, damaged or worn out property or assets in the ordinary course of business or any disposition of inventory or goods (or other assets) held for sale or no longer used or useful in the ordinary course;

(b) the disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to Section 5.01 hereof or any disposition that constitutes a Change of Control pursuant to this Indenture;

(c) the making of any Restricted Payment that is permitted to be made, and is made, under Section 4.07 hereof or any Permitted Investment;

(d) any disposition of property or assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of related transactions with an aggregate fair market value of less than the greater of $75,000,000 and 1.0% of Total Assets;

(e) any disposition of property or assets or issuance of securities by a Restricted Subsidiary to the Issuer or by the Issuer or a Restricted Subsidiary to a Restricted Subsidiary;

 

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(f) to the extent allowable under Section 1031 of the Internal Revenue Code of 1986, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

(g) (i) the lease, assignment or sub-lease, license or sublicense of any real or personal property in the ordinary course of business and (ii) the exercise of termination rights with respect to any lease, sub-lease, license or sublicense or other agreement;

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

(i) foreclosures, condemnation, expropriation or any similar action with respect to assets or the granting of Liens not prohibited by this Indenture;

(j) sales of accounts receivable, or participations therein, or Securitization Assets or related assets in connection with any Qualified Securitization Facility or the disposition of an account receivable in connection with the collection or compromise thereof in the ordinary course of business or in bankruptcy or similar proceedings;

(k) any financing transaction with respect to property built or acquired by the Issuer or any Restricted Subsidiary after the Issue Date, including Sale and Lease-Back Transactions and asset securitizations permitted by this Indenture;

(l) the sale or discount of inventory, accounts receivable or notes receivable in the ordinary course of business or the conversion of accounts receivable to notes receivable;

(m) the licensing or sub-licensing of intellectual property or other general intangibles in the ordinary course of business;

(n) any surrender or waiver of contract rights or the settlement, release or surrender of contract rights or other litigation claims in the ordinary course of business;

(o) the unwinding of any Hedging Obligations;

(p) 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;

(q) the abandonment of intellectual property rights in the ordinary course of business, which in the reasonable good faith determination of the Issuer are not material to the conduct of the business of the Issuer and its Restricted Subsidiaries taken as a whole;

(r) the granting of a Lien that is permitted under Section 4.12 hereof; and

(s) the issuance of directors’ qualifying shares and shares of Capital Stock of Foreign Subsidiaries issued to foreign nationals as required by applicable law.

Bankruptcy Law ” means Title 11, U.S. Code, as amended, or any similar federal or state law for the relief of debtors.

Board of Directors ” means, for any Person, the board of directors or other governing body of such Person or, if such Person does not have such a board of directors or other governing body and is owned or managed by a single entity, the Board of Directors of such entity, or, in either case, any committee thereof duly authorized to act on behalf of such Board of Directors. Unless otherwise provided, “Board of Directors” means the Board of Directors of the Issuer.

 

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Business Day ” means each day which is not a Legal Holiday.

Capital Stock ” means:

(1) in the case of a corporation, corporate stock or shares in the capital of such corporation;

(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 but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

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) prepared in accordance with GAAP.

Capitalized Software Expenditures ” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Restricted Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of a Person and its Restricted Subsidiaries.

Captive Insurance Subsidiary ” means any Subsidiary of the Issuer that is subject to regulation as an insurance company (or any Subsidiary thereof).

Cash Equivalents ” means:

(1) United States dollars;

(2) (a) Euros, Yen, Canadian Dollars, Sterling, Swiss Francs or any national currency of any Participating Member State of the EMU; or

(b) in the case of any Foreign Subsidiary or any jurisdiction in which the Issuer or its Restricted Subsidiaries conducts business, such local currencies held by it from time to time in the ordinary course of business and not for speculation;

(3) readily marketable direct obligations issued or directly and fully and unconditionally guaranteed or insured by the United States government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of such government with maturities of 36 months or less from the date of acquisition;

(4) certificates of deposit, time deposits and eurodollar time deposits with maturities of three years or less from the date of acquisition, demand deposits, bankers’ acceptances with maturities not exceeding three years and overnight bank deposits, in each case with any domestic or foreign commercial bank having capital and surplus of not less than $500,000,000 in the case of U.S. banks and $100,000,000 (or the United States dollar equivalent as of the date of determination) in the case of non-U.S. banks;

(5) repurchase obligations for underlying securities of the types described in clauses (3) and (4) above or clauses (7) and (8) below entered into with any financial institution or recognized securities dealer meeting the qualifications specified in clause (4) above;

 

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(6) commercial paper and variable or fixed rate notes rated at least P-2 by Moody’s or at least A-2 by S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency selected by the Issuer) and in each case maturing within 36 months after the date of acquisition;

(7) marketable short-term money market and similar liquid funds having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency selected by the Issuer);

(8) readily marketable direct obligations issued by (i) any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof or (ii) any foreign government or any political subdivision or public instrumentality thereof; provided , that each such readily marketable direct obligation shall have an Investment Grade Rating from either Moody’s or S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency selected by the Issuer) with maturities of 36 months or less from the date of acquisition;

(9) Investments with average maturities of 36 months or less from the date of acquisition in money market funds rated AAA-(or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency selected by the Issuer); and

(10) investment funds investing substantially all of their assets in securities of the types described in clauses (1) through (9) above.

In the case of Investments by any Foreign Subsidiary or Investments made in a country outside the United States of America, Cash Equivalents shall also include (i) investments of the type and maturity described in clauses (1) through (7) and clauses (8)(i) and (9) above of foreign obligors, which Investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies and (ii) other short-term investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash management in investments analogous to the foregoing investments in clauses (1) through (10) and in this paragraph.

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (1) and (2) above; provided that such amounts are converted into any currency listed in clause (1)or (2) above as promptly as practicable and in any event within ten (10) Business Days following the receipt of such amounts.

Cash Management Services ” means any agreement or arrangement to provide cash management services, including treasury, depository, overdraft, credit card processing or credit or debit card, purchase card, electronic funds transfer (including automated clearing house fund transfer services) and other cash management arrangements.

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

(1) the sale, lease, transfer, conveyance or other disposition in one or a series of related transactions (other than by merger, consolidation or amalgamation) of all or substantially all of the assets of the Issuer and its Subsidiaries, taken as a whole, to any Person other than one or more Permitted Holders; or

(2) the Issuer becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by (A) any Person (other than any Permitted Holder) or (B) Persons (other than any Permitted Holders) that are together a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor

 

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provision), including any such 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), in a single transaction or in a related series of transactions, by way of merger, amalgamation, 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 50.0% or more of the total voting power of the Voting Stock of the Issuer directly or indirectly through any of its direct or indirect parent holding companies, other than in each case, in connection with any transaction or series of transactions in which the Issuer shall become the Wholly-Owned Subsidiary of a Parent Company.

Clearstream ” means Clearstream Banking, Société Anonyme and its successors.

Consolidated Depreciation and Amortization Expense ” means with respect to any Person for any period, the total amount of depreciation and amortization expense of such Person and its Restricted Subsidiaries, including, the amortization of intangible assets, deferred financing fees, debt issuance costs, commissions, fees and expenses and amortization of Capitalized Software Expenditures of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

Consolidated Interest Expense ” means, with respect to any Person for any period, without duplication, the sum of:

(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, if any, made (less net payments, if any, received), pursuant to interest rate Hedging Obligations with respect to Indebtedness, and excluding (q) any prepayment premium or penalty, (r) annual agency fees paid to the administrative agents and collateral agents under any Credit Facilities, (s) costs associated with obtaining Hedging Obligations and breakage costs in respect of Hedging Obligations related to interest rates, (t) any expense resulting from the discounting of any indebtedness in connection with the application of recapitalization accounting or, if applicable, purchase accounting in connection with the Transactions or any acquisition (or purchase of assets), (u) penalties and interest related to taxes, (v) any “additional interest” or “liquidated damages” with respect to other securities, (w) amortization or expensing of deferred financing fees, amendment and consent fees, debt issuance costs, commissions, fees and expenses, (x) any amortization or expensing of bridge, commitment and other financing fees and any other fees related to the Transactions, the 2012 Transactions or any acquisitions (or purchases of assets) after the Issue Date, (y) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Qualified Securitization Facility and (z) any accretion of accrued interest on discounted liabilities (other than Indebtedness except to the extent arising from the application of purchase accounting); plus

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

(3) interest income of such Person and its Restricted Subsidiaries for such period.

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

 

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Consolidated Net Income ” means, with respect to any Person for any period, the aggregate of the Net Income of such Person 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 net after-tax effect of extraordinary, non-recurring or unusual gains or losses, charges or expenses (including relating to any multi-year strategic initiatives), Transaction Expenses, 2012 Transaction Expenses, restructuring costs and reserves, duplicative running costs, relocation costs, expenses related to any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternative uses, Public Company Costs, facility consolidation and closing costs, severance costs and expenses, one-time compensation charges, costs relating to pre-opening and opening costs for facilities, signing, retention or completion bonuses, executive recruiting costs, costs incurred in connection with any strategic initiatives, transition costs, costs incurred in connection with non-ordinary course product and intellectual property development, costs incurred in connection with acquisitions (or purchases of assets) prior to or after the Issue Date (including integration costs), other business optimization expenses (including costs and expenses relating to business optimization programs, and new systems design, retention charges, system establishment costs and implementation costs and project start-up costs), accruals and reserves, operating expenses attributable to the implementation of cost-savings initiatives, consulting fees and curtailments and 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;

(3) any net after-tax effect of gains or losses on disposal, abandonment (including asset retirement costs) or discontinuance of disposed, abandoned or discontinued operations, as applicable, shall be excluded;

(4) any net after-tax effect of gains or losses (less all fees, expenses and charges relating thereto) attributable to asset dispositions or abandonments or the sale or other disposition of any Equity Interests of any Person other than in the ordinary course of business, as determined in good faith by the Issuer, shall be excluded;

(5) the Net Income for such period of any Person that is an Unrestricted Subsidiary shall be excluded, and, solely for the purpose of determining the amount available for Restricted Payments under Section 4.07(a)(3)(A) hereof, the Net Income for such period of any Person that is not a Subsidiary or that is accounted for by the equity method of accounting shall be excluded; provided that Consolidated Net Income of a Person 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 such 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 4.07(a)(3)(A) hereof, the Net Income for such period of any Restricted Subsidiary (other than 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 (other than (x) restrictions that have been waived or otherwise released and (y) restrictions in effect on the Issue Date with respect to a Restricted Subsidiary); provided that Consolidated Net Income of a Person will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash), or the amount that could have been paid in cash without violating any such restriction or requiring any such approval, to such Person 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 such Person and its Restricted Subsidiaries) in such Person’s consolidated financial statements pursuant to GAAP (including in the inventory, property and equipment, software, goodwill, intangible assets, in process research and development, deferred revenue and debt line items), attributable to the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition or joint venture investment or the amortization or write-off or write-down of any amounts thereof, net of taxes, shall be excluded;

 

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(8) any net after-tax effect of income (loss) from the early extinguishment or conversion of (a) Indebtedness, (b) Hedging Obligations or (c) other derivative instruments shall be excluded;

(9) any impairment charge or asset write-off or write-down in each case, pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP shall be excluded;

(10) any equity-based or non-cash compensation charge or expense, including any such charge or expense arising from grants of stock appreciation, equity incentive programs or similar rights, stock options, restricted stock or other rights to, and any cash charges associated with the rollover, acceleration, or payout of, Equity Interests by management of such Person or of a Restricted Subsidiary or any of its direct or indirect parent companies in connection with the Transactions, shall be excluded;

(11) any fees, expenses or charges incurred during such period, or any amortization thereof for such period, in connection with any acquisition, Investment, Asset Sale, disposition, incurrence or repayment of Indebtedness (including such fees, expenses or charges related to the offering and issuance of the Notes and the syndication and incurrence of any Credit Facilities), issuance of Equity Interests, recapitalization, refinancing transaction or amendment or modification of any debt instrument (including any amendment or other modification of the Notes and other securities and any Credit Facilities) and including, in each case, any such transaction whether consummated on, after or prior to the Issue Date and any such transaction undertaken but not completed, and any charges or non-recurring merger costs incurred during such period as a result of any such transaction, in each case whether or not successful or consummated (including, for the avoidance of doubt, the effects of expensing all transaction related expenses in accordance with Accounting Standards Codification Topic No. 805, Business Combinations ), shall be excluded;

(12) accruals and reserves that are established or adjusted within twelve months after the Issue Date that are so required to be established or adjusted as a result of the Transactions (or within twelve 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) any expenses, charges or losses to the extent covered by insurance or indemnity and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer or indemnifying party and only to the extent that such amount is in fact reimbursed within 365 days of the date of the insurable or indemnifiable event (net of any amount so added back in any prior period to the extent not so reimbursed within the applicable 365-day period), shall be excluded;

(14) any noncash compensation expense resulting from the application of Accounting Standards Codification Topic No. 718, Compensation Stock Compensation or Accounting Standards Codification Topic 505-50, Equity-Based Payments to Non-Employees , shall be excluded; and

(15) the following items shall be excluded:

(a) research and development expenses and charges to the extent expensed; and

(b) earn-out and contingent consideration obligations (including to the extent accounted for as bonuses or otherwise) and adjustments thereof and purchase price adjustments.

In addition, to the extent not already included 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 the amount of proceeds received from business interruption insurance and reimbursements of any expenses and charges that are covered by indemnification or other reimbursement provisions in connection with any acquisition, Investment or any sale, conveyance, transfer or other disposition of assets permitted under this Indenture.

 

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Notwithstanding the foregoing, for the purpose of Section 4.07 hereof only (other than Section 4.07(a)(3)(D) hereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by such Person and its Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from such Person and its Restricted Subsidiaries, any repayments of loans and advances which constitute Restricted Investments by such Person 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 Section 4.07(a)(3)(D) hereof.

Consolidated Total Debt ” means, as of any date of determination, the aggregate principal amount of Indebtedness of the Issuer and its Restricted Subsidiaries outstanding on such date, determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of Indebtedness resulting from the application of purchase accounting in connection with the Transactions or any acquisition permitted under this Indenture), consisting only of Indebtedness for borrowed money, Capitalized Lease Obligations, debt obligations evidenced by bonds, notes, debentures, promissory notes or similar instruments and guarantees of Indebtedness of such types of a third Person plus , without duplication, the aggregate undrawn amount of Designated Revolving Commitments in effect on such date; provided that Consolidated Total Debt shall not include Indebtedness in respect of (i) any letter of credit, except to the extent of obligations in respect of drawn standby letters of credit which have not been reimbursed within three (3) Business Days and (ii) Hedging Obligations, except any unpaid termination payments thereunder. The U.S. dollar-equivalent principal amount of any Indebtedness denominated in a foreign currency will reflect the currency translation effects, determined in accordance with GAAP, of Hedging Obligations for currency exchange risks with respect to the applicable currency in effect on the date of determination of the U.S. dollar-equivalent principal amount of such Indebtedness.

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:

(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.

Controlled Investment Affiliate ” means, as to any Person, any other Person, other than any Investor, which directly or indirectly is in control of, is controlled by, or is under common control with such Person and is organized by such Person (or any Person controlling such Person) primarily for making direct or indirect equity or debt investments in the Issuer and/or other companies.

Corporate Trust Office of the Trustee ” shall be at the address of the Trustee specified in Section 12.02 hereof or such other address as to which the Trustee may give notice to the Holders and the Issuer.

CPP ” means CPP Investment Board Private Holdings Inc.

 

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CPP Group ” means CPP and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt their portfolio companies or other operating companies affiliated with CPP).

Credit Facilities ” means, with respect to the Issuer or any of its Restricted Subsidiaries, one or more debt facilities, including the Senior Credit Facilities or other financing arrangements (including commercial paper facilities or indentures) providing for revolving credit loans, term loans, letters of credit or other long-term indebtedness, including any notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements or refundings thereof, in whole or in part, and any indentures or credit facilities or commercial paper facilities that replace, refund, supplement or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding, supplemental or refinancing facility, arrangement or indenture that increases the amount permitted to be borrowed or issued thereunder or alters the maturity thereof ( provided that such increase in borrowings or issuances is permitted under Section 4.09 hereof) or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, trustee, lender or group of lenders or holders.

Custodian ” means the Trustee, as custodian with respect to the Notes, each in global form, or any successor entity thereto.

Debt Fund Affiliate ” means any affiliate of the Investor that is a bona fide diversified 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.

Default ” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

Definitive Note ” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06(c) hereof, substantially in the form of Exhibit A attached hereto, except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

Depositary ” means, with respect to the Notes issuable or issued in whole or in part in global form, any Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

Designated Non-cash Consideration ” means the fair market value of non-cash consideration received by the Issuer or a Restricted Subsidiary 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, redemption or repurchase of, or collection or payment on, such Designated Non-cash Consideration.

Designated Preferred Stock ” means Preferred Stock of the Issuer, any Restricted Subsidiary thereof or any direct or indirect parent company thereof (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate on or promptly after the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in Section 4.07(a)(3) hereof.

Designated Revolving Commitments ” means any commitments to make loans or extend credit on a revolving basis to the Issuer or any of its Restricted Subsidiaries by any Person other than the Issuer or any of its Restricted Subsidiaries that have been designated in an Officer’s Certificate delivered to the Trustee as “Designated Revolving Commitments” until such time as the Issuer subsequently delivers an Officer’s Certificate to the Trustee to the effect that such commitments shall no longer constitute “Designated Revolving Commitments.”

 

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Disqualified Stock ” means, with respect to any Person, any Capital Stock of such Person which, by its terms, or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable (other than solely as a result of a change of control or asset sale) pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than solely as a result of a change of control or asset sale), in whole or in part, in each case prior to the date 91 days after the earlier of the maturity date of the Notes or the date the Notes are no longer outstanding; provided , that if such Capital Stock is issued to any plan for the benefit of future, current or former employees, directors, officers, members of management or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer or its Subsidiaries or by any such plan to such employees, directors, officers, members of management or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members), such Capital Stock shall not constitute Disqualified Stock solely because it may be redeemable or subject to repurchase by the Issuer or its Subsidiaries pursuant to any such plan or agreement or in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s, director’s, officer’s, management member’s or consultant’s termination, death or disability; provided , further , that any Capital Stock held by any future, current or former employee, director, officer, member of management or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any of its Subsidiaries, any of its direct or indirect parent companies or any other entity in which the Issuer or a Restricted Subsidiary has an Investment and is designated in good faith as an “affiliate” by the Board of Directors (or the compensation committee thereof), in each case pursuant to any stock subscription or shareholders’ agreement, management equity plan or 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 the Issuer or its Subsidiaries or in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s, director’s, officer’s, management member’s or consultant’s termination, death or disability.

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

(1) increased (without duplication) by the following, in each case (other than in the case of clauses (g) and (j)) to the extent deducted (and not added back) in determining Consolidated Net Income for such period:

(a) provision for taxes based on income or profits or capital, including federal, state, franchise, property, excise and similar taxes and foreign withholding taxes (including any future taxes or other levies which replace or are intended to be in lieu of such taxes and any penalties and interest related to such taxes or arising from tax examinations) and the net tax expense associated with any adjustments made pursuant to clauses (1) through (15) of the definition of “Consolidated Net Income”; plus

(b) Fixed Charges for such period (including (x) net losses under Hedging Obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, (y) bank fees and other deferred financing fees, and (z) costs of surety bonds in connection with financing activities, plus amounts excluded from Consolidated Interest Expense as set forth in clauses (1)(q) through (z) in the definition thereof); plus

(c) Consolidated Depreciation and Amortization Expense for such period; plus

(d) 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, (A) the Issuer may determine not to add back such non-cash charge in the current period and (B) to the extent the Issuer does decide to add back such non-cash charge, 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

(e) the amount of any reductions in arriving at Net Income resulting from the application of Accounting Standards Codification Topic No. 810, Consolidation ; plus

 

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(f) the amount of management, monitoring, consulting, transaction, advisory and other fees (including termination fees) and indemnities and expenses paid or accrued in such period under the Management Fee Agreement or otherwise to the Permitted Holders or other Persons with a similar interest in the Issuer or its direct or indirect parent companies to the extent otherwise permitted under Section 4.11 hereof; plus

(g) the amount of “run rate” net cost savings, synergies and operating expense reductions (other than any of the foregoing related to Specified Transactions) projected by the Issuer in good faith to result from actions taken, committed to be taken or with respect to which substantial steps have been taken or are expected in good faith to be taken no later than twelve (12) months after the end of such period (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of the period for which EBITDA is being determined and if such cost savings, operating expense reductions 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 such cost savings, operating expense reductions and synergies are reasonably identifiable and factually supportable (it is understood and agreed that “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken); plus

(h) the amount of loss on sale of receivables, Securitization Assets and related assets to any Securitization Subsidiary in connection with a Qualified Securitization Facility; plus

(i) any costs or expense incurred pursuant to any management equity plan, stock option plan or any other management or employee benefit plan, agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of such Person or net cash proceeds of an issuance of Equity Interest of such Person (other than Disqualified Stock) solely to the extent that such cash proceeds are excluded from the calculation set forth in Section 4.07(a)(3) hereof; plus

(j) cash receipts (or any netting arrangements resulting in reduced cash expenditures) not representing EBITDA or Consolidated Net Income in any period to the extent non-cash gains relating to such income were deducted in the calculation of EBITDA pursuant to clause (2) below for any previous period and not added back; plus

(k) any net loss from disposed, abandoned or discontinued operations (excluding held-for-sale discontinued operations until actually disposed of); plus

(l) Specified Legal Expenses; and

(2) decreased (without duplication) by the following, in each case to the extent included in determining Consolidated Net Income for such period:

(a) non-cash gains increasing Consolidated Net Income for such period, excluding any non-cash gains that represent the reversal of an accrual or reserve for any anticipated cash charges in any prior period (other than any such accrual or reserve that has been added back to Consolidated Net Income in calculating EBITDA in accordance with this definition); plus

(b) any non-cash gains with respect to cash actually received in a prior period unless such cash did not increase EBITDA in such prior period; plus

(c) any net income from disposed, abandoned or discontinued operations (excluding held-for-sale discontinued operations until actually disposed of); and

 

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(3) increased (by losses) or decreased (by gains), as applicable, without duplication, in each case, except for the adjustments set forth in the proviso to this clause (3), to the extent included in computing Consolidated Net Income for such period:

(a) any net gain or loss resulting in such period from Hedging Obligations and the application of Accounting Standards Codification Topic No. 815, Derivatives and Hedging ;

(b) any net gain or loss resulting in such period from a sale of Securitization Assets to a Securitization Subsidiary in connection with a Qualified Securitization Facility;

(c) any realized or unrealized gains or losses in such period from (i) balance sheet currency translation, (ii) currency translation of assets or liabilities that are not denominated in the functional currency of a Person into the functional currency of that Person and (iii) Hedging Obligations that are designated by a Person as a hedge of an asset or liability in clause (c)(i) or (ii); and

(d) any adjustments resulting from the application of Accounting Standards Codification Topic No. 460, Guarantees , or any comparable regulation;

provided that, notwithstanding the foregoing, EBITDA shall include (without duplication) (i) any net realized gain or loss from any Hedging Obligations accounted for as cash flow hedges of intercompany royalties and (ii) any net realized gain or loss from any Hedging Obligations that are designated by the Issuer as EBITDA hedges, except to the extent any such Hedging Obligations are terminated by such Person prior to their scheduled maturity.

EMU Legislation ” means the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency.

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 of common stock or Preferred Stock of the Issuer or any of its direct or indirect parent companies (excluding Disqualified Stock), other than:

(1) public offerings with respect to the Issuer’s or any direct or indirect parent company’s common stock registered on Form S-4 or Form S-8;

(2) issuances to any Subsidiary of the Issuer; and

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

Euroclear ” means Euroclear Bank S.A./N.V., as operator of the Euroclear system, and its successors.

Euros ” means the lawful currency of the Participating Member States introduced in accordance with the EMU Legislation.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

Excluded Contribution ” means net cash proceeds, marketable securities or Qualified Proceeds received by the Issuer from

(1) contributions to its common equity capital; and

(2) the sale (other than to a Subsidiary of the Issuer or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Issuer) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Issuer;

 

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in each case designated as Excluded Contributions pursuant to an Officer’s Certificate on or promptly after the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, and which are excluded from the calculation set forth in Section 4.07(a)(3) hereof.

Existing Senior Notes ” means the up to $1,000,000,000 in aggregate principal amount of the Issuer’s 12  1 2 % Senior Unsecured Notes due 2018.

Existing Senior Notes Indenture ” means the indenture for the Existing Senior Notes, dated February 26, 2010 between the Issuer and U.S. Bank National Association, as trustee, as amended, supplemented or modified from time to time.

fair market value ” means, with respect to any asset or liability, the fair market value of such asset or liability as determined by the Issuer in good faith.

Financial Officer ” means the Chief Financial Officer, the Treasurer or other financial officer of the Issuer, as appropriate.

Fixed Charge Coverage Ratio ” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Issuer or any Restricted Subsidiary incurs, assumes, guarantees, redeems, repays, retires or extinguishes any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility in the ordinary course of business for working capital purposes) or issues, repurchases or redeems Disqualified Stock or Preferred Stock or establishes or eliminates any Designated Revolving Commitments, in each case, 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, repayment, retirement or extinguishment of Indebtedness or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable Test Period (and (i) for the purposes of the numerator of the Total Net Leverage Ratio and the Senior Secured Net Leverage Ratio, as if the same had occurred on the last day of the applicable Test Period and (ii) for all purposes, as if Indebtedness in the full amount of any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period).

For purposes of making the computation referred to above, any Specified Transaction that has been made by the Issuer or any of its Restricted Subsidiaries during any Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Fixed Charge Coverage Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such Specified Transactions (and the change in any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Issuer or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction 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 Test Period as if such Specified Transaction had occurred at the beginning of the applicable Test Period.

For purposes of this definition, whenever pro forma effect is to be given to any Specified Transaction (including the Transactions), the pro forma calculations shall be made in good faith by a Financial Officer of the Issuer and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, synergies and operating expense reductions resulting from or related to any such Specified Transaction (including the Transactions) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than 18 months after the date of any such Specified Transaction (in each case as though such cost savings and synergies had been realized on the first day of the applicable period and as if such cost savings and synergies were realized for the entirety of such period). For the purposes of this Indenture, “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken, or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public

 

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company requirements), net of the amount of actual benefits realized during such period from such actions. 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 Financial Officer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. 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 Issuer may designate. For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.

Fixed Charges ” means, with respect to any Person for any period, the sum of, without duplication:

(1) Consolidated Interest Expense of such Person for such period;

(2) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Preferred Stock during such period; and

(3) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Disqualified Stock during such period.

Foreign Subsidiary ” means, with respect to any Person, (a) any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States, any state thereof or the District of Columbia and any Restricted Subsidiary of such Foreign Subsidiary and (b) any Restricted Subsidiary that is treated as a disregarded entity for United States federal income tax purposes and substantially all of whose assets consist of Equity Interests and/or Indebtedness of one or more Foreign Subsidiaries and any Restricted Subsidiary of such Foreign Subsidiary.

GAAP ” means (1) generally accepted accounting principles in the United States of America which are in effect on the Issue Date or (2) after the Issue Date, if elected by the Issuer by written notice to the Trustee in connection with the delivery of financial statements and information, the accounting standards and interpretations (“IFRS”) adopted by the International Accounting Standard Board, as in effect on the first date of the period for which the Issuer is making such election; provided , that (a) any such election once made shall be irrevocable, (b) all financial statements and reports required to be provided after such election pursuant to this Indenture shall be prepared on the basis of IFRS, (c) from and after such election, all ratios, computations and other determinations based on GAAP contained in this Indenture shall be computed in conformity with IFRS, (d) in connection with the delivery of financial statements (x) for any of its first three financial quarters of any financial year, it shall restate its consolidated interim financial statements for such interim financial period and the comparable period in the prior year to the extent previously prepared in accordance with GAAP as in effect on the Issue Date and (y) for delivery of audited annual financial information, it shall provide consolidated historical financial statements prepared in accordance with IFRS for the prior most recent fiscal year to the extent previously prepared in accordance with GAAP as in effect on the Issue Date. For purposes of this Indenture, the term “consolidated” with respect to any Person means such Person consolidated with its Restricted Subsidiaries and does not include any Unrestricted Subsidiary.

Global Note Legend ” means the legend set forth in Section 2.06(g)(ii) hereof, which is required to be placed on all Global Notes issued under this Indenture.

Global Notes ” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of Exhibit A attached hereto, issued in accordance with Section 2.01, 2.06(b) or 2.06(d) hereof.

 

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Government Securities ” 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 either case, are not callable or redeemable at the option of the issuers 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 Government Securities or a specific payment of principal of or interest on any such Government Securities 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 Government Securities or the specific payment of principal of or interest on the Government Securities evidenced by such depository receipt.

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

Guarantee ” means the guarantee by any Guarantor of the Issuer’s Obligations under this Indenture and the Notes.

Guarantor ” means each Restricted Subsidiary of the Issuer, if any, that Guarantees the Notes in accordance with the terms of this Indenture.

Hedging Obligations ” means, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar agreement providing for the transfer, modification or mitigation of interest rate, currency or commodity risks either generally or under specific contingencies.

Holder ” means the Person in whose name a Note is registered on the Registrar’s books.

Holdings ” means Healthcare Technology Intermediate Holdings, Inc.

IAI ” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

IAI Global Note ” means a Global Note substantially in the form of Exhibit A attached hereto, bearing the Global Note Legend and the Private Placement Legend, numbered IAI-1 and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee.

Immediate Family Members ” means with respect to any individual, such individual’s child, stepchild, grandchild or more remote descendant, parent, stepparent, grandparent, spouse, former spouse, qualified domestic partner, sibling, mother-in-law, father-in-law, son-in-law and daughter-in-law (including adoptive relationships) and any trust, partnership or other bona fide estate-planning vehicle the only beneficiaries of which are any of the foregoing individuals or any private foundation or fund that is controlled by any of the foregoing individuals or any donor-advised fund of which any such individual is the donor.

 

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Indebtedness ” means, with respect to any Person, without duplication:

(1) any indebtedness (including principal and premium) 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 balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations) due more than twelve months after such property is acquired, except (i) any such balance that constitutes an obligation in respect of a commercial letter of credit, a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business, (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and is not paid after becoming due and payable; or

(d) representing the net obligations under any Hedging Obligations;

if and to the extent that any of the foregoing Indebtedness (other than obligations in respect of letters of credit and Hedging Obligations) would appear as a liability upon 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 the Issuer appearing upon the balance sheet of the Issuer solely by reason of push-down accounting under GAAP shall be excluded;

(2) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clause (1) of a third Person (whether or not such items would appear upon the balance sheet of such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business; and

(3) to the extent not otherwise included, the obligations of the type referred to in clause (1) of a third Person secured by a Lien on any asset owned by such first Person, whether or not such Indebtedness is assumed by such first Person; provided that the amount of such Indebtedness that is not recourse to the Issuer or any Restricted Subsidiary except with respect to such specific asset 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 notwithstanding the foregoing, Indebtedness shall be deemed not to include (a) Contingent Obligations incurred in the ordinary course of business, (b) reimbursement obligations under commercial letters of credit ( provided that unreimbursed amounts under letters of credit shall be counted as Indebtedness three (3) Business Days after such amount is drawn), (c) obligations under or in respect of Qualified Securitization Facilities; provided , further , that Indebtedness shall be calculated without giving effect to the effects of Accounting Standards Codification Topic No. 815, Derivatives and Hedging , and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness or (d) deferred or prepaid revenues. For the avoidance of doubt, Indebtedness shall not include royalty payments.

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

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

 

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Indirect Participant ” means a Person who holds a beneficial interest in a Global Note through a Participant.

Initial Notes ” means the first $500,000,000 aggregate principal amount of Notes issued under this Indenture on the Issue Date.

Interest Payment Date ” means May 1 and November 1 of each year to stated maturity, beginning May 1, 2013.

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 selected by the Issuer.

Investment Grade Securities ” means:

(1) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (other than Cash Equivalents);

(2) debt securities or debt instruments with an Investment Grade Rating, but excluding any debt securities or debt instruments constituting loans or advances among the Issuer and its Subsidiaries;

(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment 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, credit card and debit card receivables, trade credit, advances to customers, commission, travel and similar advances to employees, directors, officers, members of management, manufacturers and consultants, in each case 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. For purposes of the definition of “Unrestricted Subsidiary” and Section 4.07 hereof:

(1) “Investments” shall include the portion (proportionate to the Issuer’s Equity Interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary of the Issuer at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to:

(a) the Issuer’s “Investment” in such Subsidiary at the time of such redesignation; less

(b) the portion (proportionate to the Issuer’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.

The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any dividend, distribution, interest payment, return of capital, repayment or other amount received in Cash Equivalents by the Issuer or a Restricted Subsidiary in respect of such Investment.

 

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Investor ” means each of (1) TPG Group, (2) CPP Group and (3) LGP Group and their respective Affiliates and funds or partnerships managed or advised by any of them or any of their respective Affiliates, including for the avoidance of doubt, any co-investment vehicle controlled by any of the foregoing, but not including, however, any portfolio company of any of the foregoing.

Issue Date ” means the date of original issuance of the Notes under this Indenture.

Issuer ” means IMS Health Incorporated and its successors.

Issuer’s Order ” means a written request or order signed on behalf of the Issuer by an Officer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer, and delivered to the Trustee.

Legal Holiday ” means a Saturday, a Sunday or a day on which commercial banking institutions are not required to be open in the State of New York or at the place of payment. If a payment date is on a Legal Holiday, payment will be made on the next succeeding day that is not a Legal Holiday and no interest shall accrue in the intervening period.

LGP “ means Leonard Green & Partners, L.P.

LGP Group ” means LGP and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt their portfolio companies or other operating companies affiliated with LGP).

Lien ” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest 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 be deemed to constitute a Lien.

Management Fee Agreement ” means the management agreement or similar agreements among one or more of the Investors or certain of the management companies associated with it or their advisors, if applicable, and the Issuer (and/or any of its direct or indirect parent companies).

Management Stockholders ” means the members of management (and their Controlled Investment Affiliates and Immediate Family Members) of the Issuer (or its direct parent) who are holders of Equity Interests of any direct or indirect parent companies of the Issuer on the Issue Date.

Moody’s ” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

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

Net Proceeds ” means the aggregate Cash Equivalent proceeds received by the Issuer or any of its Restricted Subsidiaries in respect of any Asset Sale, including any Cash Equivalents received upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale, net of the costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration, including legal, accounting and investment banking fees, payments made in order to obtain a necessary consent or required by applicable law, and brokerage and sales commissions, all dividends, distributions or other payments required to be made to minority interest holders in Restricted Subsidiaries as a result of any such Asset Sale by a Restricted Subsidiary, the amount of any purchase price or similar adjustment claimed by any Person to be owed by the Issuer or any Restricted Subsidiary, until such time as such claim shall have been settled or otherwise finally resolved, or paid or payable by the Issuer or any Restricted Subsidiary, in either case in respect of such Asset Sale, any relocation expenses incurred as a result thereof, other fees and expenses, including title and recordation expenses, taxes paid or payable as a result thereof or any transactions occurring or deemed to occur to effectuate a payment under this Indenture (after taking

 

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into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of principal, premium, if any, and interest on Indebtedness (other than Subordinated Indebtedness) or amounts required to be applied to the repayments of Indebtedness secured by a Lien on such assets and required (other than required by Section 4.10(b)(1) hereof) to be paid as a result of such transaction and any deduction of appropriate amounts to be provided by the Issuer 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 the Issuer or any of its Restricted Subsidiaries after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

Non-U.S. Person ” means a Person who is not a U.S. Person.

Notes ” has the meaning assigned to it in the recitals to this Indenture. The Initial Notes and the Additional Notes shall be treated as a single class for all purposes under this Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes.

Obligations ” means any principal, interest (including any interest accruing on or subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), premium, penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and banker’s acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.

Offering Memorandum ” means the confidential offering memorandum, dated October 16, 2012, relating to the sale of the Initial Notes.

Officer ” means the Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of any Person. Unless otherwise indicated, Officer shall refer to an Officer of the Issuer.

Officer’s Certificate ” means a certificate signed on behalf of a Person by an Officer of such Person that meets the requirements set forth in this Indenture and provided to the Trustee. Unless otherwise indicated, Officer shall refer to an Officer of the Issuer.

Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer or the Trustee.

Parent Company ” means any Person so long as such Person directly or indirectly holds 100.0% of the total voting power of the Capital Stock of the Issuer, and at the time such Person acquired such voting power, no Person (other than any Permitted Holder) and no Persons (other than any Permitted Holders) that are together a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision), including any such 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), shall have beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), directly or indirectly, of 50.0% or more of the total voting power of the Voting Stock of such Person.

Participant ” means, with respect to the Depositary, a Person who has an account with the Depositary (and, with respect to DTC, shall include Euroclear and Clearstream).

Participating Member State ” means each state so described in any EMU Legislation.

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 Equivalents between the Issuer or any of its Restricted Subsidiaries and another Person; provided that any Cash Equivalents received must be applied in accordance with Section 4.10 hereof.

 

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Permitted Holder ” means any of the Investors and Management Stockholders and any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which any of the foregoing are members; provided , that, in the case of such group and without giving effect to the existence of such group or any other group, such Investors and Management Stockholders, collectively, have beneficial ownership of more than 50.0% of the total voting power of the Voting Stock of the Issuer or any of its direct or indirect parent companies. Any Person or group 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 (or would result in a Change of Control Offer in the absence of the waiver of such requirement by Holders in accordance with the provisions of this Indenture) will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

Permitted Investments ” means:

(1) any Investment in the Issuer or any of its Restricted Subsidiaries;

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

(3) any Investment by the Issuer or any of its Restricted Subsidiaries in a Person that is engaged (directly or through entities that will be Restricted Subsidiaries) in a Similar Business 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 amalgamated, merged or consolidated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary,

and, in each case, any Investment held by such Person; provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, amalgamation, consolidation or transfer;

(4) any Investment in securities or other assets not constituting Cash Equivalents or Investment Grade Securities and received in connection with an Asset Sale made pursuant to the provisions described under Section 4.10 hereof or any other disposition of assets not constituting an Asset Sale;

(5) any Investment existing on the Issue Date or made pursuant to binding commitments in effect on the Issue Date or an Investment consisting of any extension, modification, replacement, renewal or reinvestment of any Investment or binding commitment existing on the Issue Date; provided , that the amount of any such Investment or binding commitment may be increased (a) as required by the terms of such Investment or binding commitment as in existence on the Issue Date (including as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities) or (b) as otherwise permitted under this Indenture;

(6) any Investment acquired by the Issuer or any of its Restricted Subsidiaries:

(a) in exchange for any other Investment, accounts receivable or indorsements for collection or deposit held by the Issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of, or settlement of delinquent accounts and disputes with or judgments against, the issuer of such other Investment or accounts receivable (including any trade creditor or customer);

(b) in satisfaction of judgments against other Persons;

 

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(c) as a result of a foreclosure by the Issuer 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; or

(d) as a result of the settlement, compromise or resolution of litigation, arbitration or other disputes with Persons who are not Affiliates.

(7) Hedging Obligations permitted under Section 4.09(b)(10) hereof;

(8) any Investment in a Similar Business taken together with all other Investments made pursuant to this clause (8) that are at that time outstanding, not to exceed the greater of (a) $200,000,000 and (b) 2.5% of Total Assets (with the amount of each Investment being measured at the time made and without giving effect to subsequent changes in value, but subject to adjustment as set forth in the definition of Investment);

(9) Investments the payment for which consists of Equity Interests (other than Disqualified Stock) of the Issuer or any of its direct or indirect parent companies; provided , that such Equity Interests will not increase the amount available for Restricted Payments under Section 4.07(a)(3) hereof;

(10) guarantees of Indebtedness permitted under Section 4.09 hereof, performance guarantees and Contingent Obligations incurred in the ordinary course of business and the creation of liens on the assets of the Issuer or any Restricted Subsidiary in compliance with Section 4.12 hereof;

(11) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 4.11(b) hereof (except transactions described in clauses (2), (5), (9) and (15) of such Section);

(12) Investments consisting of purchases and acquisitions of inventory, supplies, material, services or equipment, or intellectual property, or the licensing or contribution of intellectual property pursuant to any distribution, service, joint marketing, co-branding, co-distribution or other similar arrangements with other Persons, however denominated;

(13) Investments, taken together with all other Investments made pursuant to this clause (13) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of, or have not been subsequently sold or transferred for, Cash Equivalents or marketable securities), not to exceed the greater of (a) $225,000,000 and (b) 3.0% of Total Assets (with the amount of each Investment being measured at the time made and without giving effect to subsequent changes in value, but subject to adjustment as set forth in the definition of Investment);

(14) Investments in or relating to a Securitization Subsidiary that, in the good faith determination of the Issuer, are necessary or advisable to effect any Qualified Securitization Facility or any repurchase obligation in connection therewith;

(15) loans and advances to, or guarantees of Indebtedness of, officers, directors, employees, consultants and members of management not in excess of $25,000,000 outstanding at any one time, in the aggregate;

(16) loans and advances to employees, directors, officers, members of management and consultants for business-related travel expenses, moving expenses and other similar expenses or payroll advances, in each case incurred in the ordinary course of business or consistent with past practices or to future, present and former employees, directors, officers, members of management and consultants (and their Controlled Investment Affiliates and Immediate Family Members) to fund such Person’s purchase of Equity Interests of the Issuer or any direct or indirect parent company thereof;

 

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(17) advances, loans or extensions of trade credit in the ordinary course of business by the Issuer or any of its Restricted Subsidiaries;

(18) any Investment in any Subsidiary or any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business;

(19) Investments consisting of purchases and acquisitions of assets or services in the ordinary course of business;

(20) Investments made in the ordinary course of business in connection with obtaining, maintaining or renewing client contacts and loans or advances made to distributors in the ordinary course of business;

(21) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers compensation, performance and similar deposits entered into as a result of the operations of the business in the ordinary course of business;

(22) repurchases of the Notes;

(23) Investments in Unrestricted Subsidiaries, taken together with all other Permitted Investments made pursuant to this clause (23) that are at the time outstanding, without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of, or have not been subsequently sold or transferred for, Cash Equivalents or marketable securities, not to exceed the greater of (a) $150,000,000 and (b) 2.0% of Total Assets (with the amount of each Investment being measured at the time made and without giving effect to subsequent changes in value, but subject to adjustment as set forth in the definition of Investment);

(24) Investments in the ordinary course of business consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Article 4 customary trade arrangements with customers consistent with past practices; and

(25) any Investment by any Captive Insurance Subsidiary in connection with its provision of insurance to the Issuer or any of its Subsidiaries, which Investment is made in the ordinary course of business of such Captive Insurance Subsidiary, or by reason of applicable law, rule, regulation or order, or that is required or approved by any regulatory authority having jurisdiction over such Captive Insurance Subsidiary or its business, as applicable.

Permitted Liens ” means, with respect to any Person:

(1) pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance, health, disability or employee benefits, other social security laws or similar legislation or regulations or other insurance-related obligations (including, but not limited to, in respect of deductibles, self-insured retention amounts and premiums and adjustments thereto) 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, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal 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) landlords’, carriers’, warehousemen’s, materialsmen’s, repairmen’s, construction and mechanics’ Liens, in each case arising in the ordinary course of business and (i) for sums not yet overdue for a period of more than 60 days or, if more than 60 days overdue, are unfiled and no other action has been taken to enforce such Liens, (ii) being contested in good faith by appropriate actions or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding

 

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with an appeal or other proceedings for review if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP or (iii) the nonpayment of which in the aggregate would not reasonably be expected to have a material adverse effect on the Issuer or its Restricted Subsidiaries;

(3) Liens for taxes, assessments or other governmental charges not yet overdue for a period of more than 30 days or not yet payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate actions, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

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

(5) survey exceptions, encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, servitudes, sewers, electric lines, telegraph, telephone and cable television lines and other similar purposes, or zoning, building codes or other restrictions (including minor 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 do not in the aggregate materially impair their use in the operation of the business of such Person and exceptions on title policies insuring liens granted on Mortgaged Properties (as defined in the Senior Credit Facilities);

(6) Liens securing obligations in respect of Indebtedness permitted to be incurred pursuant to clause (4), (12)(b), (13) or (23) of Section 4.09(b) hereof; provided , that (a) Liens securing obligations relating to any Indebtedness, Disqualified Stock or Preferred Stock permitted to be incurred pursuant to clause (13) relate only to obligations relating to Refinancing Indebtedness that is secured by Liens on the same assets as the assets securing the Refinanced Debt (as defined in the definition of Refinancing Indebtedness), plus improvements, accessions, proceeds or dividends or distributions in respect thereof and after-acquired property, and serves to refund or refinance Indebtedness, Disqualified Stock or Preferred Stock incurred under clause (4), (12)(b) or (13) of Section 4.09(b) hereof, (b) Liens securing obligations relating to Indebtedness permitted to be incurred pursuant to clause (23) extend only to the assets of Subsidiaries that are not Guarantors, and (c) Liens securing Indebtedness, Disqualified Stock or Preferred Stock to be incurred pursuant to Section 4.09(b)(4) hereof extend only to the assets so purchased, replaced, leased or improved and proceeds and products thereof;

(7) Liens existing, or provided for under binding contracts existing, on the Issue Date;

(8) Liens on property or shares of stock or other assets of a Person at the time such Person becomes a Subsidiary; provided , that such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided , further , that such Liens are limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof and after-acquired property) that secured the obligations to which such Liens relate;

(9) Liens on property or other assets at the time the Issuer or a Restricted Subsidiary acquired the property or such other assets, including any acquisition by means of a merger, amalgamation or consolidation with or into the Issuer or any of its Restricted Subsidiaries; provided , that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition, amalgamation, merger, or consolidation; provided , further , that such Liens are limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof and after acquired-property) that secured the obligations to which such Liens relate;

 

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(10) Liens securing obligations in respect of Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary permitted to be incurred in accordance with Section 4.09 hereof;

(11) Liens securing (x) Hedging Obligations and (y) obligations in respect of Cash Management Services;

(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 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;

(13) leases, subleases, licenses or sublicenses (or other agreement under which the Issuer or any Restricted Subsidiary has granted rights to end users to access and use the Issuer’s or any Restricted Subsidiary’s products, technologies or services) granted to others in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of the Issuer or any of its Restricted Subsidiaries and the customary rights reserved or vested in any Person by the terms of any lease, sublease, license, sublicense, grant or permit, or to require annual or periodic payments as a condition to the continuance thereof;

(14) Liens arising from Uniform Commercial Code (or equivalent statutes) financing statement filings regarding operating leases, consignments or accounts entered into by the Issuer and its Restricted Subsidiaries in the ordinary course of business or purported Liens evidenced by the filing of precautionary Uniform Commercial Code (or equivalent statutes) financing statements or similar public filings;

(15) Liens in favor of the Issuer or any Guarantor;

(16) Liens on equipment of the Issuer or any of its Restricted Subsidiaries granted in the ordinary course of business to the clients of the Issuer or any of its Restricted Subsidiaries;

(17) Liens on accounts receivable, Securitization Assets and related assets incurred in connection with a Qualified Securitization Facility;

(18) Liens to secure any modification, refinancing, refunding, extension, renewal or replacement (or successive modification, refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8) and (9); provided , that (a) such new Lien shall be limited to all or part of the same property (plus improvements, accessions, proceeds or dividends or distributions in respect thereof and after-acquired property) that secured the original Lien ( plus improvements and accessions on such property) and proceeds and products thereof, and (b) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8) and (9) at the time the original Lien became a Permitted Lien under this Indenture, and (ii) an amount necessary to pay any fees and expenses (including original issue discount, upfront fees or similar fees) and premiums (including tender premiums and accrued and unpaid interest), related to such refinancing, refunding, extension, renewal or replacement;

(19) deposits made or other security provided in the ordinary course of business to secure liability to insurance carriers or self-insurance arrangements;

(20) other Liens securing obligations in an aggregate principal amount at any one time outstanding not to exceed the greater of (a) $125,000,000 and (b) 1.75% of Total Assets, each determined as of the date of such incurrence;

(21) Liens 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;

 

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(22) (i) the prior rights of consignees and their lenders under consignment arrangements entered into in the ordinary course of business, (ii) Liens arising out of conditional sale, title retention or similar arrangements for the sale of goods in the ordinary course of business and (iii) Liens arising by operation of law under Article 2 of the Uniform Commercial Code;

(23) Liens securing judgments for the payment of money not constituting an Event of Default under Section 6.01(5) hereof;

(24) Liens 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;

(25) Liens (a) of a collection bank arising under Section 4-208 of the Uniform Commercial Code on items in the course of collection, (b) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business, and (c) in favor of banking institutions arising as a matter of law or under general terms and conditions encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;

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

(27) Liens encumbering reasonable customary 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;

(28) Liens that are contractual rights of set-off (a) relating to the establishment of depository relations with banks or other deposit-taking financial institutions and not given in connection with the issuance of Indebtedness, (b) relating to pooled deposit or sweep accounts of the Issuer or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Issuer and its Restricted Subsidiaries or (c) relating to purchase orders and other agreements entered into with customers of the Issuer or any of its Restricted Subsidiaries in the ordinary course of business;

(29) Liens arising from Personal Property Security Act financing statement filings regarding leases entered into by the Issuer or any of its Restricted Subsidiaries in the ordinary course of business;

(30) any encumbrance or restriction (including put, call arrangements, tag, drag, right of first refusal and similar rights) with respect to capital stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

(31) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into by the Issuer or any Restricted Subsidiary in the ordinary course of business;

(32) Liens solely on any cash earnest money deposits made by the Issuer or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted under this Indenture;

(33) ground leases in respect of real property on which facilities owned or leased by the Issuer or any of its Subsidiaries are located;

(34) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

 

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(35) Liens on Capital Stock or other securities of an Unrestricted Subsidiary that secure Indebtedness or other obligations of such Unrestricted Subsidiary;

(36) Liens on cash advances in favor of the seller of any property to be acquired in an Investment or other acquisition permitted under this Indenture to be applied against the purchase price for such Investment or other acquisition;

(37) any interest or title of a lessor, sublessor, licensor or sublicensor or secured by a lessor’s, sublessor’s, licensor’s or sublicensor’s interest under leases or licenses entered into by the Issuer or any of the Restricted Subsidiaries in the ordinary course of business;

(38) deposits of cash with the owner or lessor of premises leased and operated by the Issuer or any of its Subsidiaries in the ordinary course of business of the Issuer and such Subsidiary to secure the performance of the Issuer’s or such Subsidiary’s obligations under the terms of the lease for such premises;

(39) Liens arising in the ordinary course of business to secure accounts payable or similar trade obligations not constituting Indebtedness;

(40) security given to a public utility or any municipality or governmental authority when required by such utility or authority in connection with the operations of that Person in the ordinary course of business;

(41) any proxy agreement relating to IMS Government Solutions, Inc. and its Equity Interests entered into with the Defense Security Service; and

(42) any encumbrance or restriction imposed under any contract for the sale by the Issuer or any of its Restricted Subsidiaries of the Capital Stock of any Restricted Subsidiary, or any business unit or division of the Issuer or any Restricted Subsidiary permitted under this Indenture.

For purposes of this definition, the term “Indebtedness” shall be deemed to include interest on such Indebtedness.

Person ” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

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

Private Placement Legend ” means the legend set forth in Section 2.06(g)(i) hereof to be placed on all Notes issued under this Indenture, except where otherwise permitted by the provisions of this Indenture.

Public Company Costs ” means the initial costs relating to establishing compliance with the Sarbanes-Oxley Act of 2002, as amended, and other expenses arising out of or incidental to the Issuer’s or its Restricted Subsidiaries’ initial establishment of compliance with the obligations of a reporting company, including costs, fees and expenses (including legal, accounting and other professional fees) relating to compliance with provisions of the Securities Act and the Exchange Act.

QIB ” means a “qualified institutional buyer” as defined in Rule 144A.

Qualified Proceeds ” means the fair market value of assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business.

Qualified Public Offering ” means the initial underwritten public offering of common Equity Interests of Holdings or any direct or indirect parent companies of Holdings, in each case, pursuant to an effective registration statement filed with the SEC in accordance with the Securities Act (other than a registration statement on Form S-8 or any successor form) generating gross proceeds to the Issuer of not less than $150,000,000.

 

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Qualified Securitization Facility ” means any Securitization Facility (1) constituting a securitization financing facility that meets the following conditions: (a) the Board of Directors shall have determined in good faith that such Securitization Facility (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to the Issuer and the applicable Restricted Subsidiary or Securitization Subsidiary and (b) all sales and/or contributions of Securitization Assets and related assets to the applicable Person or Securitization Subsidiary are made at fair market value (as determined in good faith by the Issuer) or (2) constituting a receivables financing facility.

Rating Agencies ” means Moody’s and S&P or if Moody’s or S&P or both shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Issuer which shall be substituted for Moody’s or S&P or both, as the case may be.

Record Date ” for the interest payable on any applicable Interest Payment Date means the April 15 and October 15 (whether or not a Business Day) immediately preceding such Interest Payment Date.

Refinancing Indebtedness ” means (x) Indebtedness incurred by the Issuer or any Restricted Subsidiary, (y) Disqualified Stock issued by the Issuer or any Restricted Subsidiary or (z) Preferred Stock issued by any Restricted Subsidiary which, in each case, serves to extend, replace, refund, refinance, renew or defease any Indebtedness, Disqualified Stock or Preferred Stock, including Refinancing Indebtedness, so long as:

(1) the principal amount (or accreted value, if applicable) of such new Indebtedness, the amount of such new Preferred Stock or the liquidation preference of such new Disqualified Stock does not exceed the principal amount of (or accreted value, if applicable), plus any accrued and unpaid interest on, the Indebtedness, the amount of, plus any accrued and unpaid dividends on, the Preferred Stock or the liquidation preference of, plus any accrued and unpaid dividends on, the Disqualified Stock being so extended, replaced, refunded, refinanced, renewed or defeased (such Indebtedness, Disqualified Stock or Preferred Stock, the “ Refinanced Debt ”), plus the amount of any tender premium or penalty or premium required to be paid under the terms of the instrument or documents governing such Refinanced Debt and any defeasance costs and any fees and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness, Preferred Stock or Disqualified Stock or the extension, replacement, refunding, refinancing, renewal or defeasance of such Refinanced Debt;

(2) such Refinancing Indebtedness has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred that is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, refunded, refinanced, renewed or defeased;

(3) such Refinancing Indebtedness has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Indebtedness, Preferred Stock or Disqualified Stock being so extended, replaced, refunded, refinanced, renewed or defeased (or, if earlier, the date that is 91 days after the maturity date of the Notes); and

(4) to the extent such Refinancing Indebtedness extends, replaces, refunds, refinances, renews or defeases (i) Subordinated Indebtedness (other than Subordinated Indebtedness assumed or acquired in an acquisition and not created in contemplation thereof), such Refinancing Indebtedness is subordinated to the Notes or the Guarantees thereof at least to the same extent as the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively.

 

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Refinancing Indebtedness shall not include:

(a) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Issuer that is not a Guarantor that refinances Indebtedness or Disqualified Stock of the Issuer;

(b) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Issuer that is not a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor; or

(c) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;

and, provided , further , that (x) clauses (2) and (3) of this definition will not apply to any extension, replacement, refunding, refinancing, renewal or defeasance of any Indebtedness other than Indebtedness incurred under clauses (2) and (3) of Section 4.09(b) hereof, any Subordinated Indebtedness (other than Subordinated Indebtedness assumed or acquired in an acquisition and not created in contemplation thereof), Disqualified Stock and Preferred Stock and (y) Refinancing Indebtedness may be incurred in the form of a customary “bridge” or other interim credit facility intended to be refinanced or replaced with long-term indebtedness which does not satisfy the requirements of clauses (2) and (3) above so long as, subject to customary conditions, it would either be automatically converted into or required to be exchanged for permanent financing which satisfies the requirements of clauses (2) and (3) of this definition.

Regulation S ” means Regulation S promulgated under the Securities Act.

Regulation S Global Note ” means a Regulation S Temporary Global Note or Regulation S Permanent Global Note, as applicable.

Regulation S Permanent Global Note ” means a permanent Global Note in the form of Exhibit A attached hereto, bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Temporary Global Note upon expiration of the applicable Restricted Period.

Regulation S Temporary Global Note ” means a temporary Global Note in the form of Exhibit A attached hereto, bearing the Global Note Legend, the Private Placement Legend and the Regulation S Temporary Global Note Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903.

Regulation S Temporary Global Note Legend ” means the legend set forth in Section 2.06(g)(iii) hereof.

Related Business Assets ” means assets (other than Cash Equivalents) used or useful in a Similar Business; provided , that any assets received by the Issuer or a Restricted Subsidiary in exchange for assets transferred by the Issuer or a Restricted Subsidiary shall 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 is or would become a Restricted Subsidiary.

Responsible Officer ” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any director, vice president, assistant vice president, any trust officer or assistant trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

Restricted Definitive Note ” means a Definitive Note bearing, or that is required to bear, the Private Placement Legend.

 

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Restricted Global Note ” means a Global Note bearing, or that is required to bear, the Private Placement Legend.

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

Restricted Period ” means, in respect of any Note issued pursuant to Regulation S, the 40-day distribution compliance period as defined in Regulation S applicable to such Note.

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

Rule 144 ” means Rule 144 promulgated under the Securities Act.

Rule 144A ” means Rule 144A promulgated under the Securities Act.

Rule 903 ” means Rule 903 promulgated under the Securities Act.

Rule 904 ” means Rule 904 promulgated under the Securities Act.

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

Sale and Lease-Back Transaction ” means any arrangement providing for the leasing by the Issuer or any of its Restricted Subsidiaries of any real or tangible personal property, which property has been or is to be sold or transferred by the Issuer or such Restricted Subsidiary to a third Person in contemplation of such leasing.

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

Secured Indebtedness ” means any Indebtedness of the Issuer or any of its Restricted Subsidiaries secured by a Lien.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Securitization Assets ” means (a) the accounts receivable, royalty or other revenue streams and other rights to payment and other assets related thereto subject to a Qualified Securitization Facility and the proceeds thereof and (b) contract rights, lockbox accounts and records with respect to such accounts receivable and any other assets customarily transferred together with accounts receivable in a securitization financing.

Securitization Facility ” means any of one or more receivables or securitization financing facilities, as amended, supplemented, modified, extended, renewed, restated or refunded from time to time, the Obligations of which are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities) to the Issuer or any of its Restricted Subsidiaries (other than a Securitization Subsidiary) pursuant to which the Issuer or any of its Restricted Subsidiaries sells or grants a security interest in its accounts receivable or Securitization Assets or assets related thereto to either (a) a Person that is not a Restricted Subsidiary or (b) a Securitization Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.

Securitization 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 and expenses (including reasonable fees and expenses of legal counsel) paid to a Person that is not a Securitization Subsidiary in connection with, any Qualified Securitization Facility.

 

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Securitization Subsidiary ” means any Subsidiary formed for the purpose of, and that solely engages only in one or more Qualified Securitization Facilities and other activities reasonably related thereto.

Senior Credit Facilities ” means, collectively, the senior secured term loan facility and the senior secured revolving facility under that certain Second Amended and Restated Credit Agreement, dated on or about the Issue Date, among the Issuer, Holdings, the Restricted Subsidiaries party thereto, Bank of America, N.A., as the administrative agent, and the lenders and other entities party thereto, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings, refinancings or replacements thereof and any one or more indentures or credit facilities or commercial paper facilities with banks or other institutional lenders, or investors, whether or not secured, that replace, refund, supplement or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof ( provided , that such increase in borrowings is permitted under Section 4.09 hereof) or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, trustee, lender or group of lenders or holders.

Senior Notes Exchange Offer ” means the offer to issue the Senior Exchange Notes in exchange for the Existing Senior Notes as described in the offering circular and consent solicitation statement of the Issuer dated as of October 10, 2012 (as amended, supplemented or modified from time to time).

Senior Exchange Notes ” means the up to $1,000,000,000 in aggregate principal amount of the Issuer’s 12  1 / 2 % Senior Unsecured Exchange Notes due 2018 issued or to be issued under the Senior Exchange Notes Indenture.

Senior Exchange Notes Indenture ” means the indenture for the Senior Exchange Notes, dated on or about the Issue Date between the Issuer and U.S. Bank National Association, as trustee, as amended, supplemented or modified from time to time.

Senior Indebtedness ” means:

(1) all Indebtedness of the Issuer or any Guarantor outstanding under the Senior Credit Facilities and the Notes and related Guarantees (including interest accruing on or after the filing of any petition in bankruptcy or similar proceeding or for reorganization of the Issuer or any Guarantor (at the rate provided for in the documentation with respect thereto, regardless of whether or not a claim for post-filing interest is allowed in such proceedings)), and any and all other fees, expense reimbursement obligations, indemnification amounts, penalties, and other amounts (whether existing on the Issue Date or thereafter created or incurred) and all obligations of the Issuer or any Guarantor to reimburse any bank or other Person in respect of amounts paid under letters of credit, acceptances or other similar instruments;

(2) all (x) Hedging Obligations (and guarantees thereof) and (y) obligations in respect of Cash Management Services (and guarantees thereof) owing to a lender under the Senior Credit Facilities or any Affiliate of such lender (or any Person that was a lender or an Affiliate of such lender at the time the applicable agreement giving rise to such Hedging Obligation was entered into); provided that such Hedging Obligations and obligations in respect of Cash Management Services, as the case may be, are permitted to be incurred under the terms of this Indenture;

(3) any other Indebtedness of the Issuer or any Guarantor permitted to be incurred under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is subordinated in right of payment to the Notes or any related Guarantee; and

(4) all Obligations with respect to the items listed in the preceding clauses (1), (2) and (3);

provided , that Senior Indebtedness shall not include:

(a) any obligation of such Person to the Issuer or any of its Subsidiaries;

 

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(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 arising in the ordinary course of business;

(d) any Indebtedness or other Obligation of such Person which is subordinate or junior in any respect to any other Indebtedness or other Obligation of such Person; or

(e) that portion of any Indebtedness which at the time of incurrence is incurred in violation of this Indenture.

Senior Secured Net Leverage Ratio ” means, with respect to any Test Period, the ratio of (a) Consolidated Total Debt (other than any Indebtedness of a Restricted Subsidiary which is not a Guarantor which is not secured by any assets of the Issuer or a Guarantor) outstanding on the last day of such Test Period that is secured by a Lien on any property of the Issuer or any Restricted Subsidiary (other than property or assets held in a defeasance or similar trust or arrangement for the benefit of the Indebtedness secured thereby) minus an aggregate amount of cash and cash equivalents included in the consolidated balance sheet of the Issuer as of such date, excluding cash and cash equivalents which are listed as “Restricted” on such balance sheet, to (b) EBITDA of the Issuer for such Test Period, in each case on a pro forma basis with such pro forma adjustments as are appropriate and consistent with the pro forma provisions set forth in the definition of Fixed Charge Coverage Ratio.

Significant Subsidiary ” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X of the SEC, as such regulation is in effect on the Issue Date.

Similar Business ” means (1) any business conducted or proposed to be conducted by the Issuer or any of its Restricted Subsidiaries on the Issue Date or (2) any business or other activities that are reasonably similar, ancillary, incidental, complementary or related to, or a reasonable extension, development or expansion of, the businesses in which the Issuer and its Restricted Subsidiaries conduct or propose to conduct on the Issue Date.

Specified Legal Expenses ” means, to the extent not constituting an extraordinary, non-recurring or unusual loss, charge or expense, all attorneys’ and experts’ fees and expenses and all other costs, liabilities (including all damages, penalties, fines and indemnification and settlement payments) and expenses paid or payable in connection with any threatened, pending, completed or future claim, demand, action, suit, proceeding, inquiry or investigation (whether civil, criminal, administrative, governmental or investigative) either (i) arising from, or related to, facts and circumstances existing on or prior to the Issue Date or (ii) arising out of or related to antitrust, Federal Trade Commission or Department of Justice proceedings or securities law (other than in connection with the Transactions).

Specified Transaction ” means (t) solely for the purposes of determining the applicable cash balance, any contribution of capital, including as a result of an Equity Offering, to the Issuer, in each case, in connection with an acquisition or Investment, (u) any designation of operations or assets of the Issuer or a Restricted Subsidiary as discontinued operations (as defined under GAAP) (other than held-for-sale discontinued operations until actually disposed of), (v) any Investment that results in a Person becoming a Restricted Subsidiary, (w) any designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary in compliance with this Indenture, (x) any purchase or other acquisition of a business of any Person, of assets constituting a business unit, line of business or division of any Person, (y) any Asset Sale (i) that results in a Restricted Subsidiary ceasing to be a Subsidiary of the Issuer or (ii) of a business, business unit, line of business or division of the Issuer or a Restricted Subsidiary, in each case whether by merger, amalgamation, consolidation or otherwise or (z) other Restricted Payment that by the terms of this Indenture requires a financial ratio to be calculated on a pro forma basis.

Subordinated Indebtedness ” means, with respect to the Notes,

(1) any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the Notes, and

(2) any Indebtedness of any Guarantor which is by its terms subordinated in right of payment to the Guarantee of such entity of the Notes.

 

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Subsidiary ” means, with respect to any Person:

(1) any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50.0% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, members of management or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof; and

(2) any partnership, joint venture, limited liability company or similar entity of which:

(a) more than 50.0% of the capital accounts, distribution rights, total equity and voting interests or general or 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 or otherwise, and

(b) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

Test Period ” in effect at any time means the Issuer’s most recently ended four fiscal quarters for which internal financial statements are available (as determined in good faith by the Issuer).

Total Assets ” means the total assets of the Issuer and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as shown on the most recent balance sheet of the Issuer or such other Person as may be expressly stated (and, in the case of any determination relating to any incurrence of Indebtedness or any Investment or other acquisition, on a pro forma basis including any property or assets being acquired in connection therewith).

Total Net Leverage Ratio ” means, with respect to any Test Period, the ratio of (a) Consolidated Total Debt outstanding on the last day of such Test Period minus an aggregate amount of cash and cash equivalents included in the consolidated balance sheet of the Issuer as of such date, excluding cash and cash equivalents which are listed as “Restricted” on such balance sheet, to (b) EBITDA of the Issuer for such Test Period, in each case on a pro forma basis 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.

TPG ” means TPG Capital, L.P.

TPG Group ” means TPG and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt their portfolio companies or other operating companies affiliated with TPG).

Transaction Expenses ” means any fees, expenses, costs or charges incurred or paid by the Investors, any direct or indirect parent of the Issuer, the Issuer or any Restricted Subsidiary in connection with the Transactions, including expenses in connection with hedging transactions, if any, payments to officers, employees and directors as change of control payments, severance payments, special or retention bonuses, charges for repurchase or rollover of, or modifications to, stock options and/or restricted stock and charges related to the crediting of additional restricted stock units.

Transactions ” means the transactions consummated on February 26, 2010 pursuant to the Acquisition Agreement, the issuance of the Existing Senior Notes under the Existing Senior Notes Indenture, and the initial borrowings under the Credit Facilities and the other transactions contemplated thereby.

 

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Treasury Rate ” means, as of any Redemption Date, the yield to maturity as of such Redemption Date 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 the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to November 1, 2015; provided , that if the period from the Redemption Date to such date is less than one year, the weekly average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year will be used.

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

Trustee ” means Wells Fargo Bank, National Association, as trustee, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

Uniform Commercial Code ” means the Uniform Commercial Code or any successor provision thereof as the same may from time to time be in effect in the State of New York.

Unrestricted Definitive Note ” means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend.

Unrestricted Global Note ” means a permanent Global Note, substantially in the form of Exhibit A attached hereto, that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing Notes that do not bear the Private Placement Legend.

Unrestricted Subsidiary ” means:

(1) any Subsidiary of the Issuer which at the time of determination is an Unrestricted Subsidiary (as designated by the Issuer, as provided below); and

(2) any Subsidiary of an Unrestricted Subsidiary.

The Issuer may designate any Subsidiary of the Issuer (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) 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, the Issuer or any Subsidiary of the Issuer (other than solely any Subsidiary of the Subsidiary to be so designated); provided that:

(1) such designation complies with Section 4.07 hereof; and

(2) each of (a) the Subsidiary to be so designated and (b) its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any Restricted Subsidiary.

The Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such designation, no Default shall have occurred and be continuing and either: (1) the Issuer could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio Test or (2) the Fixed Charge Coverage Ratio for the Issuer would be equal to or greater than such ratio for the Issuer immediately prior to such designation, in each case, on a pro forma basis taking into account such designation.

Any such designation by the Issuer shall be notified by the Issuer to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors 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. Person ” means a U.S. person as defined in Rule 902(k) under the Securities Act.

 

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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, 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;

provided that for purposes of determining the Weighted Average Life to Maturity of any Indebtedness that is being extended, replaced, refunded, refinanced, renewed or defeased (the “ Applicable Indebtedness ”), the effects of any amortization or prepayments made on such Applicable Indebtedness prior to the date of the applicable extension, replacement, refunding, refinancing, renewal or defeasance shall be disregarded.

Wholly-Owned Subsidiary ” of any Person means a Subsidiary of such Person, 100.0% of the outstanding Equity Interests of which (other than directors’ qualifying shares and shares of Capital Stock of Foreign Subsidiaries issued to foreign nationals as required under applicable law) shall at the time be owned by such Person and/or by one or more Wholly-Owned Subsidiaries of such Person.

SECTION 1.02. Other Definitions .

 

Term

   Defined in
Section

“Acceptable Commitment”

   4.10

“Affiliate Transaction”

   4.11

“Applicable Premium Deficit”

   8.04

“Asset Sale Offer”

   4.10

“Authentication Order”

   2.02

“Change of Control Offer”

   4.14

“Change of Control Payment”

   4.14

“Change of Control Payment Date”

   4.14

“Covenant Defeasance”

   8.03

“Covenant Suspension Event”

   4.16

“DTC”

   2.03

“Event of Default”

   6.01

“Excess Proceeds”

   4.10

“Fixed Charge Coverage Ratio Test”

   4.09

“incur” and “incurrence”

   4.09

“Legal Defeasance”

   8.02

“Note Register”

   2.03

“Offer Amount”

   3.09

“Offer Period”

   3.09

“Pari Passu Indebtedness”

   4.10

“Paying Agent”

   2.03

“Purchase Date”

   3.09

“Redemption Date”

   3.01

“Refunding Capital Stock”

   4.07

“Registrar”

   2.03

“Restricted Payments”

   4.07

“Reversion Date”

   4.16

“Second Commitment”

   4.10

“Successor Company”

   5.01

 

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Term

   Defined in
Section
 

“Successor Person”

     5.01   

“Suspended Covenants”

     4.16   

“Suspension Date”

     4.16   

“Suspension Period”

     4.16   

“Transfer Agent”

     2.03   

“Treasury Capital Stock”

     4.07   

SECTION 1.03. Incorporation by Reference of Trust Indenture Act . Whenever this Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Indenture.

The following Trust Indenture Act terms, if used in this Indenture, have the following meanings:

“indenture securities” means the Notes and the Guarantees;

“indenture security Holder” means a Holder of a Note;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and “obligor” on the Notes and the Guarantees means the Issuer and the Guarantors, respectively, and any successor obligor upon the Notes and the Guarantees, respectively.

All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by SEC rule under the Trust Indenture Act have the meanings so assigned to them.

SECTION 1.04. Rules of Construction . Unless the context otherwise requires:

(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) the words “including,” “includes” and similar words shall be deemed to be followed by without limitation;

(e) words in the singular include the plural, and in the plural include the singular;

(f) “will” shall be interpreted to express a command;

(g) provisions apply to successive events and transactions;

(h) references to sections of, or rules under, the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

(i) unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Indenture;

 

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

(k) the principal amount of any Preferred Stock at any time shall be (i) the maximum liquidation value of such Preferred Stock at such time or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock at such time, whichever is greater;

(l) words used herein implying any gender shall apply to both genders;

(m) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including”; and

(o) the principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Issuer dated such date prepared in accordance with GAAP.

SECTION 1.05. Acts of Holders .

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01 hereof) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 1.05.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

(c) The ownership of Notes shall be proved by the Note Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

(e) The Issuer may set a record date for purposes of determining the identity of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders. Unless otherwise specified, if not set by the Issuer prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such vote, prior to such vote, any such record date shall be the later of 10 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation.

(f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.

 

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(g) Without limiting the generality of the foregoing, a Holder, including DTC, that is a Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and any Person, that is a Holder of a Global Note, including DTC, may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through such Depositary’s standing instructions and customary practices.

(h) The Issuer may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note held by DTC entitled under the procedures of such Depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action shall be valid or effective if made, given or taken more than 90 days after such record date.

ARTICLE II

THE NOTES

SECTION 2.01. Form and Dating; Terms .

(a) General . The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A attached hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rules or usage. Each Note shall be dated the date of its authentication. The Notes shall be issued initially in minimum denominations of $2,000 and any integral multiple of $1,000 in excess of $2,000.

(b) Global Notes . Notes issued in global form shall be substantially in the form of Exhibit A attached hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified in the “Schedule of Exchanges of Interests in the Global Note” attached thereto and each shall provide that it shall represent up to the aggregate principal amount of Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as applicable, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.

(c) Temporary Global Notes . Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Custodian and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.

Following (i) the termination of the applicable Restricted Period and (ii) the receipt by the Trustee of (A) a certification or other evidence in a form reasonably acceptable to the Issuer of non-United States beneficial ownership of 100% of the aggregate principal amount of each Regulation S Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who shall take delivery of a beneficial ownership interest in a 144A Global Note or an IAI Global Note bearing a Private Placement Legend, all as contemplated by Section 2.06(b)

 

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hereof) and (B) an Officer’s Certificate from the Issuer, the Trustee shall remove the Regulation S Temporary Global Note Legend from the Regulation S Temporary Global Note, following which temporary beneficial interests in the Regulation S Temporary Global Note shall automatically become beneficial interests in the Regulation S Permanent Global Note pursuant to the Applicable Procedures.

The aggregate principal amount of a Regulation S Temporary Global Note and a Regulation S Permanent Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.

(d) Terms . The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited.

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Issuer and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

The Notes shall be subject to repurchase by the Issuer pursuant to an Asset Sale Offer as provided in Section 4.10 hereof or a Change of Control Offer as provided in Section 4.14 hereof. The Notes shall not be redeemable, other than as provided in Article III hereof.

Additional Notes ranking pari passu with the Initial Notes may be created and issued from time to time by the Issuer without notice to or consent of the Holders and shall be consolidated with and form a single class with the Initial Notes and shall have the same terms as to status, redemption or otherwise as the Initial Notes except that interest may accrue on the Additional Notes from their date of issuance (or such other date specified by the Issuer); provided that the Issuer’s ability to issue Additional Notes shall be subject to the Issuer’s compliance with Section 4.09 hereof. Any Additional Notes shall be issued with the benefit of an indenture supplemental to this Indenture.

(e) Euroclear and Clearstream Applicable Procedures . The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes that are held by Participants through Euroclear or Clearstream and this Indenture shall not govern such transfers.

SECTION 2.02. Execution and Authentication . At least one Officer shall execute the Notes on behalf of the Issuer by manual, facsimile or electronic (in “.pdf” format) signature.

If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall nevertheless be valid.

A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated substantially in the form of Exhibit A attached hereto, by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.

On the Issue Date, the Trustee shall, upon receipt of an Issuer’s Order (an “ Authentication Order ”), authenticate and deliver the Initial Notes in the aggregate principal amount or amounts specified in such Authentication Order. In addition, at any time, from time to time, the Trustee shall, upon receipt of an Authentication Order, authenticate and deliver any Additional Notes for an aggregate principal amount specified in such Authentication Order for such Additional Notes issued or increased hereunder.

The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Notes. An authenticating agent may authenticate Notes 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 an Agent to deal with Holders or an Affiliate of the Issuer.

 

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SECTION 2.03. Registrar, Transfer Agent and Paying Agent . The Issuer shall maintain (i) an office or agency where Notes may be presented for registration (“ Registrar ”) (ii) an office or agency where Notes may be presented for transfer or for exchange (“ Transfer Agent ”) and (iii) an office or agency where Notes may be presented for payment (“ Paying Agent ”). The Registrar shall keep a register of the Notes (“ Note Register ”) and of their transfer and exchange. The registered Holder will be treated as the owner of the Note for all purposes. Only registered Holders will have rights under this Indenture and the Notes. The Issuer may appoint one or more co-registrars, one or more co-transfer agents and one or more additional paying agents. The term “ Registrar ” includes any co-registrar, the term “ Transfer Agent ” includes any co-transfer agent and the term “ Paying Agent ” includes any additional paying agents. The Issuer may change any Paying Agent, Transfer Agent or Registrar without prior notice to any Holder. The Issuer shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar, Transfer Agent or Paying Agent, the Trustee shall act as such. The Issuer or any of its Subsidiaries may act as Paying Agent, Transfer Agent or Registrar.

The Issuer initially appoints The Depository Trust Company (“ DTC ”) to act as Depositary with respect to the Global Notes.

The Issuer initially appoints the Trustee to act as the Paying Agent, Transfer Agent and Registrar for the Notes and to act as Custodian with respect to the Global Notes.

If any Notes are listed on an exchange, for so long as the Notes are so listed and the rules of such exchange so require, the Issuer will satisfy any requirement of such exchange as to paying agents, registrars and transfer agents and will comply with any notice requirements required under such exchange in connection with any change of any paying agent, registrar or transfer agent.

SECTION 2.04. Paying Agent to Hold Money in Trust . The Issuer shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee for its own benefit and for the benefit of the Holders. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee for its own benefit and for the benefit of the Holders. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary or the Trustee) shall have no further liability for the money. If the Issuer or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the Notes.

SECTION 2.05. 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 all Holders. If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least two 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 the Holders.

SECTION 2.06. Transfer and Exchange .

(a) Transfer and Exchange of Global Notes . Except as otherwise set forth in this Section 2.06, a Global Note may be transferred, in whole and not in part, only to another nominee of the Depositary or to a successor thereto or a nominee of such successor thereto. A beneficial interest in a Global Note may not be exchanged for a Definitive Note of the same series unless (A) the Depositary (x) notifies the Issuer that it is unwilling or unable to continue as Depositary for such Global Note or (y) has ceased to be a clearing agency registered under the Exchange Act, and, in either case, a successor Depositary is not appointed by the Issuer within 90 days, (B) the Issuer, at its option, notifies the Trustee in writing that it elects to cause the issuance of Definitive Notes and any Participant requests a Definitive Note in accordance with the Applicable Procedures (although Regulation S Temporary Global Notes at the Issuer’s election pursuant to this clause may not be exchanged for Definitive Notes prior to (1) the expiration of the applicable Restricted Period and (2) the receipt of any certificate required pursuant to Rule 903(b)(3)(ii)(B)) or (C) upon the request of a Holder if there shall have occurred and be continuing an Event of Default

 

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with respect to the Notes. Upon the occurrence of any of the events in clauses (A), (B) or (C) above, Definitive Notes delivered in exchange for any Global Note of the same series or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note of the same series or any portion thereof, pursuant to this Section 2.06 or Sections 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note, except for Definitive Notes issued subsequent to any of the events in (A), (B) or (C) above and pursuant to Section 2.06(c) hereof. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); provided , however , beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.

(b) Transfer and Exchange of Beneficial Interests in the Global Notes . The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

(i) Transfer of Beneficial Interests in the Same Global Note . Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Temporary Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person other than pursuant to Rule 144A or another available exemption from the registration requirements of the Securities Act. Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i).

(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes . In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) hereof, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note of the same series in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; provided that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (A) the expiration of the Restricted Period therefor and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B). Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.

(iii) Transfer of Beneficial Interests to Another Restricted Global Note . A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) hereof and the Registrar receives the following:

(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;

 

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(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; or

(C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (3) thereof, and the transferee must furnish to the Registrar a signed letter substantially in the form of Exhibit E .

(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note . A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) hereof and the Registrar receives the following:

(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note of the same series, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or

(B) if the holder of such beneficial interest in a Restricted Global Note 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 Note of the same series, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (5) thereof;

and, in each such case set forth in this paragraph (iv), if the Registrar or the Issuer so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Issuer 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

If any such transfer is effected pursuant to this paragraph (iv) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to this paragraph (iv) above.

Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

(c) Transfer or Exchange of Beneficial Interests for Definitive Notes .

(i) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes . If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon the occurrence of any of the events in clauses (A), (B) and (C) of Section 2.06(a) hereof and receipt by the Registrar of the following documentation:

(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;

 

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(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;

(D) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (3) thereof, and the transferee must furnish to the Registrar a signed letter substantially in the form of Exhibit E ;

(E) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (4)(a) thereof;

(F) if such beneficial interest is being transferred to the Issuer or any of its Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (4)(b) thereof; or

(G) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (4)(c) thereof,

the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer shall execute and the Trustee shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) (except transfers pursuant to clause (G) above) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

(ii) Beneficial Interests in Regulation S Temporary Global Note to Definitive Notes . Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) of the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.

(iii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes . A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only upon the occurrence of any of the events in clause (A) of Section 2.06(a) hereof and if the Registrar receives the following:

(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

(B) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit B hereto, including the certifications in item (5) thereof;

 

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and, in each such case set forth in this paragraph (iii), if the Registrar or the Issuer so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Issuer 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

(iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes . If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon the occurrence of any of the events in clauses (A), (B) and (C) of Section 2.06(a) hereof and satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer shall execute and the Trustee shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from or through the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall not bear the Private Placement Legend.

(d) Transfer and Exchange of Definitive Notes for Beneficial Interests .

(i) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes . If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;

(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;

(D) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (3) thereof, and the transferee must furnish to the Registrar a signed letter substantially in the form of Exhibit E ;

(E) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (4)(a) thereof;

 

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(F) if such Restricted Definitive Note is being transferred to the Issuer or any of its Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (4)(b) thereof; or

(G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (4)(c) thereof,

the Trustee shall cancel the Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the applicable Restricted Global Note, in the case of clause (B) above, the applicable 144A Global Note, in the case of clause (C) above, the applicable Regulation S Global Note and, in the case of clause (D) above, the applicable IAI Global Note.

(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:

(A) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or

(B) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (5) thereof;

and, in each such case set forth in this paragraph (ii), if the Registrar or the Issuer so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Issuer 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.

If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.

 

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(e) Transfer and Exchange of Definitive Notes for Definitive Notes . Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer or exchange 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 2.06(e):

(i) Restricted Definitive Notes to Restricted Definitive Notes . Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:

(A) if the transfer will be made to a QIB in accordance with Rule 144A, then the transferor must deliver a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof;

(C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (3) thereof, and the transferee must furnish to the Registrar a signed letter substantially in the form of Exhibit E ; or

(D) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications required by item (4) thereof, if applicable.

(ii) Restricted Definitive Notes to Unrestricted Definitive Notes . Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if the Registrar receives the following:

(A) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or

(B) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (5) thereof; and, in each such case set forth in this paragraph (ii), if the Registrar or the Issuer so requests, an Opinion of Counsel in form reasonably acceptable to the Issuer 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes . A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

(f) [Reserved]

 

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(g) Legends . The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture:

(i) Private Placement Legend .

(A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

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. 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 NOTES 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) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) 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 THAT PURCHASES 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, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS 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 NOT A QUALIFIED INSTITUTIONAL BUYER AND THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF SECURITIES OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. 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, THE HOLDER THEREOF AND EACH TRANSFEREE WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT AT THE TIME OF ITS ACQUISITION AND THROUGHOUT THE PERIOD THAT IT HOLDS THIS SECURITY THAT (A) EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH

 

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HOLDER TO ACQUIRE OR HOLD THIS SECURITY CONSTITUTES THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ ERISA ”), OF A 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 (“ SIMILAR LAWS ”), OR OF AN ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT (AS DETERMINED PURSUANT TO U.S. DEPARTMENT OF LABOR REGULATIONS, AS MODIFIED BY SECTION 3(42) OF ERISA), OR (2) THE ACQUISITION, HOLDING AND DISPOSITION OF THIS SECURITY 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 LAW AND (B) IT WILL NOT SELL OR OTHERWISE TRANSFER THIS SECURITY OR ANY INTEREST THEREIN OTHERWISE THAN TO A PURCHASER OR TRANSFEREE THAT IS DEEMED TO MAKE THESE SAME REPRESENTATIONS AND WARRANTIES WITH RESPECT TO ITS ACQUISITION, HOLDING AND DISPOSITION OF THIS SECURITY.

(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii) or (e)(iii) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.

(ii) Global Note Legend . Each Global Note shall bear a legend in substantially the following form (with appropriate changes in the last sentence if DTC is not the Depositary):

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(h) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“ DTC ”) 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 MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.

 

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(iii) Regulation S Temporary Global Note Legend . The Regulation S Temporary Global Note shall bear a legend in substantially the following form:

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT. 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.

(h) Cancellation and/or Adjustment of Global Notes . At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or cancelled in whole and not in part, each such Global Note shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary 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 Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

(i) General Provisions Relating to Transfers and Exchanges .

(i) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

(ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuer shall require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).

(iii) The Issuer shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the mailing of a notice of redemption of the Notes to be redeemed under Section 3.03 hereof and ending at the close of business on the day of such mailing, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part, (C) to register the transfer of or to exchange a Note between a Record Date and the next succeeding Interest Payment Date or (D) to register the transfer of or to exchange any Notes tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer or an Asset Sale Offer.

(iv) Neither the Registrar nor the Issuer shall be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(v) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer shall deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.

 

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(vii) Upon surrender for registration of transfer of any Note at the office or agency of the Issuer designated pursuant to Section 4.02 hereof, the Issuer shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.

(viii) At the option of the Holder, subject to Section 2.06(a) hereof, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and mail, the replacement Global Notes and Definitive Notes to which the Holder making the exchange is entitled in accordance with the provisions of Section 2.02 hereof.

(ix) All certifications, certificates and Opinions of Counsel required to be submitted to the Issuer pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

(x) 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 Note (including any transfers between or among Depositary Participants or beneficial owners of interests in any Global Notes) 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.

(xi) Neither the Trustee nor any Agent shall have any responsibility or liability for any actions taken or not taken by the Depositary.

SECTION 2.07. Replacement Notes . If either (x) any mutilated Note is surrendered to the Trustee, the Registrar or the Issuer or (y) if the Issuer and the Trustee receive evidence to their satisfaction of the ownership and destruction, loss or theft of any Note, then the Issuer shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note. An indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer and the Trustee may charge the Holder for their expenses in replacing a Note.

Every replacement Note is a contractual obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

SECTION 2.08. Outstanding Notes . The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuer or a Guarantor or an Affiliate of the Issuer or a Guarantor holds the Note.

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser (as defined in Section 8-303 of the Uniform Commercial Code).

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

If the Paying Agent (other than the Issuer or a Guarantor or an Affiliate of the Issuer or a Guarantor) holds, on a Redemption Date or maturity date, money sufficient to pay Notes (or portions thereof) payable on that date, then on and after that date such Notes (or portions thereof) shall be deemed to be no longer outstanding and shall cease to accrue interest.

 

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SECTION 2.09. Treasury Notes . In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer or a Guarantor or by any Affiliate of the Issuer or a Guarantor, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right to deliver any such direction, waiver or consent with respect to such pledged Notes and that the pledgee is not the Issuer or a Guarantor or any Affiliate of the Issuer or a Guarantor.

SECTION 2.10. Temporary Notes . Until certificates representing Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Issuer considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.

Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this Indenture.

SECTION 2.11. Cancellation . The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee or, at the direction of the Trustee, the Registrar or the Paying Agent and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of such cancelled Notes in accordance with its customary procedures (subject to the record retention requirement of the Exchange Act). Certification of the cancellation of all surrendered Notes shall be delivered to the Issuer at the Issuer’s written request. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.

SECTION 2.12. Defaulted Interest . If the Issuer defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Issuer may pay the defaulted interest to the Persons who are Holders on a subsequent special record date. The Issuer shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or cause to be fixed any such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. The Trustee shall promptly notify the Issuer of any such special record date. At least 15 days before any such special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) shall mail or cause to be mailed, first-class postage prepaid, or otherwise deliver in accordance with the Applicable Procedures, to each Holder, with a copy to the Trustee, a notice at his or her address as it appears in the Note Register that states the special record date, the related payment date and the amount of such interest to be paid.

Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.

SECTION 2.13. CUSIP/ISIN Numbers . The Issuer in issuing the Notes may use CUSIP and ISIN numbers (in each case, if then generally in use) and, if so, the Trustee shall use CUSIP and ISIN numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will as promptly as practicable notify the Trustee in writing of any change in the CUSIP and ISIN numbers.

 

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ARTICLE III

REDEMPTION

SECTION 3.01. Notices to Trustee . If the Issuer elects to redeem the Notes pursuant to Section 3.07 hereof, it shall furnish to the Trustee, at least two Business Days (unless the Trustee agrees to a shorter period) before notice of redemption is required to be delivered to Holders pursuant to Section 3.03 hereof, an Officer’s Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the date of redemption (the “ Redemption Date ”), (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price.

SECTION 3.02. Selection of Notes to Be Redeemed . If less than all of the Notes are to be redeemed at any time, the Trustee shall select the Notes to be redeemed (a) if the Notes are listed on an exchange, in compliance with the requirements of such exchange or (b) if the Notes are not listed on an exchange, on a pro rata basis to the extent practicable, or, if the pro rata basis is not practicable for any reason, by lot or by such other method as the Trustee shall deem fair and appropriate and otherwise in accordance with the Applicable Procedures. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the Redemption Date by the Trustee from the outstanding Notes not previously called for redemption.

The Trustee shall promptly notify the Issuer in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. No Notes of $2,000 or less can be redeemed in part, except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

SECTION 3.03. Notice of Redemption . Subject to Section 3.09 hereof, the Issuer shall deliver electronically, mail or cause to be mailed by first-class mail, postage prepaid notices of redemption at least 30 days but not more than 60 days before the Redemption Date to each Holder of Notes to be redeemed at such Holder’s registered address or otherwise in accordance with Applicable Procedures, except that redemption notices may be delivered or mailed more than 60 days prior to a Redemption Date if the notice is issued in connection with Article VIII or Article XI hereof.

The notice shall identify the Notes to be redeemed and shall state:

(a) the Redemption Date;

(b) the redemption price;

(c) if any Definitive Note is to be redeemed in part only, the portion of the principal amount of that Note that is to be redeemed and that, after the Redemption Date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion of the original Note representing the same indebtedness to the extent not redeemed will be issued in the name of the Holder upon cancellation of the original Note;

(d) the name and address of the Paying Agent;

(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(f) that, unless the Issuer defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;

 

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(g) the paragraph or subparagraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

(h) the CUSIP and ISIN number, if any, printed on the Notes being redeemed and that no representation is made as to the correctness or accuracy of any such CUSIP and ISIN number that is listed in such notice or printed on the Notes; and

(i) any condition to such redemption.

At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at its expense; provided that the Issuer shall have delivered to the Trustee, at least five Business Days before notice of redemption is required to be delivered, mailed or caused to be mailed to Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

If any Notes are listed on an exchange, and the rules of such exchange so require, the Issuer will notify the exchange of any such notice of redemption and the principal amount of any Notes outstanding following any partial redemption of such Notes. 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.

SECTION 3.04. Effect of Notice of Redemption . Once notice of redemption is delivered in accordance with Section 3.03 hereof, subject to satisfaction of any conditions precedent relating thereto specified in the applicable notice of redemption, Notes called for redemption become irrevocably due and payable on the Redemption Date at the redemption price. The notice, if delivered, mailed or caused to be mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to deliver such notice or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Subject to Section 3.05 hereof, on and after the Redemption Date, interest shall cease to accrue on Notes or portions of Notes called for redemption.

SECTION 3.05. Deposit of Redemption Price .

(a) Prior to 11:00 a.m. (New York City time) on the Redemption Date, the Issuer shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes to be redeemed on that Redemption Date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest on, all Notes to be redeemed.

(b) If the Issuer complies with the provisions of the preceding paragraph (a), on and after the Redemption Date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption. If a Note is redeemed on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest to the Redemption Date shall be paid to the Person in whose name such Note was registered at the close of business on such Record Date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Issuer to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the Redemption Date until such principal is paid, and to the extent lawful on any interest accrued to the Redemption Date not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

SECTION 3.06. Notes Redeemed in Part . Upon surrender of a Definitive Note that is redeemed in part, the Issuer shall issue and the Trustee shall authenticate for the Holder at the expense of the Issuer a new Note equal in principal amount to the unredeemed portion of the Note surrendered representing the same indebtedness to the extent not redeemed; provided , that each new Note will be in a principal amount of $2,000 and any integral multiple of $1,000 in excess of $2,000. It is understood that, notwithstanding anything in this Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.

 

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SECTION 3.07. Optional Redemption .

(a) At any time prior to November 1, 2015, the Issuer may, at its option, on one or more occasions redeem all or a part of the Notes, upon notice as described under Section 3.03 hereof at a redemption price equal to the sum of (i) 100.0% of the principal amount of the Notes redeemed, plus (ii) the Applicable Premium as of the Redemption Date plus (iii) accrued and unpaid interest, if any, to the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date. Notice of any redemption, whether in connection with an Equity Offering or otherwise, may be given prior to the completion thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, if in connection with an Equity Offering, the completion of such Equity Offering.

(b) At any time prior to November 1, 2015, the Issuer may, at its option and on one or more occasions, redeem up to 40.0% of the aggregate principal amount of Notes and Additional Notes issued under this Indenture at a redemption price equal to the sum of (i) 106.000% of the aggregate principal amount thereof, plus (ii) accrued and unpaid interest, if any, to the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, with the net cash proceeds received by it from one or more Equity Offerings or a contribution to the Issuer’s common equity capital made with the net cash proceeds of a concurrent Equity Offering; provided that (a) at least 50.0% of the aggregate principal amount of Notes originally issued under this Indenture on the Issue Date and any Additional Notes issued under this Indenture after the Issue Date (excluding Notes held by the Issuer and its Subsidiaries) remains outstanding immediately after the occurrence of each such redemption; and (b) each such redemption occurs within 180 days of the date of closing of each such Equity Offering.

(c) Except pursuant to clause (a) or (b) of this Section 3.07, the Notes will not be redeemable at the Issuer’s option prior to November 1, 2015.

(d) On and after November 1, 2015, the Issuer may, at its option redeem the Notes, in whole or in part, on one or more occasions, upon notice in accordance with Section 3.03 hereof at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, to the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on November 1 of each of the years indicated below:

 

Year

   Percentage  

2015

     103.000

2016

     101.500

2017 and thereafter

     100.000

(e) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

(f) In addition to any redemption pursuant to this Section 3.07, the Issuer or its Affiliates may at any time and from time to time purchase Notes in the open market or otherwise.

SECTION 3.08. Mandatory Redemption . The Issuer will not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

SECTION 3.09. Offers to Repurchase by Application of Excess Proceeds .

(a) In the event that, pursuant to Section 4.10 hereof, the Issuer shall be required to commence an Asset Sale Offer, it shall follow the procedures specified below.

(b) The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “ Offer Period ”).

 

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No later than five Business Days after the termination of the Offer Period (the “ Purchase Date ”), the Issuer shall apply all Excess Proceeds (the “ Offer Amount ”) to the purchase of Notes and, if required, Pari Passu Indebtedness (on a pro rata basis, if applicable), or, if less than the Offer Amount has been tendered, all Notes and Pari Passu Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

(c) If the Purchase Date is on or after a Record Date and on or before the related Interest Payment Date, any accrued and unpaid interest, up to but excluding the Purchase Date, shall be paid to the Person in whose name a Note is registered at the close of business on such Record Date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

(d) Upon the commencement of an Asset Sale Offer, the Issuer shall deliver electronically or send, by first-class mail, postage prepaid, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders and holders of such Pari Passu Indebtedness. The notice, which shall govern the terms of the Asset Sale Offer, shall state:

(i) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open;

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

(iii) that any Note not tendered or accepted for payment shall continue to accrue interest;

(iv) that, unless the Issuer defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest on and after the Purchase Date;

(v) that any Holder electing to have less than all of the aggregate principal amount of its Notes purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in an amount not less than $2,000 and integral multiples of $1,000 in excess thereof;

(vi) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Note completed, or transfer such Note by book-entry transfer, to the Issuer, the Depositary, if appointed by the Issuer, or a Paying Agent at the address specified in the notice at least two Business Days before the Purchase Date;

(vii) that Holders shall be entitled to withdraw their election if the Issuer, the Depositary 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 Note the Holder delivered for purchase and a statement that such Holder is withdrawing its election to have such Note purchased;

(viii) that, if the aggregate principal amount of Notes and Pari Passu Indebtedness surrendered by the holders thereof exceeds the Offer Amount, the Trustee shall select the Notes to be purchased in accordance with Section 3.02 and the Issuer shall select such Pari Passu Indebtedness to be purchased pursuant to the terms of such Pari Passu Indebtedness; provided that as between the Notes and any Pari Passu Indebtedness, such purchases will be made on a pro rata basis based on the accreted value or principal amount of the Notes or such Pari Passu Indebtedness tendered with adjustments as necessary so that no Notes or Pari Passu Indebtedness will be repurchased in part in an unauthorized denomination; and

(ix) that Holders whose certificated Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) representing the same indebtedness to the extent not repurchased.

 

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(e) On or before the Purchase Date, the Issuer shall, to the extent lawful, (1) accept for payment, on a pro rata basis as described in clause (d)(viii) of this Section 3.09, the Offer Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to be delivered to the Trustee the Notes properly accepted, together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof so tendered.

(f) The Issuer, the Depositary or the Paying Agent, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes properly tendered by such Holder and accepted by the Issuer for purchase, and the Issuer shall promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and mail or deliver (or cause to be transferred by book-entry) such new Note to such Holder (it being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate and mail or deliver such new Note) in a principal amount equal to any unpurchased portion of the Note surrendered representing the same indebtedness to the extent not repurchased. Any Note not so accepted shall be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer shall publicly announce the results of the Asset Sale Offer on or as soon as practicable after the Purchase Date.

(g) Prior to 11:00 a.m. (New York City time) on the Purchase Date, the Issuer shall deposit with the Trustee or with the Paying Agent money sufficient to pay the purchase price of and accrued and unpaid interest on all Notes to be purchased on that purchase date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the purchase price of, and accrued and unpaid interest on, all Notes to be redeemed.

Other than as specifically provided in this Section 3.09 or Section 4.10 hereof, any purchase pursuant to this Section 3.09 shall be made pursuant to the applicable provisions of Sections 3.01 through 3.06 hereof, and references therein to “redeem,” “redemption,” “Redemption Date” and similar words shall be deemed to refer to “purchase,” “repurchase,” “Purchase Date” and similar words, as applicable.

ARTICLE IV

COVENANTS

SECTION 4.01. Payment of Notes . The Issuer shall pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes and this Indenture. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Issuer or a Guarantor or an Affiliate of the Issuer or a Guarantor, holds as of 11:00 a.m. New York City time on the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.

The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the Notes to the extent lawful; the Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful.

SECTION 4.02. Maintenance of Office or Agency . The Issuer shall maintain the offices or agencies (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or Transfer Agent) required under Section 2.03 hereof where Notes may be surrendered for registration of transfer or for exchange or presented for payment and where notices and demands to or upon the Issuer in respect of the Notes 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.

The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain such

 

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offices or agencies as required by Section 2.03 hereof for such purposes. 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.

The Issuer hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Issuer in accordance with Section 2.03 hereof.

SECTION 4.03. Reports and Other Information .

(a) Notwithstanding that the Issuer may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Issuer shall furnish to the Trustee and Holders of the Notes (without exhibits) or post on its website (which may be password protected so long as the password is made promptly available by the Issuer to the Holders, research analysts and prospective purchasers upon request) no later than 15 days after the dates specified below:

(1) within 90 days after the end of each fiscal year (beginning with the fiscal year ending after the Issue Date), annual reports, containing substantially all of the information required to be contained in an Annual Report on Form 10-K if the Issuer had been a reporting company under the Exchange Act (but only to the extent similar information is included in the Offering Memorandum); provided , that the Issuer shall not be required to provide the information otherwise required to be presented by reporting companies under the Exchange Act pursuant to Part III of Form 10-K except for such information as would be required by Item 401 of Regulation S-K (other than the information required by subsections (c) and (g) of such item), Item 403(a) of Regulation S-K and Item 404 of Regulation S-K (assuming a transaction threshold of $2,000,000 rather than $120,000 and other than information with respect to employment and compensation arrangements and the information required by Item 404(b));

(2) within 45 days after the end of each of the first three fiscal quarters of each fiscal year, reports containing substantially all of the information required to be contained in a Quarterly Report on Form 10-Q if the Issuer had been a reporting company under the Exchange Act (but only to the extent similar information is included in this offering memorandum); and

(3) within the later of 15 days after the occurrence of the specified event or within five (5) Business Days of the date on which an event would have been required to be reported on a Form 8-K (as in effect on the Issue Date), information pursuant to Items 1.01 (Entry into a Material Definitive Agreement), 1.02 (Termination of a Material Definitive Agreement), 1.03 (Bankruptcy or Receivership), 2.01 (Completion of Acquisition or Disposition of Assets), 2.04 (Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement), 2.06 (Material Impairment), 4.01 (Changes in Registrant’s Certifying Accountants), 4.02 (Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review), 5.01 (Changes in Control of Registrant) 5.02(a),(b), (c) (Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensation Arrangements of Certain Officers) (other than any information relating to compensation arrangements with any directors or officers) and 9.01(a) (Financial Statements and Exhibits but only with respect to historical financial statements relating to transactions required to be reported pursuant to Item 2.01 and involving acquisitions of Persons that had revenues in excess of $200,000,000 for the last four completed fiscal quarters prior to the consummation of the acquisition) of a Current Report on Form 8-K (as in effect of the Issue Date); provided , that (a) no such report or information will be required to be so furnished if the Issuer determines in good faith that such event is not material to the Holders or the business, assets, operations or financial condition of the Issuer and its Restricted Subsidiaries, taken as a whole and (b) trade secrets and other confidential information that is competitively sensitive in the good faith and reasonable determination of the Issuer may be excluded from disclosures.

(b) The reports required pursuant to clauses (1), (2) and (3) of Section 4.03(a) will not be required to comply with (i) Section 302, Section 404 or Section 906 of the Sarbanes-Oxley Act of 2002, (ii) related Items 307 and 308 of Regulation S-K promulgated by the SEC, (iii) Item 10(e) of Regulation S-K (with respect to any non-GAAP

 

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financial measures contained therein) or any comparable successor provision and (iv) Regulation S-X Rule 3-10; provided that if non-Guarantor Subsidiaries (on a consolidated basis) constitute more than 10% of the Issuer’s consolidated revenues, operating income, assets or debt for the last four quarters ended on, or as of, as the case may be, the date of any reports required pursuant to clauses (1) or (2) of Section 4.03(a), then the Issuer must provide supplemental unaudited disclosure of its operating results by geographic region, provided that such operating results shall also include disclosure of United States operating income and indebtedness for borrowed money payable to Persons (other than the Issuer and its Restricted Subsidiaries).

(c) So long as any Notes are outstanding, the Issuer will also:

(1) issue a press release to an internationally recognized wire service no fewer than three Business Days prior to the delivery or posting of the annual and quarterly reports required by clauses (1) and (2) of Section 4.03(a) announcing the date on which such reports will be made available to the Holders and directing Holders, research analysts and prospective purchasers to contact the investor relations office of the Issuer to obtain copies of such reports;

(2) maintain a website (which may be password protected so long as the password is made promptly available by the Issuer to Holders, research analysts and prospective purchasers) to which all of the reports and press releases required by this Section 4.03 are posted; and

(3) host and participate in customary quarterly conference calls (which may be a single conference call together with investors holding other securities of the Issuer) to discuss operating results and related matters. The Issuer shall issue a press release which will provide the date and time of any such call and will direct Holders, prospective purchasers and research analysts to contact the investor relations office of the Issuer to obtain access to the conference call.

(d) In addition, to the extent not satisfied by the foregoing, the Issuer will, for so long as any Notes are outstanding, furnish to Holders and to prospective purchasers, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(e) In the event that any direct or indirect parent company of the Issuer becomes a Guarantor, the Issuer may satisfy its obligations in this Section 4.03 with respect to financial information relating to the Issuer by furnishing financial information relating to such parent company; provided that, if and so long as such parent company shall have Independent Assets or Operations (as defined below), the same is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such parent company, on the one hand, and the information relating to the Issuer and its Restricted Subsidiaries on a stand-alone basis, on the other hand. “ Independent Assets or Operations ” means, with respect to any such parent company, that such parent company’s total assets, revenues, income from continuing operations before income taxes and cash flows from operating activities (excluding in each case amounts related to its investment in the Issuer and the Restricted Subsidiaries), determined in accordance with GAAP and as shown on the most recent balance sheet of such parent company, is more than 3.0% of such parent company’s corresponding consolidated amount.

(f) Notwithstanding anything herein to the contrary, the Issuer will not be deemed to have failed to comply with any of its obligations under this Section 4.03 for purposes of Section 6.01(3) hereof until 90 days after the date any report hereunder is due under this Section 4.03.

(g) To the extent any information is not provided within the time periods specified in this Section 4.03 and such information is subsequently provided, the Issuer will be deemed to have satisfied its obligations with respect thereto at such time and any Default with respect thereto shall be deemed to have been cured.

(h) It is understood that the Trustee shall have no obligation whatsoever to determine whether or not such information, documents or reports have been posted on the Issuer’s website.

 

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SECTION 4.04. Compliance Certificate .

(a) The Issuer shall deliver to the Trustee, within 90 days after the end of each fiscal year ending after the Issue Date, a certificate from the principal executive officer, principal financial officer or principal accounting officer stating that a review of the activities of the Issuer and its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether the Issuer has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to such Officer signing such certificate, that to the best of his or her knowledge the Issuer has kept, observed, performed and fulfilled each and every condition and covenant contained in this Indenture during such fiscal year and is not in Default in the performance or observance of any of the terms, provisions, covenants and conditions of this Indenture (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action the Issuer is taking or proposes to take with respect thereto).

(b) When any Default has occurred and is continuing under this Indenture, or if the Trustee or the holder of any other evidence of Indebtedness of the Issuer or any Subsidiary gives any notice or takes any other action with respect to a claimed Default, the Issuer shall promptly (which shall be no more than ten (10) Business Days after becoming aware of such Default) deliver to the Trustee by registered or certified mail or by facsimile transmission an Officer’s Certificate specifying such event and what action the Issuer proposes to take with respect thereto.

SECTION 4.05. Taxes . The Issuer shall pay or discharge, and shall cause each of its Restricted Subsidiaries to pay or discharge, prior to delinquency, all material taxes, lawful assessments, and governmental levies except such as are contested in good faith and by appropriate actions or where the failure to effect such payment or discharge is not adverse in any material respect to the Holders.

SECTION 4.06. Stay, Extension and Usury Laws . The Issuer and each of the Guarantors covenant (to the extent that they may lawfully do so) that they shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer and each of the Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant (to the extent that they may lawfully do so) that they shall not, by resort to any such law, 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 has been enacted.

SECTION 4.07. Limitation on Restricted Payments .

(a) The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(I) declare or pay any dividend or make any payment or distribution on account of the Issuer’s or any of its Restricted Subsidiaries’ Equity Interests (in each case, solely in such Person’s capacity as holder of such Equity Interests), including any dividend or distribution payable in connection with any merger, amalgamation or consolidation other than:

(A) dividends or distributions by the Issuer payable solely in Equity Interests (other than Disqualified Stock) of the Issuer; or

(B) dividends or distributions 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 Subsidiary, the Issuer 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, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Issuer or any direct or indirect parent company of the Issuer, including in connection with any merger, amalgamation or consolidation, in each case held by Persons other than the Issuer or a Restricted Subsidiary;

 

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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, sinking fund payment or maturity, any Subordinated Indebtedness, other than:

(A) Indebtedness permitted under clauses (7), (8) and (9) of Section 4.09(b) hereof; or

(B) the payment, redemption, defeasance, purchase, repurchase, acquisition or retirement for value of Subordinated Indebtedness purchased 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, defeasance, purchase, repurchase, acquisition or retirement; or

(IV) make any Restricted Investment

(all such payments and other actions set forth in clauses (I) through (IV) above being collectively referred to as “ Restricted Payments ”), unless, at the time of and immediately after giving effect to such Restricted Payment:

(1) no 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 pursuant to the Fixed Charge Coverage Ratio Test; and

(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments (including the fair market value of any non-cash amount) made by the Issuer and its Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (1), (6)(c) and (8) of Section 4.07(b) hereof, but excluding all other Restricted Payments permitted by Section 4.07(b) hereof), is less than $130,000,000 plus the sum of (without duplication):

(A) 50.0% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period) beginning the first day of the fiscal quarter containing the Issue Date to the end of the most recently ended Test Period preceding such Restricted Payment, or, in the case such Consolidated Net Income for such period is a deficit, minus 100.0% of such deficit; plus

(B) 100.0% of the aggregate net cash proceeds and the fair market value of marketable securities or other property received by the Issuer since the Issue Date (other than net cash proceeds to the extent such net cash proceeds have been used to incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to Section 4.09(b)(12)(a) hereof) from the issue or sale of:

(i) (A) Equity Interests of the Issuer, including Treasury Capital Stock, but excluding cash proceeds and the fair market value of marketable securities or other property received from the sale of:

(x) Equity Interests to any future, present or former employees, directors, officers, members of management or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any direct or indirect parent company of the Issuer or any of the Issuer’s Subsidiaries after the Issue Date to the extent such amounts have been applied to Restricted Payments made in accordance with Section 4.07(b)(4) hereof; and

(y) Designated Preferred Stock; and

 

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(B) to the extent such net proceeds are actually contributed to the Issuer, Equity Interests of any direct or indirect parent company of the Issuer (excluding contributions of the proceeds from the sale of Designated Preferred Stock of such company or contributions to the extent such amounts have been applied to Restricted Payments made in accordance with Section 4.07(b)(4) hereof); or

(ii) debt securities of the Issuer, that have been converted into or exchanged for Equity Interests of the Issuer or any of its direct or indirect parent companies;

provided , that this clause (3)(B) shall not include the proceeds from (W) Refunding Capital Stock (as defined below) applied in accordance with Section 4.07(b)(2) hereof, (X) Equity Interests or convertible debt securities of the Issuer sold to a Restricted Subsidiary, (Y) Disqualified Stock or debt securities that have been converted into Disqualified Stock or (Z) Excluded Contributions; plus

(C) 100.0% of the aggregate amount of cash and the fair market value of marketable securities or other property contributed to the capital of the Issuer following the Issue Date (other than (X) net cash proceeds to the extent such net cash proceeds have been used to incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to Section 4.09(b)(12)(a) hereof) (Y) by a Restricted Subsidiary and (Z) any Excluded Contributions); plus

(D) 100.0% of the aggregate amount received in cash and the fair market value of marketable securities or other property received by means of:

(i) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of, or other returns on Investments from, Restricted Investments made by the Issuer or its Restricted Subsidiaries and repurchases and redemptions of such Restricted Investments from the Issuer or its Restricted Subsidiaries (other than by the Issuer or a Restricted Subsidiary) and repayments of loans or advances, and releases of guarantees, which constitute Restricted Investments made by the Issuer or its Restricted Subsidiaries, in each case after the Issue Date; or

(ii) the sale (other than to the Issuer or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary or a distribution from an Unrestricted Subsidiary (other than in each case to the extent the Investment in such Unrestricted Subsidiary constituted a Permitted Investment, but including such cash or fair market value to the extent exceeding the amount of such Permitted Investment) or a dividend from an Unrestricted Subsidiary after the Issue Date; plus

(E) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary or the merger, amalgamation or consolidation of an Unrestricted Subsidiary into the Issuer or a Restricted Subsidiary or the transfer of all or substantially all of the assets of an Unrestricted Subsidiary to the Issuer or a Restricted Subsidiary after the Issue Date, the fair market value of the Investment in such Unrestricted Subsidiary (or the assets transferred) at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary or at the time of such merger, amalgamation, consolidation or transfer of assets, other than to the extent the Investment in such Unrestricted Subsidiary constituted a Permitted Investment, but, to the extent exceeding the amount of such Permitted Investment, including such excess amounts of cash or fair market value; provided that, in the case of this clause (E), if the fair market value of any marketable securities or other property (other than cash) contributed or received, or such Investment, as applicable, to be included in this clause (E) shall exceed $100,000,000, such fair market value shall be determined by the Board of Directors whose resolution with respect thereto will be delivered to the Trustee.

 

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(b) The foregoing provisions of Section 4.07(a) hereof will not prohibit:

(1) the payment of any dividend or other distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or other distribution or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend or other distribution or redemption payment would have complied with the provisions of this Indenture;

(2) (a) the redemption, repurchase, retirement or other acquisition of any Equity Interests, including any accrued and unpaid dividends thereon (“ Treasury Capital Stock ”), or Subordinated Indebtedness of the Issuer or any Restricted Subsidiary or any Equity Interests of any direct or indirect parent company of the Issuer, in exchange for, or out of the proceeds of the substantially concurrent sale or issuance (other than to a Restricted Subsidiary) of, Equity Interests of the Issuer or any direct or indirect parent company of the Issuer to the extent contributed to the Issuer (in each case, other than any Disqualified Stock) (“ Refunding Capital Stock ”), (b) the declaration and payment of dividends on Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to a Restricted Subsidiary of the Issuer or to an employee stock ownership plan or any trust established by the Issuer or any of its Restricted Subsidiaries) of Refunding Capital Stock, and (c) if, immediately prior to the retirement of Treasury Capital Stock, the declaration and payment of dividends thereon was permitted under clauses (6) (a) or (b) of this Section 4.07(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, retire or otherwise acquire any Equity Interests of any direct or indirect parent company of the Issuer) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Treasury Capital Stock immediately prior to such retirement;

(3) the principal payment on, defeasance, redemption, repurchase, exchange or other acquisition or retirement of (i) Subordinated Indebtedness of the Issuer or a Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of the Issuer or a Guarantor or Disqualified Stock of the Issuer or a Guarantor, (ii) Disqualified Stock of the Issuer or a Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Disqualified Stock or Subordinated Indebtedness of the Issuer or a Guarantor, (iii) Disqualified Stock of Restricted Subsidiary that is not a Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Disqualified Stock of a Restricted Subsidiary that is not a Guarantor that, in each case, is Refinancing Indebtedness incurred or issued, as applicable, in compliance with Section 4.09 hereof and (iv) any Subordinated Indebtedness or Disqualified Stock which constitutes Acquired Indebtedness;

(4) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of the Issuer or any direct or indirect parent company of the Issuer held by any future, present or former employee, director, officer, member of management or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any of its Subsidiaries or any of its direct or indirect parent companies 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 (including, for the avoidance of doubt, any principal and interest payable on any notes issued by the Issuer or any direct or indirect parent company of the Issuer in connection with any such repurchase, retirement or other acquisition) including any arrangement including Equity Interests rolled over by management of the Issuer or any direct or indirect parent company of the Issuer in connection with the Transactions; provided , that the aggregate amount of Restricted Payments made under this clause (4) does not exceed $50,000,000 (which shall increase to $75,000,000 subsequent to the consummation of a Qualified Public Offering) in any calendar year (with unused amounts in any calendar year being carried over to the next two succeeding calendar years); provided , further , that such amount in any calendar year under this clause (4) may be increased by an amount not to exceed:

(A) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock) of the Issuer and, to the extent contributed to the Issuer, the cash proceeds from the sale of Equity Interests of any direct or indirect parent company of the Issuer, in each case to any future, present or former employees, directors, officers, members of management or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any of

 

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its Subsidiaries or any of its direct or indirect parent companies that occurs after the Issue Date, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of Section 4.07(a)(3) hereof; plus

(B) the amount of any cash bonuses otherwise payable to members of management, directors or consultants of the Issuer, any of its Subsidiaries or any direct or indirect parent company thereof in connection with the Transactions that are foregone in exchange for the receipt of Equity Interests of the Issuer or any direct or indirect parent company thereof pursuant to any deferred compensation plan of such company; plus

(C) the cash proceeds of key man life insurance policies received by the Issuer or its Restricted Subsidiaries (or by any direct or indirect parent company to the extent contributed to the Issuer) after the Issue Date; less

(D) the amount of any Restricted Payments previously made with the cash proceeds described in clauses (A), (B) and (C) of this clause (4);

and provided , further , that cancellation of Indebtedness owing to the Issuer or any of its Restricted Subsidiaries from any future, present or former employees, directors, officers, members of management or consultants of the Issuer (or their respective Controlled Investment Affiliates or Immediate Family Members), any direct or indirect parent company of the Issuer or any of the Issuer’s Restricted Subsidiaries in connection with a repurchase of Equity Interests of the Issuer or any of its direct or indirect parent companies will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of this Indenture;

(5) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Issuer or any of its Restricted Subsidiaries or any class or series of Preferred Stock of any Restricted Subsidiary issued in accordance with Section 4.09 hereof to the extent such dividends are included in the definition of “Fixed Charges”;

(6) (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 by the Issuer or any of its Restricted Subsidiaries after the Issue Date;

(B) the declaration and payment of dividends or distributions to any direct or indirect parent company of the Issuer, 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) issued by such parent company after the Issue Date; provided , that the amount of dividends paid pursuant to this clause (B) shall not exceed the aggregate amount of cash actually contributed to the Issuer from the sale of such Designated Preferred Stock; or

(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 4.07(b)(2);

provided , in the case of each of (A), (B) and (C) of this clause (6), that for the most recently ended Test Period 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 or declaration on a pro forma basis, the Issuer would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

(7) payments made or expected to be made by the Issuer or any Restricted Subsidiary in respect of withholding or similar taxes payable by any future, present or former employee, director, officer, member of management or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer or any of its Restricted Subsidiaries or any direct or indirect parent company of the Issuer and any repurchases of Equity Interests deemed to occur upon exercise of stock options, warrants or similar rights if such Equity Interests represent a portion of the exercise price of such options, warrants or similar rights or required withholding or similar taxes;

 

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(8) the declaration and payment of dividends on the Issuer’s common stock (or the payment of dividends to any direct or indirect parent company of the Issuer to fund a payment of dividends on such company’s common stock), following the first public offering of the Issuer’s common stock or the common stock of any direct or indirect parent company of the Issuer after the Issue Date, of up to 6.0% per annum of the net cash proceeds received by or contributed to the Issuer in or from any such public offering, other than public offerings with respect to the Issuer’s common stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;

(9) Restricted Payments that are made with Excluded Contributions;

(10) Restricted Payments in an aggregate amount taken together with all other Restricted Payments made pursuant to this clause (10) (in the case of Restricted Investments, at the time outstanding) not to exceed the greater of (a) $150,000,000 and (b) 2.0% of Total Assets at such time;

(11) distributions or payments of Securitization Fees;

(12) any Restricted Payment made in connection with the Transactions or the 2012 Transactions and, in each case, the fees and expenses related thereto or owed to Affiliates, in each case with respect to any Restricted Payment made or owed to an Affiliate, to the extent permitted by Section 4.11 hereof;

(13) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions similar to those of Section 4.10 and Section 4.14 hereof; provided , that the Issuer shall have made a Change of Control Offer or Asset Sale Offer, as applicable, to purchase the Notes on the terms provided in this Indenture applicable to Change of Control Offers or Asset Sale Offers, respectively, and all Notes validly tendered by Holders in such Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed, acquired or retired for value;

(14) the declaration and payment of dividends or distributions by the Issuer or a Restricted Subsidiary to, or the making of loans or advances to, any of their respective direct or indirect parent companies in amounts required for any direct or indirect parent company to pay, in each case without duplication,

(A) franchise, excise and similar taxes, and other fees, taxes and expenses required to maintain their corporate or other legal existence;

(B) so long as the Issuer is a member of a consolidated, combined or unitary group of which such direct or indirect parent company is a parent for foreign, federal, state or local income or other tax purposes, the relevant foreign, federal, state and local income or other taxes, to the extent such income or other taxes are attributable to the income of the Issuer and its Restricted Subsidiaries that are members of such group and, to the extent of the amount actually received from its Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries; provided that in each case the amount of such payments in or with respect to any taxable year does not exceed the amount that the Issuer and such Restricted Subsidiaries would be required to pay in respect of the relevant foreign, federal, state and local taxes for such taxable year were the Issuer, such Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes as a separate consolidated, combined or unitary group separately from any such parent company (or, if there are no such Restricted Subsidiaries or Unrestricted Subsidiaries, the Issuer on a separate company basis);

(C) customary salary, bonus, severance and other benefits payable to, and indemnities provided on behalf of, employees, directors, officers, members of management and consultants of any direct or indirect parent company of the Issuer and any payroll, social security or similar taxes thereof, to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of the Issuer and its Restricted Subsidiaries;

 

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(D) general corporate operating, administrative, compliance and overhead costs and expenses of any direct or indirect parent company of the Issuer to the extent such costs and expenses are attributable to the ownership or operation of the Issuer and its Subsidiaries;

(E) fees and expenses other than to Affiliates of the Issuer related to any equity or debt offering of such parent company (whether or not successful);

(F) to the extent constituting Restricted Payments, amounts that would be permitted to be paid directly by the Issuer or its Restricted Subsidiaries under Section 4.11 (other than clause (b)(2)(i) thereof);

(G) interest and/or principal on Indebtedness the proceeds of which have been contributed to the Issuer or any Restricted Subsidiary and that has been guaranteed by, or is otherwise, considered Indebtedness of, the Issuer incurred in accordance with Section 4.09 hereof; and

(H) to finance Investments or other acquisitions otherwise permitted to be made pursuant to this Section 4.07 if made by the Issuer; provided , that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment or other acquisition, (B) such direct or indirect parent company shall, promptly following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the capital of the Issuer or one of its Restricted Subsidiaries or (2) the merger, amalgamation, consolidation, or sale of the Person formed or acquired into the Issuer or one of its Restricted Subsidiaries (to the extent not prohibited by Section 5.01 hereof) in order to consummate such Investment or other acquisition, (C) such direct or indirect parent company and its Affiliates (other than the Issuer or a Restricted Subsidiary) receives no consideration or other payment in connection with such transaction except to the extent the Issuer or a Restricted Subsidiary could have given such consideration or made such payment in compliance with this Indenture, (D) any property received by the Issuer shall not increase amounts available for Restricted Payments pursuant to Section 4.07(a)(3) hereof and (E) to the extent constituting an Investment, such Investment shall be deemed to be made by the Issuer or such Restricted Subsidiary pursuant to another provision of this Section 4.07 (other than pursuant to clause (9) of this Section 4.07(b)) or pursuant to the definition of “Permitted Investments” (other than clause (9) thereof);

(15) the distribution, by dividend or otherwise, or other transfer or disposition of shares of Capital Stock of, or Indebtedness owed to the Issuer or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are cash and/or Cash Equivalents) or the proceeds thereof;

(16) cash payments or loans, advances, dividends or distributions to any direct or indirect parent of the Issuer to make payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests of the Issuer, any of its Restricted Subsidiaries or any direct or indirect parent company of the Issuer; and

(17) Restricted Payments, provided that, after giving pro forma effect thereto and the application of the net proceeds therefrom, the Total Net Leverage Ratio for the Test Period immediately preceding such Restricted Payment would be no greater than 4.00 to 1.00;

provided , that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (10), (15) and (17) of this Section 4.07(b), no Event of Default shall have occurred and be continuing or would occur as a consequence thereof.

 

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(c) The Issuer, in its sole discretion, will classify and may subsequently reclassify such Investment or other Restricted Payment (or any portion thereof) in one or more of the types of Restricted Payments or Investments and will only be required to include the amount and type of such Investment or other Restricted Payment in such of the above provisions of this covenant (and, in the case of any Investment, the clauses of the definition of Permitted Investments) as determined by the Issuer at such time.

(d) As of the Issue Date, all of the Issuer’s Subsidiaries shall be Restricted Subsidiaries. The Issuer will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the penultimate sentence of the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments or Permitted Investments in an amount determined as set forth in the penultimate sentence of the definition of “Investments.” Such designation will be permitted only if a Restricted Payment in such amount would be permitted at such time pursuant to Section 4.07 hereof or if an Investment would be permitted at such time, pursuant to the definition of “Permitted Investments,” and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries will not be subject to any of the restrictive covenants set forth in this Indenture. For the avoidance of doubt, this Section 4.07 shall not restrict the making of any “AHYDO catch up payment” with respect to, and required by the terms of, any Indebtedness of the Issuer or any of its Restricted Subsidiaries permitted to be incurred under the terms of this Indenture.

SECTION 4.08. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries .

(a) The Issuer will not, and will not permit any of its Restricted Subsidiaries that is not a Guarantor to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction ( provided , that dividend or liquidation priority between classes of Capital Stock, or subordination of any obligation (including the application of any remedy bars thereto) to any other obligation, will not be deemed to constitute such an encumbrance or restriction) on the ability of any such Restricted Subsidiary to:

(1) (A) pay dividends or make any other distributions to the Issuer or any Restricted Subsidiary that is a Guarantor on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or

(B) pay any Indebtedness owed to the Issuer or, in the case of a Restricted Subsidiary that is not a Guarantor, to any Restricted Subsidiary that is a Guarantor;

(2) make loans or advances to the Issuer or, in the case of a Restricted Subsidiary that is not a Guarantor, to any Restricted Subsidiary that is a Guarantor; or

(3) sell, lease or transfer any of its properties or assets to the Issuer or, in the case of a Restricted Subsidiary that is not a Guarantor, to any Restricted Subsidiary that is a Guarantor.

(b) The restrictions in Section 4.08(a) hereof will not apply to encumbrances or restrictions existing under or by reason of:

(1) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Senior Credit Facilities and the related documentation and Hedging Obligations and the related documentation;

(2) (i) this Indenture, the Notes and the guarantees thereof, (ii) the Existing Senior Notes Indenture, the Existing Senior Notes and the guarantees thereof and (iii) the Senior Exchange Notes Indenture, the Senior Exchange Notes and the guarantees thereof;

(3) purchase money obligations for property acquired in the ordinary course of business and capital lease obligations that impose restrictions of the nature discussed in Section 4.08(a)(3) hereof on the property so acquired;

 

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(4) applicable law or any applicable rule, regulation or order;

(5) any agreement or other instrument of a Person acquired by or merged, amalgamated or consolidated with and into the Issuer or any of its Restricted Subsidiaries in existence at the time of such acquisition or at the time it merges, amalgamates or consolidates with or into the Issuer or any of its Restricted Subsidiaries or assumed in connection with the acquisition of assets from such Person (but, in any such case, not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person so acquired and its Subsidiaries, or the property or assets of the Person so acquired and its Subsidiaries or the property or assets so acquired;

(6) contracts or agreements for the sale of assets, including any restrictions with respect to a Subsidiary of the Issuer pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary;

(7) Secured Indebtedness otherwise permitted to be incurred pursuant to Section 4.09 and Section 4.12 hereof that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(8) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business or arising in connection with any Permitted Liens;

(9) Indebtedness, Disqualified Stock or Preferred Stock of Restricted Subsidiaries that are not Guarantors permitted to be incurred subsequent to the Issue Date pursuant to Section 4.09 hereof;

(10) customary provisions in joint venture agreements and other similar agreements (including stockholder agreements) relating solely to such joint venture or entered into in the ordinary course of business;

(11) customary provisions contained in covenants not to sue, leases, sub-leases, licenses, sub-licenses, Equity Interests or similar agreements, including with respect to intellectual property and other agreements, in each case, entered into in the ordinary course of business;

(12) restrictions created in connection with any Qualified Securitization Facility that, in the good faith determination of the Issuer, are necessary or advisable to effect such Qualified Securitization Facility;

(13) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which the Issuer 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 the Issuer or such Restricted Subsidiary that are the subject to such agreement, the payment rights arising thereunder or the proceeds thereof and does not extend to any other asset or property of the Issuer or such Restricted Subsidiary or the assets or property of another Restricted Subsidiary;

(14) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of any Restricted Subsidiary;

(15) customary provisions restricting assignment of any agreement entered into in the ordinary course of business;

(16) restrictions arising in connection with cash or other deposits permitted under Section 4.12 hereof;

(17) any other agreement or instrument governing any Indebtedness, Disqualified Stock, or Preferred Stock permitted to be incurred or issued pursuant to Section 4.09 entered into after the Issue Date that contains encumbrances and other restrictions that either (x) are no more restrictive in any material respect

 

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taken as a whole with respect to any Restricted Subsidiary than (i) the restrictions contained in this Indenture as of the Issue Date or (ii) those encumbrances and other restrictions that are in effect on the Issue Date with respect to that Restricted Subsidiary pursuant to agreements in effect on the Issue Date, (y) are not materially more disadvantageous, taken as a whole, to the Holders than is customary in comparable financings for similarly situated issuers or (z) will not otherwise materially impair the Issuer’s ability to make payments on the Notes when due, in each case in the good faith judgment of the Issuer;

(18) customary restrictions and conditions contained in the document relating to any Lien so long as (i) such Lien is a Permitted Lien and such restrictions or conditions relate only to the specific asset subject to such Lien and (ii) such restrictions and conditions are not created for the purpose of avoiding the restrictions imposed by this covenant; and

(19) any encumbrances or restrictions of the type referred to in clauses (1), (2) and (3) of Section 4.08(a) hereof 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 (18) of this Section 4.08(b); provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Issuer, no more restrictive in any material respect with respect to such encumbrance and other restrictions taken as a whole than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

SECTION 4.09. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock .

(a) The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “ incur ” and collectively, an “ incurrence ”) with respect to any Indebtedness (including Acquired Indebtedness) and the Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided , that the Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio of the Issuer for the Issuer’s most recently ended Test Period preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued (or, in the case of Indebtedness under Designated Revolving Commitments, on the date such Designated Revolving Commitments are established after giving pro forma effect to the incurrence of the entire committed amount of Indebtedness thereunder, in which case such committed amount under such Designated Revolving Commitments may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this proviso) would have been at least 2.00 to 1.00, 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 Test Period (the “ Fixed Charge Coverage Ratio Test ”); provided , that Restricted Subsidiaries of the Issuer that are not Guarantors may not incur Indebtedness or Disqualified Stock or Preferred Stock under this paragraph if, after giving pro forma effect to such incurrence or issuance (including a pro forma application of the net proceeds therefrom), the aggregate amount of Indebtedness and Disqualified Stock and Preferred Stock of Restricted Subsidiaries that are not Guarantors incurred or issued pursuant to this paragraph then outstanding would exceed the greater of (x) $175,000,000 and (y) 2.25% of Total Assets at such time.

(b) The provisions of Section 4.09(a) hereof shall not apply to:

(1) the incurrence of Indebtedness pursuant to the Credit Facilities by the Issuer or any Restricted Subsidiary 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 that, together with the aggregate amount of Qualified Securitization Facilities incurred pursuant to Section 4.09(b)(25), does not exceed at any one time outstanding the sum of $3,525,000,000 plus , in the event of any extension, replacement, refinancing, renewal or defeasance of any such Credit Facility an amount equal to the amount of any penalty or premium required to

 

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be paid under the terms of the instrument or documents governing such Credit Facility and any defeasance costs and any fees and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such Credit Facility;

(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes and the Guarantees and any exchange notes and related exchange guarantees to be issued in exchange for the Notes;

(3) Indebtedness of the Issuer and its Restricted Subsidiaries in existence on the Issue Date , including (a) the Existing Senior Notes (including any guarantee thereof) and the exchange notes and related exchange guarantees to be issued in exchange for the Existing Senior Notes and the guarantees thereof and (b) the Senior Exchange Notes (including any guarantee thereof) and the exchange notes and related exchange guarantees to be issued in exchange for the Senior Exchange Notes and the guarantees thereof (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));

(4) Indebtedness (including Capitalized Lease Obligations) and Disqualified Stock incurred or issued by the Issuer or any Restricted Subsidiary and Preferred Stock issued by any Restricted Subsidiary, to finance the purchase, lease, replacement or improvement of property (real or personal), equipment or other assets, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock incurred or issued and outstanding under this clause (4) at such time, not to exceed the greater of (x) $150,000,000 and (y) 2.0% of Total Assets (in each case, determined at the date of incurrence or issuance), so long as such Indebtedness, Disqualified Stock or Preferred Stock is incurred or issued at the date of such purchase, lease, replacement or improvement or within 270 days thereafter;

(5) Indebtedness incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or created in the ordinary course of business, including in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, unemployment insurance or other social security legislation or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided , that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 Business Days following such drawing or incurrence;

(6) Indebtedness arising from agreements of the Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided , that if such Indebtedness is reflected on the balance sheet of the Issuer or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6)), such Indebtedness is paid after becoming due and payable;

(7) Indebtedness of the Issuer to a Restricted Subsidiary; provided that any such Indebtedness so long as owing to a Restricted Subsidiary that is not a Guarantor is expressly subordinated in right of payment to the Notes; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (7);

 

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(8) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided , that if a Guarantor incurs such Indebtedness to, and so long as owing to, a Restricted Subsidiary that is not a Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any such subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (8);

(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or another of its Restricted Subsidiaries or any pledge of such Capital Stock constituting a Permitted Lien) shall be deemed, in each case, to be an issuance of such shares of Preferred Stock (to the extent such Preferred Stock is then outstanding) not permitted by this clause (9);

(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);

(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Issuer or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with industry practice;

(12) (a) Indebtedness or Disqualified Stock of the Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any Restricted Subsidiary in an aggregate principal amount or liquidation preference up to 100.0% of the net cash proceeds received by the Issuer since immediately after the Issue Date from the issue or sale of Equity Interests of the Issuer or cash contributed to the capital of the Issuer (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clause (1), (2) or (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any Restricted Subsidiary in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued, as applicable, pursuant to this clause (12)(b), does not exceed the greater of (x) $300,000,000 and (y) 3.75% of Total Assets (in each case, determined at the date of incurrence) (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued pursuant to this clause (12)(b) shall cease to be deemed incurred, issued or outstanding for purposes of this clause (12)(b) but shall be deemed incurred or issued for the purposes of Section 4.09(a) hereof from and after the first date on which the Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09(a) hereof without reliance on this clause (12)(b));

(13) the incurrence or issuance by the Issuer of Indebtedness or Disqualified Stock or the incurrence or issuance by a Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund, refinance, extend, replace, renew or defease any Indebtedness (including any Designated Revolving Commitments) incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness incurred or Disqualified Stock or Preferred Stock issued to so refund, refinance, extend, replace, renew or defease such Indebtedness, Disqualified Stock or Preferred Stock; provided , that any such Indebtedness, Disqualified Stock or Preferred Stock constitutes Refinancing Indebtedness;

 

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(14) (a) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary incurred or issued to finance an acquisition (or other purchase of assets) or that is assumed by the Issuer or any Restricted Subsidiary in connection with such acquisition or (b) Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into, amalgamated or consolidated with the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided , that after giving effect to such acquisition, amalgamation, consolidation or merger, either:

(i) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio Test, or

(ii) the Fixed Charge Coverage Ratio for the Issuer is equal to or greater than immediately prior to such acquisition, amalgamation, consolidation or merger;

(15) Indebtedness arising from 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 such Indebtedness either (x) is extinguished within five Business Days of its incurrence or (y) arises in respect of any Restricted Subsidiary that is a Foreign Subsidiary with any bank or other financial institution subject to a pooling or similar arrangement with one or more accounts of any other Restricted Subsidiaries that are Foreign Subsidiaries with such bank or other financial institution to the extent the net aggregate amount of funds in all such accounts subject to such pooling or similar arrangement with such bank or other financial institution is positive;

(16) Indebtedness of the Issuer or any of its Restricted Subsidiaries supported by a letter of credit or bank guarantee issued pursuant to any Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee;

(17) (a) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or (b) any guarantee by a Restricted Subsidiary of Indebtedness of the Issuer so long as the incurrence of such Indebtedness by the Issuer is permitted under the terms of this Indenture; provided that such guarantee is incurred in accordance with, if applicable, Section 4.15 hereof;

(18) Indebtedness consisting of Indebtedness issued by the Issuer or any of its Restricted Subsidiaries to future, present or former employees, directors, officers, members of management and consultants thereof, their respective Controlled Investment Affiliates or Immediate Family Members, 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 described in Section 4.07(b)(4) hereof;

(19) to the extent constituting Indebtedness, customer deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business;

(20) (a) 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 the Issuer and its Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of the Issuer and its Restricted Subsidiaries and (b) Indebtedness in respect of Cash Management Services;

(21) Indebtedness incurred by a Restricted Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business on arm’s-length commercial terms;

 

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(22) Indebtedness of the Issuer or any of its Restricted Subsidiaries consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business;

(23) Indebtedness or Disqualified Stock of Restricted Subsidiaries of the Issuer that are not Guarantors in an amount not to exceed and together with any other Indebtedness incurred and outstanding under this clause (23) the greater of (i) $125,000,000 and (ii) 1.75% of Total Assets (in each case, determined on the date of incurrence) (it being understood that any Indebtedness or Disqualified Stock deemed incurred or issued pursuant to this clause (23) shall cease to be deemed incurred, issued or outstanding for the purpose of this clause (23) but shall be deemed incurred or issued for the purposes of Section 4.09(a) hereof from and after the first date on which the Issuer or such Restricted Subsidiaries could have incurred such Indebtedness under Section 4.09(a) hereof without reliance on this clause (23));

(24) Indebtedness of the Issuer or any of its Restricted Subsidiaries undertaken in connection with cash management and related activities with respect to any Subsidiary or joint venture in the ordinary course of business; and

(25) Indebtedness in respect of Qualified Securitization Facilities, subject to the limitations contained in clause (1) above.

(c) For purposes of determining compliance with this Section 4.09:

(1) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) at any time, whether at the time of incurrence or issuance or upon the application of all or a portion of the proceeds thereof or subsequently, meets the criteria of more than one of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through (25) of Section 4.09(b) hereof or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Issuer, in its sole discretion, will classify and may subsequently reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) and will only be required to include the amount and type of such Indebtedness, Disqualified Stock or Preferred Stock in such of the above clauses or under Section 4.09(a) hereof as determined by the Issuer at such time; provided that all Indebtedness outstanding under the Credit Facilities on the Issue Date will, at all times, be treated as incurred on the Issue Date under Section 4.09(b)(1) hereof; and

(2) the Issuer will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Section 4.09(a) and Section 4.09(b) hereof, subject to the proviso to Section 4.09(c)(1) hereof.

Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount or liquidation preference, and the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, of the same class and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies, will, in each case, not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or Preferred Stock for purposes of this Section 4.09.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness or issuance of Disqualified Stock, the U.S. dollar-equivalent principal amount of Indebtedness or Disqualified Stock 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 U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is incurred or Disqualified Stock is issued, to refinance other Indebtedness or Disqualified Stock, as applicable, denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated

 

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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 or Disqualified Stock does not exceed (i) the principal amount of such Indebtedness or Disqualified Stock, as applicable, being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with such refinancing.

The principal amount of any Indebtedness incurred or Disqualified Stock issued to refinance other Indebtedness, if incurred in a different currency from the Indebtedness or Disqualified Stock, as applicable, being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness or Disqualified Stock is denominated that is in effect on the date of such refinancing. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Issuer dated such date prepared in accordance with GAAP.

The Issuer shall not, and shall not permit any Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is contractually subordinated or junior in right of payment to any Indebtedness of the Issuer or such Guarantor, as the case may be, unless such Indebtedness is expressly subordinated in right of payment to the Notes or such Guarantor’s Guarantee to the extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Issuer or such Guarantor, as the case may be.

For purposes of this Indenture, (1) unsecured Indebtedness shall not be deemed to be subordinated or junior to Secured Indebtedness merely because it is unsecured, (2) Indebtedness shall not be deemed to be subordinated or junior to any other Indebtedness merely because it is issued or guaranteed by other obligors or (3) Secured Indebtedness shall not be deemed to be subordinated or junior to any other Secured Indebtedness merely because it has a junior priority lien with respect to the same collateral.

SECTION 4.10. Asset Sales .

(a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale, unless:

(1) the Issuer or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets sold or otherwise disposed of; and

(2) except in the case of a Permitted Asset Swap, at least 75.0% of the consideration therefor received by the Issuer or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided , that the amount of:

(A) any liabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most recent balance sheet or in the footnotes thereto) of the Issuer or such Restricted Subsidiary, other than liabilities that are by their terms subordinated to the Notes or any Guarantor’s Guarantee of the Notes, that (i) are assumed by the transferee of any such assets or (ii) that are otherwise cancelled or terminated in connection with the transaction with such transferee (other than intercompany debt owed to the Issuer or its Restricted Subsidiaries) and, in the case of clause (i) above, for which the Issuer and all of its Restricted Subsidiaries have been validly released by all applicable creditors in writing;

(B) any securities, notes or other obligations or assets received by the Issuer or such Restricted Subsidiary from such transferee that are converted by the Issuer or such Restricted Subsidiary into Cash Equivalents (to the extent of the Cash Equivalents received) within 180 days following the closing of such Asset Sale and the fair market value of any earnout or similar obligation;

 

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(C) any Designated Non-cash Consideration received by the Issuer or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed the greater of (x) $175,000,000 and (y) 2.25% 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, and

(D) Indebtedness of any Restricted Subsidiary that ceases to be a Restricted Subsidiary as a result of such asset disposition (other than intercompany debt owed to the Issuer or its Restricted Subsidiaries), to the extent that the Issuer and each other Restricted Subsidiary are released from any guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Sale,

shall be deemed to be Cash Equivalents for purposes of this clause (2) and for no other purpose.

(b) Within 450 days after the receipt of any Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale:

(1) to permanently reduce:

(A) Obligations under the Senior Credit Facilities, and to correspondingly reduce commitments with respect thereto;

(B) Obligations under Secured Indebtedness of the Issuer or a Restricted Subsidiary, other than Indebtedness owed to the Issuer or a Restricted Subsidiary, which is secured by a Lien that is permitted by this Indenture, and to correspondingly reduce commitments with respect thereto;

(C) Obligations under other Senior Indebtedness (and to correspondingly reduce commitments with respect thereto); provided , that the Issuer shall equally and ratably reduce Obligations under the Notes as provided under Section 3.07 hereof or through open-market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes to be repurchased, to the date of repurchase; or

(D) Indebtedness of a Restricted Subsidiary that is not a Guarantor, other than Indebtedness owed to the Issuer or another Restricted Subsidiary;

(2) to make (a) an Investment in any one or more businesses; provided that such Investment in any business is in the form of the acquisition of Capital Stock and results in the Issuer or any of its Restricted Subsidiaries, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (b) capital expenditures, (c) acquisitions of properties or (d) acquisitions of other assets, in the case of each of (a), (b), (c) and (d), used or useful in a Similar Business; or

(3) to make (a) an Investment in any one or more businesses; provided , that such Investment in any business is in the form of the acquisition of Capital Stock and results in the Issuer or any of its Restricted Subsidiaries, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (b) acquisitions of properties or (c) acquisitions of other assets that, in each of (a), (b) and (c), replace the businesses, properties and/or assets that are the subject of such Asset Sale;

 

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provided , that, in the case of clauses (2) and (3) of Section 4.10(b) hereof, a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment so long as the Issuer or such Restricted Subsidiary enters into such commitment with the good faith expectation that such Net Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “ Acceptable Commitment ”) and, in the event that any Acceptable Commitment is later cancelled or terminated for any reason before the Net Proceeds are applied in connection therewith, the Issuer or such Restricted Subsidiary enters into another Acceptable Commitment (a “ Second Commitment ”) within 180 days of such cancellation or termination (or, if later, 450 days after the receipt of such Net Proceeds); provided , further , that if any Second Commitment is later cancelled or terminated for any reason before such Net Proceeds are applied, then such Net Proceeds shall constitute Excess Proceeds (as defined below).

(c) Any Net Proceeds from the Asset Sale that are not invested or applied as provided and within the time period set forth in the preceding paragraph (it being understood that any portion of such Net Proceeds used to make an offer to purchase Notes, as described in clause (b)(1)(C) above, will be deemed to have been so applied whether or not such offer is accepted) will be deemed to constitute “ Excess Proceeds .” When the aggregate amount of Excess Proceeds exceeds $125,000,000, the Issuer shall make an offer to all Holders and, at the option of the Issuer, to any holders of any Indebtedness that is pari passu with the Notes (“ Pari Passu Indebtedness ” and such offer, an “ Asset Sale Offer ”), to purchase the maximum aggregate principal amount of the Notes and such Pari Passu Indebtedness that is in an amount equal to at least $2,000, or an integral multiple of $1,000 in excess thereof, that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100.0% of the principal amount thereof (or accreted value thereof, if less), plus accrued and unpaid interest, if any (or, in respect of such Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Pari Passu Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in Section 3.09. The Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within fifteen Business Days after the date that Excess Proceeds exceed $125,000,000 by mailing or electronically delivering the notice required pursuant to Section 3.09, with a copy to the Trustee or otherwise in accordance with Applicable Procedures. The Issuer may satisfy the foregoing obligations with respect to any Net Proceeds from an Asset Sale by making an Asset Sale Offer with respect to such Net Proceeds prior to the expiration of the relevant 450 days (or such longer period provided above) or with respect to Excess Proceeds of $125,000,000 or less.

To the extent that the aggregate amount of Notes and such Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes, subject to other covenants contained in this Indenture. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds that resulted in the Asset Sale Offer shall be reset to zero (regardless of whether there are any remaining Excess Proceeds upon such completion).

(d) Pending the final application of any Net Proceeds pursuant to this Section 4.10, the holder of such Net Proceeds may apply such Net Proceeds temporarily to reduce Indebtedness outstanding under a revolving credit facility, including under the Senior Credit Facilities, or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.

(e) The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of the Notes 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.

(f) The Issuer’s obligation to make an offer to repurchase the Notes pursuant to this Section 4.10 may be waived or modified with the written consent of the Holders of a majority in principal amount of the then outstanding Notes.

SECTION 4.11. Transactions with Affiliates .

(a) The Issuer will not, and will not permit any of its Restricted Subsidiaries to, 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

 

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from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an “ Affiliate Transaction ”) involving aggregate payments or consideration in excess of $25,000,000, unless:

(1) such Affiliate Transaction is on terms that are not materially less favorable to the Issuer or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis; and

(2) the Issuer delivers to the Trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $75,000,000, a resolution adopted by the majority of the Board of Directors approving such Affiliate Transaction and set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (1) of this Section 4.11(a).

(b) The foregoing provisions will not apply to the following:

(1) transactions between or among the Issuer or any of its Restricted Subsidiaries, or an entity that becomes a Restricted Subsidiary as a result of such transaction, and any merger, consolidation or amalgamation of the Issuer and any direct parent of the Issuer; provided that such merger, consolidation or amalgamation of the Issuer is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;

(2) (i) Restricted Payments permitted by Section 4.07 hereof and (ii) other Investments constituting “Permitted Investments”;

(3) the payment of management, consulting, monitoring, transaction, advisory and other fees, indemnities and expenses pursuant to the Management Fee Agreement ( plus any unpaid management, consulting, monitoring, transaction, advisory and other fees, indemnities and expenses accrued in any prior year) and the termination fees pursuant to the Management Fee Agreement, or any amendment thereto or replacement thereof so long as any such amendment or replacement is not materially disadvantageous in the good faith judgment of the Board of Directors to the Holders when taken as a whole, as compared to the Management Fee Agreement as in effect on the Issue Date;

(4) the payment of reasonable and customary fees and compensation paid to, and indemnities and reimbursements and employment and severance arrangements provided on behalf of or for the benefit of present, future or former employees, directors, officers, members of management or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any of its direct or indirect parent companies or any of its Restricted Subsidiaries;

(5) transactions in which the Issuer or any of its 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 the Issuer or such Restricted Subsidiary from a financial point of view or stating that the terms are not materially less favorable to the Issuer or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis;

(6) the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under the terms of, any agreement as in effect as of the Issue Date, or any amendment thereto or replacement thereof (so long as any such amendment or replacement is not materially disadvantageous in the good faith judgment of the Board of Directors to the Holders when taken as a whole as compared to the applicable agreement as in effect on the Issue Date);

(7) the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date and any similar agreements

 

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or arrangements which it may enter into thereafter; provided that the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of obligations under any future amendment to any such existing agreement or arrangement or under any similar agreement or arrangement entered into after the Issue Date shall only be permitted by this clause (7) to the extent that the terms of any such amendment or new agreement or arrangement are not otherwise materially disadvantageous in the good faith judgment of the Board of Directors to the Holders when taken as a whole (as compared to the original agreement or arrangement in effect on the Issue Date);

(8) (i) the Transactions and the payment of all fees and expenses related to the Transactions, including Transaction Expenses and (ii) the 2012 Transactions and the payment of all fees and expenses related to the 2012 Transactions, including 2012 Transaction Expenses;

(9) transactions with customers, clients, suppliers, contractors, joint venture partners or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale 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 the Issuer and its Restricted Subsidiaries, in the reasonable determination of the Board of Directors or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(10) the issuance of Equity Interests (other than Disqualified Stock) of the Issuer to any Person or any contribution to the capital of the Issuer;

(11) sales of accounts receivable, or participations therein, or Securitization Assets or related assets in connection with any Qualified Securitization Facility or any related transaction effected in order to consummate a financing contemplated by a Qualified Securitization Facility;

(12) payments by the Issuer or any of its Restricted Subsidiaries made for any financial advisory, consulting, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which payments are approved by a majority of the Board of Directors in good faith;

(13) payments and Indebtedness and Disqualified Stock (and cancellation of any thereof) of the Issuer and its Restricted Subsidiaries and Preferred Stock (and cancellation of any thereof) of any Restricted Subsidiary to any future, current or former employee, director, officer, member of management or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any of its Subsidiaries or any of its direct or indirect parent companies 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 distributor equity plan or agreement that are, in each case, approved by the Issuer in good faith; and any employment agreements, severance arrangements, stock option plans and other compensatory arrangements (and any successor plans thereto) and any supplemental executive retirement benefit plans or arrangements with any such employees, directors, officers, distributors, members of management or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) that are, in each case, approved by the Issuer in good faith;

(14) (i) investments by Permitted Holders in securities of the Issuer or any of its Restricted Subsidiaries (and payment of reasonable out-of-pocket expenses incurred by such Permitted Holders in connection therewith) so long as (a) the investment is being offered by the Issuer or such Restricted Subsidiary generally to other investors on the same or more favorable terms and (b) the investment constitutes less than 10.0% of the proposed or outstanding issue amount of such class of securities ( provided that any investments in debt securities by any Debt Fund Affiliates shall not be subject to the limitation in this clause (b)), and (ii) payments to Permitted Holders in respect of securities of the Issuer or any of its Restricted Subsidiaries contemplated in the foregoing subclause (i) or that were acquired from Persons other than the Issuer and its Restricted Subsidiaries, in each case, in accordance with the terms of such securities;

 

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(15) payments to or from, and transactions with, any joint venture or Unrestricted Subsidiary in the ordinary course of business or consistent with past practice or industry norms (including, any cash management activities related thereto);

(16) payments by the Issuer (and any direct or indirect parent company thereof) and its Subsidiaries pursuant to tax sharing agreements among the Issuer (and any such parent company) and its Subsidiaries; provided that in each case the amount of such payments in any taxable year does not exceed the amount that the Issuer, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent of the amount received from Unrestricted Subsidiaries) would be required to pay in respect of foreign, federal, state and local taxes for such taxable year were the Issuer, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such parent entity;

(17) any lease entered into between the Issuer or any Restricted Subsidiary, as lessee and any Affiliate of the Issuer, as lessor, which is approved by a majority of the disinterested members of the Board of Directors in good faith;

(18) intellectual property licenses in the ordinary course of business;

(19) the payment of reasonable out-of-pocket costs and expenses relating to registration rights and indemnities provided to stockholders of the Issuer or any direct or indirect parent thereof pursuant to the stockholders agreement or the registration rights agreement entered into on or after the Issue Date in connection therewith;

(20) transactions permitted by, and complying with, the provisions of Section 5.01 solely for the purpose of (a) reorganizing to facilitate any initial public offering of securities of the Issuer or any direct or indirect parent company (b) forming a holding company, or (c) reincorporating the Issuer in a new jurisdiction;

(21) transactions undertaken in good faith (as certified by a responsible financial or accounting officer of the Issuer in an Officer’s Certificate) for the purposes of improving the consolidated tax efficiency of the Issuer and its Restricted Subsidiaries and not for the purpose of circumventing any covenant set forth in this Indenture;

(22) payments on the Notes in accordance with this Indenture, payments on the Existing Senior Notes (and any exchange notes to be issued in exchange therefor) in accordance with the Existing Senior Notes Indenture, payments on the Senior Exchange Notes (and any exchange notes to be issued in exchange therefor) in accordance with the Senior Exchange Notes Indenture and payments in respect of Obligations under the Credit Facilities; provided that such Obligations were acquired by an Affiliate of the Issuer in compliance with this Indenture; and

(23) transactions between the Issuer or any Restricted Subsidiary and any Person that is an Affiliate of the Issuer or such Restricted Subsidiary solely because a director of such Person is also a director of the Issuer, such Restricted Subsidiary or any direct or indirect parent of the Issuer; provided , however, that such director abstains from voting as a director of the Issuer, such Restricted Subsidiary or such direct or indirect parent, as the case may be, on any matter involving such other Person.

SECTION 4.12. Liens . The Issuer will not, and will not permit any Guarantor to, directly or indirectly, create, incur or assume any Lien (except Permitted Liens) that secures Obligations under any Indebtedness or any related guarantee of Indebtedness, on any asset or property of the Issuer or any Guarantor, or any income or profits therefrom, or assign or convey any right to receive income therefrom, unless:

(1) in the case of Liens securing Subordinated Indebtedness, the Notes and related Guarantees are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens; and

(2) in all other cases, the Notes or the Guarantees are equally and ratably secured,

 

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except that the foregoing shall not apply to or restrict (a) Liens securing obligations in respect of the Notes and the related Guarantees (including exchange notes and related guarantees), (b) Liens securing obligations in respect of Indebtedness permitted to be incurred under any Credit Facility, including any letter of credit facility relating thereto, that was permitted by the terms of this Indenture to be incurred pursuant to Section 4.09(b)(1) hereof and (c) Liens securing obligations in respect of Indebtedness permitted to be incurred pursuant to Section 4.09 hereof; provided that, with respect to Liens securing obligations in respect of Indebtedness permitted under this clause (c), at the time of incurrence (or, in the case of Indebtedness under Designated Revolving Commitments, on the date such Designated Revolving Commitments are established after giving pro forma effect to the incurrence of the entire committed amount of Indebtedness thereunder, in which case such committed amount under such Designated Revolving Commitments may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this subclause) and after giving pro forma effect thereto and the application of the net proceeds therefrom, the Senior Secured Net Leverage Ratio for the Test Period immediately preceding the incurrence of such Lien would be no greater than 3.50 to 1.00.

Any Lien created for the benefit of the Holders pursuant to this Section 4.12 shall be deemed automatically and unconditionally released and discharged upon the release and discharge of each of the Liens described in clauses (1) and (2) of this Section 4.12.

The expansion of Liens by virtue of accretion or amortization of original issue discount (excluding accretion or amortization that is expressly provided for in the agreement providing for the applicable Indebtedness that is a zero coupon or similar discount yield instrument) 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 Liens for purposes of this covenant.

For purposes of determining compliance with this Section 4.12, (x) a Lien need not be incurred solely by reference to one category of Permitted Liens or Liens described in clauses (a) through (c) above 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 or Liens described in clauses (a) through (c) above, the Issuer shall, in its sole discretion, classify or may subsequently reclassify at any time such Lien (or any portion thereof) in any manner that complies with this covenant and the definition of Permitted Liens.

SECTION 4.13. Company Existence . Subject to Article V hereof, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its company existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Issuer or any such Restricted Subsidiary; provided that the Issuer shall not be required to preserve the corporate, partnership or other existence of its Restricted Subsidiaries, if the Issuer in good faith shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and its Restricted Subsidiaries, taken as a whole.

SECTION 4.14. Offer to Repurchase Upon Change of Control .

(a) If a Change of Control occurs, unless the Issuer has previously or concurrently electronically delivered or mailed a redemption notice with respect to all the outstanding Notes as described under Section 3.07 hereof, the Issuer shall make an offer to purchase all of the Notes pursuant to the offer described below (the “ Change of Control Offer ”) at a price in cash (the “ Change of Control Payment ”) equal to 101.0% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date prior to such repurchase. Within 30 days following any Change of Control, the Issuer shall send notice of such Change of Control Offer electronically or by first-class mail, with a copy to the Trustee, to each Holder to the address of such Holder appearing in the Note Register or otherwise in accordance with the Applicable Procedures with the following information:

(1) that a Change of Control Offer is being made pursuant to this Section 4.14 and that all Notes properly tendered pursuant to such Change of Control Offer will be accepted for payment by the Issuer;

 

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(2) the purchase price and the purchase date, which will be no earlier than 30 days nor later than 60 days from the date such notice is mailed or otherwise delivered (the “ Change of Control Payment Date ”);

(3) that any Note not properly tendered will remain outstanding and continue to accrue interest;

(4) that unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;

(5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to the Paying Agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(6) that Holders will be entitled to withdraw their tendered Notes and their election to require the Issuer to purchase such Notes; provided , that the Paying Agent receives, not later than the close of business on the second Business Day prior to the expiration date of the Change of Control Offer, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;

(7) that Holders whose Notes are being purchased only in part will be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered. The unpurchased portion of the Notes must be equal to at least $2,000 or any integral multiple of $1,000 in excess of $2,000;

(8) if such notice is delivered prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of Control; and

(9) the other instructions, as determined by the Issuer, consistent with this Section 4.14, that a Holder must follow in order to have its Notes repurchased.

The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes by the Issuer pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Indenture by virtue thereof.

(b) On the Change of Control Payment Date, the Issuer shall, to the extent permitted by law:

(1) accept for payment all Notes issued by it or portions thereof properly tendered pursuant to the Change of Control Offer;

(2) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered; and

(3) deliver, or cause to be delivered, to the Trustee an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuer and, at the Issuer’s option, the Notes so accepted for cancellation.

 

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(c) The Issuer shall not be required to make a Change of Control Offer following 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 this Indenture applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

(d) Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

(e) Other than as specifically provided in this Section 4.14, any purchase pursuant to this Section 4.14 shall be made pursuant to the provisions of Sections 3.02, 3.05 and 3.06 hereof, and references therein to “redeem,” “redemption,” “Redemption Date” and similar words shall be deemed to refer to “purchase,” “repurchase,” “Change of Control Payment Date” and similar words, as applicable.

(f) The Issuer’s obligation to make an offer to repurchase the Notes pursuant to this section 4.14 may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.

SECTION 4.15. Limitation on Guarantees of Indebtedness by Restricted Subsidiaries . The Issuer shall not permit any of its Wholly-Owned Subsidiaries that are Restricted Subsidiaries (and non-Wholly-Owned Subsidiaries if such non-Wholly-Owned Subsidiaries guarantee other capital markets debt securities of the Issuer or any Guarantor), other than a Guarantor, a Foreign Subsidiary or a Securitization Subsidiary, to guarantee the payment of any Indebtedness of the Issuer or any other Guarantor unless:

(1) such Restricted Subsidiary within 30 days after the guarantee of such Indebtedness executes and delivers a supplemental indenture to this Indenture, the form of which is attached as Exhibit D hereto, providing for a Guarantee by such Restricted Subsidiary, except that with respect to a guarantee of Indebtedness of the Issuer or any Guarantor, if such Indebtedness is by its express terms subordinated in right of payment to the Notes or such Guarantor’s Guarantee, any such guarantee by such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Guarantee substantially to the same extent as such Indebtedness is subordinated to the Notes; and

(2) such Restricted Subsidiary waives and shall not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other applicable rights against the Issuer or any other Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Guarantee;

provided that this covenant shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary. The Issuer may elect, in its sole discretion, to cause any Subsidiary that is not otherwise required to be a Guarantor to become a Guarantor, in which case such Subsidiary shall not be required to comply with the 30-day period described in clause (1) of this Section 4.15.

SECTION 4.16. Suspension of Covenants .

(a) During any period of time that (i) the Notes 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 ” and the date thereof being referred to as the “ Suspension Date ”) then, Section 4.07, Section 4.08, Section 4.09, Section 4.10, Section 4.11, Section 4.15 and Section 5.01(a)(4) hereof shall not be applicable to the Notes (collectively, the “ Suspended Covenants ”).

(b) During a Suspension Period (as defined below), the Issuer may not designate any of its Subsidiaries as Unrestricted Subsidiaries pursuant to the second sentence of the definition of “Unrestricted Subsidiary.”

 

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(c) In the event that the Issuer 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 Notes below an Investment Grade Rating, then the Issuer and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events. The period of time between the Suspension Date and the Reversion Date is referred to in this Indenture as the “ Suspension Period .” The Guarantees of the Guarantors will be suspended during the Suspension Period. Additionally, upon the occurrence of a Covenant Suspension Event, the amount of Excess Proceeds from Net Proceeds shall be reset to zero.

(d) Notwithstanding the foregoing, in the event of any such reinstatement, no action taken or omitted to be taken by the Issuer or any of its Restricted Subsidiaries or events occurring prior to such reinstatement will give rise to a Default or Event of Default under this Indenture with respect to the Notes; provided , that (i) with respect to Restricted Payments made after such reinstatement, the amount available to be made as Restricted Payments will be calculated as though Section 4.07 hereof had been in effect prior to, but not during, the Suspension Period; (ii) all Indebtedness incurred, or Disqualified Stock issued, during the Suspension Period will be classified to have been incurred or issued pursuant to Section 4.09(b)(3) hereof; provided , that all Indebtedness outstanding on the Reversion Date under the Senior Credit Facilities shall be deemed incurred or issued pursuant to Section 4.09(b)(1) hereof (up to the maximum amount of such Indebtedness that would be permitted to be incurred thereunder as of the Reversion Date and after giving effect to Indebtedness incurred prior to the Suspension Period and outstanding on the Reversion Date); (iii) any Affiliate Transaction entered into after the Reversion Date pursuant to an agreement entered into during any Suspension Period shall be deemed to be permitted pursuant to Section 4.11(b)(6) hereof; (iv) any encumbrance or restriction on the ability of any Restricted Subsidiary that is not a Guarantor to take any action described in clauses (1) through (3) of Section 4.08(a) hereof that becomes effective during any Suspension Period shall be deemed to be permitted pursuant to Section 4.08(b)(1) hereof; and (v) no Subsidiary of the Issuer shall be required to comply with Section 4.15 hereof after such reinstatement with respect to any guarantee entered into by such Subsidiary during any Suspension Period.

(e) On and after each Reversion Date, the Issuer and its Subsidiaries will be permitted to consummate the transactions contemplated by any contract entered into during the Suspension Period, so long as such contract and such consummation would have been permitted during such Suspension Period.

ARTICLE V

SUCCESSORS

SECTION 5.01. Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets .

(a) The Issuer may not consolidate, amalgamate or merge with or into or wind up into (whether or not the Issuer is the surviving Person), 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 unless:

(1) the Issuer is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Issuer) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made, is a Person organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Person, as the case may be, being herein called the “ Successor Company ”); provided that in the case where the surviving Person is not a corporation, a co-obligor of the Notes is a corporation;

(2) the Successor Company, if other than the Issuer, expressly assumes all the obligations of the Issuer under the Notes pursuant to supplemental indentures or other documents or instruments;

(3) immediately after such transaction, no Default exists;

 

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(4) immediately after giving pro forma effect to such transaction and any related financing transactions, as if such transactions had occurred at the beginning of the applicable Test Period,

(A) the Successor Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio Test, or

(B) the Fixed Charge Coverage Ratio for the Successor Company would be equal to or greater than the Fixed Charge Coverage Ratio for the Issuer immediately prior to such transaction;

(5) each Guarantor, unless it is the other party to the transactions described above, in which case Section 5.01(a)(2) hereof shall apply, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Person’s obligations under this Indenture and the Notes; and

(6) the Successor Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indentures, if any, comply with this Indenture.

(b) The foregoing clauses (3), (4), (5) and (6) of Section 5.01(a) hereof shall not apply to the Transactions. Notwithstanding clauses (3) and (4) of Section 5.01(a) hereof,

(1) any Restricted Subsidiary may consolidate with, amalgamate with or merge with or into or wind up into or sell, assign, lease, convey, transfer or otherwise dispose of all or part of its properties and assets to the Issuer, and

(2) the Issuer may consolidate with, amalgamate with or merge with or into, or wind up into an Affiliate of the Issuer solely for the purpose of reincorporating the Issuer in the United States, any state thereof, the District of Columbia or any territory thereof so long as the amount of Indebtedness of the Issuer and its Restricted Subsidiaries is not increased thereby.

(c) Subject to Section 10.06 hereof, no Guarantor will, and the Issuer will not permit any Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Guarantor is the surviving Person), 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 unless:

(1) (A) such Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of such Guarantor, as applicable, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Guarantor or such Person, as the case may be, being herein called the “ Successor Person ”);

(B) the Successor Person, if other than such Guarantor, expressly assumes all the obligations of such Guarantor under this Indenture and such Guarantor’s related Guarantee pursuant to supplemental indentures or other documents or instruments;

(C) immediately after such transaction, no Default exists; and,

(D) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indentures, if any, comply with this Indenture;

(2) the transaction is made in compliance with, if applicable, Section 4.10; or

(3) in the case of assets comprised of Equity Interests of Subsidiaries that are not Guarantors, such Equity Interests are sold, assigned, transferred, leased, conveyed or otherwise disposed of to one or more Restricted Subsidiaries.

 

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(d) Notwithstanding the foregoing, any Guarantor may (1) merge, amalgamate or consolidate with or into, wind up into or sell, assign, transfer, lease, convey or otherwise dispose of all or part of its properties and assets to another Guarantor or the Issuer, (2) merge with an Affiliate of the Issuer solely for the purpose of reincorporating the Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof, (3) convert into a corporation, partnership, limited partnership, limited liability company or trust organized or existing under the laws of the jurisdiction of organization of such Guarantor or (4) liquidate or dissolve or change its legal form if the Issuer determines in good faith that such action is in the best interests of the Issuer and is not materially disadvantageous to the Holders.

SECTION 5.02. Successor Person Substituted . Upon any consolidation, amalgamation or merger, or any winding up, sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Issuer or a Guarantor in accordance with Section 5.01 hereof, the successor Person formed by such consolidation or amalgamation or into or with which the Issuer or such Guarantor, as applicable, is merged or to which such wind up, sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, amalgamation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture, the Notes and the Guarantees referring to the Issuer or such Guarantor, as applicable, shall refer instead to the Successor Person and not to the Issuer or such Guarantor, as applicable), and may exercise every right and power of the Issuer or such Guarantor, as applicable, under this Indenture, the Notes and the Guarantees with the same effect as if such Successor Person had been named as the Issuer or a Guarantor, as applicable, herein, and, in the case of a predecessor Issuer shall be automatically released from its obligations thereunder; provided that the predecessor Issuer shall not be relieved from the obligations under this Indenture, the Notes and the Guarantees in the case of any consolidation, amalgamation, lease or merger.

ARTICLE VI

DEFAULTS AND REMEDIES

SECTION 6.01. Events of Default . An “ Event of Default ,” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected 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):

(1) default in payment when due and payable, upon redemption, acceleration or otherwise, of principal of, or premium, if any, on the Notes;

(2) default for 30 days or more in the payment when due of interest on or with respect to the Notes;

(3) failure by the Issuer or any Guarantor for 60 days after receipt of written notice given by the Trustee or the Holders of not less than 25.0% in principal amount of the then outstanding Notes to comply with any of its obligations, covenants or agreements (other than a default referred to in clause (1) or (2) of this Section 6.01) contained in this Indenture or the Notes;

(4) default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Issuer or any of its Restricted Subsidiaries or the payment of which is guaranteed by the Issuer or any of its Restricted Subsidiaries, other than Indebtedness owed to the Issuer or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists or is created after the issuance of the Notes, if both:

(A) such default either results from the failure to pay any principal of such Indebtedness at its stated final maturity (after giving effect to any applicable grace periods) or relates to

 

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an obligation other than the obligation to pay principal of any such Indebtedness at its stated final maturity and results in the holder or holders of such Indebtedness causing such Indebtedness to become due prior to its stated maturity; and

(B) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at its stated final maturity (after giving effect to any applicable grace periods), or the maturity of which has been so accelerated, aggregate $100,000,000 or more at any one time outstanding;

(5) failure by the Issuer or any Significant Subsidiary to pay final judgments aggregating in excess of $100,000,000 (net of amounts covered by insurance policies issued by reputable insurance companies), which final judgments remain unpaid, undischarged, unwaived and unstayed for a period of more than 90 days after such judgment becomes final, 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;

(6) the Issuer or any of its Significant Subsidiaries, pursuant to or within the meaning of any Bankruptcy Law:

(i) commences proceedings to be adjudicated bankrupt or insolvent;

(ii) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy Law;

(iii) consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;

(iv) makes a general assignment for the benefit of its creditors; or

(v) generally is not paying its debts as they become due;

(7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against the Issuer or any of its Significant Subsidiaries in a proceeding in which the Issuer or any such Significant Subsidiary is to be adjudicated bankrupt or insolvent;

(ii) appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or any of its Significant Subsidiaries or for all or substantially all of the property of the Issuer or any of its Significant Subsidiaries; or

(iii) orders the liquidation of the Issuer or any of its Significant Subsidiaries;

and the order or decree remains unstayed and in effect for 60 consecutive days; or

(8) the Guarantee of any Significant Subsidiary shall for any reason cease to be in full force and effect or be declared null and void in a final non-appealable judgment of a court of competent jurisdiction or any responsible officer of any Guarantor that is a Significant Subsidiary, denies in writing that it has any further liability under its Guarantee or gives written notice to such effect, other than by reason of the termination of this Indenture or the release of any such Guarantee in accordance with this Indenture.

SECTION 6.02. Acceleration . If any Event of Default (other than an Event of Default specified in clause (6) or (7) of Section 6.01 hereof with respect to the Issuer) occurs and is continuing under this Indenture, the

 

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Trustee or the Holders of at least 25.0% in principal amount of the then total outstanding Notes by notice to the Issuer may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. Upon the effectiveness of such declaration, such principal of and premium, if any, and interest shall be due and payable immediately. The Trustee may withhold from the Holders notice of any continuing Default, except a Default relating to the payment of principal, premium, if any, or interest, if it determines that withholding notice is in the Holders’ interest. The Trustee shall have no obligation to accelerate the Notes if the Trustee in its best judgment determines that acceleration is not in the best interests of the Holders.

Notwithstanding the foregoing, in the case of an Event of Default arising under clause (6) or (7) of Section 6.01 hereof with respect to the Issuer, all outstanding Notes shall be due and payable immediately without further action or notice.

The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of the Holders of all of the Notes rescind any acceleration with respect to the Notes and its consequences if such rescission would not conflict with any judgment of a court of competent jurisdiction and if all existing Events of Default (except non-payment of interest on, premium, if any, or the principal of any Note held by a non-consenting Holder that has become due solely because of the acceleration) have been cured or waived.

In the event of any Event of Default specified in Section 6.01(4) hereof, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) 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:

(1) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged;

(2) holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or

(3) the default that is the basis for such Event of Default has been cured or is no longer continuing.

SECTION 6.03. Other Remedies . If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note 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. All remedies are cumulative to the extent permitted by law.

SECTION 6.04. Waiver of Past Defaults . Subject to Section 6.02 hereof, Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences hereunder (except a continuing Default in the payment of interest on, premium, if any, or the principal of any Note held by a non-consenting Holder) (including in connection with an Asset Sale Offer or a Change of Control Offer). Upon any such waiver, 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 right consequent thereon.

SECTION 6.05. Control by Majority . Holders of a majority in principal amount of the then total outstanding Notes 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 this Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability.

 

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SECTION 6.06. Limitation on Suits . Subject to Section 6.07 hereof, no Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:

(1) such Holder has previously given the Trustee written notice that an Event of Default is continuing;

(2) Holders of at least 25.0% in principal amount of the total outstanding Notes have requested in writing the Trustee to pursue the remedy;

(3) Holders have offered the Trustee security or indemnity reasonably satisfactory to it against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5) Holders of a majority in principal amount of the total outstanding Notes have not given the Trustee a direction inconsistent with such written request within such 60-day period.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

SECTION 6.07. Rights of Holders to Receive Payment . Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal of, premium, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an Asset Sale Offer or a Change of Control Offer), 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.

SECTION 6.08. Collection Suit by Trustee . If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal of, premium, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

SECTION 6.09. 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 proceedings, the Issuer, 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 has been instituted.

SECTION 6.10. Rights and Remedies Cumulative . Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07 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 6.11. Delay or Omission Not Waiver . No delay or omission of the Trustee or of any Holder of any Note 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 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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SECTION 6.12. Trustee May File Proofs of Claim . The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes including the Guarantors), its creditors or its property and shall be entitled and empowered to participate as a member in any official committee of creditors appointed in such matter and to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee on behalf of such Holder, 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 to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained 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 Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

SECTION 6.13. Priorities . If the Trustee or any Agent collects any money or property pursuant to this Article VI, it shall pay out the money or property in the following order:

(i) to the Trustee, such Agent, their agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee or such Agent and the costs and expenses of collection;

(ii) to Holders for amounts due and unpaid on the Notes for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and

(iii) to the Issuer or to such party as a court of competent jurisdiction shall direct including a Guarantor, if applicable.

The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.13.

SECTION 6.14. 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 a 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 6.14 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10.0% in principal amount of the then outstanding Notes.

ARTICLE VII

TRUSTEE

SECTION 7.01. Duties of Trustee .

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture on behalf of the Holders, 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.

 

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(b) Except during the continuance of an Event of Default:

(i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(ii) in the absence of willful misconduct or 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 any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the 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 liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(i) this paragraph (c) does not limit the effect of paragraph (b) of this Section 7.01;

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved in a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and

(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 6.02, 6.04 or 6.05 hereof.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

(e) The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders unless the Holders have offered to the Trustee indemnity or security reasonably satisfactory to it against any loss, liability or expense that might be incurred by it in compliance with such request or direction.

(f) 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. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

SECTION 7.02. Rights of Trustee .

(a) The Trustee may conclusively rely upon and shall be fully protected in acting or refraining from acting upon 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, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(b) 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 such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

 

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(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by an Officer.

(f) None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

(g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default or Event of Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.

(h) In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(j) Delivery of 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).

(k) The permissive rights of the Trustee to take certain actions under this Indenture shall not be construed as a duty unless so specified herein.

(l) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer, and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(m) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.

(n) 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.

SECTION 7.03. Individual Rights of Trustee . The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any of its Affiliates with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee (if this Indenture has been qualified under the Trust Indenture Act) or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

 

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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 or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

SECTION 7.05. Notice of Defaults . If a Default occurs and is continuing and if it is known to the Trustee, the Trustee shall deliver to Holders a notice of the Default within 90 days after it occurs. Except in the case of a Default relating to the payment of principal, premium, if any, or interest on any Note, the Trustee may withhold from the Holders notice of any continuing Default if and so long as it in good faith determines that withholding the notice is in the interests of the Holders.

SECTION 7.06. Reports by Trustee to Holders . Within 60 days after each September 15, beginning with the September 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders a brief report dated as of such reporting date that complies with Trust Indenture Act Section 313(a) (but if no event described in Trust Indenture Act Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with Trust Indenture Act Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by Trust Indenture Act Section 313(c).

A copy of each report at the time of its mailing to the Holders shall be mailed to the Issuer and filed with the SEC and each stock exchange on which the Notes are listed in accordance with Trust Indenture Act Section 313(d). The Issuer shall promptly notify the Trustee in writing when the Notes are listed on any stock exchange and of any delisting thereof.

SECTION 7.07. Compensation and Indemnity . The Issuer shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the parties shall agree in writing from time to time. 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 promptly upon request for all reasonable out-of-pocket disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

The Issuer and the Guarantors, jointly and severally, shall indemnify the Trustee for, and hold the Trustee harmless against, any and all loss, damage, claims, liability or expense (including reasonable attorneys’ fees and expenses) incurred by it in connection with the acceptance or administration of this trust and the performance of its duties hereunder (including the reasonable costs and expenses of enforcing this Indenture against the Issuer or any of the Guarantors (including this Section 7.07) or defending itself against any claim whether asserted by any Holder, the Issuer or any Guarantor, or any other Person or liability in connection with the acceptance, exercise or performance of any of its powers or duties hereunder) (but excluding taxes imposed on such persons in connection with compensation for such administration or performance). The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee may have separate counsel and the Issuer shall pay the reasonable fees and expenses of such counsel. The Issuer nor any Guarantor need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct or negligence. Neither the Issuer nor any Guarantor need pay for any settlement made without its consent, which consent shall not be unreasonably withheld.

The obligations of the Issuer under this Section 7.07 shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee.

To secure the payment obligations of the Issuer and the Guarantors in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except for money or property held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

 

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When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(6) or (7) hereof occurs, the expenses and the compensation for the services (including the reasonable fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

The Trustee shall comply with the provisions of Trust Indenture Act Section 313(b)(2) to the extent applicable.

SECTION 7.08. Replacement of Trustee . A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuer in writing not less than 30 days prior to the effective date of such removal. The Issuer may remove the Trustee if:

(A) the Trustee fails to comply with Section 7.10 hereof;

(B) the Trustee is adjudged bankrupt or insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

(C) a custodian or public officer takes charge of the Trustee or its property; or

(D) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the Issuer’s expense), the Issuer or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

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 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 have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

The resigning Trustee shall have no responsibility or liability for any action or inaction of a successor Trustee.

SECTION 7.09. Successor Trustee by Merger, etc . If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.

 

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SECTION 7.10. Eligibility; Disqualification . There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has, together with its parent, a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.

This Indenture shall always have a Trustee who satisfies the requirements of Trust Indenture Act Sections 310(a)(1), (2) and (5). The Trustee is subject to Trust Indenture Act Section 310(b).

SECTION 7.11. Preferential Collection of Claims Against Issuer . The Trustee is subject to Trust Indenture Act Section 311(a), excluding any creditor relationship listed in Trust Indenture Act Section 311(b). A Trustee who has resigned or been removed shall be subject to Trust Indenture Act Section 311(a) to the extent indicated therein.

ARTICLE VIII

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 8.01. Option to Effect Legal Defeasance or Covenant Defeasance . The Issuer may, at its option and at any time, elect to have either Section 8.02 or 8.03 hereof applied to all outstanding Notes and all obligations of the Guarantors with respect to the Guarantees upon compliance with the conditions set forth below in this Article VIII.

SECTION 8.02. Legal Defeasance and Discharge . Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Issuer and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes and Guarantees on the date the conditions set forth below are satisfied (“ Legal Defeasance ”). For this purpose, Legal Defeasance means that the Issuer and the Guarantors shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof, to have cured all then existing Events of Default and to have satisfied all its other obligations under such Notes and this Indenture including that of the Guarantors (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:

(A) the rights of Holders to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due solely out of the trust created pursuant to this Indenture referred to in Section 8.04 hereof;

(B) the Issuer’s obligations with respect to Notes concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(C) the rights, powers, trusts, duties and immunities of the Trustee, and the Issuer’s obligations in connection therewith; and

(D) this Section 8.02.

Subject to compliance with this Article VIII, the Issuer may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

SECTION 8.03. Covenant Defeasance . Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuer and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14 and 4.15 hereof and clauses (4) and (5) of Section 5.01(a), and Sections 5.01(c) and 5.01(d) hereof with respect to the outstanding Notes on and after the date the conditions set

 

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forth in Section 8.04 hereof are satisfied (“ Covenant Defeasance ”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and the Guarantees, the Issuer and the Guarantors may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document, and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and the Guarantees shall be unaffected thereby. In addition, upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) (solely with respect to the covenants that are released upon a Covenant Defeasance), 6.01(4), 6.01(5), 6.01(6) (solely with respect to the Issuer’s Restricted Subsidiaries), 6.01(7) (solely with respect to the Issuer’s Restricted Subsidiaries) and 6.01(8) hereof shall not constitute Events of Default.

SECTION 8.04. Conditions to Legal or Covenant Defeasance . In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes:

(1) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, U.S. dollar-denominated Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, investment bank or appraisal firm to pay the principal of, premium, if any, and interest due on the Notes on the stated maturity date or on the Redemption Date, as the case may be, of such principal, premium, if any, or interest on such Notes, and the Issuer must specify whether such Notes are being defeased to maturity or to a particular Redemption Date; provided , that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of this Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any deficit as of the date of redemption (any such amount, the “ Applicable Premium Deficit ”) only required to be deposited with the Trustee on or prior to the date of redemption. Any Applicable Premium Deficit shall be set forth in an Officer’s Certificate delivered to the Trustee simultaneously with the deposit of such Applicable Premium Deficit that confirms that such Applicable Premium Deficit shall be applied toward such redemption;

(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel confirming that, subject to customary assumptions and exclusions

(A) the Issuer has received from, or there has been published by, the United States Internal Revenue Service a ruling or

(B) since the issuance of the Notes, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the beneficial owners of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal 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 Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel confirming that, subject to customary assumptions and exclusions, the beneficial owners of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

 

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(4) no Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under the Senior Credit Facilities or any other material agreement, instrument or documents (other than this Indenture) to which, the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound (other than that resulting from any borrowing of 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 other Indebtedness, and, in each case, the granting of Liens in connection therewith);

(6) the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that, as of the date of such opinion and subject to customary assumptions and exclusions following the deposit, the trust funds will not be subject to the effect of Section 547 of Title 11 of the United States Code;

(7) the Issuer shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Issuer with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuer or any Guarantor or others; and

(8) the Issuer shall have delivered 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 provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.

Notwithstanding the foregoing, an Opinion of Counsel required by the immediately preceding paragraph with respect to Legal Defeasance need not be delivered if all of the Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer.

SECTION 8.05. Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions . Subject to Section 8.06 hereof, all money and Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “ Trustee ”) pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer or a Guarantor acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and interest, but such money need not be segregated from other funds except to the extent required by law.

The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon the request of the Issuer any money or Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

SECTION 8.06. Repayment to Issuer . Subject to any applicable abandoned property law, any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium,

 

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if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Issuer on its request or (if then held by the Issuer) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease.

SECTION 8.07. Reinstatement . If the Trustee or Paying Agent is unable to apply any United States dollars or Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuer’s and the Guarantors’ obligations under this Indenture and the Notes and the Guarantees shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided that, if the Issuer makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE IX

AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 9.01. Without Consent of Holders . Notwithstanding Section 9.02 hereof, the Issuer, any Guarantor (with respect to a Guarantee or this Indenture to which it is a party) and the Trustee may amend or supplement this Indenture and any Guarantee or Notes without the consent of any Holder:

(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;

(3) to comply with Section 5.01 hereof;

(4) to provide the assumption of the Issuer’s or any Guarantor’s obligations to the Holders;

(5) to make any change that would provide any additional rights or benefits to the Holders or that does not materially adversely affect the legal rights under this Indenture of any such Holder;

(6) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuer or any Guarantor;

(7) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act;

(8) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee hereunder pursuant to the requirements hereof;

(9) to provide for the issuance of exchange notes or private exchange notes, which are identical to exchange notes except that they are not freely transferable;

(10) to add a Guarantor under this Indenture or to release a Guarantor in accordance with the terms of this Indenture;

(11) to conform the text of this Indenture, Guarantees or the Notes to any provision of the “Description of Notes” section of the Offering Memorandum to the extent that such provision in such “Description of Notes” section was intended to be a verbatim recitation of a provision of this Indenture, Guarantee or Notes, as provided to the Trustee in an Officer’s Certificate;

 

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(12) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including, to facilitate the issuance and administration of the Notes; provided that (a) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (b) such amendment does not materially and adversely affect the rights of Holders to transfer Notes; or

(13) to provide for the issuance of Additional Notes in accordance with the terms of this Indenture.

Upon the request of the Issuer accompanied by a resolution of the Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof (to the extent requested by the Trustee), the Trustee shall join with the Issuer and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall have the right, but not be obligated to, enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise. Notwithstanding the foregoing, neither an Opinion of Counsel nor an Officer’s Certificate shall be required in connection with the addition of a Guarantor under this Indenture upon execution and delivery by such Guarantor and the Trustee of a supplemental indenture to this Indenture, the form of which is attached as Exhibit D hereto, provided that the execution thereof shall be deemed a representation by such Guarantor(s) that all conditions precedent and covenants, if any, relating to the execution of such supplemental indenture have been satisfied, provided that the execution thereof shall be deemed a representation by such Guarantor(s) that all conditions precedent and covenants, if any, relating to the execution of such supplemental indenture have been satisfied and the supplemental indenture is enforceable in accordance with its terms subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and similar laws affecting the rights and remedies of creditors generally and (ii) general principles of equity.

SECTION 9.02. With Consent of Holders . Except as provided below in this Section 9.02, the Issuer, the Guarantors and the Trustee may amend or supplement this Indenture, the Notes and the Guarantees with the consent of the Holders of at least a majority in principal amount of the Notes (including Additional Notes, if any) then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Guarantees or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes); Section 2.08 hereof and Section 2.09 hereof shall determine which Notes are considered to be “outstanding” for the purposes of this Section 9.02.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Issuer and the Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

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 or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall deliver to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to deliver such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

 

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Without the consent of each affected Holder of Notes, an amendment or waiver under this Section 9.02 may not, with respect to any Notes held by a non-consenting Holder:

(1) reduce the principal amount of such Notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the principal of or change the fixed final maturity of any such Note or reduce the premium payable upon the redemption of such Notes on any date (other than the provisions relating to Section 3.09, Section 4.10 and Section 4.14 hereof); provided , that any amendment to the minimum notice requirement may be made with the consent of the Holders of a majority in aggregate principal amount of then outstanding Notes;

(3) reduce the rate of or change the time for payment of interest on any Note;

(4) waive a Default in the payment of principal of or premium, if any, or interest on the Notes, except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration, or in respect of a covenant or provision contained in this Indenture or any Guarantee which cannot be amended or modified without the consent of all affected Holders;

(5) make any Note payable in money other than that stated therein;

(6) make any change in the provisions of this Indenture relating to waivers of past Defaults;

(7) make any change in this Article IX that is materially adverse to the Holders;

(8) impair the right of any Holder to receive payment of principal of, or premium, if any, or interest on such Holder’s Notes or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes;

(9) make any change to or modify the ranking of the Notes that would adversely affect the Holders; or

(10) except as expressly permitted by this Indenture, modify the Guarantees of any Significant Subsidiary, in any manner materially adverse to the Holders.

SECTION 9.03. Compliance with Trust Indenture Act . Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies in all material respects with the Trust Indenture Act as then in effect.

SECTION 9.04. Revocation and Effect of Consents . Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, 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 unless the consent of the requisite number of Holders has been obtained.

 

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SECTION 9.05. Notation on or Exchange of Notes . The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

SECTION 9.06. Trustee to Sign Amendments, etc . The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article IX if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Issuer may not sign an amendment, supplement or waiver until the board of directors of the Issuer approves it. In executing any amendment, supplement or waiver, the Trustee shall receive, and shall be fully protected in relying conclusively upon, in addition to the documents required by Section 12.04 hereof, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer and any Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03 hereof).

Notwithstanding the foregoing, neither an Opinion of Counsel nor an Officer’s Certificate will be required for the Trustee to execute any amendment or supplement adding a new Guarantor under this Indenture.

ARTICLE X

GUARANTEES

SECTION 10.01. Guarantee . Subject to this Article X, each of the Guarantors hereby, jointly and severally, irrevocably and unconditionally guarantees, on an unsecured basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the Obligations of the Issuer hereunder or thereunder, that (a) the principal of and interest and premium, if any, on the Notes shall be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Issuer to the Holders or the Trustee hereunder or thereunder, including for expenses, indemnification or otherwise, shall be promptly paid in full, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other Obligations, that same shall be promptly paid in full when due in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same promptly. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than payment in full of all of the Obligations of the Issuer hereunder and under the Notes). Each Guarantor hereby waives, to the fullest extent permitted by law, diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Guarantee shall not be discharged except by full payment of the obligations contained in the Notes and this Indenture or by release in accordance with the provisions of this Indenture.

Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, then any amount paid either to the Trustee or such Holder, then this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

 

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Until terminated in accordance with Section 10.06, each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article VI hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee. The Guarantors shall have the right to seek contribution from any nonpaying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantees.

Each Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer for liquidation, reorganization, should the Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes or Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

In case any provision of any Guarantee 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.

The Guarantee issued by any Guarantor shall be a general unsecured senior obligation of such Guarantor and shall be pari passu in right of payment with all existing and future Senior Indebtedness of such Guarantor, if any.

Each payment to be made by a Guarantor in respect of its Guarantee shall be made without setoff, counterclaim, reduction or diminution of any kind or nature.

SECTION 10.02. Limitation on Guarantor Liability . Each Guarantor, and by its acceptance of the Notes, each Holder, hereby confirms that it is the intention of all such parties that the Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article X, result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law. Each Guarantor that makes a payment under its Guarantee shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.

SECTION 10.03. Execution and Delivery . To evidence its Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that this Indenture (or a supplemental indenture in the form of Exhibit D ) shall be executed on behalf of such Guarantor by one of its authorized Officers.

Each Guarantor hereby agrees that its Guarantee set forth in Section 10.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

 

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If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Guarantee of such Guarantor shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantors.

If required by Section 4.15 hereof, the Issuer shall cause any newly created or acquired Restricted Subsidiary to comply with the provisions of Section 4.15 hereof and this Article X, to the extent applicable.

SECTION 10.04. Subrogation . Subject to the fifth paragraph of Section 10.01 and Section 10.02, each Guarantor shall be subrogated to all rights of Holders against the Issuer in respect of any amounts paid by any Guarantor pursuant to the provisions of Section 10.01 hereof; provided that, if an Event of Default has occurred and is continuing, no Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.

SECTION 10.05. Benefits Acknowledged . Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Guarantee are knowingly made in contemplation of such benefits.

SECTION 10.06. Release of Guarantees . Each Guarantee by a Guarantor will provide by its terms that it shall be automatically and unconditionally released and discharged and shall thereupon terminate and be of no further force and effect, and no further action by such Guarantor, the Issuer or the Trustee is required for the release of such Guarantor’s Guarantee, upon:

(1) (A) any sale, exchange, disposition or transfer (by merger, amalgamation, consolidation or otherwise) of (i) the Capital Stock of such Guarantor, after which the applicable Guarantor is no longer a Restricted Subsidiary, or (ii) all or substantially all of the assets of such Guarantor including if to the Issuer or another Guarantor, in each case if such sale, exchange, disposition or transfer is made in compliance with the applicable provisions of this Indenture;

(B) the release or discharge of the guarantee by such Guarantor of Indebtedness under the Senior Credit Facilities, or the release or discharge of such other guarantee that resulted in the creation of such Guarantee, except a discharge or release by or as a result of payment under such guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that if any such guarantee is so reinstated, such Guarantee shall also be reinstated to the extent that such Guarantor would then be required to provide a Guarantee pursuant to Section 4.15 hereof);

(C) the designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in compliance with the applicable provisions of this Indenture; or

(D) the exercise by the Issuer of its Legal Defeasance option or Covenant Defeasance option in accordance with Article VIII hereof or the discharge of the Issuer’s obligations under this Indenture in accordance with the terms of this Indenture; and

(2) the Issuer delivering to the Trustee an Officer’s Certificate of such Guarantor and an Opinion of Counsel, each stating that all conditions precedent provided for in this Indenture relating to such transaction have been complied with.

 

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ARTICLE XI

SATISFACTION AND DISCHARGE

SECTION 11.01. Satisfaction and Discharg e . This Indenture shall be discharged and shall cease to be of further effect as to all Notes, when either:

(1) all Notes theretofore authenticated and delivered, except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or

(2) (A) all Notes not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption 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 as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, U.S. dollar-denominated Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption; provided that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of this Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any Applicable Premium Deficit only required to be deposited with the Trustee on or prior to the date of redemption. Any Applicable Premium Deficit shall be set forth in an Officer’s Certificate delivered to the Trustee simultaneously with the deposit of such Applicable Premium Deficit that confirms that such Applicable Premium Deficit shall be applied toward such redemption;

(B) the Issuer has paid or caused to be paid all sums payable by it under this Indenture; and

(C) the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the Redemption Date, as the case may be.

In addition, the Issuer must deliver an Officer’s Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied. Such Opinion of Counsel may rely on such Officer’s Certificate as to matters of fact, including clauses 2(A), (B) and (C) above.

Notwithstanding the satisfaction and discharge of this Indenture, if money shall have been deposited with the Trustee pursuant to subclause (A) of clause (2) of this Section 11.01, the provisions of Section 11.02 and Section 8.06 hereof shall survive such satisfaction and discharge.

SECTION 11.02. Application of Trust Money . Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 11.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer or a Guarantor acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 11.01 hereof 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 and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 hereof; provided that if the Issuer has made any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

 

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ARTICLE XII

MISCELLANEOUS

SECTION 12.01. [Reserved] .

SECTION 12.02. Notices . Any notice or communication by the Issuer, any Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), facsimile, electronic mail (in “.pdf” format) or overnight air courier guaranteeing next day delivery, to the others’ address:

If to the Issuer and/or any Guarantor:

IMS Health Incorporated

83 Wooster Heights Road

Danbury, Connecticut 06810

Attention: General Counsel

with a copy (which copy shall not constitute notice) to:

TPG Capital, L.P.

345 California Street

Suite 3300

San Francisco, California 94104

Attention: Jack Weingart

CPP Investment Board Private Holdings Inc.

1 Queen Street East

Suite 1500

Toronto, Ontario M5C 2W5

Canada

Attention: Andre Bourbonnais

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, Massachusetts 02199

Attention: Michael Lee, Esq.

If to the Trustee:

Wells Fargo Bank, National Association

45 Broadway, 14th floor

New York, NY 10006

Attention: Corporate Trust Services, Administrator for IMS Health Incorporated

Fax: (212) 515-1589

The Issuer, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five calendar days after being deposited in the mail, postage

 

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prepaid, if mailed by first-class mail; on the first date on which publication is made or electronic delivery made; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; provided that any notice or communication delivered to the Trustee shall be deemed effective upon actual receipt thereof.

Any notice or communication to a Holder shall be electronically delivered, mailed by first-class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the Note Register kept by the Registrar. Any notice or communication shall also be so delivered or mailed to any Person described in Trust Indenture Act Section 313(c), to the extent required by the Trust Indenture Act.

Failure to deliver 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 or otherwise delivered in the manner provided above within the time prescribed, such notice or communication shall be deemed duly given, whether or not the addressee receives it.

If the Issuer delivers or mails a notice or communication to Holders, it shall deliver or mail a copy to the Trustee and each Agent at the same time.

SECTION 12.03. Communication by Holders with Other Holders . Holders may communicate pursuant to Trust Indenture Act Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and anyone else shall have the protection of Trust Indenture Act Section 312(c).

Notwithstanding any other provision of this Indenture or any Note, where this Indenture or any Note provides for notice of any event or any other communication (including any notice of redemption or repurchase) to a holder of a Global Note (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depository (or its designee) pursuant to the standing instructions from the Depository or its designee, including by electronic mail in accordance with accepted practices at the Depository.

SECTION 12.04. Certificate and Opinion as to Conditions Precedent . Upon any request or application by the Issuer or any of the Guarantors to the Trustee to take any action under this Indenture (other than as set forth in the last sentence of Section 9.06 and with respect to clause (B) below, in connection with the initial issuance of Notes on the Issue Date), the Issuer or such Guarantor, as the case may be, shall furnish to the Trustee:

(A) An Officer’s Certificate in form reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(B) An Opinion of Counsel in form reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

SECTION 12.05. Statements Required in Certificate or Opinion . Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to Section 4.04 hereof) 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;

 

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(C) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officer’s Certificate as to matters of fact); and

(D) a statement as to whether or not, in the opinion of such Person, such condition or covenant 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. Rules by Trustee and Agents . The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

SECTION 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders . No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Issuer or any Guarantor or any of their parent companies or subsidiaries (other than the Issuer and the Guarantors) shall have any liability for any obligations of the Issuer or the Guarantors under the Notes, the Guarantees, this Indenture or any supplemental indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

SECTION 12.08. Governing Law . THIS INDENTURE, THE NOTES AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

SECTION 12.09. Waiver of Jury Trial . EACH OF THE ISSUER, THE GUARANTORS, AND THE TRUSTEE 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 NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

SECTION 12.10. Force Majeure . In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable 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 or hardware) services.

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 Restricted 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 in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of each Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 10.06 hereof.

SECTION 12.13. Severability . In case any provision in this Indenture or in the Notes 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.

SECTION 12.14. Counterpart 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. This Indenture may be executed in multiple counterparts, which, when taken together, shall constitute one instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmissions 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 12.15. Table of Contents, Headings, etc . The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

SECTION 12.16. Qualification of Indenture . [Reserved].

SECTION 12.17. USA PATRIOT Act . The parties hereto acknowledge that in order to help the government fight the funding of terrorism and money laundering activities, pursuant to federal regulations that became effective on October 1, 2003, Section 326 of the USA PATRIOT Act requires all financial institutions to obtain, verify, and record information that identifies each person establishing a relationship or opening an account with Wells Fargo Bank, National Association. The parties hereto agree that they will provide the Trustee with name, address, tax identification number, if applicable, and other information that will allow the Trustee to identify the individual or entity who is establishing the relationship, and will further provide the Trustee with formation documents such as articles of incorporation or other identifying documents.

[Signatures on following page]

 

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IMS HEALTH INCORPORATED
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Vice President and Treasurer

Signature Page to Indenture (Senior Notes)


ARSENAL HOLDING COMPANY
ARSENAL HOLDING (II) COMPANY
DATA NICHE ASSOCIATES, INC.
IMS HEALTH FINANCE, INC.
IMS HEALTH HOLDING CORPORATION
IMS HEALTH INDIA HOLDING CORPORATION
IMS HEALTH INVESTING CORPORATION
IMS HEALTH INVESTMENTS, INC.
IMS HEALTH PURCHASING, INC.
IMS HEALTH TRADING CORPORATION
IMS HOLDINGS INC.
IMS SERVICES, LLC
IMS TRADING MANAGEMENT, INC.
RX INDIA CORPORATION
TTC ACQUISITION CORPORATION
VALUEMEDICS RESEARCH, LLC, as Guarantors
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   President

 

Signature Page to Indenture (Senior Notes)


WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By:  

/s/ Martin Reed

  Name:   Martin Reed
  Title:   Vice President

Signature Page to Indenture (Senior Notes)


IMS CONTRACTING & COMPLIANCE, INC.
IMS GOVERNMENT SOLUTIONS, INC.
IMS HEALTH TRANSPORTATION SERVICES CORPORATION
IMS SOFTWARE SERVICES LTD.
MED-VANTAGE, INC.
PHARMETRICS, INC., as Guarantors
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Treasurer

Signature Page to Indenture (Senior Notes)


IMS HEALTH LICENSING ASSOCIATES, L.L.C., as Guarantor
By:  

/s/ Maryanne Piorek

  Name:   Maryanne Piorek
  Title:   Responsible Officer

Signature Page to Indenture (Senior Notes)


COORDINATED MANAGEMENT HOLDINGS, L.L.C.
COORDINATED MANAGEMENT SYSTEMS, INC.
MARKET RESEARCH MANAGEMENT, INC.
SPARTAN LEASING CORPORATION, as Guarantors
By:  

/s/ Margaret F. Cupp

  Name:   Margaret F. Cupp
  Title:   President

Signature Page to Indenture (Senior Notes)


IMS CHINAMETRIK INCORPORATED, as Guarantor
By:  

/s/ Margaret F. Cupp

  Name:   Margaret F. Cupp
  Title:   Vice President

Signature Page to Indenture (Senior Notes)


INTERCONTINENTAL MEDICAL STATISTICS INTERNATIONAL, LTD., as Guarantor
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Secretary

 

Signature Page to Indenture (Senior Notes)


ENTERPRISE ASSOCIATES, L.L.C., as Guarantor
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Vice President

 

Signature Page to Indenture (Senior Notes)


THE TAR HEEL TRADING COMPANY, LLC, as Guarantor
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Vice President and Treasurer

 

Signature Page to Indenture (Senior Notes)


EXHIBIT A

CUSIP/ISIN

[RULE 144A][REGULATION S][IAI] GLOBAL NOTE

representing up to $[        ]

6% Senior Notes due 2020

 

No.    US$[        ]

IMS HEALTH INCORPORATED

promises to pay to              or registered assigns,

the principal sum of [the principal sum set forth on the Schedule of Exchange of Interests in the Global Note attached hereto] [DOLLARS] on November 1, 2020.

Interest Payment Dates: May 1 and November 1, beginning May 1, 2013

Record Dates: April 15 and October 15

 

A-1


IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed.

 

IMS HEALTH INCORPORATED
By:  

 

  Name:  
  Title:  

 

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This is one of the Notes referred to

in the within-mentioned Indenture:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION as Trustee
By:  

 

  Authorized Signatory

Dated:

 

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[Back of Note]

6% Senior Note due 2020

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. IMS Health Incorporated (the “ Issuer ”), promises to pay interest on the principal amount of this Note at a rate per annum of 6% from October 24, 2012 until maturity. The Issuer will pay interest on this Note semi-annually in arrears on May 1 and November 1 of each year, beginning May 1, 2013 or, if any such day is not a Business Day, on the next succeeding Business Day (each, an “ Interest Payment Date ”). The Issuer will make each interest payment to the Holder of record of this Note on the immediately preceding April 15 and October 15 (each, a “ Record Date ”). Interest on this Note will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that the first Interest Payment Date shall be May 1, 2013. The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the rate borne by this Note; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the rate borne by this Note. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

2. METHOD OF PAYMENT. The Issuer will pay interest on this Note to the Person who is the registered Holder of this Note at the close of business on the Record Date (whether or not a Business Day) next preceding the Interest Payment Date, even if this Note is cancelled after such Record Date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. Payments of principal of, premium, if any, and interest on the Notes will be payable at the office or agency of the Issuer maintained pursuant to Section 4.02 of the Indenture or, at the option of the Issuer, may be made by check mailed to the Holders at their addresses set forth in the Note Register, provided that (a) all payments of principal, premium, if any, and interest on, Notes represented by Global Notes registered in the name of or held by DTC or its nominee will be made by wire transfer of immediately available funds to the accounts specified by the Holder or Holders thereof and (b) all payments of principal, premium, if any, and interest with respect to certificated Notes will be made 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 the 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). Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. If a payment date is on a Legal Holiday, payment will be made on the next succeeding day that is not a Legal Holiday and no interest shall accrue for the intervening period.

3. PAYING AGENT AND REGISTRAR. Initially, Wells Fargo Bank, National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuer may change any Paying Agent or Registrar without prior notice to any Holder. The Issuer or any of its domestic Subsidiaries may act in any such capacity.

4. INDENTURE. The Issuer issued the Notes under an Indenture, dated as of October 24, 2012 (the “ Indenture ”), among IMS Health Incorporated, the Guarantors and the Trustee. The Issuer shall be entitled to issue Additional Notes pursuant to Sections 2.01 and 4.09 of the Indenture. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “ Trust Indenture Act ”). The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION.

(a) At any time prior to November 1, 2015, the Issuer may, at its option and on one or more occasions redeem all or a part of the Notes, upon notice as described under Section 3.03 of the Indenture, at a redemption price equal to the sum of (i) 100.0% of the principal amount of the Notes redeemed, plus (ii) the Applicable Premium as of the Redemption Date plus (iii) accrued and unpaid interest, if any, to the Redemption Date, subject to the right of

 

A-4


Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date. Notice of any redemption, whether in connection with an Equity Offering or otherwise, may be given prior to the completion thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, if in connection with an Equity Offering, the completion of such Equity Offering.

(b) At any time prior to November 1, 2015, the Issuer may, at its option and on one or more occasions, redeem up to 40.0% of the aggregate principal amount of Notes and Additional Notes issued under the Indenture at a redemption price equal to the sum of (i) 106.000% of the aggregate principal amount thereof, plus (ii) accrued and unpaid interest, if any, to the date of redemption, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, with the net cash proceeds received by it from one or more Equity Offerings or a contribution to the Issuer’s common equity capital made with the net cash proceeds of a concurrent Equity Offering; provided , that (a) at least 50.0% of the aggregate principal amount of Notes originally issued under the Indenture on the Issue Date and any Additional Notes issued under the Indenture after the Issue Date (excluding notes held by the Issuer and its Subsidiaries) remains outstanding immediately after the occurrence of each such redemption; and (b) each such redemption occurs within 180 days of the date of closing of each such Equity Offering.

(c) Except pursuant to clause (a) or (b) of Section 3.07 of the Indenture, the Notes will not be redeemable at the Issuer’s option prior to November 1, 2015.

(d) On and after November 1, 2015, the Issuer may, at its option redeem the Notes, in whole or in part, on one or more occasions, upon notice in accordance with Section 3.03 of the Indenture, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, to the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on November 1 of each of the years indicated below:

 

Year

   Percentage  

2015

     103.000

2016

     101.500

2017 and thereafter

     100.000

(e) Any redemption pursuant to Section 3.07 of the Indenture shall be made pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.

6. MANDATORY REDEMPTION; OFFERS TO PURCHASE AND OPEN MARKET PURCHASES. The Issuer will not be required to make any mandatory redemption or sinking fund payments with respect to the Notes. However, under certain circumstances, the Issuer may be required to offer to purchase Notes as described under Sections 4.10 and 4.14 of the Indenture.

7. NOTICE OF REDEMPTION. Subject to Section 3.03 of the Indenture, the Issuer shall deliver electronically, mail or cause to be mailed by first-class mail notices of redemption at least 30 days but not more than 60 days before the Redemption Date to each Holder to be redeemed at such Holder’s registered address or otherwise in accordance with Applicable Procedures, except that redemption notices may be mailed or delivered more than 60 days prior to a Redemption Date if the notice is issued in connection with Article VIII or Article XI of the Indenture.

8. OFFERS TO REPURCHASE. Upon the occurrence of a Change of Control, the Issuer shall make a Change of Control Offer in accordance with Section 4.14 of the Indenture. In connection with certain Asset Sales, the Issuer shall make an Asset Sale Offer as and when provided in accordance with Sections 3.09 and 4.10 of the Indenture.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and any integral multiple of $1,000 in excess of $2,000. The transfer of Notes shall be registered and Notes may only be exchanged as provided in the Indenture. The Registrar and the Trustee

 

A-5


may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not issue, exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not issue, exchange or register the transfer of any Notes during the period of 15 days before the mailing of a notice of redemption of Notes to be redeemed or between a Record Date with respect to such Note and the next succeeding Interest Payment Date with respect to such Note.

10. PERSONS DEEMED OWNERS. The registered Holder shall be treated as its owner for all purposes. Only registered Holders shall have rights hereunder.

11. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes may be amended or supplemented as provided in the Indenture.

12. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25.0% in principal amount of the then outstanding Notes by notice to the Issuer may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Issuer, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture, the Notes or the Guarantees except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default (except a Default relating to the payment of principal, premium, if any, or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by written notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or and its consequences under the Indenture except a continuing Default in payment of the principal of, premium, if any, or interest on, any of the Notes held by a non-consenting Holder. The Issuer is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required within ten (10) Business Days after becoming aware of any Default, to deliver to the Trustee a statement specifying such Default and what action the Issuer proposes to take with respect thereto.

13. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.

14. GOVERNING LAW. THE INDENTURE, THIS NOTE AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

15. CUSIP AND ISIN NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP and ISIN numbers to be printed on the Notes and the Trustee may use CUSIP and ISIN numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes 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 upon written request and without charge a copy of the Indenture. Requests may be made to the Issuer at the following address:

IMS Health Incorporated

83 Wooster Heights Road

Danbury, Connecticut 06810

Attention: General Counsel

 

A-6


ASSIGNMENT FORM

To assign this Note, fill in the form below:

 

(I) or (we) assign and transfer this Note to:    

 

    (Insert assignee’s legal name)

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                        to transfer this Note 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 face of this Note)

 

Signature Guarantee*:  

 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-7


OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

[    ] Section 4.10 [    ] Section 4.14

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:

$         

 

Date:  

 

 

Your Signature:  

 

  (Sign exactly as your name appears on the face of this Note)

 

Tax Identification No.:

 

 

 

Signature Guarantee*:  

 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-8


SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $        . The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

Date of Exchange

   Amount of
decrease in
Principal
Amount of this
Global Note
   Amount of
increase in
Principal
Amount of this
Global Note
   Principal
Amount of this
Global Note
following such
decrease or
increase
   Signature of
authorized
signatory of
Trustee or
Custodian
           

 

* This schedule should be included only if the Note is issued in global form.

 

A-9


EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

IMS Health Incorporated

83 Wooster Heights Road

Danbury, Connecticut 06810

Attention: General Counsel

Wells Fargo Bank, National Association

as Trustee and Registrar – DAPS Reorg.

MAC N9303-121

608 2nd Avenue South

Minneapolis, MN 55479

Telephone No.: (877) 872-4605

Fax No.: (866) 969-1290

Email: DAPSReorg@wellsfargo.com

 

  Re: 6% Senior Notes due 2020

Reference is hereby made to the Indenture, dated as of October 24, 2012 (the “ Indenture ”), among IMS Health Incorporated, the Guarantors and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                    (the “ Transferor ”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $         in such Note[s] or interests (the “ Transfer ”), to (the “ Transferee ”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. [    ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT 144A GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “ Securities Act ”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States.

2. [    ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT REGULATION S GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the applicable Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Indenture and the Securities Act.

 

B-1


3. [    ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT IAI GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT TO RULE 501. The Transfer is being effected to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that has furnished to the Trustee a signed letter substantially in the form of Exhibit E of the Indenture, and such Transfer is in compliance with any applicable blue sky laws of any state of the United States.

4. [    ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

(a) [    ] such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or

(b) [    ] such Transfer is being effected to the Issuer or a subsidiary thereof; or

(c) [    ] such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act.

5. [    ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

(a) [    ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(b) [    ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(c) [    ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

 

B-2


This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer.

 

[Insert Name of Transferor]
By:  

 

  Name:  
  Title:  

 

Dated:  

 

 

B-3


ANNEX A TO CERTIFICATE OF TRANSFER

 

  1. The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

 

  (a) [    ] a beneficial interest in the:

 

  (i) [    ] 144A Global Note ([CUSIP:    ]), or

 

  (ii) [    ] Regulation S Global Note ([CUSIP:    ]), or

 

  (iii) [    ] IAI Global Note ([CUSIP:    ]), or

 

  (b) [    ] a Restricted Definitive Note.

 

  2. After the Transfer the Transferee will hold:

[CHECK ONE]

 

  (a) [    ] a beneficial interest in the:

 

  (i) [    ] 144A Global Note ([CUSIP:    ]), or

 

  (ii) [    ] Regulation S Global Note ([CUSIP:    ]), or

 

  (iii) [    ] IAI Global Note ([CUSIP:    ]), or

 

  (iv) [    ] Unrestricted Global Note ([    ] [    ]), or

 

  (b) [    ] a Restricted Definitive Note; or

 

  (c) [    ] an Unrestricted Definitive Note, in accordance with the terms of the Indenture.

 

B-4


EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

IMS Health Incorporated

83 Wooster Heights Road

Danbury, Connecticut 06810

Attention: General Counsel

Wells Fargo Bank, National Association

as Trustee and Registrar – DAPS Reorg.

MAC N9303-121

608 2nd Avenue South

Minneapolis, MN 55479

Telephone No.: (877) 872-4605

Fax No.: (866) 969-1290

Email: DAPSReorg@wellsfargo.com

 

  Re: 6% Senior Notes due 2020

Reference is hereby made to the Indenture, dated as of October 24, 2012 (the “ Indenture ”), among IMS Health Incorporated, the Guarantors and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                    (the “ Owner ”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $         in such Note[s] or interests (the “ Exchange ”). In connection with the Exchange, the Owner hereby certifies that:

1) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE OF THE SAME SERIES

a) [    ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note of the same series in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the “ Securities Act ”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

b) [    ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note of the same series, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

C-1


c) [    ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OF THE SAME SERIES. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note of the same series, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

d) [    ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE OF THE SAME SERIES. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note of the same series, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

2) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OF THE SAME SERIES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES OF THE SAME SERIES

a) [    ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note of the same series with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.

b) [    ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE]:

[    ] 144A Global Note,

[    ] Regulation S Global Note or

[    ] IAI Global Note,

in each case of the same series, with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and are dated                     .

 

C-2


[Insert Name of Transferor]
By:  

 

  Name:  
  Title:  

 

C-3


EXHIBIT D

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS

Supplemental Indenture (this “ Supplemental Indenture ”), dated as of [                    ], among [                    ] (the “ Guaranteeing Subsidiary ”), a subsidiary of IMS Health Incorporated a Delaware corporation (the “ Company ”), and Wells Fargo Bank, National Association, a national banking association, as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, the Company and the Guarantors have heretofore executed and delivered to the Trustee an Indenture (the “ Indenture ”), dated as of October 24, 2012, providing for the issuance of an unlimited aggregate principal amount of 6% Senior Notes due 2020 (the “ Notes ”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Indenture including, but not limited to, Article X thereof.

(3) No Recourse Against Others . No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Issuer or any Guarantor or any of their parent companies or subsidiaries (other than the Issuer and the Guarantors) shall have any liability for any obligations of the Issuer or the Guarantors under the Notes, the Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(4) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(5) 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. This Supplemental Indenture may be executed in multiple counterparts, which, when taken together, shall constitute one instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmissions 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.

 

D-1


(6) Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction hereof.

(7) The Trustee . The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary.

(8) Successors . All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

 

D-2


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

 

[GUARANTEEING SUBSIDIARY]
By:  

 

  Name:
  Title:
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By:  

 

  Name:
  Title:

 

D-3


EXHIBIT E

FORM OF

TRANSFEREE LETTER OF REPRESENTATION

IMS Health Incorporated

83 Wooster Heights Road

Danbury, Connecticut 06810

Attention: General Counsel

Wells Fargo Bank, National Association

as Trustee and Registrar – DAPS Reorg.

MAC N9303-121

608 2nd Avenue South

Minneapolis, MN 55479

Telephone No.: (877) 872-4605

Fax No.: (866) 969-1290

Email: DAPSReorg@wellsfargo.com

Ladies and Gentlemen:

This certificate is delivered to request a transfer of $[        ] principal amount of the 6% Senior Notes due 2020 (the “ Notes ”) of IMS Health Incorporated (the “ Issuer ”).

Upon transfer, the Notes 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 Notes, and we are acquiring the Notes, for investment purposes and 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 Notes, and we invest in or purchase securities similar to the Notes 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.

2. We understand that the Notes 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 Notes to offer, sell or otherwise transfer such Notes 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 Notes (or any predecessor thereto) (the “ Resale Restriction Termination Date ”) only (a) to the Issuer or any Subsidiary thereof, (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 to non-U.S. persons that occur outside the United States of America 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

 

E-1


own account or for the account of such an institutional “accredited investor,” in each case in a minimum principal amount of Notes of $250,000, for investment purposes and not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act 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 Notes 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 Notes 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 Notes 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.

 

TRANSFEREE:  

 

  ,
By:  

 

 

E-2

Exhibit 4.10

First Supplemental Indenture (this “ Supplemental Indenture ”), dated as of May 28, 2013, between Appature Inc., a Washington corporation (the “ Guaranteeing Subsidiary ”), a subsidiary of IMS Health Incorporated, a Delaware corporation (the “ Company ”), and Wells Fargo Bank, National Association, a national banking association, as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, the Company and the Guarantors have heretofore executed and delivered to the Trustee an Indenture (the “ Indenture ”), dated as of October 24, 2012, providing for the issuance of an unlimited aggregate principal amount of 6% Senior Notes due 2020 (the “ Notes ”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Indenture including, but not limited to, Article X thereof.

(3) No Recourse Against Others . No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Issuer or any Guarantor or any of their parent companies or subsidiaries (other than the Issuer and the Guarantors) shall have any liability for any obligations of the Issuer or the Guarantors under the Notes, the Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(4) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(5) 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. This Supplemental Indenture may be executed in multiple counterparts, which, when taken together, shall constitute one instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmissions 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.

(6) Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction hereof.


(7) The Trustee . The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary.

(8) Successors . All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

[Signature pages follow]


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

 

APPATURE INC.
By:  

/s/ Jeffrey Ford

  Name:   Jeffrey Ford
  Title:   President
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By:  

/s/ Martin Reed

 

Name:

  Martin Reed
 

Title:

  Vice President

Exhibit 4.11

INDENTURE

Dated as of August 6, 2013

Between

Healthcare Technology Intermediate, Inc., as Issuer,

And

Wells Fargo Bank, National Association,

as Trustee

7.375%/8.125% SENIOR PIK TOGGLE NOTES DUE 2018


TABLE OF CONTENTS

 

         Page  
ARTICLE I   
DEFINITIONS AND INCORPORATION BY REFERENCE  

SECTION 1.01.

 

Definitions

     1  

SECTION 1.02.

 

Other Definitions

     36  

SECTION 1.03.

 

Incorporation by Reference of Trust Indenture Act

     37  

SECTION 1.04.

 

Rules of Construction

     37  

SECTION 1.05.

 

Acts of Holders

     38  
ARTICLE II   
THE NOTES  

SECTION 2.01.

 

Form and Dating; Terms

     39  

SECTION 2.02.

 

Execution and Authentication

     41  

SECTION 2.03.

 

Registrar, Transfer Agent and Paying Agent

     41  

SECTION 2.04.

 

Paying Agent to Hold Money in Trust

     41  

SECTION 2.05.

 

Holder Lists

     42  

SECTION 2.06.

 

Transfer and Exchange

     42  

SECTION 2.07.

 

Replacement Notes

     51  

SECTION 2.08.

 

Outstanding Notes

     52  

SECTION 2.09.

 

Treasury Notes

     52  

SECTION 2.10.

 

Temporary Notes

     52  

SECTION 2.11.

 

Cancellation

     52  

SECTION 2.12.

 

Defaulted Interest

     53  

SECTION 2.13.

 

CUSIP/ISIN Numbers

     53  
ARTICLE III   
REDEMPTION  

SECTION 3.01.

 

Notices to Trustee

     53  

SECTION 3.02.

 

Selection of Notes to Be Redeemed

     53  

SECTION 3.03.

 

Notice of Redemption

     54  

SECTION 3.04.

 

Effect of Notice of Redemption

     54  

SECTION 3.05.

 

Deposit of Redemption Price

     55  

SECTION 3.06.

 

Notes Redeemed in Part

     55  

SECTION 3.07.

 

Optional Redemption

     55  

SECTION 3.08.

 

Mandatory Redemption

     56  

SECTION 3.09.

 

Offers to Repurchase by Application of Excess Proceeds

     56  
ARTICLE IV   
COVENANTS  

SECTION 4.01.

 

Payment of Notes

     58  

SECTION 4.02.

 

Maintenance of Office or Agency

     58  

SECTION 4.03.

 

Reports and Other Information

     59  

SECTION 4.04.

 

Compliance Certificate

     61  

SECTION 4.05.

 

Taxes

     61  

 

-i-


         Page  

SECTION 4.06.

 

Stay, Extension and Usury Laws

     61  

SECTION 4.07.

 

Limitation on Restricted Payments

     61  

SECTION 4.08.

 

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

     68  

SECTION 4.09.

 

Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock

     71  

SECTION 4.10.

 

Asset Sales

     76  

SECTION 4.11.

 

Transactions with Affiliates

     79  

SECTION 4.12.

 

Liens

     82  

SECTION 4.13.

 

Company Existence

     82  

SECTION 4.14.

 

Offer to Repurchase Upon Change of Control

     82  

SECTION 4.15.

 

Limitation on Guarantees of Indebtedness by Restricted Subsidiaries

     84  

SECTION 4.16.

 

Suspension of Covenants

     84  
ARTICLE V   
SUCCESSORS  

SECTION 5.01.

 

Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets

     85  

SECTION 5.02.

 

Successor Person Substituted

     87  
ARTICLE VI   
DEFAULTS AND REMEDIES  

SECTION 6.01.

 

Events of Default

     87  

SECTION 6.02.

 

Acceleration

     88  

SECTION 6.03.

 

Other Remedies

     89  

SECTION 6.04.

 

Waiver of Past Defaults

     89  

SECTION 6.05.

 

Control by Majority

     89  

SECTION 6.06.

 

Limitation on Suits

     90  

SECTION 6.07.

 

Rights of Holders to Receive Payment

     90  

SECTION 6.08.

 

Collection Suit by Trustee

     90  

SECTION 6.09.

 

Restoration of Rights and Remedies

     90  

SECTION 6.10.

 

Rights and Remedies Cumulative

     90  

SECTION 6.11.

 

Delay or Omission Not Waiver

     90  

SECTION 6.12.

 

Trustee May File Proofs of Claim

     91  

SECTION 6.13.

 

Priorities

     91  

SECTION 6.14.

 

Undertaking for Costs

     91  
ARTICLE VII   
TRUSTEE  

SECTION 7.01.

 

Duties of Trustee

     91  

SECTION 7.02.

 

Rights of Trustee

     92  

SECTION 7.03.

 

Individual Rights of Trustee

     93  

SECTION 7.04.

 

Trustee’s Disclaimer

     94  

SECTION 7.05.

 

Notice of Defaults

     94  

SECTION 7.06.

 

[Reserved]

     94  

SECTION 7.07.

 

Compensation and Indemnity

     94  

SECTION 7.08.

 

Replacement of Trustee

     94  

SECTION 7.09.

 

Successor Trustee by Merger, etc.

     95  

SECTION 7.10.

 

Eligibility; Disqualification

     95  

 

-ii-


         Page  
ARTICLE VIII   
LEGAL DEFEASANCE AND COVENANT DEFEASANCE  

SECTION 8.01.

 

Option to Effect Legal Defeasance or Covenant Defeasance

     95  

SECTION 8.02.

 

Legal Defeasance and Discharge

     96  

SECTION 8.03.

 

Covenant Defeasance

     96  

SECTION 8.04.

 

Conditions to Legal or Covenant Defeasance

     96  

SECTION 8.05.

 

Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions

     98  

SECTION 8.06.

 

Repayment to Issuer

     98  

SECTION 8.07.

 

Reinstatement

     98  
ARTICLE IX   
AMENDMENT, SUPPLEMENT AND WAIVER  

SECTION 9.01.

 

Without Consent of Holders

     98  

SECTION 9.02.

 

With Consent of Holders

     100  

SECTION 9.03.

 

[Reserved]

     101  

SECTION 9.04.

 

Revocation and Effect of Consents

     101  

SECTION 9.05.

 

Notation on or Exchange of Notes

     101  

SECTION 9.06.

 

Trustee to Sign Amendments, etc.

     101  
ARTICLE X   
GUARANTEES  

SECTION 10.01.

 

Guarantee

     101  

SECTION 10.02.

 

Limitation on Guarantor Liability

     103  

SECTION 10.03.

 

Execution and Delivery

     103  

SECTION 10.04.

 

Subrogation

     103  

SECTION 10.05.

 

Benefits Acknowledged

     103  

SECTION 10.06.

 

Release of Guarantees

     104  
ARTICLE XI   
SATISFACTION AND DISCHARGE  

SECTION 11.01.

 

Satisfaction and Discharge

     104  

SECTION 11.02.

 

Application of Trust Money

     105  
ARTICLE XII   
MISCELLANEOUS  

SECTION 12.01.

 

[Reserved]

     105  

SECTION 12.02.

 

Notices

     105  

SECTION 12.03.

 

[Communication by Holders with Other Holders

     106  

SECTION 12.04.

 

Certificate and Opinion as to Conditions Precedent

     107  

SECTION 12.05.

 

Statements Required in Certificate or Opinion

     107  

SECTION 12.06.

 

Rules by Trustee and Agents

     107  

SECTION 12.07.

 

No Personal Liability of Directors, Officers, Employees and Stockholders

     107  

SECTION 12.08.

 

Governing Law

     108  

SECTION 12.09.

 

Waiver of Jury Trial

     108  

 

-iii-


         Page  

SECTION 12.10.

 

Force Majeure

     108  

SECTION 12.11.

 

No Adverse Interpretation of Other Agreements

     108  

SECTION 12.12.

 

Successors

     108  

SECTION 12.13.

 

Severability

     108  

SECTION 12.14.

 

Counterpart Originals

     108  

SECTION 12.15.

 

Table of Contents, Headings, etc.

     108  

SECTION 12.16.

 

[Reserved]

     108  

SECTION 12.17.

 

USA PATRIOT Act

     108  

EXHIBITS

 

Exhibit A   Form of Note
Exhibit B   Form of Certificate of Transfer
Exhibit C   Form of Certificate of Exchange
Exhibit D   Form of Supplemental Indenture to Be Delivered by Future Guarantors
Exhibit E   Form of Transferee Letter of Representation

 

-iv-


INDENTURE, dated as of August 6, 2013, between Healthcare Technology Intermediate, Inc., a Delaware corporation and Wells Fargo Bank, National Association, a national banking association, as Trustee.

W I T N E S S E T H

WHEREAS, the Issuer (as defined herein) has duly authorized the creation of an issue of $750,000,000 aggregate principal amount of the Issuer’s 7.375%/8.125% Senior PIK Toggle Notes due 2018 (the “ Initial Notes ”); and

WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture (as defined herein).

NOW, THEREFORE, each party hereto agrees as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined herein) of (i) the Initial Notes, (ii) the Additional Notes, if any and (iii) the PIK Notes, if any.

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions .

144A Global Note ” means a Global Note substantially in the form of Exhibit A attached hereto, bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.

2012 Transaction Expenses ” means any fees or expenses incurred or paid by the Issuer or any Restricted Subsidiary in connection with the 2012 Transactions, including payments to officers, employees and directors as change of control payments, severance payments, special or retention bonuses and charges for repurchase or rollover of, or modifications to, stock options and/or restricted stock and charges related to the crediting of additional restricted stock units.

2012 Transactions ” means the transactions related or incidental to, consisting of or in connection with (i) the issuance of the 2020 Notes and the borrowings under, and amendments to, the Senior Credit Facilities, in each case on October 24, 2012, (ii) the issuance of the Senior Exchange Notes, (iii) the retirement of the 2018 Notes tendered in the Senior Notes Exchange Offer and the amendments to the 2018 Notes Indenture on October 24, 2012, (iv) a one-time cash dividend in an amount up to $1,250,000,000 made on or about October 24, 2012 by Opco to Holdings (and by Holdings to its direct or indirect parents) and (v) the payment of all fees and expenses associated with the foregoing, in each case, substantially as described in the offering memorandum.

2013 Transaction Expenses ” means any fees, expenses or charges incurred or paid by the Issuer or any Restricted Subsidiary in connection with the 2013 Transactions, including payments to current or former officers, employee and directors of special or retention cash bonuses, charges for modifications to stock options and other stock-based awards, and charges related to the crediting of additional restricted stock units.

2013 Transactions ” means the transactions related or incidental to, consisting of or in connection with (i) the issuance of the Notes on the Issue Date, (ii) a distribution to equity award holders and a dividend to Healthcare Technology Holdings, Inc., the Issuer’s direct parent (which will use such proceeds to pay a dividend on its common stock), in the aggregate amount of $753,000,000 made on or about the Issue Date and (iii) the payment of all fees and expenses associated with the foregoing, in each case, substantially as described in the offering memorandum.

2018 Notes ” means the up to $1,000.0 million in aggregate principle amount of Opco’s 12 1/2 % Senior Unsecured Notes due 2018.


2018 Notes Indenture ” means the Indenture for the 2018 Notes, dated as of February 26, 2010, between Opco and U.S. Bank National Association, as trustee, as amended, supplement or modified from time to time.

2020 Notes ” means the $500,000,000 in aggregate principal amount of Opco’s 6% Senior Notes due 2020 issued under the 2020 Notes Indenture.

2020 Notes Indenture ” means the Indenture for the 2020 Notes, dated as of October 24, 2012 between Opco and Wells Fargo Bank, National Association, as trustee, as amended, supplemented or modified from time to time.

Acquisition Agreement ” means the Agreement and Plan of Merger, dated as of November 5, 2009, among IMS Health Incorporated, Healthcare Technology Holdings, Inc. and Healthcare Technology Acquisition, Inc., as the same may be amended prior to February 26, 2010.

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

(1) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging, amalgamating or consolidating 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.

Additional Notes ” means additional Notes (other than the Initial Notes and PIK Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the Initial Notes.

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.

Agent ” means any Registrar, co-registrar, Transfer Agent, Paying Agent or additional paying agent.

Applicable Premium ” means, with respect to any Note on any Redemption Date, the greater of:

(1) 1.0% of the principal amount of such Note; and

(2) the excess, if any, of (a) the present value at such Redemption Date of (i) the redemption price of such Note at September 1, 2014 (each such redemption price being set forth in the table appearing in Section 3.07(d) hereof), plus (ii) all required remaining scheduled interest payments due on such Note through September 1, 2014 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over (b) the then outstanding principal amount of such Note on such Redemption Date, as calculated by the Issuer or on behalf of the Issuer by such Person as the Issuer shall designate; provided , that such calculation shall not be the duty or obligation of the Trustee.

Applicable Procedures ” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.

 

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Asset Sale ” means:

(1) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions (including by way of a Sale and Lease-Back Transaction) of property or assets of the Issuer or any of its Restricted Subsidiaries (each referred to in this definition as a “ disposition ”); or

(2) the issuance or sale of Equity Interests of any Restricted Subsidiary (other than Preferred Stock or Disqualified Stock of Restricted Subsidiaries issued in compliance with Section 4.09 hereof), whether in a single transaction or a series of related transactions;

in each case, other than:

(a) any disposition of (i) Cash Equivalents or Investment Grade Securities and (ii) obsolete, damaged or worn out property or assets in the ordinary course of business or any disposition of inventory or goods (or other assets) held for sale or no longer used or useful in the ordinary course;

(b) the disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to Section 5.01 hereof or any disposition that constitutes a Change of Control pursuant to this Indenture;

(c) the making of any Restricted Payment that is permitted to be made, and is made, under Section 4.07 hereof or any Permitted Investment;

(d) any disposition of property or assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of related transactions with an aggregate fair market value of less than the greater of $75,000,000 and 1.0% of Total Assets;

(e) any disposition of property or assets or issuance of securities by a Restricted Subsidiary to the Issuer or by the Issuer or a Restricted Subsidiary to a Restricted Subsidiary;

(f) to the extent allowable under Section 1031 of the Internal Revenue Code of 1986, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

(g) (i) the lease, assignment or sub-lease, license or sublicense of any real or personal property in the ordinary course of business and (ii) the exercise of termination rights with respect to any lease, sub-lease, license or sublicense or other agreement;

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

(i) foreclosures, condemnation, expropriation or any similar action with respect to assets or the granting of Liens not prohibited by this Indenture;

(j) sales of accounts receivable, or participations therein, or Securitization Assets or related assets in connection with any Qualified Securitization Facility or the disposition of an account receivable in connection with the collection or compromise thereof in the ordinary course of business or in bankruptcy or similar proceedings;

(k) any financing transaction with respect to property built or acquired by the Issuer or any Restricted Subsidiary after October 24, 2012, including Sale and Lease-Back Transactions and asset securitizations permitted by this Indenture;

(l) the sale or discount of inventory, accounts receivable or notes receivable in the ordinary course of business or the conversion of accounts receivable to notes receivable;

 

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(m) the licensing or sub-licensing of intellectual property or other general intangibles in the ordinary course of business;

(n) any surrender or waiver of contract rights or the settlement, release or surrender of contract rights or other litigation claims in the ordinary course of business;

(o) the unwinding of any Hedging Obligations;

(p) 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;

(q) the abandonment of intellectual property rights in the ordinary course of business, which in the reasonable good faith determination of the Issuer are not material to the conduct of the business of the Issuer and its Restricted Subsidiaries taken as a whole;

(r) the granting of a Lien that is permitted under Section 4.12 hereof; and

(s) the issuance of directors’ qualifying shares and shares of Capital Stock of Foreign Subsidiaries issued to foreign nationals as required by applicable law.

Bankruptcy Law ” means Title 11, U.S. Code, as amended, or any similar federal or state law for the relief of debtors.

Board of Directors ” means, for any Person, the board of directors or other governing body of such Person or, if such Person does not have such a board of directors or other governing body and is owned or managed by a single entity, the Board of Directors of such entity, or, in either case, any committee thereof duly authorized to act on behalf of such Board of Directors. Unless otherwise provided, “Board of Directors” means the Board of Directors of the Issuer.

Business Day ” means each day which is not a Legal Holiday.

Capital Stock ” means:

(1) in the case of a corporation, corporate stock or shares in the capital of such corporation;

(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 but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

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) prepared in accordance with GAAP.

Capitalized Software Expenditures ” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Restricted Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of a Person and its Restricted Subsidiaries.

 

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Captive Insurance Subsidiary ” means any Subsidiary of the Issuer that is subject to regulation as an insurance company (or any Subsidiary thereof).

Cash Equivalents ” means:

(1) United States dollars;

(2) (a) Euros, Yen, Canadian Dollars, Sterling, Swiss Francs or any national currency of any Participating Member State of the EMU; or

(b) in the case of any Foreign Subsidiary or any jurisdiction in which the Issuer or its Restricted Subsidiaries conducts business, such local currencies held by it from time to time in the ordinary course of business and not for speculation;

(3) readily marketable direct obligations issued or directly and fully and unconditionally guaranteed or insured by the United States government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of such government with maturities of 36 months or less from the date of acquisition;

(4) certificates of deposit, time deposits and eurodollar time deposits with maturities of three years or less from the date of acquisition, demand deposits, bankers’ acceptances with maturities not exceeding three years and overnight bank deposits, in each case with any domestic or foreign commercial bank having capital and surplus of not less than $500,000,000 in the case of U.S. banks and $100,000,000 (or the United States dollar equivalent as of the date of determination) in the case of non-U.S. banks;

(5) repurchase obligations for underlying securities of the types described in clauses (3) and (4) above or clauses (7) and (8) below entered into with any financial institution or recognized securities dealer meeting the qualifications specified in clause (4) above;

(6) commercial paper and variable or fixed rate notes rated at least P-2 by Moody’s or at least A-2 by S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency selected by the Issuer) and in each case maturing within 36 months after the date of acquisition;

(7) marketable short-term money market and similar liquid funds having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency selected by the Issuer);

(8) readily marketable direct obligations issued by (i) any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof or (ii) any foreign government or any political subdivision or public instrumentality thereof; provided , that each such readily marketable direct obligation shall have an Investment Grade Rating from either Moody’s or S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency selected by the Issuer) with maturities of 36 months or less from the date of acquisition;

(9) Investments with average maturities of 36 months or less from the date of acquisition in money market funds rated AAA-(or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency selected by the Issuer); and

(10) investment funds investing substantially all of their assets in securities of the types described in clauses (1) through (9) above.

 

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In the case of Investments by any Foreign Subsidiary or Investments made in a country outside the United States of America, Cash Equivalents shall also include (i) investments of the type and maturity described in clauses (1) through (7) and clauses (8)(i) and (9) above of foreign obligors, which Investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies and (ii) other short-term investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash management in investments analogous to the foregoing investments in clauses (1) through (10) and in this paragraph.

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (1) and (2) above; provided that such amounts are converted into any currency listed in clause (1)or (2) above as promptly as practicable and in any event within ten (10) Business Days following the receipt of such amounts.

Cash Management Services ” means any agreement or arrangement to provide cash management services, including treasury, depository, overdraft, credit card processing or credit or debit card, purchase card, electronic funds transfer (including automated clearing house fund transfer services) and other cash management arrangements.

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

(1) the sale, lease, transfer, conveyance or other disposition in one or a series of related transactions (other than by merger, consolidation or amalgamation) of all or substantially all of the assets of the Issuer and its Subsidiaries, taken as a whole, to any Person other than one or more Permitted Holders;

(2) the Issuer becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) the acquisition by (A) any Person (other than any Permitted Holder) or (B) Persons (other than any Permitted Holders) that are together a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any such 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), in a single transaction or in a related series of transactions, by way of merger, amalgamation, 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 50.0% or more of the total voting power of the Voting Stock of the Issuer directly or indirectly through any of its direct or indirect parent holding companies, other than in each case, in connection with any transaction or series of transactions in which the Issuer shall become the Wholly-Owned Subsidiary of a Parent Company; or

(3) the Issuer ceases to beneficially own (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) directly or indirectly 100% of the issued and outstanding Capital Stock of Opco (or any successor thereto to the extent Opco is consolidated into or merged with or into such Person in accordance with the terms of the Indenture) other than in a transaction (A) in which Opco is merged with or into the Issuer in accordance with the terms of this Indenture or (B) that complies with Section 5.01 hereof.

Clearstream ” means Clearstream Banking, Société Anonyme and its successors.

Consolidated Depreciation and Amortization Expense ” means with respect to any Person for any period, the total amount of depreciation and amortization expense of such Person and its Restricted Subsidiaries, including, the amortization of intangible assets, deferred financing fees, debt issuance costs, commissions, fees and expenses and amortization of Capitalized Software Expenditures of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

 

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Consolidated Interest Expense ” means, with respect to any Person for any period, without duplication, the sum of:

(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, if any, made (less net payments, if any, received), pursuant to interest rate Hedging Obligations with respect to Indebtedness, and excluding (q) any prepayment premium or penalty, (r) annual agency fees paid to the administrative agents and collateral agents under any Credit Facilities, (s) costs associated with obtaining Hedging Obligations and breakage costs in respect of Hedging Obligations related to interest rates, (t) any expense resulting from the discounting of any indebtedness in connection with the application of recapitalization accounting or, if applicable, purchase accounting in connection with the Transactions or any acquisition (or purchase of assets), (u) penalties and interest related to taxes, (v) any “additional interest” or “liquidated damages” with respect to other securities, (w) amortization or expensing of deferred financing fees, amendment and consent fees, debt issuance costs, commissions, fees and expenses, (x) any amortization or expensing of bridge, commitment and other financing fees and any other fees related to the Transactions, the 2012 Transactions, the 2013 Transactions or any acquisitions (or purchases of assets) after the Issue Date, (y) commissions, discounts, yield and other fees and charges (including any interest expense) related to any Qualified Securitization Facility and (z) any accretion of accrued interest on discounted liabilities (other than Indebtedness except to the extent arising from the application of purchase accounting); plus

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

(3) interest income of such Person and its Restricted Subsidiaries for such period.

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

Consolidated Net Income ” means, with respect to any Person for any period, the aggregate of the Net Income of such Person 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 net after-tax effect of extraordinary, non-recurring or unusual gains or losses, charges or expenses (including relating to any multi-year strategic initiatives), Transaction Expenses, 2012 Transaction Expenses, 2013 Transaction Expenses, restructuring costs and reserves, duplicative running costs, relocation costs, expenses related to any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternative uses, Public Company Costs, facility consolidation and closing costs, severance costs and expenses, one-time compensation charges, costs relating to pre-opening and opening costs for facilities, signing, retention or completion bonuses, executive recruiting costs, costs incurred in connection with any strategic initiatives, transition costs, costs incurred in connection with non-ordinary course product and intellectual property development, costs incurred in connection with acquisitions (or purchases of assets) prior to or after the Issue Date (including integration costs), other business optimization expenses (including costs and expenses relating to business optimization programs, and new systems design, retention charges, system establishment costs and implementation costs and project start-up costs), accruals and reserves, operating expenses attributable to the implementation of cost-savings initiatives, consulting fees and curtailments and modifications to pension and post-retirement employee benefit plans shall be excluded;

 

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(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;

(3) any net after-tax effect of gains or losses on disposal, abandonment (including asset retirement costs) or discontinuance of disposed, abandoned or discontinued operations, as applicable, shall be excluded;

(4) any net after-tax effect of gains or losses (less all fees, expenses and charges relating thereto) attributable to asset dispositions or abandonments or the sale or other disposition of any Equity Interests of any Person other than in the ordinary course of business, as determined in good faith by the Issuer, shall be excluded;

(5) the Net Income for such period of any Person that is an Unrestricted Subsidiary shall be excluded, and, solely for the purpose of determining the amount available for Restricted Payments under Section 4.07(a)(3)(A) hereof, the Net Income for such period of any Person that is not a Subsidiary or that is accounted for by the equity method of accounting shall be excluded; provided that Consolidated Net Income of a Person 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 such 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 4.07(a)(3)(A) hereof, the Net Income for such period of any Restricted Subsidiary (other than any Guarantor, Opco or any guarantor of indebtedness of Opco) 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 (other than (x) restrictions that have been waived or otherwise released or (y) restrictions permitted under Section 4.08 hereof); provided that Consolidated Net Income of a Person will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash), or the amount that could have been paid in cash without violating any such restriction or requiring any such approval, to such Person 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 such Person and its Restricted Subsidiaries) in such Person’s consolidated financial statements pursuant to GAAP (including in the inventory, property and equipment, software, goodwill, intangible assets, in process research and development, deferred revenue and debt line items), attributable to the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition or joint venture investment or the amortization or write-off or write-down of any amounts thereof, net of taxes, shall be excluded;

(8) any net after-tax effect of income (loss) from the early extinguishment or conversion of (a) Indebtedness, (b) Hedging Obligations or (c) other derivative instruments shall be excluded;

(9) any impairment charge or asset write-off or write-down in each case, pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP shall be excluded;

(10) any equity-based or non-cash compensation charge or expense, including any such charge or expense arising from grants of stock appreciation, equity incentive programs or similar rights, stock options, restricted stock or other rights to, and any cash charges associated with the rollover, acceleration, or payout of, Equity Interests by management of such Person or of a Restricted Subsidiary or any of its direct or indirect parent companies in connection with the Transactions, shall be excluded;

 

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(11) any fees, expenses or charges incurred during such period, or any amortization thereof for such period, in connection with any acquisition, Investment, Asset Sale, disposition, incurrence or repayment of Indebtedness (including such fees, expenses or charges related to the offering and issuance of the Notes, the Opco Notes and the syndication and incurrence of any Credit Facilities), issuance of Equity Interests, recapitalization, refinancing transaction or amendment or modification of any debt instrument (including any amendment or other modification of the Notes, the Opco Notes and other securities and any Credit Facilities) and including, in each case, any such transaction whether consummated on, after or prior to the Issue Date and any such transaction undertaken but not completed, and any charges or non-recurring merger costs incurred during such period as a result of any such transaction, in each case whether or not successful or consummated (including, for the avoidance of doubt, the effects of expensing all transaction related expenses in accordance with Accounting Standards Codification Topic No. 805, Business Combinations ), shall be excluded;

(12) accruals and reserves that are established or adjusted within twelve months after the Issue Date that are so required to be established or adjusted as a result of the Transactions (or within twelve 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) any expenses, charges or losses to the extent covered by insurance or indemnity and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer or indemnifying party and only to the extent that such amount is in fact reimbursed within 365 days of the date of the insurable or indemnifiable event (net of any amount so added back in any prior period to the extent not so reimbursed within the applicable 365-day period), shall be excluded;

(14) any noncash compensation expense resulting from the application of Accounting Standards Codification Topic No. 718, Compensation Stock Compensation or Accounting Standards Codification Topic 505-50, Equity-Based Payments to Non-Employees , shall be excluded; and

(15) the following items shall be excluded:

(a) research and development expenses and charges to the extent expensed; and

(b) earn-out and contingent consideration obligations (including to the extent accounted for as bonuses or otherwise) and adjustments thereof and purchase price adjustments.

In addition, to the extent not already included 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 the amount of proceeds received from business interruption insurance and reimbursements of any expenses and charges that are covered by indemnification or other reimbursement provisions in connection with any acquisition, Investment or any sale, conveyance, transfer or other disposition of assets permitted under this Indenture.

Notwithstanding the foregoing, for the purpose of Section 4.07 hereof only (other than Section 4.07(a)(3)(D) hereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by such Person and its Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from such Person and its Restricted Subsidiaries, any repayments of loans and advances which constitute Restricted Investments by such Person 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 Section 4.07(a)(3)(D) hereof.

Consolidated Total Debt ” means, with respect to any Person, as of any date of determination, the aggregate principal amount of Indebtedness of such Person and its Restricted Subsidiaries outstanding on such date, determined

 

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on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of Indebtedness resulting from the application of purchase accounting in connection with the Transactions or any acquisition permitted under this Indenture), consisting only of Indebtedness for borrowed money, Capitalized Lease Obligations, debt obligations evidenced by bonds, notes, debentures, promissory notes or similar instruments and guarantees of Indebtedness of such types of a third Person plus , without duplication, the aggregate undrawn amount of Designated Revolving Commitments in effect on such date; provided that Consolidated Total Debt shall not include Indebtedness in respect of (i) any letter of credit, except to the extent of obligations in respect of drawn standby letters of credit which have not been reimbursed within three (3) Business Days and (ii) Hedging Obligations, except any unpaid termination payments thereunder. The U.S. dollar-equivalent principal amount of any Indebtedness denominated in a foreign currency will reflect the currency translation effects, determined in accordance with GAAP, of Hedging Obligations for currency exchange risks with respect to the applicable currency in effect on the date of determination of the U.S. dollar-equivalent principal amount of such Indebtedness.

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:

(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.

Controlled Investment Affiliate ” means, as to any Person, any other Person, other than any Investor, which directly or indirectly is in control of, is controlled by, or is under common control with such Person and is organized by such Person (or any Person controlling such Person) primarily for making direct or indirect equity or debt investments in the Issuer and/or other companies.

Corporate Trust Office of the Trustee ” shall be at the address of the Trustee specified in Section 12.02 hereof or such other address as to which the Trustee may give notice to the Holders and the Issuer.

CPP ” means CPP Investment Board Private Holdings Inc.

CPP Group ” means CPP and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt their portfolio companies or other operating companies affiliated with CPP).

Credit Facilities ” means, with respect to the Issuer or any of its Restricted Subsidiaries, one or more debt facilities, including the Senior Credit Facilities or other financing arrangements (including commercial paper facilities or indentures) providing for revolving credit loans, term loans, letters of credit or other long-term indebtedness, including any notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements or refundings thereof, in whole or in part, and any indentures or credit facilities or commercial paper facilities that replace, refund, supplement or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding, supplemental or refinancing facility, arrangement or indenture that increases the amount permitted to be borrowed or issued thereunder or alters the maturity thereof ( provided that such increase in borrowings or issuances is permitted under Section 4.09 hereof) or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, trustee, lender or group of lenders or holders.

 

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Custodian ” means the Trustee, as custodian with respect to the Notes, each in global form, or any successor entity thereto.

Debt Fund Affiliate ” means any affiliate of the Investor that is a bona fide diversified 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.

Default ” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

Definitive Note ” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06(c) hereof, substantially in the form of Exhibit A attached hereto, except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

Depositary ” means, with respect to the Notes issuable or issued in whole or in part in global form, any Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

Designated Non-cash Consideration ” means the fair market value of non-cash consideration received by the Issuer or a Restricted Subsidiary 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, redemption or repurchase of, or collection or payment on, such Designated Non-cash Consideration.

Designated Preferred Stock ” means Preferred Stock of the Issuer, any Restricted Subsidiary thereof or any direct or indirect parent company thereof (in each case other than Disqualified Stock) that is issued for cash (other than to a Restricted Subsidiary or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate on or promptly after the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in Section 4.07(a)(3) hereof.

Designated Revolving Commitments ” means any commitments to make loans or extend credit on a revolving basis to the Issuer or any of its Restricted Subsidiaries by any Person other than the Issuer or any of its Restricted Subsidiaries that have been designated in an Officer’s Certificate delivered to the Trustee as “Designated Revolving Commitments” until such time as the Issuer subsequently delivers an Officer’s Certificate to the Trustee to the effect that such commitments shall no longer constitute “Designated Revolving Commitments.”

Disqualified Stock ” means, with respect to any Person, any Capital Stock of such Person which, by its terms, or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable (other than solely as a result of a change of control or asset sale) pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than solely as a result of a change of control or asset sale), in whole or in part, in each case prior to the date 91 days after the earlier of the maturity date of the Notes or the date the Notes are no longer outstanding; provided , that if such Capital Stock is issued to any plan for the benefit of future, current or former employees, directors, officers, members of management or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer or its Subsidiaries or by any such plan to such employees, directors, officers, members of management or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members), such Capital Stock shall not constitute Disqualified Stock solely because it may be redeemable or subject to repurchase by the Issuer or its Subsidiaries pursuant to any such plan or agreement or in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s, director’s, officer’s, management member’s or consultant’s termination, death or disability; provided , further , that any Capital Stock held by any future, current or

 

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former employee, director, officer, member of management or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any of its Subsidiaries, any of its direct or indirect parent companies or any other entity in which the Issuer or a Restricted Subsidiary has an Investment and is designated in good faith as an “affiliate” by the Board of Directors (or the compensation committee thereof), in each case pursuant to any stock subscription or shareholders’ agreement, management equity plan or 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 the Issuer or its Subsidiaries or in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s, director’s, officer’s, management member’s or consultant’s termination, death or disability.

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

(1) increased (without duplication) by the following, in each case (other than in the case of clauses (g) and (j)) to the extent deducted (and not added back) in determining Consolidated Net Income for such period:

(a) provision for taxes based on income or profits or capital, including federal, state, franchise, property, excise and similar taxes and foreign withholding taxes (including any future taxes or other levies which replace or are intended to be in lieu of such taxes and any penalties and interest related to such taxes or arising from tax examinations) and the net tax expense associated with any adjustments made pursuant to clauses (1) through (15) of the definition of “Consolidated Net Income”; plus

(b) Fixed Charges for such period (including (x) net losses under Hedging Obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, (y) bank fees and other deferred financing fees, and (z) costs of surety bonds in connection with financing activities, plus amounts excluded from Consolidated Interest Expense as set forth in clauses (1)(q) through (z) in the definition thereof); plus

(c) Consolidated Depreciation and Amortization Expense for such period; plus

(d) 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, (A) the Issuer may determine not to add back such non-cash charge in the current period and (B) to the extent the Issuer does decide to add back such non-cash charge, 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

(e) the amount of any reductions in arriving at Net Income resulting from the application of Accounting Standards Codification Topic No. 810, Consolidation ; plus

(f) the amount of management, monitoring, consulting, transaction, advisory and other fees (including termination fees) and indemnities and expenses paid or accrued in such period under the Management Fee Agreement or otherwise to the Permitted Holders or other Persons with a similar interest in the Issuer or its direct or indirect parent companies to the extent otherwise permitted under Section 4.11 hereof; plus

(g) the amount of “run rate” net cost savings, synergies and operating expense reductions (other than any of the foregoing related to Specified Transactions) projected by the Issuer in good faith to result from actions taken, committed to be taken or with respect to which substantial steps have been taken or are expected in good faith to be taken no later than twelve (12) months after the end of such period (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of the period for

 

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which EBITDA is being determined and if such cost savings, operating expense reductions 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 such cost savings, operating expense reductions and synergies are reasonably identifiable and factually supportable (it is understood and agreed that “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken); plus

(h) the amount of loss on sale of receivables, Securitization Assets and related assets to any Securitization Subsidiary in connection with a Qualified Securitization Facility; plus

(i) any costs or expense incurred pursuant to any management equity plan, stock option plan or any other management or employee benefit plan, agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of such Person or net cash proceeds of an issuance of Equity Interest of such Person (other than Disqualified Stock) solely to the extent that such cash proceeds are excluded from the calculation set forth in Section 4.07(a)(3) hereof; plus

(j) cash receipts (or any netting arrangements resulting in reduced cash expenditures) not representing EBITDA or Consolidated Net Income in any period to the extent non-cash gains relating to such income were deducted in the calculation of EBITDA pursuant to clause (2) below for any previous period and not added back; plus

(k) any net loss from disposed, abandoned or discontinued operations (excluding held-for-sale discontinued operations until actually disposed of); plus

(l) Specified Legal Expenses; and

(2) decreased (without duplication) by the following, in each case to the extent included in determining Consolidated Net Income for such period:

(a) non-cash gains increasing Consolidated Net Income for such period, excluding any non-cash gains that represent the reversal of an accrual or reserve for any anticipated cash charges in any prior period (other than any such accrual or reserve that has been added back to Consolidated Net Income in calculating EBITDA in accordance with this definition); plus

(b) any non-cash gains with respect to cash actually received in a prior period unless such cash did not increase EBITDA in such prior period; plus

(c) any net income from disposed, abandoned or discontinued operations (excluding held-for-sale discontinued operations until actually disposed of); and

(3) increased (by losses) or decreased (by gains), as applicable, without duplication, in each case, except for the adjustments set forth in the proviso to this clause (3), to the extent included in computing Consolidated Net Income for such period:

(a) any net gain or loss resulting in such period from Hedging Obligations and the application of Accounting Standards Codification Topic No. 815, Derivatives and Hedging ;

(b) any net gain or loss resulting in such period from a sale of Securitization Assets to a Securitization Subsidiary in connection with a Qualified Securitization Facility;

(c) any realized or unrealized gains or losses in such period from (i) balance sheet currency translation, (ii) currency translation of assets or liabilities that are not denominated in the functional currency of a Person into the functional currency of that Person and (iii) Hedging Obligations that are designated by a Person as a hedge of an asset or liability in clause (c)(i) or (ii); and

(d) any adjustments resulting from the application of Accounting Standards Codification Topic No. 460, Guarantees , or any comparable regulation;

 

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provided that, notwithstanding the foregoing, EBITDA shall include (without duplication) (i) any net realized gain or loss from any Hedging Obligations accounted for as cash flow hedges of intercompany royalties and (ii) any net realized gain or loss from any Hedging Obligations that are designated by the Issuer as EBITDA hedges, except to the extent any such Hedging Obligations are terminated by such Person prior to their scheduled maturity.

EMU Legislation ” means the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency.

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 of common stock or Preferred Stock of the Issuer or any of its direct or indirect parent companies (excluding Disqualified Stock), other than:

(1) public offerings with respect to the Issuer’s or any direct or indirect parent company’s common stock registered on Form S-4 or Form S-8;

(2) issuances to any Subsidiary of the Issuer; and

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

Euroclear ” means Euroclear Bank S.A./N.V., as operator of the Euroclear system, and its successors.

Euros ” means the lawful currency of the Participating Member States introduced in accordance with the EMU Legislation.

Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

Excluded Contribution ” means net cash proceeds, marketable securities or Qualified Proceeds received by the Issuer from

(1) contributions to its common equity capital; and

(2) the sale (other than to a Subsidiary of the Issuer or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Issuer) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Issuer;

in each case designated as Excluded Contributions pursuant to an Officer’s Certificate on or promptly after the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, and which are excluded from the calculation set forth in Section 4.07(a)(3) hereof.

Existing Senior Notes ” means, collectively, the 2018 Notes and the 2020 Notes.

Existing Senior Notes Indentures ” means, collectively, the 2018 Notes Indenture and the 2020 Notes Indenture.

fair market value ” means, with respect to any asset or liability, the fair market value of such asset or liability as determined by the Issuer in good faith.

 

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Financial Officer ” means the Chief Financial Officer, the Treasurer or other financial officer of the Issuer or Opco, as applicable.

Fixed Charge Coverage Ratio ” means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Issuer or any Restricted Subsidiary incurs, assumes, guarantees, redeems, repays, retires or extinguishes any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility in the ordinary course of business for working capital purposes) or issues, repurchases or redeems Disqualified Stock or Preferred Stock or establishes or eliminates any Designated Revolving Commitments, in each case, 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, repayment, retirement or extinguishment of Indebtedness or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable Test Period (and (i) for the purposes of the numerator of the Total Net Leverage Ratio and the Senior Secured Net Leverage Ratio, as if the same had occurred on the last day of the applicable Test Period and (ii) for all purposes, as if Indebtedness in the full amount of any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period).

For purposes of making the computation referred to above, any Specified Transaction that has been made by the Issuer or any of its Restricted Subsidiaries during any Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Fixed Charge Coverage Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such Specified Transactions (and the change in any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Issuer or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction 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 Test Period as if such Specified Transaction had occurred at the beginning of the applicable Test Period.

For purposes of this definition, whenever pro forma effect is to be given to any Specified Transaction (including the Transactions), the pro forma calculations shall be made in good faith by a Financial Officer of the Issuer or Opco, as applicable, and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, synergies and operating expense reductions resulting from or related to any such Specified Transaction (including the Transactions) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than 18 months after the date of any such Specified Transaction (in each case as though such cost savings and synergies had been realized on the first day of the applicable period and as if such cost savings and synergies were realized for the entirety of such period). For the purposes of this Indenture, “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken, or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements), net of the amount of actual benefits realized during such period from such actions.

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 Financial Officer of the Issuer or Opco, as applicable, to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. 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 Issuer may designate. For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.

 

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Fixed Charges ” means, with respect to any Person for any period, the sum of, without duplication:

(1) Consolidated Interest Expense of such Person for such period;

(2) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Preferred Stock during such period; and

(3) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Disqualified Stock during such period.

Foreign Subsidiary ” means, with respect to any Person, (a) any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States, any state thereof or the District of Columbia and any Restricted Subsidiary of such Foreign Subsidiary and (b) any Restricted Subsidiary that is treated as a disregarded entity for United States federal income tax purposes and substantially all of whose assets consist of Equity Interests and/or Indebtedness of one or more Foreign Subsidiaries and any Restricted Subsidiary of such Foreign Subsidiary.

GAAP ” means (1) generally accepted accounting principles in the United States of America which are in effect on the Issue Date or (2) after the Issue Date, if elected by the Issuer by written notice to the Trustee in connection with the delivery of financial statements and information, the accounting standards and interpretations (“IFRS”) adopted by the International Accounting Standard Board, as in effect on the first date of the period for which the Issuer is making such election; provided , that (a) any such election once made shall be irrevocable, (b) all financial statements and reports required to be provided after such election pursuant to this Indenture shall be prepared on the basis of IFRS, (c) from and after such election, all ratios, computations and other determinations based on GAAP contained in this Indenture shall be computed in conformity with IFRS, (d) in connection with the delivery of financial statements (x) for any of its first three financial quarters of any financial year, it shall restate its consolidated interim financial statements for such interim financial period and the comparable period in the prior year to the extent previously prepared in accordance with GAAP as in effect on the Issue Date and (y) for delivery of audited annual financial information, it shall provide consolidated historical financial statements prepared in accordance with IFRS for the prior most recent fiscal year to the extent previously prepared in accordance with GAAP as in effect on the Issue Date. For purposes of this Indenture, the term “consolidated” with respect to any Person means such Person consolidated with its Restricted Subsidiaries and does not include any Unrestricted Subsidiary.

Global Note Legend ” means the legend set forth in Section 2.06(g)(ii) hereof, which is required to be placed on all Global Notes issued under this Indenture.

Global Notes ” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of Exhibit A attached hereto, issued in accordance with Section 2.01, 2.06(b) or 2.06(d) hereof.

Government Securities ” 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 either case, are not callable or redeemable at the option of the issuers 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 Government Securities or a specific payment of principal of or interest on any such Government Securities held by such custodian for the account of the holder of such depository receipt; provided that (except as required by

 

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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 Government Securities or the specific payment of principal of or interest on the Government Securities evidenced by such depository receipt.

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

Guarantee ” means the guarantee by any Guarantor of the Issuer’s Obligations under this Indenture and the Notes.

Guarantor ” means each Restricted Subsidiary of the Issuer, if any, that Guarantees the Notes in accordance with the terms of this Indenture.

Hedging Obligations ” means, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar agreement providing for the transfer, modification or mitigation of interest rate, currency or commodity risks either generally or under specific contingencies.

Holder ” means the Person in whose name a Note is registered on the Registrar’s books.

Holdings ” means Healthcare Technology Intermediate Holdings, Inc.

IAI ” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

IAI Global Note ” means a Global Note substantially in the form of Exhibit A attached hereto, bearing the Global Note Legend and the Private Placement Legend, numbered IAI-1 and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee.

Immediate Family Members ” means with respect to any individual, such individual’s child, stepchild, grandchild or more remote descendant, parent, stepparent, grandparent, spouse, former spouse, qualified domestic partner, sibling, mother-in-law, father-in-law, son-in-law and daughter-in-law (including adoptive relationships) and any trust, partnership or other bona fide estate-planning vehicle the only beneficiaries of which are any of the foregoing individuals or any private foundation or fund that is controlled by any of the foregoing individuals or any donor-advised fund of which any such individual is the donor.

Indebtedness ” means, with respect to any Person, without duplication:

(1) any indebtedness (including principal and premium) 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 balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations) due more than twelve months after such property is acquired, except (i) any such balance that constitutes an obligation in respect of a commercial letter of credit, a trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business, (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and is not paid after becoming due and payable; or

(d) representing the net obligations under any Hedging Obligations;

 

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if and to the extent that any of the foregoing Indebtedness (other than obligations in respect of letters of credit and Hedging Obligations) would appear as a liability upon 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 the Issuer appearing upon the balance sheet of the Issuer solely by reason of push-down accounting under GAAP shall be excluded;

(2) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clause (1) of a third Person (whether or not such items would appear upon the balance sheet of such obligor or guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business; and

(3) to the extent not otherwise included, the obligations of the type referred to in clause (1) of a third Person secured by a Lien on any asset owned by such first Person, whether or not such Indebtedness is assumed by such first Person; provided that the amount of such Indebtedness that is not recourse to the Issuer or any Restricted Subsidiary except with respect to such specific asset 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 notwithstanding the foregoing, Indebtedness shall be deemed not to include (a) Contingent Obligations incurred in the ordinary course of business, (b) reimbursement obligations under commercial letters of credit ( provided that unreimbursed amounts under letters of credit shall be counted as Indebtedness three (3) Business Days after such amount is drawn), (c) obligations under or in respect of Qualified Securitization Facilities; provided , further , that Indebtedness shall be calculated without giving effect to the effects of Accounting Standards Codification Topic No. 815, Derivatives and Hedging , and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness or (d) deferred or prepaid revenues. For the avoidance of doubt, Indebtedness shall not include royalty payments.

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

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

Indirect Participant ” means a Person who holds a beneficial interest in a Global Note through a Participant.

Initial Notes ” has the meaning assigned to it in the recitals to this Indenture.

Interest Payment Date ” means March 1 and September 1 of each year to stated maturity, beginning March 1, 2014.

Initial Purchasers ” means Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, Fifth Third Securities, Inc., Mizuho Securities USA Inc., RBC Capital Markets, LLC, SunTrust Robinson Humphrey, Inc. and TPG Capital BD, LLC.

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 selected by the Issuer.

 

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Investment Grade Securities ” means:

(1) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (other than Cash Equivalents);

(2) debt securities or debt instruments with an Investment Grade Rating, but excluding any debt securities or debt instruments constituting loans or advances among the Issuer and its Subsidiaries;

(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment 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, credit card and debit card receivables, trade credit, advances to customers, commission, travel and similar advances to employees, directors, officers, members of management, manufacturers and consultants, in each case 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 4.07 hereof:

(1) “Investments” shall include the portion (proportionate to the Issuer’s Equity Interest in such Subsidiary) of the fair market value of the net assets of a Subsidiary of the Issuer at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to:

(a) the Issuer’s “Investment” in such Subsidiary at the time of such redesignation; less

(b) the portion (proportionate to the Issuer’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.

The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any dividend, distribution, interest payment, return of capital, repayment or other amount received in Cash Equivalents by the Issuer or a Restricted Subsidiary in respect of such Investment.

Investor ” means each of (1) TPG Group, (2) CPP Group and (3) LGP Group and their respective Affiliates and funds or partnerships managed or advised by any of them or any of their respective Affiliates, including for the avoidance of doubt, any co-investment vehicle controlled by any of the foregoing, but not including, however, any portfolio company of any of the foregoing.

Issue Date ” means the date of original issuance of the Notes under this Indenture.

Issuer ” means Healthcare Technology Intermediate, Inc. and its successors.

Issuer’s Order ” means a written request or order signed on behalf of the Issuer by an Officer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer, and delivered to the Trustee.

 

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Legal Holiday ” means a Saturday, a Sunday or a day on which commercial banking institutions are not required to be open in the State of New York or at the place of payment. If a payment date is on a Legal Holiday, payment will be made on the next succeeding day that is not a Legal Holiday and no interest shall accrue in the intervening period.

LGP ” means Leonard Green & Partners, L.P.

LGP Group ” means LGP and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt their portfolio companies or other operating companies affiliated with LGP).

Lien ” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest 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 be deemed to constitute a Lien.

Management Fee Agreement ” means the management agreement or similar agreements among one or more of the Investors or certain of the management companies associated with it or their advisors, if applicable, and Opco (and/or any of its direct or indirect parent companies).

Management Stockholders ” means the members of management (and their Controlled Investment Affiliates and Immediate Family Members) of the Issuer (or its direct parent) who are holders of Equity Interests of any direct or indirect parent companies of the Issuer on the Issue Date.

Moody’s ” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

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

Net Proceeds ” means the aggregate Cash Equivalent proceeds received by the Issuer or any of its Restricted Subsidiaries in respect of any Asset Sale, including any Cash Equivalents received upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale, net of the costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration, including legal, accounting and investment banking fees, payments made in order to obtain a necessary consent or required by applicable law, and brokerage and sales commissions, all dividends, distributions or other payments required to be made to minority interest holders in Restricted Subsidiaries as a result of any such Asset Sale by a Restricted Subsidiary, the amount of any purchase price or similar adjustment claimed by any Person to be owed by the Issuer or any Restricted Subsidiary, until such time as such claim shall have been settled or otherwise finally resolved, or paid or payable by the Issuer or any Restricted Subsidiary, in either case in respect of such Asset Sale, any relocation expenses incurred as a result thereof, other fees and expenses, including title and recordation expenses, taxes paid or payable as a result thereof or any transactions occurring or deemed to occur to effectuate a payment under this Indenture (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of principal, premium, if any, and interest on Indebtedness (other than Subordinated Indebtedness) or amounts required to be applied to the repayments of Indebtedness secured by a Lien on such assets and required (other than required by Section 4.10(b)(1) hereof) to be paid as a result of such transaction and any deduction of appropriate amounts to be provided by the Issuer 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 the Issuer or any of its Restricted Subsidiaries after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

Non-U.S. Person ” means a Person who is not a U.S. Person.

Notes ” means the Initial Notes and any Additional Notes or PIK Notes that are authenticated and delivered under this Indenture. The Initial Notes, the Additional Notes and the PIK Notes shall be treated as a single class for all purposes under this Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes, any Additional Notes and any PIK Notes.

 

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Obligations ” means any principal, interest (including any interest accruing on or subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foreign law), premium, penalties, fees, indemnifications, reimbursements (including reimbursement obligations with respect to letters of credit and banker’s acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.

Offering Memorandum ” means the confidential offering memorandum, dated August 1, 2013, relating to the sale of the Initial Notes.

Officer ” means the Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of any Person. Unless otherwise indicated, Officer shall refer to an Officer of the applicable Person.

Officer’s Certificate ” means a certificate signed on behalf of a Person by an Officer of such Person that meets the requirements set forth in this Indenture and provided to the Trustee. Unless otherwise indicated, Officer shall refer to an Officer of the Issuer.

Opco ” means IMS Health Incorporated and its successors.

Opco Notes ” means, collectively, the Senior Exchange Notes and the Existing Senior Notes.

Opco Notes Indentures ” means, collectively, the Senior Exchange Notes Indenture and the Existing Senior Notes Indentures.

Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Issuer.

Parent Company ” means any Person so long as such Person directly or indirectly holds 100.0% of the total voting power of the Capital Stock of the Issuer, and at the time such Person acquired such voting power, no Person (other than any Permitted Holder) and no Persons (other than any Permitted Holders) that are together a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision), including any such 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), shall have beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), directly or indirectly, of 50.0% or more of the total voting power of the Voting Stock of such Person.

Participant ” means, with respect to the Depositary, a Person who has an account with the Depositary (and, with respect to DTC, shall include Euroclear and Clearstream).

Participating Member State ” means each state so described in any EMU Legislation.

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 Equivalents between the Issuer or any of its Restricted Subsidiaries and another Person; provided that any Cash Equivalents received must be applied in accordance with Section 4.10 hereof.

Permitted Holder ” means any of the Investors and Management Stockholders and any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which any of the foregoing are members; provided , that, in the case of such group and without giving effect to the existence of

 

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such group or any other group, such Investors and Management Stockholders, collectively, have beneficial ownership of more than 50.0% of the total voting power of the Voting Stock of the Issuer or any of its direct or indirect parent companies. Any Person or group 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 (or would result in a Change of Control Offer in the absence of the waiver of such requirement by Holders in accordance with the provisions of this Indenture) will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

Permitted Investments ” means:

(1) any Investment in the Issuer or any of its Restricted Subsidiaries;

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

(3) any Investment by the Issuer or any of its Restricted Subsidiaries in a Person that is engaged (directly or through entities that will be Restricted Subsidiaries) in a Similar Business 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 amalgamated, merged or consolidated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary,

and, in each case, any Investment held by such Person; provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, amalgamation, consolidation or transfer;

(4) any Investment in securities or other assets not constituting Cash Equivalents or Investment Grade Securities and received in connection with an Asset Sale made pursuant to the provisions described under Section 4.10 hereof or any other disposition of assets not constituting an Asset Sale;

(5) any Investment existing on the Issue Date or made pursuant to binding commitments in effect on the Issue Date or an Investment consisting of any extension, modification, replacement, renewal or reinvestment of any Investment or binding commitment existing on the Issue Date; provided , that the amount of any such Investment or binding commitment may be increased (a) as required by the terms of such Investment or binding commitment as in existence on the Issue Date (including as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities) or (b) as otherwise permitted under this Indenture;

(6) any Investment acquired by the Issuer or any of its Restricted Subsidiaries:

(a) in exchange for any other Investment, accounts receivable or indorsements for collection or deposit held by the Issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of, or settlement of delinquent accounts and disputes with or judgments against, the issuer of such other Investment or accounts receivable (including any trade creditor or customer);

(b) in satisfaction of judgments against other Persons;

(c) as a result of a foreclosure by the Issuer 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; or

(d) as a result of the settlement, compromise or resolution of litigation, arbitration or other disputes with Persons who are not Affiliates.

 

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(7) Hedging Obligations permitted under Section 4.09(b)(10) hereof;

(8) any Investment in a Similar Business taken together with all other Investments made pursuant to this clause (8) that are at that time outstanding, not to exceed the greater of (a) $200,000,000 and (b) 2.5% of Total Assets (with the amount of each Investment being measured at the time made and without giving effect to subsequent changes in value, but subject to adjustment as set forth in the definition of Investment);

(9) Investments the payment for which consists of Equity Interests (other than Disqualified Stock) of the Issuer or any of its direct or indirect parent companies; provided , that such Equity Interests will not increase the amount available for Restricted Payments under Section 4.07(a)(3) hereof;

(10) guarantees of Indebtedness permitted under Section 4.09 hereof, performance guarantees and Contingent Obligations incurred in the ordinary course of business and the creation of liens on the assets of the Issuer or any Restricted Subsidiary in compliance with Section 4.12 hereof;

(11) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with Section 4.11(b) hereof (except transactions described in clauses (2), (5), (9) and (15) of such Section);

(12) Investments consisting of purchases and acquisitions of inventory, supplies, material, services or equipment, or intellectual property, or the licensing or contribution of intellectual property pursuant to any distribution, service, joint marketing, co-branding, co-distribution or other similar arrangements with other Persons, however denominated;

(13) Investments, taken together with all other Investments made pursuant to this clause (13) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of, or have not been subsequently sold or transferred for, Cash Equivalents or marketable securities), not to exceed the greater of (a) $225,000,000 and (b) 3.0% of Total Assets (with the amount of each Investment being measured at the time made and without giving effect to subsequent changes in value, but subject to adjustment as set forth in the definition of Investment);

(14) Investments in or relating to a Securitization Subsidiary that, in the good faith determination of the Issuer, are necessary or advisable to effect any Qualified Securitization Facility or any repurchase obligation in connection therewith;

(15) loans and advances to, or guarantees of Indebtedness of, officers, directors, employees, consultants and members of management not in excess of $25,000,000 outstanding at any one time, in the aggregate;

(16) loans and advances to employees, directors, officers, members of management and consultants for business-related travel expenses, moving expenses and other similar expenses or payroll advances, in each case incurred in the ordinary course of business or consistent with past practices or to future, present and former employees, directors, officers, members of management and consultants (and their Controlled Investment Affiliates and Immediate Family Members) to fund such Person’s purchase of Equity Interests of the Issuer or any direct or indirect parent company thereof;

(17) advances, loans or extensions of trade credit in the ordinary course of business by the Issuer or any of its Restricted Subsidiaries;

(18) any Investment in any Subsidiary or any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business;

(19) Investments consisting of purchases and acquisitions of assets or services in the ordinary course of business;

 

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(20) Investments made in the ordinary course of business in connection with obtaining, maintaining or renewing client contacts and loans or advances made to distributors in the ordinary course of business;

(21) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers compensation, performance and similar deposits entered into as a result of the operations of the business in the ordinary course of business;

(22) Investments in the Notes and the related Guarantees, if any;

(23) Investments in Unrestricted Subsidiaries, taken together with all other Permitted Investments made pursuant to this clause (23) that are at the time outstanding, without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of, or have not been subsequently sold or transferred for, Cash Equivalents or marketable securities, not to exceed the greater of (a) $150,000,000 and (b) 2.0% of Total Assets (with the amount of each Investment being measured at the time made and without giving effect to subsequent changes in value, but subject to adjustment as set forth in the definition of Investment);

(24) Investments in the ordinary course of business consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Article 4 customary trade arrangements with customers consistent with past practices; and

(25) any Investment by any Captive Insurance Subsidiary in connection with its provision of insurance to the Issuer or any of its Subsidiaries, which Investment is made in the ordinary course of business of such Captive Insurance Subsidiary, or by reason of applicable law, rule, regulation or order, or that is required or approved by any regulatory authority having jurisdiction over such Captive Insurance Subsidiary or its business, as applicable.

Permitted Liens ” means, with respect to any Person:

(1) pledges or deposits by such Person under workmen’s compensation laws, unemployment insurance, health, disability or employee benefits, other social security laws or similar legislation or regulations or other insurance-related obligations (including, but not limited to, in respect of deductibles, self-insured retention amounts and premiums and adjustments thereto) 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, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal 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) landlords’, carriers’, warehousemen’s, materialsmen’s, repairmen’s, construction and mechanics’ Liens, in each case arising in the ordinary course of business and (i) for sums not yet overdue for a period of more than 60 days or, if more than 60 days overdue, are unfiled and no other action has been taken to enforce such Liens, (ii) being contested in good faith by appropriate actions 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 maintained on the books of such Person in accordance with GAAP or (iii) the nonpayment of which in the aggregate would not reasonably be expected to have a material adverse effect on the Issuer or its Restricted Subsidiaries;

(3) Liens for taxes, assessments or other governmental charges not yet overdue for a period of more than 30 days or not yet payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate actions, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

 

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

(5) survey exceptions, encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, servitudes, sewers, electric lines, telegraph, telephone and cable television lines and other similar purposes, or zoning, building codes or other restrictions (including minor 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 do not in the aggregate materially impair their use in the operation of the business of such Person and exceptions on title policies insuring liens granted on Mortgaged Properties (as defined in the Senior Credit Facilities);

(6) Liens securing obligations in respect of Indebtedness permitted to be incurred pursuant to clause (4), (12)(b), (13) or (23) of Section 4.09(b) hereof; provided , that (a) Liens securing obligations relating to any Indebtedness, Disqualified Stock or Preferred Stock permitted to be incurred pursuant to clause (13) relate only to obligations relating to Refinancing Indebtedness that is secured by Liens on the same assets as the assets securing the Refinanced Debt (as defined in the definition of Refinancing Indebtedness), plus improvements, accessions, proceeds or dividends or distributions in respect thereof and after-acquired property, and serves to refund or refinance Indebtedness, Disqualified Stock or Preferred Stock incurred under clause (4), (12)(b) or (13) of Section 4.09(b) hereof, (b) Liens securing obligations relating to Indebtedness permitted to be incurred pursuant to clause (23) extend only to the assets of Subsidiaries that are not Guarantors, and (c) Liens securing Indebtedness, Disqualified Stock or Preferred Stock to be incurred pursuant to Section 4.09(b)(4) hereof extend only to the assets so purchased, replaced, leased or improved and proceeds and products thereof;

(7) Liens existing, or provided for under binding contracts existing, on the Issue Date;

(8) Liens on property or shares of stock or other assets of a Person at the time such Person becomes a Subsidiary; provided , that such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided , further , that such Liens are limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof and after-acquired property) that secured the obligations to which such Liens relate;

(9) Liens on property or other assets at the time the Issuer or a Restricted Subsidiary acquired the property or such other assets, including any acquisition by means of a merger, amalgamation or consolidation with or into the Issuer or any of its Restricted Subsidiaries; provided , that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition, amalgamation, merger, or consolidation; provided , further , that such Liens are limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof and after acquired-property) that secured the obligations to which such Liens relate;

(10) Liens securing obligations in respect of Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary permitted to be incurred in accordance with Section 4.09 hereof;

(11) Liens securing (x) Hedging Obligations and (y) obligations in respect of Cash Management Services;

(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 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;

 

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(13) leases, subleases, licenses or sublicenses (or other agreement under which the Issuer or any Restricted Subsidiary has granted rights to end users to access and use the Issuer’s or any Restricted Subsidiary’s products, technologies or services) granted to others in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of the Issuer or any of its Restricted Subsidiaries and the customary rights reserved or vested in any Person by the terms of any lease, sublease, license, sublicense, grant or permit, or to require annual or periodic payments as a condition to the continuance thereof;

(14) Liens arising from Uniform Commercial Code (or equivalent statutes) financing statement filings regarding operating leases, consignments or accounts entered into by the Issuer and its Restricted Subsidiaries in the ordinary course of business or purported Liens evidenced by the filing of precautionary Uniform Commercial Code (or equivalent statutes) financing statements or similar public filings;

(15) Liens in favor of the Issuer or any Restricted Subsidiary;

(16) Liens on equipment of the Issuer or any of its Restricted Subsidiaries granted in the ordinary course of business to the clients of the Issuer or any of its Restricted Subsidiaries;

(17) Liens on accounts receivable, Securitization Assets and related assets incurred in connection with a Qualified Securitization Facility;

(18) Liens to secure any modification, refinancing, refunding, extension, renewal or replacement (or successive modification, refinancing, refunding, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8) and (9); provided , that (a) such new Lien shall be limited to all or part of the same property (plus improvements, accessions, proceeds or dividends or distributions in respect thereof and after-acquired property) that secured the original Lien ( plus improvements and accessions on such property) and proceeds and products thereof, and (b) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8) and (9) at the time the original Lien became a Permitted Lien under this Indenture, and (ii) an amount necessary to pay any fees and expenses (including original issue discount, upfront fees or similar fees) and premiums (including tender premiums and accrued and unpaid interest), related to such refinancing, refunding, extension, renewal or replacement;

(19) deposits made or other security provided in the ordinary course of business to secure liability to insurance carriers or self-insurance arrangements;

(20) other Liens securing obligations in an aggregate principal amount at any one time outstanding not to exceed the greater of (a) $125,000,000 and (b) 1.75% of Total Assets, each determined as of the date of such incurrence;

(21) Liens 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;

(22) (i) the prior rights of consignees and their lenders under consignment arrangements entered into in the ordinary course of business, (ii) Liens arising out of conditional sale, title retention or similar arrangements for the sale of goods in the ordinary course of business and (iii) Liens arising by operation of law under Article 2 of the Uniform Commercial Code;

(23) Liens securing judgments for the payment of money not constituting an Event of Default under Section 6.01(5) hereof;

(24) Liens 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;

 

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(25) Liens (a) of a collection bank arising under Section 4-208 of the Uniform Commercial Code on items in the course of collection, (b) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business, and (c) in favor of banking institutions arising as a matter of law or under general terms and conditions encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;

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

(27) Liens encumbering reasonable customary 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;

(28) Liens that are contractual rights of set-off (a) relating to the establishment of depository relations with banks or other deposit-taking financial institutions and not given in connection with the issuance of Indebtedness, (b) relating to pooled deposit or sweep accounts of the Issuer or any of its Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Issuer and its Restricted Subsidiaries or (c) relating to purchase orders and other agreements entered into with customers of the Issuer or any of its Restricted Subsidiaries in the ordinary course of business;

(29) Liens arising from Personal Property Security Act financing statement filings regarding leases entered into by the Issuer or any of its Restricted Subsidiaries in the ordinary course of business;

(30) any encumbrance or restriction (including put, call arrangements, tag, drag, right of first refusal and similar rights) with respect to capital stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

(31) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into by the Issuer or any Restricted Subsidiary in the ordinary course of business;

(32) Liens solely on any cash earnest money deposits made by the Issuer or any of its Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted under this Indenture;

(33) ground leases in respect of real property on which facilities owned or leased by the Issuer or any of its Subsidiaries are located;

(34) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

(35) Liens on Capital Stock or other securities of an Unrestricted Subsidiary that secure Indebtedness or other obligations of such Unrestricted Subsidiary;

(36) Liens on cash advances in favor of the seller of any property to be acquired in an Investment or other acquisition permitted under this Indenture to be applied against the purchase price for such Investment or other acquisition;

(37) any interest or title of a lessor, sublessor, licensor or sublicensor or secured by a lessor’s, sublessor’s, licensor’s or sublicensor’s interest under leases or licenses entered into by the Issuer or any of the Restricted Subsidiaries in the ordinary course of business;

 

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(38) deposits of cash with the owner or lessor of premises leased and operated by the Issuer or any of its Subsidiaries in the ordinary course of business of the Issuer and such Subsidiary to secure the performance of the Issuer’s or such Subsidiary’s obligations under the terms of the lease for such premises;

(39) Liens arising in the ordinary course of business to secure accounts payable or similar trade obligations not constituting Indebtedness;

(40) security given to a public utility or any municipality or governmental authority when required by such utility or authority in connection with the operations of that Person in the ordinary course of business;

(41) any proxy agreement relating to IMS Government Solutions, Inc. and its Equity Interests entered into with the Defense Security Service;

(42) any encumbrance or restriction imposed under any contract for the sale by the Issuer or any of its Restricted Subsidiaries of the Capital Stock of any Restricted Subsidiary, or any business unit or division of the Issuer or any Restricted Subsidiary permitted under this Indenture;

(43) Liens (x) securing the Notes and Guarantees, if any, of the Notes, (y) securing Subordinated Indebtedness, so long as the Notes and Guarantees are secured by a Lien on the same assets, property or proceeds that is senior in priority to such Liens and (z) so long as the Notes are equally and ratably secured;

(44) Liens securing obligations in respect of Indebtedness permitted to be incurred under any Credit Facility, including any letter of credit facility relating thereto, that was permitted to be incurred pursuant to Section 4.09(b)(1) hereof; and

(45) Liens securing obligations in respect of Indebtedness permitted to be incurred under Section 4.09 hereof; provided that, with respect to Liens securing obligations in respect of Indebtedness permitted under this clause (45), at the time of incurrence (or, in the case of Indebtedness under Designated Revolving Commitments, on the date such Designated Revolving Commitments are established after giving pro forma effect to the incurrence of the entire committed amount of Indebtedness thereunder, in which case such committed amount under such Designated Revolving Commitments may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this subclause) and after giving pro forma effect thereto and the application of the net proceeds therefrom, the Senior Secured Net Leverage Ratio for the Test Period immediately preceding the incurrence of such Lien would be no greater than 3.50 to 1.00

For purposes of this definition, the term “Indebtedness” shall be deemed to include interest on such Indebtedness.

Person ” means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

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

Private Placement Legend ” means the legend set forth in Section 2.06(g)(i) hereof to be placed on all Notes issued under this Indenture, except where otherwise permitted by the provisions of this Indenture.

Public Company Costs ” means the initial costs relating to establishing compliance with the Sarbanes-Oxley Act of 2002, as amended, and other expenses arising out of or incidental to the Issuer’s or its Restricted Subsidiaries’ initial establishment of compliance with the obligations of a reporting company, including costs, fees and expenses (including legal, accounting and other professional fees) relating to compliance with provisions of the Securities Act and the Exchange Act.

 

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QIB ” means a “qualified institutional buyer” as defined in Rule 144A.

Qualified Proceeds ” means the fair market value of assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business.

Qualified Public Offering ” means the initial underwritten public offering of common Equity Interests of Holdings or any direct or indirect parent companies of Holdings, in each case, pursuant to an effective registration statement filed with the SEC in accordance with the Securities Act (other than a registration statement on Form S-8 or any successor form) generating gross proceeds to the Issuer of not less than $150,000,000.

Qualified Securitization Facility ” means any Securitization Facility (1) constituting a securitization financing facility that meets the following conditions: (a) the Board of Directors shall have determined in good faith that such Securitization Facility (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to the Issuer and the applicable Restricted Subsidiary or Securitization Subsidiary and (b) all sales and/or contributions of Securitization Assets and related assets to the applicable Person or Securitization Subsidiary are made at fair market value (as determined in good faith by the Issuer) or (2) constituting a receivables financing facility.

Rating Agencies ” means Moody’s and S&P or if Moody’s or S&P or both shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Issuer which shall be substituted for Moody’s or S&P or both, as the case may be.

Record Date ” for the interest payable on any applicable Interest Payment Date means the February 15 and August 15 (whether or not a Business Day) immediately preceding such Interest Payment Date.

Refinancing Indebtedness ” means (x) Indebtedness incurred by the Issuer or any Restricted Subsidiary, (y) Disqualified Stock issued by the Issuer or any Restricted Subsidiary or (z) Preferred Stock issued by any Restricted Subsidiary which, in each case, serves to extend, replace, refund, refinance, renew or defease any Indebtedness, Disqualified Stock or Preferred Stock, including Refinancing Indebtedness, so long as:

(1) the principal amount (or accreted value, if applicable) of such new Indebtedness, the amount of such new Preferred Stock or the liquidation preference of such new Disqualified Stock does not exceed the principal amount of (or accreted value, if applicable), plus any accrued and unpaid interest on, the Indebtedness, the amount of, plus any accrued and unpaid dividends on, the Preferred Stock or the liquidation preference of, plus any accrued and unpaid dividends on, the Disqualified Stock being so extended, replaced, refunded, refinanced, renewed or defeased (such Indebtedness, Disqualified Stock or Preferred Stock, the “ Refinanced Debt ”), plus the amount of any tender premium or penalty or premium required to be paid under the terms of the instrument or documents governing such Refinanced Debt and any defeasance costs and any fees and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness, Preferred Stock or Disqualified Stock or the extension, replacement, refunding, refinancing, renewal or defeasance of such Refinanced Debt;

(2) such Refinancing Indebtedness has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred that is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, refunded, refinanced, renewed or defeased;

(3) such Refinancing Indebtedness has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Indebtedness, Preferred Stock or Disqualified Stock being so extended, replaced, refunded, refinanced, renewed or defeased (or, if earlier, the date that is 91 days after the maturity date of the Notes); and

 

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(4) to the extent such Refinancing Indebtedness extends, replaces, refunds, refinances, renews or defeases (i) Subordinated Indebtedness (other than Subordinated Indebtedness assumed or acquired in an acquisition and not created in contemplation thereof), such Refinancing Indebtedness is subordinated to the Notes or the Guarantees thereof at least to the same extent as the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively.

Refinancing Indebtedness shall not include Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Issuer that is not a Guarantor that refinances Indebtedness or Disqualified Stock of the Issuer; provided , that (x) clauses (2) and (3) of this definition will not apply to any extension, replacement, refunding, refinancing, renewal or defeasance of any Indebtedness other than Indebtedness incurred under clause (2) of Section 4.09(b) hereof, any Subordinated Indebtedness (other than Subordinated Indebtedness assumed or acquired in an acquisition and not created in contemplation thereof), Disqualified Stock and Preferred Stock and (y) Refinancing Indebtedness may be incurred in the form of a customary “bridge” or other interim credit facility intended to be refinanced or replaced with long-term indebtedness which does not satisfy the requirements of clauses (2) and (3) above so long as, subject to customary conditions, it would either be automatically converted into or required to be exchanged for permanent financing which satisfies the requirements of clauses (2) and (3) of this definition.

Regulation S ” means Regulation S promulgated under the Securities Act.

Regulation S Global Note ” means a Regulation S Temporary Global Note or Regulation S Permanent Global Note, as applicable.

Regulation S Permanent Global Note ” means a permanent Global Note in the form of Exhibit A attached hereto, bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Temporary Global Note upon expiration of the applicable Restricted Period.

Regulation S Temporary Global Note ” means a temporary Global Note in the form of Exhibit A attached hereto, bearing the Global Note Legend, the Private Placement Legend and the Regulation S Temporary Global Note Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903.

Regulation S Temporary Global Note Legend ” means the legend set forth in Section 2.06(g)(iii) hereof.

Related Business Assets ” means assets (other than Cash Equivalents) used or useful in a Similar Business; provided , that any assets received by the Issuer or a Restricted Subsidiary in exchange for assets transferred by the Issuer or a Restricted Subsidiary shall 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 is or would become a Restricted Subsidiary.

Responsible Officer ” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any director, vice president, assistant vice president, any trust officer or assistant trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

Restricted Definitive Note ” means a Definitive Note bearing, or that is required to bear, the Private Placement Legend.

Restricted Global Note ” means a Global Note bearing, or that is required to bear, the Private Placement Legend.

 

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

Restricted Period ” means, in respect of any Note issued pursuant to Regulation S, the 40-day distribution compliance period as defined in Regulation S applicable to such Note.

Restricted Subsidiary ” means, at any time, any direct or indirect Subsidiary of the Issuer or Opco, as applicable (including any Foreign Subsidiary) that is not then an Unrestricted Subsidiary; provided , that upon the occurrence of an Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall be included in the definition of “Restricted Subsidiary.”

Rule 144 ” means Rule 144 promulgated under the Securities Act.

Rule 144A ” means Rule 144A promulgated under the Securities Act.

Rule 903 ” means Rule 903 promulgated under the Securities Act.

Rule 904 ” means Rule 904 promulgated under the Securities Act.

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

Sale and Lease-Back Transaction ” means any arrangement providing for the leasing by the Issuer or any of its Restricted Subsidiaries of any real or tangible personal property, which property has been or is to be sold or transferred by the Issuer or such Restricted Subsidiary to a third Person in contemplation of such leasing.

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

Secured Indebtedness ” means any Indebtedness of the Issuer or any of its Restricted Subsidiaries secured by a Lien.

Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

Securitization Assets ” means (a) the accounts receivable, royalty or other revenue streams and other rights to payment and other assets related thereto subject to a Qualified Securitization Facility and the proceeds thereof and (b) contract rights, lockbox accounts and records with respect to such accounts receivable and any other assets customarily transferred together with accounts receivable in a securitization financing.

Securitization Facility ” means any of one or more receivables or securitization financing facilities, as amended, supplemented, modified, extended, renewed, restated or refunded from time to time, the Obligations of which are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities) to the Issuer or any of its Restricted Subsidiaries (other than a Securitization Subsidiary) pursuant to which the Issuer or any of its Restricted Subsidiaries sells or grants a security interest in its accounts receivable or Securitization Assets or assets related thereto to either (a) a Person that is not a Restricted Subsidiary or (b) a Securitization Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.

Securitization 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 and expenses (including reasonable fees and expenses of legal counsel) paid to a Person that is not a Securitization Subsidiary in connection with, any Qualified Securitization Facility.

Securitization Subsidiary ” means any Subsidiary formed for the purpose of, and that solely engages only in one or more Qualified Securitization Facilities and other activities reasonably related thereto.

 

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Senior Credit Facilities ” means, collectively, the senior secured term loan facility and the senior secured revolving facility under that certain Second Amended and Restated Credit Agreement, dated on or about October 24, 2012, among Opco, Holdings, the Restricted Subsidiaries party thereto, Bank of America, N.A., as the administrative agent, and the lenders and other entities party thereto, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings, refinancings or replacements thereof and any one or more indentures or credit facilities or commercial paper facilities with banks or other institutional lenders, or investors, whether or not secured, that replace, refund, supplement or refinance any part of the loans, notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof ( provided , that such increase in borrowings is permitted under Section 4.09 hereof) or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, trustee, lender or group of lenders or holders.

Senior Notes Exchange Offer ” means the offer to issue the Senior Exchange Notes in exchange for the Existing Senior Notes as described in the offering circular and consent solicitation statement of Opco dated as of October 10, 2012 (as amended, supplemented or modified from time to time).

Senior Exchange Notes ” means the up to $1,000,000,000 in aggregate principal amount of Opco’s 12  1 / 2 % Senior Unsecured Exchange Notes due 2018 issued or to be issued under the Senior Exchange Notes Indenture.

Senior Exchange Notes Indenture ” means the indenture for the Senior Exchange Notes, dated as of October 24, 2012 between Opco and U.S. Bank National Association, as trustee, as amended, supplemented or modified from time to time.

Senior Indebtedness ” means:

(1) all Indebtedness of the Issuer or any Guarantor outstanding under the Notes and related Guarantees, if any (including interest accruing on or after the filing of any petition in bankruptcy or similar proceeding or for reorganization of the Issuer or any Guarantor (at the rate provided for in the documentation with respect thereto, regardless of whether or not a claim for post-filing interest is allowed in such proceedings)), and any and all other fees, expense reimbursement obligations, indemnification amounts, penalties, and other amounts (whether existing on the Issue Date or thereafter created or incurred) and all obligations of the Issuer or any Guarantor to reimburse any bank or other Person in respect of amounts paid under letters of credit, acceptances or other similar instruments;

(2) all (x) Hedging Obligations (and guarantees thereof) and (y) obligations in respect of Cash Management Services (and guarantees thereof), in each case, of the Issuer or any Guarantor; provided that such Hedging Obligations and obligations in respect of Cash Management Services, as the case may be, are permitted to be incurred under the terms of this Indenture;

(3) any other Indebtedness of the Issuer or any Guarantor permitted to be incurred under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is subordinated in right of payment to the Notes or any related Guarantee; and

(4) all Obligations with respect to the items listed in the preceding clauses (1), (2) and (3);

provided , that Senior Indebtedness shall not include:

(a) any obligation of such Person to the Issuer or any of its Subsidiaries;

(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 arising in the ordinary course of business;

 

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(d) any Indebtedness or other Obligation of such Person which is subordinate or junior in any respect to any other Indebtedness or other Obligation of such Person; or

(e) that portion of any Indebtedness which at the time of incurrence is incurred in violation of this Indenture.

Senior Secured Net Leverage Ratio ” means, with respect to any Test Period, the ratio of (a) Consolidated Total Debt of the Issuer outstanding on the last day of such Test Period that is secured by a Lien on any property of the Issuer or any Restricted Subsidiary (other than property or assets held in a defeasance or similar trust or arrangement for the benefit of the Indebtedness secured thereby) minus an aggregate amount of cash and cash equivalents included in the consolidated balance sheet of the Issuer as of such date, excluding cash and cash equivalents which are listed as “Restricted” on such balance sheet, to (b) EBITDA of the Issuer for such Test Period, in each case on a pro forma basis with such pro forma adjustments as are appropriate and consistent with the pro forma provisions set forth in the definition of Fixed Charge Coverage Ratio.

Significant Subsidiary ” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X of the SEC, as such regulation is in effect on the Issue Date.

Similar Business ” means (1) any business conducted or proposed to be conducted by the Issuer or any of its Restricted Subsidiaries on the Issue Date or (2) any business or other activities that are reasonably similar, ancillary, incidental, complementary or related to, or a reasonable extension, development or expansion of, the businesses in which the Issuer and its Restricted Subsidiaries conduct or propose to conduct on the Issue Date.

Specified Legal Expenses ” means, to the extent not constituting an extraordinary, non-recurring or unusual loss, charge or expense, all attorneys’ and experts’ fees and expenses and all other costs, liabilities (including all damages, penalties, fines and indemnification and settlement payments) and expenses paid or payable in connection with any threatened, pending, completed or future claim, demand, action, suit, proceeding, inquiry or investigation (whether civil, criminal, administrative, governmental or investigative) either (i) arising from, or related to, facts and circumstances existing on or prior to the Issue Date or (ii) arising out of or related to antitrust, Federal Trade Commission or Department of Justice proceedings or securities law (other than in connection with the Transactions).

Specified Transaction ” means (t) solely for the purposes of determining the applicable cash balance, any contribution of capital, including as a result of an Equity Offering, to the Issuer, in each case, in connection with an acquisition or Investment, (u) any designation of operations or assets of the Issuer or a Restricted Subsidiary as discontinued operations (as defined under GAAP) (other than held-for-sale discontinued operations until actually disposed of), (v) any Investment that results in a Person becoming a Restricted Subsidiary, (w) any designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary in compliance with this Indenture, (x) any purchase or other acquisition of a business of any Person, of assets constituting a business unit, line of business or division of any Person, (y) any Asset Sale (i) that results in a Restricted Subsidiary ceasing to be a Subsidiary of the Issuer or (ii) of a business, business unit, line of business or division of the Issuer or a Restricted Subsidiary, in each case whether by merger, amalgamation, consolidation or otherwise or (z) other Restricted Payment that by the terms of this Indenture requires a financial ratio to be calculated on a pro forma basis.

Subordinated Indebtedness ” means, with respect to the Notes,

(1) any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the Notes, and

(2) any Indebtedness of any Guarantor which is by its terms subordinated in right of payment to the Guarantee of such entity of the Notes.

 

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Subsidiary ” means, with respect to any Person:

(1) any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50.0% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, members of management or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof; and

(2) any partnership, joint venture, limited liability company or similar entity of which:

(a) more than 50.0% of the capital accounts, distribution rights, total equity and voting interests or general or 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 or otherwise, and

(b) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

Test Period ” means, with respect to any Person, such Person’s most recently ended four fiscal quarters for which internal financial statements are available (as determined in good faith by such Person).

Total Assets ” means the total assets of the Issuer and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as shown on the most recent balance sheet of the Issuer or such other Person as may be expressly stated (and, in the case of any determination relating to any incurrence of Indebtedness or any Investment or other acquisition, on a pro forma basis including any property or assets being acquired in connection therewith).

Total Net Leverage Ratio ” means, with respect to any Person for any Test Period, the ratio of (a) Consolidated Total Debt outstanding on the last day of such Test Period minus an aggregate amount of cash and cash equivalents included in the consolidated balance sheet of such Person as of such date, excluding cash and cash equivalents which are listed as “Restricted” on such balance sheet, to (b) EBITDA of such Person for such Test Period, in each case on a pro forma basis 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.

TPG ” means TPG Capital, L.P.

TPG Group ” means TPG and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt their portfolio companies or other operating companies affiliated with TPG).

Transaction Expenses ” means any fees, expenses, costs or charges incurred or paid by the Investors, any direct or indirect parent of the Issuer, the Issuer or any Restricted Subsidiary in connection with the Transactions, including expenses in connection with hedging transactions, if any, payments to officers, employees and directors as change of control payments, severance payments, special or retention bonuses, charges for repurchase or rollover of, or modifications to, stock options and/or restricted stock and charges related to the crediting of additional restricted stock units.

Transactions ” means the transactions consummated on February 26, 2010 pursuant to the Acquisition Agreement, the issuance of the 2018 Notes under the 2018 Notes Indenture, and the initial borrowings under the Credit Facilities and the other transactions contemplated thereby.

Treasury Rate ” means, as of any Redemption Date, the yield to maturity as of such Redemption Date 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 the

 

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Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to September 1, 2014; provided , that if the period from the Redemption Date to such date is less than one year, the weekly average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year will be used.

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

Trustee ” means Wells Fargo Bank, National Association, as trustee, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

Uniform Commercial Code ” means the Uniform Commercial Code or any successor provision thereof as the same may from time to time be in effect in the State of New York.

Unrestricted Definitive Note ” means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend.

Unrestricted Global Note ” means a permanent Global Note, substantially in the form of Exhibit A attached hereto, that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing Notes that do not bear the Private Placement Legend.

Unrestricted Subsidiary ” means:

(1) any Subsidiary of the Issuer which at the time of determination is an Unrestricted Subsidiary (as designated by the Issuer, as provided below); and

(2) any Subsidiary of an Unrestricted Subsidiary.

The Issuer may designate any Subsidiary of the Issuer (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) 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, the Issuer or any Subsidiary of the Issuer (other than solely any Subsidiary of the Subsidiary to be so designated); provided that:

(1) such designation complies with Section 4.07 hereof; and

(2) each of (a) the Subsidiary to be so designated and (b) its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any Restricted Subsidiary.

The Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such designation, no Default shall have occurred and be continuing and either: (1) if such Unrestricted Subsidiary is a Subsidiary of the Issuer (other than Opco or any of its Subsidiaries), either (x) the Issuer could incur at least $1.00 of additional Indebtedness under clause (i) of Section 4.09(a) hereof or (y) the Fixed Charge Coverage Ratio for the Issuer would be equal to or greater than such ratio for the Issuer immediately prior to such designation, in each case, on a pro forma basis taking into account such designation or (2) if such Unrestricted Subsidiary is a Subsidiary of Opco, either (x) Opco could incur at least $1.00 of additional Indebtedness under clause (ii) of Section 4.09(a) hereof or (y) the Fixed Charge Coverage Ratio for Opco would be equal to or greater than such ratio for the Issuer immediately prior to such designation, in each case, on a pro forma basis taking into account such designation.

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

 

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U.S. Person ” means a U.S. person as defined in Rule 902(k) under the Securities Act.

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, 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;

provided that for purposes of determining the Weighted Average Life to Maturity of any Indebtedness that is being extended, replaced, refunded, refinanced, renewed or defeased (the “ Applicable Indebtedness ”), the effects of any amortization or prepayments made on such Applicable Indebtedness prior to the date of the applicable extension, replacement, refunding, refinancing, renewal or defeasance shall be disregarded.

Wholly-Owned Subsidiary ” of any Person means a Subsidiary of such Person, 100.0% of the outstanding Equity Interests of which (other than directors’ qualifying shares and shares of Capital Stock of Foreign Subsidiaries issued to foreign nationals as required under applicable law) shall at the time be owned by such Person and/or by one or more Wholly-Owned Subsidiaries of such Person.

SECTION 1.02. Other Definitions .

 

Term

   Defined in
Section

“Acceptable Commitment”

   4.10

“Affiliate Transaction”

   4.11

“Applicable Amount”

   Exhibit A

“Applicable Premium Deficit”

   8.04

“Asset Sale Offer”

   4.10

“Authentication Order”

   2.02

“Cash Interest”

   Exhibit A

“Change of Control Offer”

   4.14

“Change of Control Payment”

   4.14

“Change of Control Payment Date”

   4.14

“Covenant Defeasance”

   8.03

“Covenant Suspension Event”

   4.16

“Determination Date”

   Exhibit A

“DTC”

   2.03

“Event of Default”

   6.01

“Excess Proceeds”

   4.10

“Fixed Charge Coverage Ratio Test”

   4.09

“incur” and “incurrence”

   4.09

“Interest Period”

   Exhibit A

“Legal Defeasance”

   8.02

“Note Register”

   2.03

“Offer Amount”

   3.09

“Offer Period”

   3.09

“Pari Passu Indebtedness”

   4.10

“Paying Agent”

   2.03

“PIK Interest”

   Exhibit A

“PIK Notes”

   2.01

 

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Term

   Defined in
Section

“PIK Notice”

   Exhibit A

“PIK Payment”

   2.01

“Purchase Date”

   3.09

“Redemption Date”

   3.01

“Refunding Capital Stock”

   4.07

“Registrar”

   2.03

“Restricted Payments”

   4.07

“Reversion Date”

   4.16

“Second Commitment”

   4.10

“Successor Company”

   5.01

“Successor Person”

   5.01

“Suspended Covenants”

   4.16

“Suspension Date”

   4.16

“Suspension Period”

   4.16

“Transfer Agent”

   2.03

“Treasury Capital Stock”

   4.07

SECTION 1.03. Incorporation by Reference of Trust Indenture Act . Whenever this Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Indenture.

The following Trust Indenture Act terms, if used in this Indenture, have the following meanings:

“indenture securities” means the Notes and the Guarantees;

“indenture security Holder” means a Holder of a Note;

“indenture trustee” or “institutional trustee” means the Trustee; and

“obligor” on the Notes and the Guarantees means the Issuer and the Guarantors (if any), respectively, and any successor obligor upon the Notes and the Guarantees (if any), respectively.

All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by SEC rule under the Trust Indenture Act have the meanings so assigned to them. For the avoidance of doubt, the Issuer shall not be required to qualify this Indenture under the Trust Indenture Act.

SECTION 1.04. Rules of Construction . Unless the context otherwise requires:

(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) the words “including,” “includes” and similar words shall be deemed to be followed by without limitation;

(e) words in the singular include the plural, and in the plural include the singular;

(f) “will” shall be interpreted to express a command;

 

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(g) provisions apply to successive events and transactions;

(h) references to sections of, or rules under, the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

(i) unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Indenture;

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

(k) the principal amount of any Preferred Stock at any time shall be (i) the maximum liquidation value of such Preferred Stock at such time or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock at such time, whichever is greater;

(l) words used herein implying any gender shall apply to both genders;

(m) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including”; and

(o) the principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Issuer dated such date prepared in accordance with GAAP.

SECTION 1.05. Acts of Holders .

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Proof of execution of any such instrument or of a writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01 hereof) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 1.05.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

(c) The ownership of Notes shall be proved by the Note Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

(e) The Issuer may set a record date for purposes of determining the identity of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders. Unless otherwise specified,

 

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if not set by the Issuer prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such vote, prior to such vote, any such record date shall be the later of 10 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee prior to such solicitation.

(f) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.

(g) Without limiting the generality of the foregoing, a Holder, including DTC, that is a Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and any Person, that is a Holder of a Global Note, including DTC, may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through such Depositary’s standing instructions and customary practices.

(h) The Issuer may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note held by DTC entitled under the procedures of such Depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action shall be valid or effective if made, given or taken more than 90 days after such record date.

ARTICLE II

THE NOTES

SECTION 2.01. Form and Dating; Terms .

(a) General . The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A attached hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rules or usage. Each Note shall be dated the date of its authentication. Subject to the making of PIK Payments as described herein, the Notes shall be issued initially in minimum denominations of $2,000 and any integral multiple of $1,000 in excess of $2,000. PIK Payments on the Notes will be made in denominations of $1.00 and any integral multiple of $1.00 in excess thereof.

(b) Global Notes . Notes issued in global form shall be substantially in the form of Exhibit A attached hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified in the “Schedule of Exchanges of Interests in the Global Note” attached thereto and each shall provide that it shall represent up to the aggregate principal amount of Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as applicable, to reflect exchanges and redemptions and increased to reflect the making of payments of PIK Interest. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.

 

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(c) Temporary Global Notes . Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Custodian and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.

Following (i) the termination of the applicable Restricted Period and (ii) the receipt by the Trustee of (A) a certification or other evidence in a form reasonably acceptable to the Issuer of non-United States beneficial ownership of 100% of the aggregate principal amount of each Regulation S Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who shall take delivery of a beneficial ownership interest in a 144A Global Note or an IAI Global Note bearing a Private Placement Legend, all as contemplated by Section 2.06(b) hereof) and (B) an Officer’s Certificate from the Issuer, the Trustee shall remove the Regulation S Temporary Global Note Legend from the Regulation S Temporary Global Note, following which temporary beneficial interests in the Regulation S Temporary Global Note shall automatically become beneficial interests in the Regulation S Permanent Global Note pursuant to the Applicable Procedures.

The aggregate principal amount of a Regulation S Temporary Global Note and a Regulation S Permanent Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.

(d) Terms . The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited.

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Issuer and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

The Notes shall be subject to repurchase by the Issuer pursuant to an Asset Sale Offer as provided in Section 4.10 hereof or a Change of Control Offer as provided in Section 4.14 hereof. The Notes shall not be redeemable, other than as provided in Article III hereof.

Additional Notes ranking pari passu with the Initial Notes may be created and issued from time to time by the Issuer without notice to or consent of the Holders and shall be consolidated with and form a single class with the Initial Notes and shall have the same terms as to status, redemption or otherwise as the Initial Notes except that interest may accrue on the Additional Notes from their date of issuance (or such other date specified by the Issuer); provided that the Issuer’s ability to issue Additional Notes shall be subject to the Issuer’s compliance with Section 4.09 hereof. Any Additional Notes shall be issued with the benefit of an indenture supplemental to this Indenture.

(e) PIK Notes . In connection with the payment of PIK Interest in respect of the Notes, the Issuer may, without the consent of the Holders and without regard to any restrictions or limitations set forth in Section 4.09 hereof, elect to either increase the outstanding principal amount of the Notes or issue additional certificated Notes (“ PIK Notes ”) under this Indenture on the same terms and conditions as the Initial Notes (in each case, a “ PIK Payment ”). The Notes and any Additional Notes and PIK Notes subsequently issued under this Indenture, will be treated as a single class for all purposes under this Indenture, including waivers, amendments, redemptions and offers to purchase; provided , however , that if any such Additional Notes are not fungible with the Notes (including any outstanding PIK Notes), such Additional Notes shall have a different CUSIP number (or other applicable identifying number). Unless the context requires otherwise, references to “Notes” for all purposes of this Indenture shall include any Additional Notes and PIK Notes that are actually issued, and references to “principal amount” of the Notes include any increase in the principal amount of the outstanding Notes (including PIK Notes) as a result of the issuance of Additional Notes and any PIK Payment. PIK Notes will be issued in minimum denominations of $1.00 and integral multiples of $1.00 in excess thereof.

(f) Euroclear and Clearstream Applicable Procedures . The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and

 

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Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes that are held by Participants through Euroclear or Clearstream and this Indenture shall not govern such transfers.

SECTION 2.02. Execution and Authentication . At least one Officer shall execute the Notes on behalf of the Issuer by manual, facsimile or electronic (in “.pdf” format) signature.

If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall nevertheless be valid.

A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated substantially in the form of Exhibit A attached hereto, by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been duly authenticated and delivered under this Indenture.

On the Issue Date, the Trustee shall, upon receipt of an Issuer’s Order (an “ Authentication Order ”), authenticate and deliver the Initial Notes in the aggregate principal amount or amounts specified in such Authentication Order. In addition, at any time, from time to time, the Trustee shall, upon receipt of an Authentication Order, authenticate and deliver any (i) Additional Notes for an aggregate principal amount specified in such Authentication Order for such Additional Notes issued or increased hereunder and (ii) PIK Notes for an aggregate principal amount specified by the Issuer in the applicable PIK Notice.

The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Notes. An authenticating agent may authenticate Notes 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 an Agent to deal with Holders or an Affiliate of the Issuer.

SECTION 2.03. Registrar, Transfer Agent and Paying Agent . The Issuer shall maintain in the United States (i) an office or agency where Notes may be presented for registration (“ Registrar ”) (ii) an office or agency where Notes may be presented for transfer or for exchange (“ Transfer Agent ”) and (iii) an office or agency where Notes may be presented for payment (“ Paying Agent ”). The Registrar shall keep a register of the Notes (“ Note Register ”) and of their transfer and exchange. The registered Holder will be treated as the owner of the Note for all purposes. Only registered Holders will have rights under this Indenture and the Notes. The Issuer may appoint one or more co-registrars, one or more co-transfer agents and one or more additional paying agents. The term “ Registrar ” includes any co-registrar, the term “ Transfer Agent ” includes any co-transfer agent and the term “ Paying Agent ” includes any additional paying agents. The Issuer may change any Paying Agent, Transfer Agent or Registrar without prior notice to any Holder. The Issuer shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar, Transfer Agent or Paying Agent, the Trustee shall act as such. The Issuer or any of its Subsidiaries may act as Paying Agent, Transfer Agent or Registrar.

The Issuer initially appoints The Depository Trust Company (“ DTC ”) to act as Depositary with respect to the Global Notes.

The Issuer initially appoints the Trustee to act as the Paying Agent, Transfer Agent and Registrar for the Notes and to act as Custodian with respect to the Global Notes.

SECTION 2.04. Paying Agent to Hold Money in Trust . The Issuer shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee for its own benefit and for the benefit of the Holders. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee for its own benefit and for the benefit of the Holders. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary or the Trustee) shall have no further liability for the money. If the Issuer or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the Notes.

 

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SECTION 2.05. 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 all Holders. If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least two 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 the Holders.

SECTION 2.06. Transfer and Exchange .

(a) Transfer and Exchange of Global Notes . Except as otherwise set forth in this Section 2.06, a Global Note may be transferred, in whole and not in part, only to another nominee of the Depositary or to a successor thereto or a nominee of such successor thereto. A beneficial interest in a Global Note may not be exchanged for a Definitive Note of the same series unless (A) the Depositary (x) notifies the Issuer that it is unwilling or unable to continue as Depositary for such Global Note or (y) has ceased to be a clearing agency registered under the Exchange Act, and, in either case, a successor Depositary is not appointed by the Issuer within 90 days, (B) the Issuer, at its option, notifies the Trustee in writing that it elects to cause the issuance of Definitive Notes and any Participant requests a Definitive Note in accordance with the Applicable Procedures (although Regulation S Temporary Global Notes at the Issuer’s election pursuant to this clause may not be exchanged for Definitive Notes prior to (1) the expiration of the applicable Restricted Period and (2) the receipt of any certificate required pursuant to Rule 903(b)(3)(ii)(B)) or (C) upon the request of the Depositary if there shall have occurred and be continuing an Event of Default with respect to the Notes. Upon the occurrence of any of the events in clauses (A), (B) or (C) above, Definitive Notes delivered in exchange for any Global Note of the same series or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures). Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note of the same series or any portion thereof, pursuant to this Section 2.06 or Sections 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note, except for Definitive Notes issued subsequent to any of the events in (A), (B) or (C) above and pursuant to Section 2.06(c) hereof. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); provided , however , beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.

(b) Transfer and Exchange of Beneficial Interests in the Global Notes . The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

(i) Transfer of Beneficial Interests in the Same Global Note . Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Temporary Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person other than pursuant to Rule 144A or another available exemption from the registration requirements of the Securities Act. Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i).

(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes . In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) hereof, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an

 

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amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note of the same series in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; provided that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (A) the expiration of the Restricted Period therefor and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B). Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.

(iii) Transfer of Beneficial Interests to Another Restricted Global Note . A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) hereof and the Registrar receives the following:

(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; or

(C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (3) thereof, and the transferee must furnish to the Registrar a signed letter substantially in the form of Exhibit E .

(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note . A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) hereof and the Registrar receives the following:

(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note of the same series, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or

(B) if the holder of such beneficial interest in a Restricted Global Note 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 Note of the same series, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (5) thereof;

and, in each such case set forth in this paragraph (iv), if the Registrar or the Issuer so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Issuer 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

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If any such transfer is effected pursuant to this paragraph (iv) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to this paragraph (iv) above.

Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

(c) Transfer or Exchange of Beneficial Interests for Definitive Notes .

(i) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes . If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon the occurrence of any of the events in clauses (A), (B) and (C) of Section 2.06(a) hereof and receipt by the Registrar of the following documentation:

(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;

(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;

(D) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (3) thereof, and the transferee must furnish to the Registrar a signed letter substantially in the form of Exhibit E ;

(E) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (4)(a) thereof; or

(F) if such beneficial interest is being transferred to the Issuer or any of its Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (4)(b) thereof,

the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer shall execute and the Trustee shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

(ii) Beneficial Interests in Regulation S Temporary Global Note to Definitive Notes . Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (A) the expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) of the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.

 

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(iii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes . A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only upon the occurrence of any of the events in clause (A) of Section 2.06(a) hereof and if the Registrar receives the following:

(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

(B) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder substantially in the form of Exhibit B hereto, including the certifications in item (5) thereof;

and, in each such case set forth in this paragraph (iii), if the Registrar or the Issuer so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Issuer 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

(iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes . If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon the occurrence of any of the events in clauses (A), (B) and (C) of Section 2.06(a) hereof and satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Issuer shall execute and the Trustee shall authenticate and mail to the Person designated in the instructions a Definitive Note in the applicable principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from or through the Depositary and the Participant or Indirect Participant. The Trustee shall mail such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall not bear the Private Placement Legend.

(d) Transfer and Exchange of Definitive Notes for Beneficial Interests .

(i) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes . If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;

(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

 

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(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (2) thereof;

(D) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (3) thereof, and the transferee must furnish to the Registrar a signed letter substantially in the form of Exhibit E ;

(E) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (4)(a) thereof; or

(F) if such Restricted Definitive Note is being transferred to the Issuer or any of its Subsidiaries, a certificate substantially in the form of Exhibit B hereto, including the certifications in item (4)(b) thereof,

the Trustee shall cancel the Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the applicable Restricted Global Note, in the case of clause (B) above, the applicable 144A Global Note, in the case of clause (C) above, the applicable Regulation S Global Note and, in the case of clause (D) above, the applicable IAI Global Note.

(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:

(A) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or

(B) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (5) thereof;

and, in each such case set forth in this paragraph (ii), if the Registrar or the Issuer so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Issuer 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes . A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.

If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (ii) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue

 

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and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.

(e) Transfer and Exchange of Definitive Notes for Definitive Notes . Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer or exchange 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 2.06(e):

(i) Restricted Definitive Notes to Restricted Definitive Notes . Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:

(A) if the transfer will be made to a QIB in accordance with Rule 144A, then the transferor must deliver a certificate substantially in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof;

(C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (3) thereof, and the transferee must furnish to the Registrar a signed letter substantially in the form of Exhibit E ; or

(D) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications required by item (4) thereof, if applicable.

(ii) Restricted Definitive Notes to Unrestricted Definitive Notes . Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if the Registrar receives the following:

(A) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or

(B) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder substantially in the form of Exhibit B hereto, including the certifications in item (5) thereof; and, in each such case set forth in this paragraph (ii), if the Registrar or the Issuer so requests, an Opinion of Counsel in form reasonably acceptable to the Issuer 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 Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes . A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

 

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(f) [Reserved]

(g) Legends . The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture:

(i) Private Placement Legend .

(A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

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. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF 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 NOTES 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) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) 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 THAT PURCHASES 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, (C) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER AND THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF SECURITIES OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C), (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. 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.]

 

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BY ACQUIRING THIS SECURITY OR ANY INTEREST THEREIN, EACH HOLDER AND EACH TRANSFEREE IS DEEMED TO REPRESENT, WARRANT AND AGREE THAT AT THE TIME OF ITS ACQUISITION AND THROUGHOUT THE PERIOD THAT IT HOLDS THIS SECURITY OR ANY INTEREST THEREIN (1) EITHER (A) IT IS NOT ACQUIRING THE SECURITY OR ANY INTEREST THEREIN FOR OR ON BEHALF OF (AND FOR SO LONG AS IT HOLDS THIS SECURITY OR ANY INTEREST THEREIN WILL NOT BE AND WILL NOT BE ACTING ON BEHALF OF) (I) ANY EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) THAT IS SUBJECT TO TITLE I OF ERISA, (II) ANY “PLAN” (AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (“CODE”)) THAT IS SUBJECT TO SECTION 4975 OF THE CODE (INCLUDING AN INDIVIDUAL RETIREMENT ARRANGEMENT UNDER SECTION 408 OF THE CODE), OR (III) ANY ENTITY OF WHICH THE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY PLANS DESCRIBED IN THE FOREGOING CLAUSES (I) OR (II) (AS DETERMINED PURSUANT TO U.S. DEPARTMENT OF LABOR REGULATIONS, AS MODIFIED BY SECTION 3(42) OF ERISA), OR (IV) ANY PLAN, SUCH AS A FOREIGN PLAN, GOVERNMENTAL PLAN (AS DEFINED IN SECTION 3(32) OF ERISA) OR CHURCH PLAN (AS DEFINED IN SECTION 3(33) OF ERISA) THAT IS NOT SUBJECT TO TITLE I OF ERISA, BUT THAT IS SUBJECT TO ANY FEDERAL, STATE, LOCAL, FOREIGN OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE (EACH, A “SIMILAR LAW”), OR (B) THE ACQUISITION, HOLDING AND DISPOSITION OF THIS SECURITY OR ANY INTEREST THEREIN WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A VIOLATION UNDER ANY PROVISION OF A SIMILAR LAW; AND (2) IT WILL NOT SELL OR OTHERWISE TRANSFER THIS SECURITY OR ANY INTEREST THEREIN OTHER THAN TO A PURCHASER OR TRANSFEREE THAT IS DEEMED TO MAKE THESE SAME REPRESENTATIONS, WARRANTIES AND AGREEMENTS WITH RESPECT TO ITS ACQUISITION, HOLDING AND DISPOSITION OF THIS SECURITY.

(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii) or (e)(iii) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.

(ii) Global Note Legend . Each Global Note shall bear a legend in substantially the following form (with appropriate changes in the last sentence if DTC is not the Depositary):

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(h) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“ DTC ”) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR

 

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PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.

(iii) Regulation S Temporary Global Note Legend . The Regulation S Temporary Global Note shall bear a legend in substantially the following form:

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT. 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.

(iv) OID Legend . Each Note that has more than a de minimus amount of original issue discount for U.S. federal income tax purposes shall bear a legend in substantially the following form:

THIS NOTE HAS BEEN ISSUED WITH “ORIGINAL ISSUE DISCOUNT” (WITHIN THE MEANING OF SECTION 1272 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED) FOR U.S. FEDERAL INCOME TAX PURPOSES. UPON WRITTEN REQUEST, THE ISSUER WILL PROMPTLY MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE THE FOLLOWING INFORMATION: (1) THE ISSUE PRICE AND DATE OF THE NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE AND (3) THE YIELD TO MATURITY OF THE NOTE. HOLDERS SHOULD CONTACT THE CHIEF FINANCIAL OFFICER OF THE ISSUER AT 83 WOOSTER HEIGHTS ROAD, DANBURY, CONNECTICUT 06810.

(h) Cancellation and/or Adjustment of Global Notes . At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or cancelled in whole and not in part, each such Global Note shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary 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 Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

(i) General Provisions Relating to Transfers and Exchanges .

(i) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.

 

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(ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuer shall require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.07, 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).

(iii) The Issuer shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the mailing of a notice of redemption of the Notes to be redeemed under Section 3.03 hereof and ending at the close of business on the day of such mailing, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part, (C) to register the transfer of or to exchange a Note between a Record Date and the next succeeding Interest Payment Date or (D) to register the transfer of or to exchange any Notes tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer or an Asset Sale Offer.

(iv) Neither the Registrar nor the Issuer shall be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(v) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer shall deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of (and premium, if any) and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.

(vii) Upon surrender for registration of transfer of any Note at the office or agency of the Issuer designated pursuant to Section 4.02 hereof, the Issuer shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or transferees, one or more replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.

(viii) At the option of the Holder, subject to Section 2.06(a) hereof, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and mail, the replacement Global Notes and Definitive Notes to which the Holder making the exchange is entitled in accordance with Section 2.02 hereof.

(ix) All certifications, certificates and Opinions of Counsel required to be submitted to the Issuer pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

(x) 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 Note (including any transfers between or among Depositary Participants or beneficial owners of interests in any Global Notes) 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.

(xi) Neither the Trustee nor any Agent shall have any responsibility or liability for any actions taken or not taken by the Depositary.

SECTION 2.07. Replacement Notes . If either (x) any mutilated Note is surrendered to the Trustee, the Registrar or the Issuer or (y) the Issuer and the Trustee receive evidence to their satisfaction of the ownership and destruction, loss or theft of any Note, then the Issuer shall issue and the Trustee, upon receipt of an Authentication

 

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Order, shall authenticate a replacement Note. An indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer and the Trustee may charge the Holder for their expenses in replacing a Note.

Every replacement Note is a contractual obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

SECTION 2.08. Outstanding Notes . The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof and those described in this Section 2.08 hereof as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuer or a Guarantor or an Affiliate of the Issuer or a Guarantor holds the Note. For the avoidance of doubt, the aggregate principal amount outstanding under any Note shall include any increase in the outstanding principal amount of such Note as the result of any PIK Payment.

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser (as defined in Section 8-303 of the Uniform Commercial Code).

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

If the Paying Agent (other than the Issuer or a Guarantor or an Affiliate of the Issuer or a Guarantor) holds, on a Redemption Date or maturity date, money sufficient to pay Notes (or portions thereof) payable on that date, then on and after that date such Notes (or portions thereof) shall be deemed to be no longer outstanding and shall cease to accrue interest.

SECTION 2.09. Treasury Notes . In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer or a Guarantor or by any Affiliate of the Issuer or a Guarantor, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right to deliver any such direction, waiver or consent with respect to such pledged Notes and that the pledgee is not the Issuer or a Guarantor or any Affiliate of the Issuer or a Guarantor.

SECTION 2.10. Temporary Notes . Until certificates representing Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Issuer considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes.

Holders and beneficial holders, as the case may be, of temporary Notes shall be entitled to all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this Indenture.

SECTION 2.11. Cancellation . The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee or, at the direction of the Trustee, the Registrar or the Paying Agent and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of such cancelled Notes in accordance with its customary procedures (subject to the record retention requirement of the Exchange Act). Certification of the cancellation of all surrendered Notes shall be delivered to the Issuer at the Issuer’s written request. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.

 

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SECTION 2.12. Defaulted Interest . If the Issuer defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Issuer may pay the defaulted interest to the Persons who are Holders on a subsequent special record date. The Issuer shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12. The Trustee shall fix or cause to be fixed any such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. The Trustee shall promptly notify the Issuer of any such special record date. At least 15 days before any such special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) shall mail or cause to be mailed, first-class postage prepaid, or otherwise deliver in accordance with the Applicable Procedures, to each Holder, with a copy to the Trustee, a notice at his or her address as it appears in the Note Register that states the special record date, the related payment date and the amount of such interest to be paid.

Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.

SECTION 2.13. CUSIP/ISIN Numbers . The Issuer in issuing the Notes may use CUSIP and ISIN numbers (in each case, if then generally in use) and, if so, the Trustee shall use CUSIP and ISIN numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will as promptly as practicable notify the Trustee in writing of any change in the CUSIP and ISIN numbers.

ARTICLE III

REDEMPTION

SECTION 3.01. Notices to Trustee . If the Issuer elects to redeem the Notes pursuant to Section 3.07 hereof, it shall furnish to the Trustee, at least two Business Days (unless the Trustee agrees to a shorter period) before notice of redemption is required to be delivered to Holders pursuant to Section 3.03 hereof, an Officer’s Certificate setting forth (i) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the date of redemption (the “ Redemption Date ”), (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price.

SECTION 3.02. Selection of Notes to Be Redeemed . If less than all of the Notes are to be redeemed at any time, the Trustee shall select the Notes to be redeemed on a pro rata basis to the extent practicable, or, if the pro rata basis is not practicable for any reason, by lot or by such other method as the Trustee shall deem fair and appropriate and otherwise in accordance with the Applicable Procedures. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor (except in the event the Redemption Date is delayed as a result of any condition precedent to the occurrence thereof not being satisfied or waived by the Issuer) more than 60 days prior to the Redemption Date by the Trustee from the outstanding Notes not previously called for redemption.

The Trustee shall promptly notify the Issuer in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. No Notes of $2,000 or less (or if a PIK Payment has been made, no PIK Notes of $1.00 or less) may be redeemed in part, except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

 

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SECTION 3.03. Notice of Redemption . Subject to Section 3.09 hereof, the Issuer shall deliver electronically, mail or cause to be mailed by first-class mail, postage prepaid notices of redemption at least 30 days but not more than 60 days before the Redemption Date to each Holder of Notes to be redeemed at such Holder’s registered address or otherwise in accordance with Applicable Procedures, except that redemption notices may be delivered or mailed more than 60 days prior to a Redemption Date if the notice is (a) issued in connection with Article VIII or Article XI hereof or (b) subject to one or more conditions precedent and such Redemption Date is delayed until such time as any or all such conditions shall be satisfied (or waived by the Issuer in its sole discretion).

The notice shall identify the Notes to be redeemed and shall state:

(a) the Redemption Date;

(b) the redemption price;

(c) if any Definitive Note is to be redeemed in part only, the portion of the principal amount of that Note that is to be redeemed and that, after the Redemption Date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion of the original Note representing the same indebtedness to the extent not redeemed will be issued in the name of the Holder upon cancellation of the original Note;

(d) the name and address of the Paying Agent;

(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(f) that, unless the Issuer defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;

(g) the paragraph or subparagraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

(h) the CUSIP and ISIN number, if any, printed on the Notes being redeemed and that no representation is made as to the correctness or accuracy of any such CUSIP and ISIN number that is listed in such notice or printed on the Notes; and

(i) any condition to such redemption.

At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at its expense; provided that the Issuer shall have delivered to the Trustee, at least five Business Days before notice of redemption is required to be delivered, mailed or caused to be mailed to Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

If any redemption is subject to satisfaction of one or more conditions precedent, the notice of redemption in respect thereof shall describe each such condition, and if applicable, shall state that, in the Issuer’s discretion, the Redemption Date may be delayed until such time as any or all such conditions shall be satisfied (or waived by the Issuer in its sole discretion), or that 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 (or waived by the Issuer in its sole discretion) by the Redemption Date as stated in such notice, or by the Redemption Date as so delayed. 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.

SECTION 3.04. Effect of Notice of Redemption . Once notice of redemption is delivered in accordance with Section 3.03 hereof, subject to satisfaction of any conditions precedent relating thereto specified in the applicable notice of redemption, Notes called for redemption become irrevocably due and payable on the Redemption Date

 

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at the redemption price. The notice, if delivered, mailed or caused to be mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to deliver such notice or any defect in the notice to the Holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Subject to Section 3.05 hereof, on and after the Redemption Date, interest shall cease to accrue on Notes or portions of Notes called for redemption.

SECTION 3.05. Deposit of Redemption Price .

(a) Prior to 11:00 a.m. (New York City time) on the Redemption Date, the Issuer shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes to be redeemed on that Redemption Date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest on, all Notes to be redeemed.

(b) If the Issuer complies with the provisions of the preceding paragraph (a), on and after the Redemption Date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption. If a Note is redeemed on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest to the Redemption Date shall be paid to the Person in whose name such Note was registered at the close of business on such Record Date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Issuer to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the Redemption Date until such principal is paid, and to the extent lawful on any interest accrued to the Redemption Date not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

SECTION 3.06. Notes Redeemed in Part . Upon surrender of a Definitive Note that is redeemed in part, the Issuer shall issue and the Trustee shall authenticate for the Holder at the expense of the Issuer a new Note equal in principal amount to the unredeemed portion of the Note surrendered representing the same indebtedness to the extent not redeemed; provided , that each new Note will be in a principal amount of $2,000 and any integral multiple of $1,000 in excess of $2,000 or, in case any PIK Payment has been made, in minimum denominations of $1.00 and any integral multiple of $1.00 in excess thereof. It is understood that, notwithstanding anything in this Indenture to the contrary, only an Authentication Order and not an Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate such new Note.

SECTION 3.07. Optional Redemption .

(a) At any time prior to September 1, 2014, the Issuer may, at its option, on one or more occasions redeem all or a part of the Notes, upon notice as described under Section 3.03 hereof at a redemption price equal to the sum of (i) 100.0% of the principal amount of the Notes redeemed, plus (ii) the Applicable Premium as of the Redemption Date plus (iii) accrued and unpaid interest, if any, to the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date. Notice of any redemption, whether in connection with an Equity Offering or otherwise, may be given prior to the completion thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, if in connection with an Equity Offering, the completion of such Equity Offering.

(b) At any time prior to September 1, 2015, the Issuer may, at its option and on one or more occasions, redeem up to 100.0% of the aggregate principal amount of Notes (including any Additional Notes and PIK Notes issued after the Issue Date) with the aggregate principal amount of Notes to be redeemed (the “ Equity Offering Redemption Amount ”) not to exceed an amount equal to the aggregate gross proceeds from one or more Equity Offerings, at a redemption price equal to (i) prior to September 1, 2014, 102.0% of the aggregate principal amount thereof and (ii) from September 1, 2014 to September 1, 2015, 101.0% of the aggregate principal amount thereof, in each case, plus accrued and unpaid interest, if any, to the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date; provided , that each such redemption occurs within 180 days of the date of closing of each such Equity Offering; and provided , further , that an amount equal to or exceeding the applicable Equity Offering Redemption Amount shall be received by, or contributed to the capital of, the Issuer or any Restricted Subsidiary.

 

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(c) Except pursuant to clause (a), (b) or (e) of this Section 3.07, the Notes will not be redeemable at the Issuer’s option prior to September 1, 2014.

(d) On and after September 1, 2014, the Issuer may, at its option redeem the Notes, in whole or in part, on one or more occasions, upon notice in accordance with Section 3.03 hereof at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, to the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on September 1 of each of the years indicated below:

 

Year

   Percentage  

2014

     102.000

2015

     101.000

2016 and thereafter

     100.000

(e) If Holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer, purchases all of the Notes validly tendered and not withdrawn by such Holders, the Issuer or such third party will have the right, upon prior notice given not more than 30 days following such purchase pursuant to such Change of Control Offer, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to 101.0% of the principal amount thereof plus accrued and unpaid interest to but excluding the Redemption Date.

(f) Any redemption pursuant to this Section 3.07 shall be made pursuant to Sections 3.01 through 3.06 hereof.

(g) In addition to any redemption pursuant to this Section 3.07, the Issuer or its Affiliates may at any time and from time to time purchase Notes. Any such purchases may be made through open market purchases or privately negotiated transactions or pursuant to one or more tender offers or otherwise, upon such terms and conditions and at such prices or other consideration as the Issuer or any such Affiliate may determine.

SECTION 3.08. Mandatory Redemption . The Issuer will not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

SECTION 3.09. Offers to Repurchase by Application of Excess Proceeds .

(a) In the event that, pursuant to Section 4.10 hereof, the Issuer shall be required to commence an Asset Sale Offer, it shall follow the procedures specified below.

(b) The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, 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 ”), the Issuer shall apply all Excess Proceeds (the “ Offer Amount ”) to the purchase of Notes and, if required, Pari Passu Indebtedness (on a pro rata basis, if applicable), or, if less than the Offer Amount has been tendered, all Notes and Pari Passu Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

(c) If the Purchase Date is on or after a Record Date and on or before the related Interest Payment Date, any accrued and unpaid interest, up to but excluding the Purchase Date, shall be paid to the Person in whose name a Note is registered at the close of business on such Record Date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

 

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(d) Upon the commencement of an Asset Sale Offer, the Issuer shall deliver electronically or send, by first-class mail, postage prepaid, a notice to each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders and holders of such Pari Passu Indebtedness. The notice, which shall govern the terms of the Asset Sale Offer, shall state:

(i) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open;

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

(iii) that any Note not tendered or accepted for payment shall continue to accrue interest;

(iv) that, unless the Issuer defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest on and after the Purchase Date;

(v) that any Holder electing to have less than all of the aggregate principal amount of its Notes purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in an amount not less than $2,000 and integral multiples of $1,000 in excess thereof or, in case any PIK Payment has been made, in minimum denominations of $1.00 and any integral multiple of $1.00 in excess thereof;

(vi) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Note completed, or transfer such Note by book-entry transfer, to the Issuer, the Depositary, if appointed by the Issuer, or a Paying Agent at the address specified in the notice at least two Business Days before the Purchase Date;

(vii) that Holders shall be entitled to withdraw their election if the Issuer, the Depositary 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 Note the Holder delivered for purchase and a statement that such Holder is withdrawing its election to have such Note purchased;

(viii) that, if the aggregate principal amount of Notes and Pari Passu Indebtedness surrendered by the holders thereof exceeds the Offer Amount, the Trustee shall select the Notes to be purchased in accordance with Section 3.02 and the Issuer shall select such Pari Passu Indebtedness to be purchased pursuant to the terms of such Pari Passu Indebtedness; provided that as between the Notes and any Pari Passu Indebtedness, such purchases will be made on a pro rata basis based on the accreted value or principal amount of the Notes or such Pari Passu Indebtedness tendered with adjustments as necessary so that no Notes or Pari Passu Indebtedness will be repurchased in part in an unauthorized denomination; and

(ix) that Holders whose certificated Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) representing the same indebtedness to the extent not repurchased.

(e) On or before the Purchase Date, the Issuer shall, to the extent lawful, (1) accept for payment, on a pro rata basis as described in clause (d)(viii) of this Section 3.09, the Offer Amount of Notes or portions thereof validly tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to be delivered to the Trustee the Notes properly accepted, together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof so tendered.

(f) The Issuer, the Depositary or the Paying Agent, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes properly tendered by such Holder and accepted by the Issuer for purchase, and the Issuer shall promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and mail or deliver (or cause to be transferred by book-entry) such new

 

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Note to such Holder (it being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officer’s Certificate is required for the Trustee to authenticate and mail or deliver such new Note) in a principal amount equal to any unpurchased portion of the Note surrendered representing the same indebtedness to the extent not repurchased. Any Note not so accepted shall be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer shall publicly announce the results of the Asset Sale Offer on or as soon as practicable after the Purchase Date.

(g) Prior to 11:00 a.m. (New York City time) on the Purchase Date, the Issuer shall deposit with the Trustee or with the Paying Agent money sufficient to pay the purchase price of and accrued and unpaid interest on all Notes to be purchased on that purchase date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the purchase price of, and accrued and unpaid interest on, all Notes to be redeemed.

Other than as specifically provided in this Section 3.09 or Section 4.10 hereof, any purchase pursuant to this Section 3.09 shall be made pursuant to the applicable provisions of Sections 3.01 through 3.06 hereof, and references therein to “redeem,” “redemption,” “Redemption Date” and similar words shall be deemed to refer to “purchase,” “repurchase,” “Purchase Date” and similar words, as applicable.

ARTICLE IV

COVENANTS

SECTION 4.01. Payment of Notes . The Issuer shall pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes and this Indenture. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Issuer or an Affiliate of the Issuer, holds as of 11:00 a.m. New York City time on the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due; provided that, if the Issuer elect to pay interest in the form of PIK Interest in the manner provided for herein and in the Notes, then all such interest paid in the form of PIK Interest shall be considered paid or duly provided for, for all purposes of this Indenture, and shall not be considered overdue.

The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the Notes to the extent lawful; the Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful.

SECTION 4.02. Maintenance of Office or Agency . The Issuer shall maintain the offices or agencies (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or Transfer Agent) required under Section 2.03 hereof where Notes may be surrendered for registration of transfer or for exchange or presented for payment and where notices and demands to or upon the Issuer in respect of the Notes 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.

The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain such offices or agencies as required by Section 2.03 hereof for such purposes. 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.

The Issuer hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Issuer in accordance with Section 2.03 hereof.

 

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SECTION 4.03. Reports and Other Information .

(a) Notwithstanding that the Issuer may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Issuer shall furnish to the Trustee and Holders of the Notes (without exhibits) or post on its website (which may be password protected so long as the password is made promptly available by the Issuer to the Holders, research analysts and prospective purchasers upon request) no later than 15 days after the dates specified below:

(1) within 90 days after the end of each fiscal year (beginning with the fiscal year ending after the Issue Date), annual reports, containing substantially all of the information required to be contained in an Annual Report on Form 10-K if the Issuer had been a reporting company under the Exchange Act (but only to the extent similar information is included in the Offering Memorandum); provided , that the Issuer shall not be required to provide the information otherwise required to be presented by reporting companies under the Exchange Act pursuant to Part III of Form 10-K except for such information as would be required by Item 401 of Regulation S-K (other than the information required by subsections (c) and (g) of such item), Item 403(a) of Regulation S-K and Item 404 of Regulation S-K (assuming a transaction threshold of $2,000,000 rather than $120,000 and other than information with respect to employment and compensation arrangements and the information required by Item 404(b));

(2) within 45 days after the end of each of the first three fiscal quarters of each fiscal year, reports containing substantially all of the information required to be contained in a Quarterly Report on Form 10-Q if the Issuer had been a reporting company under the Exchange Act (but only to the extent similar information is included in this offering memorandum); and

(3) within the later of 15 days after the occurrence of the specified event or within five (5) Business Days of the date on which an event would have been required to be reported on a Form 8-K (as in effect on the Issue Date), information pursuant to Items 1.01 (Entry into a Material Definitive Agreement), 1.02 (Termination of a Material Definitive Agreement), 1.03 (Bankruptcy or Receivership), 2.01 (Completion of Acquisition or Disposition of Assets), 2.04 (Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement), 2.06 (Material Impairment), 4.01 (Changes in Registrant’s Certifying Accountants), 4.02 (Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review), 5.01 (Changes in Control of Registrant) 5.02(a),(b), (c) (Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensation Arrangements of Certain Officers) (other than any information relating to compensation arrangements with any directors or officers) and 9.01(a) (Financial Statements and Exhibits but only with respect to historical financial statements relating to transactions required to be reported pursuant to Item 2.01 and involving acquisitions of Persons that had revenues in excess of $200,000,000 for the last four completed fiscal quarters prior to the consummation of the acquisition) of a Current Report on Form 8-K (as in effect of the Issue Date); provided , that (a) no such report or information will be required to be so furnished if the Issuer determines in good faith that such event is not material to the Holders or the business, assets, operations or financial condition of the Issuer and its Restricted Subsidiaries, taken as a whole and (b) trade secrets and other confidential information that is competitively sensitive in the good faith and reasonable determination of the Issuer may be excluded from disclosures.

(b) The reports required pursuant to clauses (1), (2) and (3) of Section 4.03(a) will not be required to comply with (i) Section 302, Section 404 or Section 906 of the Sarbanes-Oxley Act of 2002, (ii) related Items 307 and 308 of Regulation S-K promulgated by the SEC, (iii) Item 10(e) of Regulation S-K (with respect to any non-GAAP financial measures contained therein) or any comparable successor provision and (iv) Regulation S-X Rule 3-10; provided that if non-Guarantor Subsidiaries (on a consolidated basis) constitute more than 10.0% of the Issuer’s consolidated revenues, operating income, assets or debt for the last four quarters ended on, or as of, as the case may be, the date of any reports required pursuant to clauses (1) or (2) of Section 4.03(a), then the Issuer must provide supplemental unaudited disclosure of its operating results by geographic region, provided that such operating results shall also include disclosure of United States operating income and indebtedness for borrowed money payable to Persons (other than the Issuer and its Restricted Subsidiaries).

 

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(c) So long as any Notes are outstanding, the Issuer will also:

(1) issue a press release to an internationally recognized wire service no fewer than three Business Days prior to the delivery or posting of the annual and quarterly reports required by clauses (1) and (2) of Section 4.03(a) announcing the date on which such reports will be made available to the Holders and directing Holders, research analysts and prospective purchasers to contact the investor relations office of the Issuer to obtain copies of such reports;

(2) maintain a website (which may be password protected so long as the password is made promptly available by the Issuer to Holders, research analysts and prospective purchasers) to which all of the reports and press releases required by this Section 4.03 are posted; and

(3) host and participate in customary quarterly conference calls (which may be a single conference call together with investors holding other securities of the Issuer and/or its Restricted Subsidiaries) to discuss operating results and related matters. The Issuer shall issue a press release which will provide the date and time of any such call and will direct Holders, prospective purchasers and research analysts to contact the investor relations office of the Issuer to obtain access to the conference call.

(d) In addition, to the extent not satisfied by the foregoing, the Issuer will, for so long as any Notes are outstanding, furnish to Holders and to prospective purchasers, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(e) For so long as the Issuer and its Subsidiaries (other than Opco and its Subsidiaries) do not have any material assets on a consolidated basis that are not reflected on a consolidated balance sheet of Opco (other than (i) cash and Cash Equivalents, and (ii) Equity Interests and Indebtedness of Opco and any Subsidiary of Opco) and do not conduct any material operations that are not conducted through Opco and its Subsidiaries, the Issuer may satisfy its reporting obligations under this Section 4.03 relating to the Issuer by furnishing information relating to Opco; provided , that any obligation of the Issuer to furnish or deliver any such reports and information to the Trustee, the Holders of the Notes and such prospective purchasers shall be deemed satisfied if such reports or information shall have been filed by Opco with the SEC pursuant to its Electronic Data Gathering Analysis and Retrieval System (or any successor system); provided , further , that the Issuer shall furnish to Holders information that explains in reasonable detail the differences between the financial information relating to the Issuer and its consolidated Subsidiaries (other than Opco and its Subsidiaries, as the case may be) on the one hand, and the financial information reflected in such financial information relating to Opco and its consolidated Subsidiaries, on the other hand. To the extent financial information, including any financial statements, of Opco are substituted for those of the Issuer in reliance on the foregoing sentence, then references in this Indenture to any financial statement of the Issuer shall be deemed to refer to the financial information for the Issuer and the Subsidiaries of the Issuer described above.

(f) In the event that any direct or indirect parent company of the Issuer becomes a Guarantor, the Issuer may satisfy its obligations in this Section 4.03 with respect to financial information relating to the Issuer by furnishing financial information relating to such parent company; provided that, if and so long as such parent company shall have Independent Assets or Operations (as defined below), the same is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such parent company, on the one hand, and the information relating to the Issuer and its Restricted Subsidiaries on a stand-alone basis, on the other hand. “ Independent Assets or Operations ” means, with respect to any such parent company, that such parent company’s total assets, revenues, income from continuing operations before income taxes and cash flows from operating activities (excluding in each case amounts related to its investment in the Issuer and the Restricted Subsidiaries), determined in accordance with GAAP and as shown on the most recent balance sheet of such parent company, is more than 3.0% of such parent company’s corresponding consolidated amount.

(g) Notwithstanding anything herein to the contrary, the Issuer will not be deemed to have failed to comply with any of its obligations under this Section 4.03 for purposes of Section 6.01(3) hereof until 90 days after the date any report hereunder is due under this Section 4.03.

 

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(h) To the extent any information is not provided within the time periods specified in this Section 4.03 and such information is subsequently provided, the Issuer will be deemed to have satisfied its obligations with respect thereto at such time and any Default with respect thereto shall be deemed to have been cured.

(i) It is understood that the Trustee shall have no obligation whatsoever to determine whether or not such information, documents or reports have been posted on the Issuer’s website or filed with the SEC’s Electronic Data Gathering Analysis and Retrieval System (or any successor system).

SECTION 4.04. Compliance Certificate .

(a) The Issuer shall deliver to the Trustee, within 90 days after the end of each fiscal year ending after the Issue Date, a certificate from the principal executive officer, principal financial officer or principal accounting officer stating that a review of the activities of the Issuer and its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether the Issuer has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to such Officer signing such certificate, that to the best of his or her knowledge the Issuer has kept, observed, performed and fulfilled each and every condition and covenant contained in this Indenture during such fiscal year and is not in Default in the performance or observance of any of the terms, provisions, covenants and conditions of this Indenture (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action the Issuer is taking or proposes to take with respect thereto).

(b) When any Default has occurred and is continuing under this Indenture, or if the Trustee or the holder of any other evidence of Indebtedness of the Issuer gives any notice or takes any other action with respect to a claimed Default, the Issuer shall promptly (which shall be no more than ten (10) Business Days after becoming aware of such Default) deliver to the Trustee by registered or certified mail or by facsimile transmission an Officer’s Certificate specifying such event and what action the Issuer proposes to take with respect thereto.

SECTION 4.05. Taxes . The Issuer shall pay or discharge, and shall cause each of its Restricted Subsidiaries to pay or discharge, prior to delinquency, all material taxes, lawful assessments, and governmental levies except such as are contested in good faith and by appropriate actions or where the failure to effect such payment or discharge is not adverse in any material respect to the Holders.

SECTION 4.06. Stay, Extension and Usury Laws . The Issuer and each Guarantor executing a supplemental indenture to Guarantee the Notes covenant (to the extent that they may lawfully do so) that they shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer and each Guarantor executing a supplemental indenture to Guarantee the Notes (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant (to the extent that they may lawfully do so) that they shall not, by resort to any such law, 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 has been enacted.

SECTION 4.07. Limitation on Restricted Payments .

(a) The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(I) declare or pay any dividend or make any payment or distribution on account of the Issuer’s or any of its Restricted Subsidiaries’ Equity Interests (in each case, solely in such Person’s capacity as holder of such Equity Interests), including any dividend or distribution payable in connection with any merger, amalgamation or consolidation other than:

(A) dividends or distributions by the Issuer payable solely in Equity Interests (other than Disqualified Stock) of the Issuer; or

(B) dividends or distributions 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 Subsidiary, the Issuer 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;

 

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(II) purchase, redeem, defease or otherwise acquire or retire for value any Equity Interests of the Issuer or any direct or indirect parent company of the Issuer, including in connection with any merger, amalgamation or consolidation, in each case held by Persons other than the Issuer or a Restricted Subsidiary;

(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, sinking fund payment or maturity, any Subordinated Indebtedness, other than:

(A) Indebtedness permitted under clauses (7), (8) and (9) of Section 4.09(b) hereof; or

(B) the payment, redemption, defeasance, purchase, repurchase, acquisition or retirement for value of Subordinated Indebtedness purchased 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, defeasance, purchase, repurchase, acquisition or retirement; or

(IV) make any Restricted Investment

(all such payments and other actions set forth in clauses (I) through (IV) above being collectively referred to as “ Restricted Payments ”), unless, at the time of and immediately after giving effect to such Restricted Payment:

(1) no 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, (x) in the case of a Restricted Payment by the Issuer or its Restricted Subsidiaries (other than Opco and its Subsidiaries), the Issuer could incur at least $1.00 of additional Indebtedness under clause (i) of Section 4.09(a) hereof (it being understood for purposes of calculating the Fixed Charge Coverage Ratio for this purpose only, amortization of original issue discount shall be excluded from Fixed Charges) or (y) in the case of a Restricted Payment by Opco or any of its Restricted Subsidiaries, Opco could incur at least $1.00 of additional Indebtedness under clause (ii) of Section 4.09(a) hereof; and

(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments (including the fair market value of any non-cash amount) made by the Issuer and its Restricted Subsidiaries after October 24, 2012 (including Restricted Payments permitted by clauses (1), (6)(c) and (8) of Section 4.07(b) hereof, but excluding all other Restricted Payments permitted by Section 4.07(b) hereof), is less than $130,000,000 plus the sum of (without duplication):

(A) 50.0% of the Consolidated Net Income of (x) the Issuer for the period (taken as one accounting period) beginning on October 1, 2012 to the end of the most recently ended Test Period preceding such Restricted Payment, in the case of a Restricted Payment by the Issuer or its Restricted Subsidiaries (other than Opco and its Subsidiaries) (it being understood for purposes of calculating the Consolidated Net Income for this purpose only, any PIK Interest, non-cash interest expense and amortization of original issue discount shall be excluded) or (y) Opco for the period (taken as one accounting period) beginning on October 1, 2012 to the end of Opco’s most recently ended Test Period preceding such Restricted Payment, in the case of a Restricted Payment by Opco or any of its Restricted Subsidiaries, or, in each case, in the case such Consolidated Net Income for such period is a deficit, minus 100.0% of such deficit; plus

 

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(B) 100.0% of the aggregate net cash proceeds and the fair market value of marketable securities or other property received by the Issuer since October 24, 2012 (other than net cash proceeds to the extent such net cash proceeds have been used to incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to Section 4.09(b)(12)(a) hereof) from the issue or sale of:

(i) (A) Equity Interests of the Issuer, including Treasury Capital Stock, but excluding cash proceeds and the fair market value of marketable securities or other property received from the sale of:

(x) Equity Interests to any future, present or former employees, directors, officers, members of management or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any direct or indirect parent company of the Issuer or any of the Issuer’s Subsidiaries after October 24, 2012 to the extent such amounts have been applied to Restricted Payments made in accordance with Section 4.07(b)(4) hereof; and

(y) Designated Preferred Stock; and

(B) to the extent such net proceeds are actually contributed to the Issuer, Equity Interests of any direct or indirect parent company of the Issuer (excluding contributions of the proceeds from the sale of Designated Preferred Stock of such company or contributions to the extent such amounts have been applied to Restricted Payments made in accordance with Section 4.07(b)(4) hereof); or

(ii) debt securities of the Issuer, that have been converted into or exchanged for Equity Interests of the Issuer or any of its direct or indirect parent companies;

provided , that this clause (3)(B) shall not include the proceeds from (W) Refunding Capital Stock (as defined below) applied in accordance with Section 4.07(b)(2) hereof, (X) Equity Interests or convertible debt securities of the Issuer sold to a Restricted Subsidiary, (Y) Disqualified Stock or debt securities that have been converted into Disqualified Stock or (Z) Excluded Contributions; plus

(C) 100.0% of the aggregate amount of cash and the fair market value of marketable securities or other property contributed to the capital of the Issuer since immediately after October 24, 2012 (other than (X) net cash proceeds to the extent such net cash proceeds have been used to incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to Section 4.09(b)(12)(a) hereof) (Y) by a Restricted Subsidiary and (Z) any Excluded Contributions); plus

(D) 100.0% of the aggregate amount received in cash and the fair market value of marketable securities or other property received by means of:

(i) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of, or other returns on Investments from, Restricted Investments made by the Issuer or its Restricted Subsidiaries and repurchases and redemptions of such Restricted Investments from the Issuer or its Restricted Subsidiaries (other than by the Issuer or a Restricted Subsidiary) and repayments of loans or advances, and releases of guarantees, which constitute Restricted Investments made by the Issuer or its Restricted Subsidiaries, in each case after October 24, 2012; or

(ii) the sale (other than to the Issuer or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary or a distribution from an Unrestricted Subsidiary (other than in each case to the extent the Investment in such Unrestricted Subsidiary constituted

 

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a Permitted Investment, but including such cash or fair market value to the extent exceeding the amount of such Permitted Investment) or a dividend from an Unrestricted Subsidiary after October 24, 2012; plus

(E) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary or the merger, amalgamation or consolidation of an Unrestricted Subsidiary into the Issuer or a Restricted Subsidiary or the transfer of all or substantially all of the assets of an Unrestricted Subsidiary to the Issuer or a Restricted Subsidiary after October 24, 2012, the fair market value of the Investment in such Unrestricted Subsidiary (or the assets transferred) at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary or at the time of such merger, amalgamation, consolidation or transfer of assets, other than to the extent the Investment in such Unrestricted Subsidiary constituted a Permitted Investment, but, to the extent exceeding the amount of such Permitted Investment, including such excess amounts of cash or fair market value; provided that, in the case of this clause (E), if the fair market value of any marketable securities or other property (other than cash) contributed or received, or such Investment, as applicable, to be included in this clause (E) shall exceed $100,000,000, such fair market value shall be determined by the Board of Directors whose resolution with respect thereto will be delivered to the Trustee.

(b) The foregoing provisions of Section 4.07(a) hereof will not prohibit:

(1) the payment of any dividend or other distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or other distribution or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend or other distribution or redemption payment would have complied with the provisions of this Indenture;

(2) (a) the redemption, repurchase, retirement or other acquisition of any Equity Interests, including any accrued and unpaid dividends thereon (“ Treasury Capital Stock ”), or Subordinated Indebtedness or any Equity Interests of any direct or indirect parent company of the Issuer, in exchange for, or out of the proceeds of the substantially concurrent sale or issuance (other than to a Restricted Subsidiary) of, Equity Interests of the Issuer or any direct or indirect parent company of the Issuer to the extent contributed to the Issuer (in each case, other than any Disqualified Stock) (“ Refunding Capital Stock ”), (b) the declaration and payment of dividends on Treasury Capital Stock out of the proceeds of the substantially concurrent sale or issuance (other than to a Restricted Subsidiary of the Issuer or to an employee stock ownership plan or any trust established by the Issuer or any of its Restricted Subsidiaries) of Refunding Capital Stock, and (c) if, immediately prior to the retirement of Treasury Capital Stock, the declaration and payment of dividends thereon was permitted under clauses (6) (a) or (b) of this Section 4.07(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, retire or otherwise acquire any Equity Interests of any direct or indirect parent company of the Issuer) in an aggregate amount per year no greater than the aggregate amount of dividends per annum that were declarable and payable on such Treasury Capital Stock immediately prior to such retirement;

(3) the principal payment on, defeasance, redemption, repurchase, exchange or other acquisition or retirement of (i) Subordinated Indebtedness of the Issuer or a Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of the Issuer or a Guarantor or Disqualified Stock of the Issuer or a Guarantor, (ii) Disqualified Stock of the Issuer or a Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Disqualified Stock or Subordinated Indebtedness of the Issuer or a Guarantor, (iii) Disqualified Stock of Restricted Subsidiary that is not a Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Disqualified Stock of a Restricted Subsidiary that is not a Guarantor that, in each case, is Refinancing Indebtedness incurred or issued, as applicable, in compliance with Section 4.09 hereof and (iv) any Subordinated Indebtedness or Disqualified Stock which constitutes Acquired Indebtedness;

(4) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of the Issuer or any direct or indirect parent

 

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company of the Issuer held by any future, present or former employee, director, officer, member of management or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any of its Subsidiaries or any of its direct or indirect parent companies 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 (including, for the avoidance of doubt, any principal and interest payable on any notes issued by the Issuer or any direct or indirect parent company of the Issuer in connection with any such repurchase, retirement or other acquisition) including any arrangement including Equity Interests rolled over by management of the Issuer or any direct or indirect parent company of the Issuer in connection with the Transactions; provided , that the aggregate amount of Restricted Payments made under this clause (4) does not exceed $100,000,000 in the calendar year including the Issue Date and $50,000,000 in any calendar year thereafter (which shall increase to $75,000,000 subsequent to the consummation of a Qualified Public Offering) in any calendar year (with up to: (x) $100,000,000 in unused amounts in the calendar year including the Issue Date being carried over to the next succeeding calendar year, (y) $50,000,000 in unused amounts in the calendar year including the Issue Date being carried over to the second succeeding calendar year and (z) any unused amounts in any calendar year other than the calendar year including the Issue Date being carried over to the next two succeeding calendar years); provided , further , that such amount in any calendar year under this clause (4) may be increased by an amount not to exceed:

(A) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock) of the Issuer and, to the extent contributed to the Issuer, the cash proceeds from the sale of Equity Interests of any direct or indirect parent company of the Issuer, in each case to any future, present or former employees, directors, officers, members of management or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any of its Subsidiaries or any of its direct or indirect parent companies that occurs after October 24, 2012, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of Section 4.07(a)(3) hereof; plus

(B) the amount of any cash bonuses otherwise payable to members of management, directors or consultants of the Issuer, any of its Subsidiaries or any direct or indirect parent company thereof in connection with the Transactions that are foregone in exchange for the receipt of Equity Interests of the Issuer or any direct or indirect parent company thereof pursuant to any deferred compensation plan of such company; plus

(C) the cash proceeds of key man life insurance policies received by the Issuer or its Restricted Subsidiaries (or by any direct or indirect parent company to the extent contributed to the Issuer) after October 24, 2012; less

(D) the amount of any Restricted Payments previously made with the cash proceeds described in clauses (A), (B) and (C) of this clause (4);

and provided , further , that cancellation of Indebtedness owing to the Issuer or any of its Restricted Subsidiaries from any future, present or former employees, directors, officers, members of management or consultants of the Issuer (or their respective Controlled Investment Affiliates or Immediate Family Members), any direct or indirect parent company of the Issuer or any of the Issuer’s Restricted Subsidiaries in connection with a repurchase of Equity Interests of the Issuer or any of its direct or indirect parent companies will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of this Indenture;

(5) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Issuer or any of its Restricted Subsidiaries or any class or series of Preferred Stock of any Restricted Subsidiary issued in accordance with Section 4.09 hereof to the extent such dividends or distributions are included in the definition of “Fixed Charges”;

 

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(6) (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 by the Issuer or any of its Restricted Subsidiaries after the Issue Date;

(B) the declaration and payment of dividends or distributions to any direct or indirect parent company of the Issuer, 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) issued by such parent company after the Issue Date; provided , that the amount of dividends or distributions paid pursuant to this clause (B) shall not exceed the aggregate amount of cash actually contributed to the Issuer from the sale of such Designated Preferred Stock; or

(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 4.07(b)(2);

provided , in the case of each of (A), (B) and (C) of this clause (6), that for the most recently ended Test Period 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 or declaration on a pro forma basis, (x) with respect to such issuance or declaration by the Issuer and its Restricted Subsidiaries (other than Opco and its Subsidiaries), the Issuer would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00 and (y) with respect to such issuance or declaration by Opco and its Restricted Subsidiaries, Opco would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

(7) payments made or expected to be made by the Issuer or any Restricted Subsidiary in respect of withholding or similar taxes payable by any future, present or former employee, director, officer, member of management or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer or any of its Restricted Subsidiaries or any direct or indirect parent company of the Issuer and any repurchases of Equity Interests deemed to occur upon exercise of stock options, warrants or similar rights if such Equity Interests represent a portion of the exercise price of such options, warrants or similar rights or required withholding or similar taxes;

(8) the declaration and payment of dividends on the Issuer’s common stock (or the payment of dividends to any direct or indirect parent company of the Issuer to fund a payment of dividends on such company’s common stock), following the first public offering of the Issuer’s common stock or the common stock of any direct or indirect parent company of the Issuer after the Issue Date, of up to 6.0% per annum of the net cash proceeds received by or contributed to the Issuer in or from any such public offering, other than public offerings with respect to the Issuer’s common stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;

(9) Restricted Payments that are made with Excluded Contributions;

(10) Restricted Payments in an aggregate amount taken together with all other Restricted Payments made pursuant to this clause (10) (in the case of Restricted Investments, at the time outstanding) not to exceed the greater of (a) $150,000,000 and (b) 2.0% of Total Assets at such time;

(11) distributions or payments of Securitization Fees;

(12) any Restricted Payment made in connection with the Transactions, the 2012 Transactions or the 2013 Transactions and, in each case, the fees and expenses related thereto or owed to Affiliates, in each case with respect to any Restricted Payment made or owed to an Affiliate, to the extent permitted by Section 4.11 hereof;

(13) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions similar to those of Section 4.10 and Section 4.14 hereof; provided , that the Issuer shall have made a Change of Control Offer or Asset Sale Offer, as applicable, to purchase the Notes on the terms provided in this Indenture applicable to Change of Control Offers or Asset Sale Offers, respectively, and all Notes validly tendered by Holders in such Change of Control Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed, acquired or retired for value;

 

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(14) the declaration and payment of dividends or distributions by the Issuer or a Restricted Subsidiary to, or the making of loans or advances to, any of their respective direct or indirect parent companies in amounts required for any direct or indirect parent company to pay, in each case without duplication,

(A) franchise, excise and similar taxes, and other fees, taxes and expenses required to maintain their corporate or other legal existence;

(B) so long as the Issuer is a member of a consolidated, combined or unitary group of which such direct or indirect parent company is a parent for foreign, federal, state or local income or other tax purposes, the relevant foreign, federal, state and local income or other taxes, to the extent such income or other taxes are attributable to the income of the Issuer and its Restricted Subsidiaries that are members of such group and, to the extent of the amount actually received from its Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries; provided that in each case the amount of such payments in or with respect to any taxable year does not exceed the amount that the Issuer and such Restricted Subsidiaries would be required to pay in respect of the relevant foreign, federal, state and local taxes for such taxable year were the Issuer, such Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes as a separate consolidated, combined or unitary group separately from any such parent company (or, if there are no such Restricted Subsidiaries or Unrestricted Subsidiaries, the Issuer on a separate company basis);

(C) customary salary, bonus, severance and other benefits payable to, and indemnities provided on behalf of, employees, directors, officers, members of management and consultants of any direct or indirect parent company of the Issuer and any payroll, social security or similar taxes thereof, to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of the Issuer and its Restricted Subsidiaries;

(D) general corporate operating, administrative, compliance and overhead costs and expenses of any direct or indirect parent company of the Issuer to the extent such costs and expenses are attributable to the ownership or operation of the Issuer and its Subsidiaries;

(E) fees and expenses other than to Affiliates of the Issuer related to any equity or debt offering of such parent company (whether or not successful);

(F) to the extent constituting Restricted Payments, amounts that would be permitted to be paid directly by the Issuer or its Restricted Subsidiaries under Section 4.11 (other than clause (b)(2)(i) thereof);

(G) interest and/or principal on Indebtedness the proceeds of which have been contributed to the Issuer or any Restricted Subsidiary and that has been guaranteed by, or is otherwise, considered Indebtedness of, the Issuer incurred in accordance with Section 4.09 hereof; and

(H) to finance Investments or other acquisitions otherwise permitted to be made pursuant to this Section 4.07 if made by the Issuer; provided , that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment or other acquisition, (B) such direct or indirect parent company shall, promptly following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the capital of the Issuer or one of its Restricted Subsidiaries or (2) the merger, amalgamation, consolidation, or sale of the Person formed or acquired into the Issuer or one of its Restricted Subsidiaries (to the extent not prohibited by Section 5.01 hereof) in order to consummate such Investment or other acquisition, (C) such direct or indirect parent company and its Affiliates (other than the Issuer or a Restricted

 

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Subsidiary) receives no consideration or other payment in connection with such transaction except to the extent the Issuer or a Restricted Subsidiary could have given such consideration or made such payment in compliance with this Indenture, (D) any property received by the Issuer shall not increase amounts available for Restricted Payments pursuant to Section 4.07(a)(3) hereof and (E) to the extent constituting an Investment, such Investment shall be deemed to be made by the Issuer or such Restricted Subsidiary pursuant to another provision of this Section 4.07 (other than pursuant to clause (9) of this Section 4.07(b)) or pursuant to the definition of “Permitted Investments” (other than clause (9) thereof);

(15) the distribution, by dividend or otherwise, or other transfer or disposition of shares of Capital Stock of, or Indebtedness owed to the Issuer or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which are cash and/or Cash Equivalents) or the proceeds thereof;

(16) cash payments or loans, advances, dividends or distributions to any direct or indirect parent of the Issuer to make payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests of the Issuer, any of its Restricted Subsidiaries or any direct or indirect parent company of the Issuer; and

(17) Restricted Payments, provided that, after giving pro forma effect thereto and the application of the net proceeds therefrom, (x) in the case of Restricted Payments by the Issuer and its Restricted Subsidiaries (other than Opco and its Subsidiaries), the Total Net Leverage Ratio of the Issuer for the Test Period immediately preceding such Restricted Payment would be no greater than 4.75 to 1.00 and (y) in the case of Restricted Payments by Opco and its Restricted Subsidiaries, the Total Net Leverage Ratio of Opco for the Test Period immediately preceding such Restricted Payment would be no greater than 4.00 to 1.00;

provided , that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (10), (15) and (17) of this Section 4.07(b), no Event of Default shall have occurred and be continuing or would occur as a consequence thereof.

(c) The Issuer, in its sole discretion, will classify and may subsequently reclassify such Investment or other Restricted Payment (or any portion thereof) in one or more of the types of Restricted Payments or Investments and will only be required to include the amount and type of such Investment or other Restricted Payment in such of the above provisions of this covenant (and, in the case of any Investment, the clauses of the definition of Permitted Investments) as determined by the Issuer at such time.

(d) As of the Issue Date, all of the Issuer’s Subsidiaries shall be Restricted Subsidiaries. The Issuer will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the penultimate sentence of the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments or Permitted Investments in an amount determined as set forth in the penultimate sentence of the definition of “Investments.” Such designation will be permitted only if a Restricted Payment in such amount would be permitted at such time pursuant to Section 4.07 hereof or if an Investment would be permitted at such time, pursuant to the definition of “Permitted Investments,” and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries will not be subject to any of the restrictive covenants set forth in this Indenture. For the avoidance of doubt, this Section 4.07 shall not restrict the making of any “AHYDO catch up payment” with respect to, and required by the terms of, any Indebtedness of the Issuer or any of its Restricted Subsidiaries permitted to be incurred under the terms of this Indenture.

SECTION 4.08. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries .

(a) The Issuer will not, and will not permit any of its Restricted Subsidiaries that is not a Guarantor to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction ( provided , that dividend or liquidation priority between classes of Capital Stock, or subordination of any obligation (including the application of any remedy bars thereto) to any other obligation, will not be deemed to constitute such an encumbrance or restriction) on the ability of any such Restricted Subsidiary to:

(1) (A) pay dividends or make any other distributions to the Issuer or any Restricted Subsidiary that is a Guarantor on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or

 

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(B) pay any Indebtedness owed to the Issuer or, in the case of a Restricted Subsidiary that is not a Guarantor, to any Restricted Subsidiary that is a Guarantor;

(2) make loans or advances to the Issuer or, in the case of a Restricted Subsidiary that is not a Guarantor, to any Restricted Subsidiary that is a Guarantor; or

(3) sell, lease or transfer any of its properties or assets to the Issuer or, in the case of a Restricted Subsidiary that is not a Guarantor, to any Restricted Subsidiary that is a Guarantor.

(b) The restrictions in Section 4.08(a) hereof will not apply to encumbrances or restrictions existing under or by reason of:

(1) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Senior Credit Facilities and the related documentation and Hedging Obligations and the related documentation;

(2) (i) this Indenture, the Notes and the guarantees thereof, (ii) the Existing Senior Notes Indentures, the Existing Senior Notes and the guarantees thereof, and (iii) the Senior Exchange Notes Indenture, the Senior Exchange Notes and the guarantees thereof;

(3) purchase money obligations for property acquired in the ordinary course of business and capital lease obligations that impose restrictions of the nature discussed in Section 4.08(a)(3) hereof on the property so acquired;

(4) applicable law or any applicable rule, regulation or order;

(5) any agreement or other instrument of a Person acquired by or merged, amalgamated or consolidated with and into the Issuer or any of its Restricted Subsidiaries in existence at the time of such acquisition or at the time it merges, amalgamates or consolidates with or into the Issuer or any of its Restricted Subsidiaries or assumed in connection with the acquisition of assets from such Person (but, in any such case, not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person so acquired and its Subsidiaries, or the property or assets of the Person so acquired and its Subsidiaries or the property or assets so acquired;

(6) contracts or agreements for the sale of assets, including any restrictions with respect to a Subsidiary of the Issuer pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Subsidiary;

(7) Secured Indebtedness otherwise permitted to be incurred pursuant to Section 4.09 and Section 4.12 hereof that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(8) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business or arising in connection with any Permitted Liens;

(9) Indebtedness, Disqualified Stock or Preferred Stock of Restricted Subsidiaries that are not Guarantors permitted to be incurred subsequent to the Issue Date pursuant to Section 4.09 hereof;

 

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(10) customary provisions in joint venture agreements and other similar agreements (including stockholder agreements) relating solely to such joint venture or entered into in the ordinary course of business;

(11) customary provisions contained in covenants not to sue, leases, sub-leases, licenses, sub-licenses, Equity Interests or similar agreements, including with respect to intellectual property and other agreements, in each case, entered into in the ordinary course of business;

(12) restrictions created in connection with any Qualified Securitization Facility that, in the good faith determination of the Issuer, are necessary or advisable to effect such Qualified Securitization Facility;

(13) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which the Issuer 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 the Issuer or such Restricted Subsidiary that are the subject to such agreement, the payment rights arising thereunder or the proceeds thereof and does not extend to any other asset or property of the Issuer or such Restricted Subsidiary or the assets or property of another Restricted Subsidiary;

(14) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of any Restricted Subsidiary;

(15) customary provisions restricting assignment of any agreement entered into in the ordinary course of business;

(16) restrictions arising in connection with cash or other deposits permitted under Section 4.12 hereof;

(17) any other agreement or instrument governing any Indebtedness, Disqualified Stock, or Preferred Stock permitted to be incurred or issued pursuant to Section 4.09 entered into after the Issue Date that contains encumbrances and other restrictions that either (x) are no more restrictive in any material respect taken as a whole with respect to any Restricted Subsidiary than (i) the restrictions contained in this Indenture as of the Issue Date or (ii) those encumbrances and other restrictions that are in effect on the Issue Date with respect to that Restricted Subsidiary pursuant to agreements in effect on the Issue Date, (y) are not materially more disadvantageous, taken as a whole, to the Holders than is customary in comparable financings for similarly situated issuers or (z) will not otherwise materially impair the Issuer’s ability to make payments on the Notes when due, in each case in the good faith judgment of the Issuer;

(18) customary restrictions and conditions contained in the document relating to any Lien so long as (i) such Lien is a Permitted Lien and such restrictions or conditions relate only to the specific asset subject to such Lien and (ii) such restrictions and conditions are not created for the purpose of avoiding the restrictions imposed by this covenant; and

(19) any encumbrances or restrictions of the type referred to in clauses (1), (2) and (3) of Section 4.08(a) hereof 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 (18) of this Section 4.08(b); provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Issuer, no more restrictive in any material respect with respect to such encumbrance and other restrictions taken as a whole than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

 

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SECTION 4.09. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock .

(a) The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “ incur ” and collectively, an “ incurrence ”) with respect to any Indebtedness (including Acquired Indebtedness) and the Issuer will not, and will not permit Opco to, issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary (other than Opco) to issue any shares of Disqualified Stock or Preferred Stock; provided , that (i) the Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary (other than Opco and its Restricted Subsidiaries) may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio of the Issuer for the Issuer’s most recently ended Test Period preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued (or, in the case of Indebtedness under Designated Revolving Commitments, on the date such Designated Revolving Commitments are established after giving pro forma effect to the incurrence of the entire committed amount of Indebtedness thereunder, in which case such committed amount under such Designated Revolving Commitments may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this proviso) would have been at least 2.00 to 1.00, 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 Test Period and (ii) Opco and its Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) and issue shares of Disqualified Stock and any Restricted Subsidiary of Opco may issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio of Opco for the most recently ended Test Period preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued (or, in the case of Indebtedness under Designated Revolving Commitments, on the date such Designated Revolving Commitments are established after giving pro forma effect to the incurrence of the entire committed amount of Indebtedness thereunder, in which case such committed amount under such Designated Revolving Commitments may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this proviso) would have been at least 2.00 to 1.00, 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 Test Period.

(b) Section 4.09(a) hereof shall not apply to:

(1) the incurrence of Indebtedness pursuant to the Credit Facilities by the Issuer or any Restricted Subsidiary 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 that, together with the aggregate amount of Qualified Securitization Facilities incurred pursuant to Section 4.09(b)(25), does not exceed at any one time outstanding the sum of $3,525,000,000 plus , in the event of any extension, replacement, refinancing, renewal or defeasance of any such Credit Facility an amount equal to the amount of any penalty or premium required to be paid under the terms of the instrument or documents governing such Credit Facility and any defeasance costs and any fees and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such Credit Facility;

(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by (A) the Notes and the Guarantees and any increase in the principal amount of the Notes and any PIK Notes issued in respect of any PIK Payment in accordance with the terms of the Indenture (in each case other than Additional Notes and guarantees in respect thereof) and (B) any exchange notes and related exchange guarantees to be issued in exchange for the Notes;

(3) Indebtedness of the Issuer and its Restricted Subsidiaries in existence on the Issue Date , including (a) the Existing Senior Notes (including any guarantee thereof) and the exchange notes and related exchange guarantees to be issued in exchange for the Existing Senior Notes and the guarantees thereof,

 

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and (b) the Senior Exchange Notes (including any guarantee thereof) and the exchange notes and related exchange guarantees to be issued in exchange for the Senior Exchange Notes and the guarantees thereof (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));

(4) Indebtedness (including Capitalized Lease Obligations) and Disqualified Stock incurred or issued by the Issuer or any Restricted Subsidiary and Preferred Stock issued by any Restricted Subsidiary, to finance the purchase, lease, replacement or improvement of property (real or personal), equipment or other assets, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock incurred or issued and outstanding under this clause (4) at such time, not to exceed the greater of (x) $150,000,000 and (y) 2.0% of Total Assets (in each case, determined at the date of incurrence or issuance), so long as such Indebtedness, Disqualified Stock or Preferred Stock is incurred or issued at the date of such purchase, lease, replacement or improvement or within 270 days thereafter;

(5) Indebtedness incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or created in the ordinary course of business, including in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, unemployment insurance or other social security legislation or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided , that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 Business Days following such drawing or incurrence;

(6) Indebtedness arising from agreements of the Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided , that if such Indebtedness is reflected on the balance sheet of the Issuer or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6)), such Indebtedness is paid after becoming due and payable;

(7) Indebtedness of the Issuer to a Restricted Subsidiary; provided that any such Indebtedness so long as owing to a Restricted Subsidiary that is not a Guarantor is expressly subordinated in right of payment to the Notes; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (7);

(8) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided , that if a Guarantor incurs such Indebtedness to, and so long as owing to, a Restricted Subsidiary that is not a Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided , further , that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any such subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (8);

(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided , that any subsequent issuance or transfer of any Capital Stock or any other

 

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event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or another of its Restricted Subsidiaries or any pledge of such Capital Stock constituting a Permitted Lien) shall be deemed, in each case, to be an issuance of such shares of Preferred Stock (to the extent such Preferred Stock is then outstanding) not permitted by this clause (9);

(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);

(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Issuer or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with industry practice;

(12) (a) Indebtedness or Disqualified Stock of the Issuer and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary in an aggregate principal amount or liquidation preference up to 100.0% of the net cash proceeds received by the Issuer since immediately after October 24, 2012 from the issue or sale of Equity Interests of the Issuer or cash contributed to the capital of the Issuer (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clause (1), (2) or (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any Restricted Subsidiary in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued, as applicable, pursuant to this clause (12)(b), does not exceed the greater of (x) $300,000,000 and (y) 3.75% of Total Assets (in each case, determined at the date of incurrence) (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued pursuant to this clause (12)(b) shall cease to be deemed incurred, issued or outstanding for purposes of this clause (12)(b) but shall be deemed incurred or issued for the purposes of Section 4.09(a) hereof from and after the first date on which the Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09(a) hereof without reliance on this clause (12)(b));

(13) the incurrence or issuance by the Issuer of Indebtedness or Disqualified Stock or the incurrence or issuance by a Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund, refinance, extend, replace, renew or defease any Indebtedness (including any Designated Revolving Commitments) incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness incurred or Disqualified Stock or Preferred Stock issued to so refund, refinance, extend, replace, renew or defease such Indebtedness, Disqualified Stock or Preferred Stock; provided , that any such Indebtedness, Disqualified Stock or Preferred Stock constitutes Refinancing Indebtedness;

(14) (a) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary incurred or issued to finance an acquisition (or other purchase of assets) or that is assumed by the Issuer or any Restricted Subsidiary in connection with such acquisition or (b) Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into, amalgamated or consolidated with the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided , that after giving effect to such acquisition, amalgamation, consolidation or merger:

 

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(i) in the case of Indebtedness or Disqualified Stock incurred, issued or assumed by the Issuer or Indebtedness, Disqualified Stock or Preferred Stock incurred, issued or assumed by a Restricted Subsidiary (other than Opco and its Restricted Subsidiaries), either:

(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness under clause (i) of Section 4.09(a) hereof, or

(b) the Fixed Charge Coverage Ratio for the Issuer is equal to or greater than immediately prior to such acquisition, amalgamation, consolidation or merger; or

(ii) in the case of Indebtedness or Disqualified Stock incurred, issued or assumed by Opco or Indebtedness, Disqualified Stock or Preferred Stock incurred, issued or assumed by a Restricted Subsidiary of Opco, either:

(a) Opco would be permitted to incur at least $1.00 of additional Indebtedness under clause (ii) of Section 4.09(a) hereof, or

(b) the Fixed Charge Coverage Ratio for Opco is equal to or greater than immediately prior to such acquisition, amalgamation, consolidation or merger;

(15) Indebtedness arising from 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 such Indebtedness either (x) is extinguished within five Business Days of its incurrence or (y) arises in respect of any Restricted Subsidiary that is a Foreign Subsidiary with any bank or other financial institution subject to a pooling or similar arrangement with one or more accounts of any other Restricted Subsidiaries that are Foreign Subsidiaries with such bank or other financial institution to the extent the net aggregate amount of funds in all such accounts subject to such pooling or similar arrangement with such bank or other financial institution is positive;

(16) Indebtedness of the Issuer or any of its Restricted Subsidiaries supported by a letter of credit or bank guarantee issued pursuant to any Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee;

(17) (a) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or (b) any guarantee by a Restricted Subsidiary of Indebtedness of the Issuer so long as the incurrence of such Indebtedness by the Issuer is permitted under the terms of this Indenture; provided that such guarantee is incurred in accordance with, if applicable, Section 4.15 hereof;

(18) Indebtedness consisting of Indebtedness issued by the Issuer or any of its Restricted Subsidiaries to future, present or former employees, directors, officers, members of management and consultants thereof, their respective Controlled Investment Affiliates or Immediate Family Members, 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 described in Section 4.07(b)(4) hereof;

(19) to the extent constituting Indebtedness, customer deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business;

(20) (a) 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 the Issuer and its Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of the Issuer and its Restricted Subsidiaries and (b) Indebtedness in respect of Cash Management Services;

 

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(21) Indebtedness incurred by a Restricted Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business on arm’s-length commercial terms;

(22) Indebtedness of the Issuer or any of its Restricted Subsidiaries consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business;

(23) Indebtedness or Disqualified Stock of Restricted Subsidiaries of the Issuer that are not Guarantors in an amount not to exceed and together with any other Indebtedness incurred and outstanding under this clause (23) the greater of (i) $125,000,000 and (ii) 1.75% of Total Assets (in each case, determined on the date of incurrence) (it being understood that any Indebtedness or Disqualified Stock deemed incurred or issued pursuant to this clause (23) shall cease to be deemed incurred, issued or outstanding for the purpose of this clause (23) but shall be deemed incurred or issued for the purposes of Section 4.09(a) hereof from and after the first date on which the Issuer or such Restricted Subsidiaries could have incurred such Indebtedness under Section 4.09(a) hereof without reliance on this clause (23));

(24) Indebtedness of the Issuer or any of its Restricted Subsidiaries undertaken in connection with cash management and related activities with respect to any Subsidiary or joint venture in the ordinary course of business; and

(25) Indebtedness in respect of Qualified Securitization Facilities, subject to the limitations contained in clause (1) above.

(c) For purposes of determining compliance with this Section 4.09:

(1) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) at any time, whether at the time of incurrence or issuance or upon the application of all or a portion of the proceeds thereof or subsequently, meets the criteria of more than one of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through (25) of Section 4.09(b) hereof or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Issuer, in its sole discretion, will classify and may subsequently reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) and will only be required to include the amount and type of such Indebtedness, Disqualified Stock or Preferred Stock in such of the above clauses or under Section 4.09(a) hereof as determined by the Issuer at such time; provided that all Indebtedness outstanding under the Credit Facilities on the Issue Date will, at all times, be treated as incurred on the Issue Date under Section 4.09(b)(1) hereof; and

(2) the Issuer will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Section 4.09(a) and Section 4.09(b) hereof, subject to the proviso to Section 4.09(c)(1) hereof.

Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount or liquidation preference, and the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, of the same class and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies, will, in each case, not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or Preferred Stock for purposes of this Section 4.09.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness or issuance of Disqualified Stock, the U.S. dollar-equivalent principal amount of Indebtedness or Disqualified Stock 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 U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness

 

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is incurred or Disqualified Stock is issued, to refinance other Indebtedness or Disqualified Stock, as applicable, denominated in a foreign currency, 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 or Disqualified Stock does not exceed (i) the principal amount of such Indebtedness or Disqualified Stock, as applicable, being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with such refinancing.

The principal amount of any Indebtedness incurred or Disqualified Stock issued to refinance other Indebtedness, if incurred in a different currency from the Indebtedness or Disqualified Stock, as applicable, being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness or Disqualified Stock is denominated that is in effect on the date of such refinancing. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Issuer dated such date prepared in accordance with GAAP.

The Issuer shall not, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is contractually subordinated or junior in right of payment to any Indebtedness of the Issuer unless such Indebtedness is expressly subordinated in right of payment to the Notes to the extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Issuer.

For purposes of this Indenture, (1) unsecured Indebtedness shall not be deemed to be subordinated or junior to Secured Indebtedness merely because it is unsecured, (2) Indebtedness shall not be deemed to be subordinated or junior to any other Indebtedness merely because it is issued or guaranteed by other obligors or (3) Secured Indebtedness shall not be deemed to be subordinated or junior to any other Secured Indebtedness merely because it has a junior priority lien with respect to the same collateral.

SECTION 4.10. Asset Sales .

(a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale, unless:

(1) the Issuer or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets sold or otherwise disposed of; and

(2) except in the case of a Permitted Asset Swap, at least 75.0% of the consideration therefor received by the Issuer or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided , that the amount of:

(A) any liabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most recent balance sheet or in the footnotes thereto) of the Issuer or such Restricted Subsidiary, other than liabilities that are by their terms subordinated to the Notes that are (i) assumed by the transferee of any such assets or (ii) otherwise cancelled or terminated in connection with the transaction with such transferee (other than intercompany debt owed to the Issuer or its Restricted Subsidiaries) and, in the case of clause (i) above, for which the Issuer and all of its Restricted Subsidiaries have been validly released by all applicable creditors in writing;

(B) any securities, notes or other obligations or assets received by the Issuer or such Restricted Subsidiary from such transferee that are converted by the Issuer or such Restricted Subsidiary into Cash Equivalents (to the extent of the Cash Equivalents received) within 180 days following the closing of such Asset Sale and the fair market value of any earnout or similar obligation;

 

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(C) any Designated Non-cash Consideration received by the Issuer or such Restricted Subsidiary in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed the greater of (x) $175,000,000 and (y) 2.25% 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, and

(D) Indebtedness of any Restricted Subsidiary that ceases to be a Restricted Subsidiary as a result of such Asset Sale (other than intercompany debt owed to the Issuer or its Restricted Subsidiaries), to the extent that the Issuer and each other Restricted Subsidiary are released from any guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Sale,

shall be deemed to be Cash Equivalents for purposes of this clause (2) and for no other purpose.

(b) Within 450 days after the receipt of any Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale:

(1) to permanently reduce:

(A) Obligations under Secured Indebtedness of the Issuer or a Restricted Subsidiary, other than Indebtedness owed to the Issuer or a Restricted Subsidiary, which is secured by a Lien that is permitted by this Indenture, and to correspondingly reduce commitments with respect thereto;

(B) Obligations under other Senior Indebtedness (and to correspondingly reduce commitments with respect thereto); provided , that the Issuer shall equally and ratably reduce Obligations under the Notes as provided under Section 3.07 hereof or through open-market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes to be repurchased, to the date of repurchase; or

(C) Obligations under Indebtedness of a Restricted Subsidiary (including the Senior Credit Facilities and the Opco Notes) that is not a Guarantor (including Opco), other than Indebtedness owed to the Issuer or another Restricted Subsidiary; provided , that (i) if an offer to purchase any Indebtedness of a Restricted Subsidiary of the Issuer is made in accordance with the terms of such Indebtedness, the obligation to repay or reduce Indebtedness of a Restricted Subsidiary will be deemed satisfied to the extent of the amount of the offer, whether or not accepted by the holders of such Indebtedness, and no Net Proceeds in the amount of such offer will be deemed to exist following such offer, and (ii) if the holder of any Indebtedness of a Restricted Subsidiary of the Issuer declines the repayment of such Indebtedness owed to it from such Net Proceeds, the obligation to repay or reduce Indebtedness of a Restricted Subsidiary will be deemed satisfied to the extent of the declined Net Proceeds;

(2) to make (a) an Investment in any one or more businesses; provided that such Investment in any business is in the form of the acquisition of Capital Stock and results in the Issuer or any of its Restricted Subsidiaries, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (b) capital expenditures, (c) acquisitions of properties or (d) acquisitions of other assets, in the case of each of (a), (b), (c) and (d), used or useful in a Similar Business; or

(3) to make (a) an Investment in any one or more businesses; provided , that such Investment in any business is in the form of the acquisition of Capital Stock and results in the Issuer or any of its Restricted

 

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Subsidiaries, as the case may be, owning an amount of the Capital Stock of such business such that it constitutes a Restricted Subsidiary, (b) acquisitions of properties or (c) acquisitions of other assets that, in each of (a), (b) and (c), replace the businesses, properties and/or assets that are the subject of such Asset Sale;

provided , that, in the case of clauses (2) and (3) of Section 4.10(b) hereof, a binding commitment shall be treated as a permitted application of the Net Proceeds from the date of such commitment so long as the Issuer or such Restricted Subsidiary enters into such commitment with the good faith expectation that such Net Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “ Acceptable Commitment ”) and, in the event that any Acceptable Commitment is later cancelled or terminated for any reason before the Net Proceeds are applied in connection therewith, the Issuer or such Restricted Subsidiary enters into another Acceptable Commitment (a “ Second Commitment ”) within 180 days of such cancellation or termination (or, if later, 450 days after the receipt of such Net Proceeds); provided , further , that if any Second Commitment is later cancelled or terminated for any reason before such Net Proceeds are applied, then such Net Proceeds shall constitute Excess Proceeds (as defined below).

(c) Any Net Proceeds from the Asset Sale that are not invested or applied as provided and within the time period set forth in the preceding paragraph (it being understood that any portion of such Net Proceeds used to make an offer to purchase Notes, as described in clause (b)(1)(B) above, will be deemed to have been so applied whether or not such offer is accepted) will be deemed to constitute “ Excess Proceeds .” When the aggregate amount of Excess Proceeds exceeds $125,000,000, the Issuer shall make an offer to all Holders and, at the option of the Issuer, to any holders of any Indebtedness that is pari passu with the Notes (“ Pari Passu Indebtedness ” and such offer, an “ Asset Sale Offer ”), to purchase the maximum aggregate principal amount of the Notes and such Pari Passu Indebtedness that is in an amount equal to at least $2,000, or an integral multiple of $1,000 in excess thereof, or, in case any PIK Payment has been made, in a minimum amount of $1.00 and any integral multiple of $1.00, that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100.0% of the principal amount thereof (or accreted value thereof, if less), plus accrued and unpaid interest, if any (or, in respect of such Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Pari Passu Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in Section 3.09. The Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within fifteen Business Days after the date that Excess Proceeds exceed $125,000,000 by mailing or electronically delivering the notice required pursuant to Section 3.09, with a copy to the Trustee or otherwise in accordance with Applicable Procedures. The Issuer may satisfy the foregoing obligations with respect to any Net Proceeds from an Asset Sale by making an Asset Sale Offer with respect to such Net Proceeds prior to the expiration of the relevant 450 days (or such longer period provided above) or with respect to Excess Proceeds of $125,000,000 or less.

To the extent that the aggregate amount of Notes and such Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes, subject to other covenants contained in this Indenture. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds that resulted in the Asset Sale Offer shall be reset to zero (regardless of whether there are any remaining Excess Proceeds upon such completion).

(d) Pending the final application of any Net Proceeds pursuant to this Section 4.10, the holder of such Net Proceeds may apply such Net Proceeds temporarily to reduce Indebtedness outstanding under a revolving credit facility, including under the Senior Credit Facilities, or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.

(e) Notwithstanding the foregoing, the Issuer will not be required to apply in accordance with this Section 4.10 any Net Proceeds received in respect of any Asset Sale by any Restricted Subsidiary until such time as such Restricted Subsidiary is permitted in accordance with the terms of its Indebtedness to dividend or distribute an amount at least equal to such Net Proceeds to the Issuer, excluding for such purpose any such dividends or distributions that are made to be applied to Cash Interest or that are not included in the Applicable Amount because they were intended for another purpose (other than to be applied in accordance with this Section 4.10).

(f) The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with

 

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the repurchase of the Notes 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.

(g) The Issuer’s obligation to make an offer to repurchase the Notes pursuant to this Section 4.10 may be waived or modified with the written consent of the Holders of a majority in principal amount of the then outstanding Notes.

SECTION 4.11. Transactions with Affiliates .

(a) The Issuer will not, and will not permit any of its Restricted Subsidiaries to, 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, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an “ Affiliate Transaction ”) involving aggregate payments or consideration in excess of $25,000,000, unless:

(1) such Affiliate Transaction is on terms that are not materially less favorable to the Issuer or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis; and

(2) the Issuer delivers to the Trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate payments or consideration in excess of $75,000,000, a resolution adopted by the majority of the Board of Directors approving such Affiliate Transaction and set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (1) of this Section 4.11(a).

(b) The foregoing provisions will not apply to the following:

(1) transactions between or among the Issuer or any of its Restricted Subsidiaries, or an entity that becomes a Restricted Subsidiary as a result of such transaction, and any merger, consolidation or amalgamation of the Issuer and any direct parent of the Issuer; provided that such merger, consolidation or amalgamation of the Issuer is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;

(2) (i) Restricted Payments permitted by Section 4.07 hereof and (ii) other Investments constituting “Permitted Investments”;

(3) the payment of management, consulting, monitoring, transaction, advisory and other fees, indemnities and expenses pursuant to the Management Fee Agreement ( plus any unpaid management, consulting, monitoring, transaction, advisory and other fees, indemnities and expenses accrued in any prior year) and the termination fees pursuant to the Management Fee Agreement, or any amendment thereto or replacement thereof so long as any such amendment or replacement is not materially disadvantageous in the good faith judgment of the Board of Directors to the Holders when taken as a whole, as compared to the Management Fee Agreement as in effect on the Issue Date;

(4) the payment of reasonable and customary fees and compensation paid to, and indemnities and reimbursements and employment and severance arrangements provided on behalf of or for the benefit of present, future or former employees, directors, officers, members of management or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any of its direct or indirect parent companies or any of its Restricted Subsidiaries;

(5) transactions in which the Issuer or any of its 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 the Issuer or such Restricted Subsidiary from a financial point of view or stating that the terms are not materially

 

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less favorable to the Issuer or its relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arm’s-length basis;

(6) the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under the terms of, any agreement as in effect as of the Issue Date, or any amendment thereto or replacement thereof (so long as any such amendment or replacement is not materially disadvantageous in the good faith judgment of the Board of Directors to the Holders when taken as a whole as compared to the applicable agreement as in effect on the Issue Date);

(7) the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date and any similar agreements or arrangements which it may enter into thereafter; provided that the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of obligations under any future amendment to any such existing agreement or arrangement or under any similar agreement or arrangement entered into after the Issue Date shall only be permitted by this clause (7) to the extent that the terms of any such amendment or new agreement or arrangement are not otherwise materially disadvantageous in the good faith judgment of the Board of Directors to the Holders when taken as a whole (as compared to the original agreement or arrangement in effect on the Issue Date);

(8) (i) the Transactions and the payment of all fees and expenses related to the Transactions, including Transaction Expenses, (ii) the 2012 Transactions and the payment of all fees and expenses related to the 2012 Transactions, including 2012 Transaction Expenses and (iii) the 2013 Transactions and the payment of all fees and expenses related to the 2013 Transactions, including the 2013 Transaction Expenses;

(9) transactions with customers, clients, suppliers, contractors, joint venture partners or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale 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 the Issuer and its Restricted Subsidiaries, in the reasonable determination of the Board of Directors or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(10) the issuance of Equity Interests (other than Disqualified Stock) of the Issuer to any Person or any contribution to the capital of the Issuer;

(11) sales of accounts receivable, or participations therein, or Securitization Assets or related assets in connection with any Qualified Securitization Facility or any related transaction effected in order to consummate a financing contemplated by a Qualified Securitization Facility;

(12) payments by the Issuer or any of its Restricted Subsidiaries made for any financial advisory, consulting, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which payments are approved by a majority of the Board of Directors in good faith;

(13) payments and Indebtedness and Disqualified Stock (and cancellation of any thereof) of the Issuer and its Restricted Subsidiaries and Preferred Stock (and cancellation of any thereof) of any Restricted Subsidiary to any future, current or former employee, director, officer, member of management or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of the Issuer, any of its Subsidiaries or any of its direct or indirect parent companies 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 distributor equity plan or agreement that are, in each case, approved by the Issuer in good faith; and any employment agreements, severance arrangements, stock option plans and other compensatory arrangements (and any successor plans thereto) and any supplemental executive retirement benefit plans or arrangements with any such employees, directors, officers, distributors, members of management or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) that are, in each case, approved by the Issuer in good faith;

 

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(14) (i) investments by Permitted Holders in securities of the Issuer or any of its Restricted Subsidiaries (and payment of reasonable out-of-pocket expenses incurred by such Permitted Holders in connection therewith) so long as (a) the investment is being offered by the Issuer or such Restricted Subsidiary generally to other investors on the same or more favorable terms and (b) the investment constitutes less than 10.0% of the proposed or outstanding issue amount of such class of securities ( provided that any investments in debt securities by any Debt Fund Affiliates shall not be subject to the limitation in this clause (b)), and (ii) payments to Permitted Holders in respect of securities of the Issuer or any of its Restricted Subsidiaries contemplated in the foregoing subclause (i) or that were acquired from Persons other than the Issuer and its Restricted Subsidiaries, in each case, in accordance with the terms of such securities;

(15) payments to or from, and transactions with, any joint venture or Unrestricted Subsidiary in the ordinary course of business or consistent with past practice or industry norms (including, any cash management activities related thereto);

(16) payments by the Issuer (and any direct or indirect parent company thereof) and its Subsidiaries pursuant to tax sharing agreements among the Issuer (and any such parent company) and its Subsidiaries; provided that in each case the amount of such payments in any taxable year does not exceed the amount that the Issuer, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent of the amount received from Unrestricted Subsidiaries) would be required to pay in respect of foreign, federal, state and local taxes for such taxable year were the Issuer, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such parent entity;

(17) any lease entered into between the Issuer or any Restricted Subsidiary, as lessee and any Affiliate of the Issuer, as lessor, which is approved by a majority of the disinterested members of the Board of Directors in good faith;

(18) intellectual property licenses in the ordinary course of business;

(19) the payment of reasonable out-of-pocket costs and expenses relating to registration rights and indemnities provided to stockholders of the Issuer or any direct or indirect parent thereof pursuant to the stockholders agreement or the registration rights agreement entered into on or after the Issue Date in connection therewith;

(20) transactions permitted by, and complying with, Section 5.01 solely for the purpose of (a) reorganizing to facilitate any initial public offering of securities of the Issuer or any direct or indirect parent company (b) forming a holding company, or (c) reincorporating the Issuer in a new jurisdiction;

(21) transactions undertaken in good faith (as certified by a responsible financial or accounting officer of the Issuer in an Officer’s Certificate) for the purposes of improving the consolidated tax efficiency of the Issuer and its Restricted Subsidiaries and not for the purpose of circumventing any covenant set forth in this Indenture;

(22) payments on the Notes in accordance with this Indenture, payments on the Opco Notes (and any exchange notes to be issued in exchange therefor) in accordance with the applicable Opco Notes Indenture and payments in respect of Obligations under the Credit Facilities and payments in respect of Obligations under other Indebtedness of the Issuer and its Subsidiaries held by Affiliates; provided that such Obligations were acquired by an Affiliate of the Issuer in compliance with this Indenture; and

(23) transactions between the Issuer or any Restricted Subsidiary and any Person that is an Affiliate of the Issuer or such Restricted Subsidiary solely because a director of such Person is also a director of the Issuer, such Restricted Subsidiary or any direct or indirect parent of the Issuer; provided , however , that such director abstains from voting as a director of the Issuer, such Restricted Subsidiary or such direct or indirect parent, as the case may be, on any matter involving such other Person.

 

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SECTION 4.12. Liens . The Issuer will not, and will not permit any Guarantor to, directly or indirectly, create, incur or assume any Lien (except Permitted Liens) that secures Obligations under any Indebtedness of the Issuer, on any asset or property of the Issuer or any Guarantor, or any income or profits therefrom, or assign or convey any right to receive income therefrom, unless:

(1) in the case of Liens securing Subordinated Indebtedness, the Notes and related Guarantees, if any, are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens; and

(2) in all other cases, the Notes or the Guarantees, if any, are equally and ratably secured.

Any Lien created for the benefit of the Holders pursuant to this Section 4.12 shall be deemed automatically and unconditionally released and discharged upon the release and discharge of each of the Liens described in clauses (1) and (2) of this Section 4.12.

The expansion of Liens by virtue of accretion or amortization of original issue discount (excluding accretion or amortization that is expressly provided for in the agreement providing for the applicable Indebtedness that is a zero coupon or similar discount yield instrument) 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 Liens for purposes of this covenant.

For purposes of determining compliance with this Section 4.12, (x) a Lien need not be incurred solely by reference to one category of Permitted Liens or Liens described in clauses (a) through (c) above 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 or Liens described in clauses (a) through (c) above, the Issuer shall, in its sole discretion, classify or may subsequently reclassify at any time such Lien (or any portion thereof) in any manner that complies with this covenant and the definition of Permitted Liens.

SECTION 4.13. Company Existence . Subject to Article V hereof, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its company existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Issuer or any such Restricted Subsidiary; provided that the Issuer shall not be required to preserve the corporate, partnership or other existence of its Restricted Subsidiaries, if the Issuer in good faith shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer and its Restricted Subsidiaries, taken as a whole.

SECTION 4.14. Offer to Repurchase Upon Change of Control .

(a) If a Change of Control occurs, unless the Issuer has previously or concurrently electronically delivered or mailed a redemption notice with respect to all the outstanding Notes as described under Section 3.07 hereof, the Issuer shall make an offer to purchase all of the Notes pursuant to the offer described below (the “ Change of Control Offer ”) at a price in cash (the “ Change of Control Payment ”) equal to 101.0% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date prior to such repurchase. Within 30 days following any Change of Control, the Issuer shall send notice of such Change of Control Offer electronically or by first-class mail, with a copy to the Trustee, to each Holder to the address of such Holder appearing in the Note Register or otherwise in accordance with the Applicable Procedures with the following information:

(1) that a Change of Control Offer is being made pursuant to this Section 4.14 and that all Notes properly tendered pursuant to such Change of Control Offer will be accepted for payment by the Issuer;

 

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(2) the purchase price and the purchase date, which will be no earlier than 30 days nor later than 60 days from the date such notice is mailed or otherwise delivered (the “ Change of Control Payment Date ”), subject to extension (in the case where such notice is mailed or otherwise delivered prior to the occurrence of the Change of Control) in the event that the occurrence of the Change of Control is delayed;

(3) that any Note not properly tendered will remain outstanding and continue to accrue interest;

(4) that unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;

(5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to the Paying Agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(6) that Holders will be entitled to withdraw their tendered Notes and their election to require the Issuer to purchase such Notes; provided , that the Paying Agent receives, not later than the close of business on the second Business Day prior to the expiration date of the Change of Control Offer, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;

(7) that Holders whose Notes are being purchased only in part will be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered. The unpurchased portion of the Notes must be equal to at least $2,000 or any integral multiple of $1,000 in excess of $2,000 or, in case any PIK Payment has been made, in minimum denominations of $1.00 and any integral multiple of $1.00 in excess thereof;

(8) if such notice is delivered prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of Control; and

(9) the other instructions, as determined by the Issuer, consistent with this Section 4.14, that a Holder must follow in order to have its Notes repurchased.

The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes by the Issuer pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Indenture by virtue thereof.

(b) On the Change of Control Payment Date, the Issuer shall, to the extent permitted by law:

(1) accept for payment all Notes issued by it or portions thereof properly tendered pursuant to the Change of Control Offer;

(2) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered; and

(3) deliver, or cause to be delivered, to the Trustee an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuer and, at the Issuer’s option, the Notes so accepted for cancellation.

 

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(c) The Issuer shall not be required to make a Change of Control Offer following 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 this Indenture applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

(d) Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

(e) Other than as specifically provided in this Section 4.14, any purchase pursuant to this Section 4.14 shall be made pursuant to Sections 3.02, 3.05 and 3.06 hereof, and references therein to “redeem,” “redemption,” “Redemption Date” and similar words shall be deemed to refer to “purchase,” “repurchase,” “Change of Control Payment Date” and similar words, as applicable.

(f) The Issuer’s obligation to make an offer to repurchase the Notes pursuant to this section 4.14 may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.

SECTION 4.15. Limitation on Guarantees of Indebtedness by Restricted Subsidiaries . The Issuer shall not permit any of its Wholly-Owned Subsidiaries that are Restricted Subsidiaries (and non-Wholly-Owned Subsidiaries if such non-Wholly-Owned Subsidiaries guarantee other capital markets debt securities of the Issuer or any Guarantor), other than a Guarantor, a Foreign Subsidiary or a Securitization Subsidiary, to guarantee the payment of any Indebtedness of the Issuer or any related guarantee of such Indebtedness unless:

(1) such Restricted Subsidiary within 30 days after the guarantee of such Indebtedness of the Issuer executes and delivers a supplemental indenture to this Indenture, the form of which is attached as Exhibit D hereto, providing for a Guarantee by such Restricted Subsidiary, except that with respect to a guarantee of Indebtedness of the Issuer, if such Indebtedness is by its express terms subordinated in right of payment to the Notes, any such guarantee by such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Guarantee substantially to the same extent as such Indebtedness is subordinated to the Notes; and

(2) such Restricted Subsidiary waives and shall not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other applicable rights against the Issuer or any other Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Guarantee;

provided that this covenant shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary. The Issuer may elect, in its sole discretion, to cause any Subsidiary that is not otherwise required to be a Guarantor to become a Guarantor, in which case such Subsidiary shall not be required to comply with the 30-day period described in clause (1) of this Section 4.15.

SECTION 4.16. Suspension of Covenants .

(a) During any period of time that (i) the Notes 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 ” and the date thereof being referred to as the “ Suspension Date ”) then, Section 4.07, Section 4.08, Section 4.09, Section 4.10, Section 4.11, Section 4.15 and Section 5.01(a)(4) hereof shall not be applicable to the Notes (collectively, the “ Suspended Covenants ”).

 

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(b) During a Suspension Period (as defined below), the Issuer may not designate any of its Subsidiaries as Unrestricted Subsidiaries pursuant to the second sentence of the definition of “Unrestricted Subsidiary.”

(c) In the event that the Issuer 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 Notes below an Investment Grade Rating, then the Issuer and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under this Indenture with respect to future events. The period of time between the Suspension Date and the Reversion Date is referred to in this Indenture as the “ Suspension Period .” The Guarantees of the Guarantors, if any, will be suspended during the Suspension Period. Additionally, upon the occurrence of a Covenant Suspension Event, the amount of Excess Proceeds from Net Proceeds shall be reset to zero.

(d) Notwithstanding the foregoing, in the event of any such reinstatement, no action taken or omitted to be taken by the Issuer or any of its Restricted Subsidiaries or events occurring prior to such reinstatement will give rise to a Default or Event of Default under this Indenture with respect to the Notes; provided , that (i) with respect to Restricted Payments made after such reinstatement, the amount available to be made as Restricted Payments will be calculated as though Section 4.07 hereof had been in effect prior to, but not during, the Suspension Period; (ii) all Indebtedness incurred, or Disqualified Stock issued, during the Suspension Period will be classified to have been incurred or issued pursuant to Section 4.09(b)(3) hereof; provided , that all Indebtedness outstanding on the Reversion Date under the Senior Credit Facilities shall be deemed incurred or issued pursuant to Section 4.09(b)(1) hereof (up to the maximum amount of such Indebtedness that would be permitted to be incurred thereunder as of the Reversion Date and after giving effect to Indebtedness incurred prior to the Suspension Period and outstanding on the Reversion Date); (iii) any Affiliate Transaction entered into after the Reversion Date pursuant to an agreement entered into during any Suspension Period shall be deemed to be permitted pursuant to Section 4.11(b)(6) hereof; (iv) any encumbrance or restriction on the ability of any Restricted Subsidiary that is not a Guarantor to take any action described in clauses (1) through (3) of Section 4.08(a) hereof that becomes effective during any Suspension Period shall be deemed to be permitted pursuant to Section 4.08(b)(1) hereof; and (v) no Subsidiary of the Issuer shall be required to comply with Section 4.15 hereof after such reinstatement with respect to any guarantee entered into by such Subsidiary during any Suspension Period.

(e) On and after each Reversion Date, the Issuer and its Subsidiaries will be permitted to consummate the transactions contemplated by any contract entered into during the Suspension Period, so long as such contract and such consummation would have been permitted during such Suspension Period.

ARTICLE V

SUCCESSORS

SECTION 5.01. Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets .

(a) The Issuer may not consolidate, amalgamate or merge with or into or wind up into (whether or not the Issuer is the surviving Person), 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 unless:

(1) the Issuer is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than the Issuer) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made, is a Person organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Person, as the case may be, being herein called the “ Successor Company ”); provided that in the case where the surviving Person is not a corporation, a co-obligor of the Notes is a corporation;

(2) the Successor Company, if other than the Issuer, expressly assumes all the obligations of the Issuer under the Notes pursuant to supplemental indentures or other documents or instruments;

 

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(3) immediately after such transaction, no Default exists;

(4) immediately after giving pro forma effect to such transaction and any related financing transactions, as if such transactions had occurred at the beginning of the applicable Test Period,

(A) the Successor Company would be permitted to incur at least $1.00 of additional Indebtedness under clause (i) of Section 4.09(a) hereof, or

(B) the Fixed Charge Coverage Ratio for the Successor Company would be equal to or greater than the Fixed Charge Coverage Ratio for the Issuer immediately prior to such transaction;

(5) each Guarantor, if any, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Person’s obligations under this Indenture and the Notes; and

(6) the Successor Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indentures, if any, comply with this Indenture.

(b) The foregoing clauses (3), (4), (5) and (6) of Section 5.01(a) hereof shall not apply to the Transactions. Notwithstanding clauses (3) and (4) of Section 5.01(a) hereof,

(1) any Restricted Subsidiary may consolidate with, amalgamate with or merge with or into or wind up into or sell, assign, lease, convey, transfer or otherwise dispose of all or part of its properties and assets to the Issuer, and

(2) the Issuer may consolidate with, amalgamate with or merge with or into, or wind up into an Affiliate of the Issuer solely for the purpose of reincorporating the Issuer in the United States, any state thereof, the District of Columbia or any territory thereof so long as the amount of Indebtedness of the Issuer and its Restricted Subsidiaries is not increased thereby.

(c) Subject to Section 10.06 hereof, no Guarantor will, and the Issuer will not permit any Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Guarantor is the surviving Person), 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 unless:

(1) (A) such Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a Person organized or existing under the laws of the jurisdiction of organization of such Guarantor, as applicable, or the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Guarantor or such Person, as the case may be, being herein called the “ Successor Person ”);

(B) the Successor Person, if other than such Guarantor, expressly assumes all the obligations of such Guarantor under this Indenture and such Guarantor’s related Guarantee pursuant to supplemental indentures or other documents or instruments;

(C) immediately after such transaction, no Default exists; and,

(D) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indentures, if any, comply with this Indenture;

(2) the transaction is made in compliance with, if applicable, Section 4.10; or

(3) in the case of assets comprised of Equity Interests of Subsidiaries that are not Guarantors, such Equity Interests are sold, assigned, transferred, leased, conveyed or otherwise disposed of to one or more Restricted Subsidiaries.

 

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(d) Notwithstanding the foregoing, any Guarantor may (1) merge, amalgamate or consolidate with or into, wind up into or sell, assign, transfer, lease, convey or otherwise dispose of all or part of its properties and assets to another Guarantor or the Issuer, (2) merge with an Affiliate of the Issuer solely for the purpose of reincorporating the Guarantor in the United States, any state thereof, the District of Columbia or any territory thereof, (3) convert into a corporation, partnership, limited partnership, limited liability company or trust organized or existing under the laws of the jurisdiction of organization of such Guarantor or (4) liquidate or dissolve or change its legal form if the Issuer determines in good faith that such action is in the best interests of the Issuer and is not materially disadvantageous to the Holders.

SECTION 5.02. Successor Person Substituted . Upon any consolidation, amalgamation or merger, or any winding up, sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Issuer or a Guarantor in accordance with Section 5.01 hereof, the successor Person formed by such consolidation or amalgamation or into or with which the Issuer or such Guarantor, as applicable, is merged or to which such wind up, sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, amalgamation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture, the Notes and the Guarantees referring to the Issuer or such Guarantor, as applicable, shall refer instead to the Successor Person and not to the Issuer or such Guarantor, as applicable), and may exercise every right and power of the Issuer or such Guarantor, as applicable, under this Indenture, the Notes and the Guarantees with the same effect as if such Successor Person had been named as the Issuer or a Guarantor, as applicable, herein, and, in the case of a predecessor Issuer shall be automatically released from its obligations thereunder; provided that the predecessor Issuer shall not be relieved from the obligations under this Indenture, the Notes and the Guarantees in the case of any consolidation, amalgamation, lease or merger.

ARTICLE VI

DEFAULTS AND REMEDIES

SECTION 6.01. Events of Default . An “ Event of Default ,” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected 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):

(1) default in payment when due and payable, upon redemption, acceleration or otherwise, of principal of, or premium, if any, on the Notes;

(2) default for 30 days or more in the payment when due of interest on or with respect to the Notes;

(3) failure by the Issuer or any Guarantor for 60 days after receipt of written notice given by the Trustee or the Holders of not less than 25.0% in principal amount of the then outstanding Notes to comply with any of its obligations, covenants or agreements (other than a default referred to in clause (1) or (2) of this Section 6.01) contained in this Indenture or the Notes;

(4) default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Issuer or any of its Restricted Subsidiaries or the payment of which is guaranteed by the Issuer or any of its Restricted Subsidiaries, other than Indebtedness owed to the Issuer or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists or is created after the issuance of the Notes, if both:

(A) such default either results from the failure to pay any principal of such Indebtedness at its stated final maturity (after giving effect to any applicable grace periods) or relates to

 

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an obligation other than the obligation to pay principal of any such Indebtedness at its stated final maturity and results in the holder or holders of such Indebtedness causing such Indebtedness to become due prior to its stated maturity; and

(B) the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at its stated final maturity (after giving effect to any applicable grace periods), or the maturity of which has been so accelerated, aggregate $100,000,000 or more at any one time outstanding;

(5) failure by the Issuer or any Significant Subsidiary to pay final judgments aggregating in excess of $100,000,000 (net of amounts covered by insurance policies issued by reputable insurance companies), which final judgments remain unpaid, undischarged, unwaived and unstayed for a period of more than 90 days after such judgment becomes final, 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;

(6) the Issuer or any of its Significant Subsidiaries, pursuant to or within the meaning of any Bankruptcy Law:

(i) commences proceedings to be adjudicated bankrupt or insolvent;

(ii) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under applicable Bankruptcy Law;

(iii) consents to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;

(iv) makes a general assignment for the benefit of its creditors; or

(v) generally is not paying its debts as they become due;

(7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against the Issuer or any of its Significant Subsidiaries in a proceeding in which the Issuer or any such Significant Subsidiary is to be adjudicated bankrupt or insolvent;

(ii) appoints a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or any of its Significant Subsidiaries or for all or substantially all of the property of the Issuer or any of its Significant Subsidiaries; or

(iii) orders the liquidation of the Issuer or any of its Significant Subsidiaries;

and the order or decree remains unstayed and in effect for 60 consecutive days; or

(8) the Guarantee, if any, of any Significant Subsidiary shall for any reason cease to be in full force and effect or be declared null and void in a final non-appealable judgment of a court of competent jurisdiction or any responsible officer of any Guarantor that is a Significant Subsidiary, denies in writing that it has any further liability under its Guarantee or gives written notice to such effect, other than by reason of the termination of this Indenture or the release of any such Guarantee in accordance with this Indenture.

SECTION 6.02. Acceleration . If any Event of Default (other than an Event of Default specified in clause (6) or (7) of Section 6.01 hereof with respect to the Issuer) occurs and is continuing under this Indenture, the

 

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Trustee or the Holders of at least 25.0% in principal amount of the then total outstanding Notes by notice to the Issuer may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. Upon the effectiveness of such declaration, such principal of and premium, if any, and interest shall be due and payable immediately. The Trustee may withhold from the Holders notice of any continuing Default, except a Default relating to the payment of principal, premium, if any, or interest, if it determines that withholding notice is in the Holders’ interest. The Trustee shall have no obligation to accelerate the Notes if the Trustee in its best judgment determines that acceleration is not in the best interests of the Holders.

Notwithstanding the foregoing, in the case of an Event of Default arising under clause (6) or (7) of Section 6.01 hereof with respect to the Issuer, all outstanding Notes shall be due and payable immediately without further action or notice.

The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of the Holders of all of the Notes rescind any acceleration with respect to the Notes and its consequences if such rescission would not conflict with any judgment of a court of competent jurisdiction and if all existing Events of Default (except non-payment of interest on, premium, if any, or the principal of any Note held by a non-consenting Holder that has become due solely because of the acceleration) have been cured or waived.

In the event of any Event of Default specified in Section 6.01(4) hereof, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) 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:

(1) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged;

(2) holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or

(3) the default that is the basis for such Event of Default has been cured or is no longer continuing.

SECTION 6.03. Other Remedies . If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note 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. All remedies are cumulative to the extent permitted by law.

SECTION 6.04. Waiver of Past Defaults . Subject to Section 6.02 hereof, Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default and its consequences hereunder (except a continuing Default in the payment of interest on, premium, if any, or the principal of any Note held by a non-consenting Holder) (including in connection with an Asset Sale Offer or a Change of Control Offer). Upon any such waiver, 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 right consequent thereon.

SECTION 6.05. Control by Majority . Holders of a majority in principal amount of the then total outstanding Notes 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 this Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability.

 

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SECTION 6.06. Limitation on Suits . Subject to Section 6.07 hereof, no Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:

(1) such Holder has previously given the Trustee written notice that an Event of Default is continuing;

(2) Holders of at least 25.0% in principal amount of the then total outstanding Notes have requested in writing the Trustee to pursue the remedy;

(3) Holders have offered the Trustee security or indemnity reasonably satisfactory to it against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5) Holders of a majority in principal amount of the then total outstanding Notes have not given the Trustee a direction inconsistent with such written request within such 60-day period.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

SECTION 6.07. Rights of Holders to Receive Payment . Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal of, premium, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an Asset Sale Offer or a Change of Control Offer), 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.

SECTION 6.08. Collection Suit by Trustee . If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount of principal of, premium, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

SECTION 6.09. 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 proceedings, the Issuer, 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 has been instituted.

SECTION 6.10. Rights and Remedies Cumulative . Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07 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 6.11. Delay or Omission Not Waiver . No delay or omission of the Trustee or of any Holder of any Note 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 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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SECTION 6.12. Trustee May File Proofs of Claim . The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes including the Guarantors, if any), its creditors or its property and shall be entitled and empowered to participate as a member in any official committee of creditors appointed in such matter and to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee on behalf of such Holder, 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 to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained 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 Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

SECTION 6.13. Priorities . If the Trustee or any Agent collects any money or property pursuant to this Article VI, it shall pay out the money or property in the following order:

(i) to the Trustee, such Agent, their agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee or such Agent and the costs and expenses of collection;

(ii) to Holders for amounts due and unpaid on the Notes for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and

(iii) to the Issuer or to such party as a court of competent jurisdiction shall direct including a Guarantor, if applicable.

The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.13.

SECTION 6.14. 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 a 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 6.14 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10.0% in principal amount of the then outstanding Notes.

ARTICLE VII

TRUSTEE

SECTION 7.01. Duties of Trustee .

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture on behalf of the Holders, 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.

 

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(b) Except during the continuance of an Event of Default:

(i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(ii) in the absence of willful misconduct or 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 any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the 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 liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(i) this paragraph (c) does not limit the effect of paragraph (b) of this Section 7.01;

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved in a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and

(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 6.02, 6.04 or 6.05 hereof.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.

(e) The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders unless the Holders have offered to the Trustee indemnity or security reasonably satisfactory to it against any loss, liability or expense that might be incurred by it in compliance with such request or direction.

(f) 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. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

SECTION 7.02. Rights of Trustee .

(a) The Trustee may conclusively rely upon and shall be fully protected in acting or refraining from acting upon 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, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(b) 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 such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

 

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(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by an Officer.

(f) None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

(g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default or Event of Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.

(h) In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

(j) Delivery of 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).

(k) The permissive rights of the Trustee to take certain actions under this Indenture shall not be construed as a duty unless so specified herein.

(l) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer, and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(m) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.

(n) 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.

SECTION 7.03. Individual Rights of Trustee . The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any of its Affiliates with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

 

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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 or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

SECTION 7.05. Notice of Defaults . If a Default occurs and is continuing and if it is known to the Trustee, the Trustee shall deliver to Holders a notice of the Default within 90 days after it occurs. Except in the case of a Default relating to the payment of principal, premium, if any, or interest on any Note, the Trustee may withhold from the Holders notice of any continuing Default if and so long as it in good faith determines that withholding the notice is in the interests of the Holders.

SECTION 7.06. [Reserved] .

SECTION 7.07. Compensation and Indemnity . The Issuer shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the parties shall agree in writing from time to time. 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 promptly upon request for all reasonable out-of-pocket disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

The Issuer and each Guarantor executing a supplemental indenture to Guarantee the Notes, jointly and severally, shall indemnify the Trustee for, and hold the Trustee harmless against, any and all loss, damage, claims, liability or expense (including reasonable attorneys’ fees and expenses) incurred by it in connection with the acceptance or administration of this trust and the performance of its duties hereunder (including the reasonable costs and expenses of enforcing this Indenture against the Issuer or any Guarantor (including this Section 7.07) or defending itself against any claim whether asserted by any Holder, the Issuer or any Guarantor, or any other Person or liability in connection with the acceptance, exercise or performance of any of its powers or duties hereunder) (but excluding taxes imposed on such persons in connection with compensation for such administration or performance). The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee may have separate counsel and the Issuer shall pay the reasonable fees and expenses of such counsel. The Issuer nor any Guarantor need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct or negligence. Neither the Issuer nor any Guarantor need pay for any settlement made without its consent, which consent shall not be unreasonably withheld.

The obligations of the Issuer under this Section 7.07 shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee.

To secure the payment obligations of the Issuer and any Guarantor in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except for money or property held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(6) or (7) hereof occurs, the expenses and the compensation for the services (including the reasonable fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

SECTION 7.08. Replacement of Trustee . A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuer in writing not less than 30 days prior to the effective date of such removal. The Issuer may remove the Trustee if:

(A) the Trustee fails to comply with Section 7.10 hereof;

 

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(B) the Trustee is adjudged bankrupt or insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

(C) a custodian or public officer takes charge of the Trustee or its property; or

(D) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee (at the Issuer’s expense), the Issuer or the Holders of at least 10.0% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

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 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 have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

The resigning Trustee shall have no responsibility or liability for any action or inaction of a successor Trustee.

SECTION 7.09. Successor Trustee by Merger, etc . If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.

SECTION 7.10. Eligibility; Disqualification . There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has, together with its parent, a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.

ARTICLE VIII

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 8.01. Option to Effect Legal Defeasance or Covenant Defeasance . The Issuer may, at its option and at any time, elect to have either Section 8.02 or 8.03 hereof applied to all outstanding Notes and all obligations of the Guarantors (if any) with respect to the Guarantees (if any) upon compliance with the conditions set forth below in this Article VIII.

 

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SECTION 8.02. Legal Defeasance and Discharge . Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Issuer and the Guarantors (if any) shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes and Guarantees (if any) on the date the conditions set forth below are satisfied (“ Legal Defeasance ”). For this purpose, Legal Defeasance means that the Issuer and the Guarantors (if any) shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof, to have cured all then existing Events of Default and to have satisfied all its other obligations under such Notes and this Indenture including that of the Guarantors (if any) (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:

(A) the rights of Holders to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due solely out of the trust created pursuant to this Indenture referred to in Section 8.04 hereof;

(B) the Issuer’s obligations with respect to Notes concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(C) the rights, powers, trusts, duties and immunities of the Trustee, and the Issuer’s obligations in connection therewith; and

(D) this Section 8.02.

Subject to compliance with this Article VIII, the Issuer may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

SECTION 8.03. Covenant Defeasance . Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Issuer and the Guarantors (if any) shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14 and 4.15 hereof and clauses (4) and (5) of Section 5.01(a), and Sections 5.01(c) and 5.01(d) hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 hereof are satisfied (“ Covenant Defeasance ”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and the Guarantees (if any), the Issuer and the Guarantors (if any) may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document, and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and the Guarantees (if any) shall be unaffected thereby. In addition, upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) (solely with respect to the covenants that are released upon a Covenant Defeasance), 6.01(4), 6.01(5), 6.01(6) (solely with respect to the Issuer’s Restricted Subsidiaries), 6.01(7) (solely with respect to the Issuer’s Restricted Subsidiaries) and 6.01(8) hereof shall not constitute Events of Default.

SECTION 8.04. Conditions to Legal or Covenant Defeasance . In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes:

(1) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, U.S. dollar-denominated Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, investment bank or appraisal firm to pay the principal of, premium, if any, and interest due on the

 

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Notes on the stated maturity date or on the Redemption Date, as the case may be, of such principal, premium, if any, or interest on such Notes, and the Issuer must specify whether such Notes are being defeased to maturity or to a particular Redemption Date; provided , that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of this Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any deficit as of the date of redemption (any such amount, the “ Applicable Premium Deficit ”) only required to be deposited with the Trustee on or prior to the date of redemption. Any Applicable Premium Deficit shall be set forth in an Officer’s Certificate delivered to the Trustee simultaneously with the deposit of such Applicable Premium Deficit that confirms that such Applicable Premium Deficit shall be applied toward such redemption;

(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel confirming that, subject to customary assumptions and exclusions

(A) the Issuer has received from, or there has been published by, the United States Internal Revenue Service a ruling or

(B) since the issuance of the Notes, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the beneficial owners of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes, as applicable, as a result of such Legal 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 Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel confirming that, subject to customary assumptions and exclusions, the beneficial owners of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to such tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under any material agreement, instrument or documents (other than this Indenture) to which, the Issuer or any Guarantor (if any) is a party or by which the Issuer or any Guarantor is bound (other than that resulting from any borrowing of 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 other Indebtedness, and, in each case, the granting of Liens in connection therewith);

(6) the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that, as of the date of such opinion and subject to customary assumptions and exclusions following the deposit, the trust funds will not be subject to the effect of Section 547 of Title 11 of the United States Code;

(7) the Issuer shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Issuer with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuer or any Guarantor or others; and

(8) the Issuer shall have delivered 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 provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.

 

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Notwithstanding the foregoing, an Opinion of Counsel required by the immediately preceding paragraph with respect to Legal Defeasance need not be delivered if all of the Notes not theretofore delivered to the Trustee for cancellation (x) have become due and payable or (y) will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer.

SECTION 8.05. Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions . Subject to Section 8.06 hereof, all money and Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “ Trustee ”) pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer or a Guarantor acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and interest, but such money need not be segregated from other funds except to the extent required by law.

The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon the request of the Issuer any money or Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

SECTION 8.06. Repayment to Issuer . Subject to any applicable abandoned property law, any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Issuer on its request or (if then held by the Issuer) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease.

SECTION 8.07. Reinstatement . If the Trustee or Paying Agent is unable to apply any United States dollars or Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuer’s and any Guarantor’s obligations under this Indenture and the Notes and any Guarantees shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided that, if the Issuer makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE IX

AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 9.01. Without Consent of Holders . Notwithstanding Section 9.02 hereof, the Issuer, any Guarantor (with respect to a Guarantee or this Indenture to which it is a party) and the Trustee may amend or supplement this Indenture and any Guarantee or Notes without the consent of any Holder:

(1) to cure any ambiguity, omission, mistake, defect or inconsistency;

 

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(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;

(3) to comply with Section 5.01 hereof;

(4) to provide the assumption of the Issuer’s or any Guarantor’s obligations to the Holders;

(5) to make any change that would provide any additional rights or benefits to the Holders or that does not materially adversely affect the legal rights under this Indenture of any such Holder;

(6) to add covenants for the benefit of the Holders or to surrender any right or power conferred upon the Issuer or any Guarantor;

(7) [Reserved];

(8) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee hereunder pursuant to the requirements hereof;

(9) to provide for the issuance of exchange notes or private exchange notes, which are identical to exchange notes except that they are not freely transferable;

(10) to add a Guarantor under this Indenture or to release a Guarantor in accordance with the terms of this Indenture;

(11) to conform the text of this Indenture, Guarantees or the Notes to any provision of the “Description of Notes” section of the Offering Memorandum to the extent that such provision in such “Description of Notes” section was intended to be a verbatim recitation of a provision of this Indenture, Guarantee or Notes, as provided to the Trustee in an Officer’s Certificate;

(12) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including, to facilitate the issuance and administration of the Notes; provided that (a) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (b) such amendment does not materially and adversely affect the rights of Holders to transfer Notes;

(13) to provide for the issuance of Additional Notes or PIK Notes in accordance with the terms of this Indenture; or

(14) in the event that the PIK Notes are issued in certificated form, to make appropriate amendments to this Indenture to reflect an appropriate minimum denomination of certificated PIK Notes and establish minimum redemption amounts for certificated PIK Notes.

Upon the request of the Issuer accompanied by a resolution of the Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof (to the extent requested by the Trustee), the Trustee shall join with the Issuer and the Guarantors (if any) in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall have the right, but not be obligated to, enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise. Notwithstanding the foregoing, neither an Opinion of Counsel nor an Officer’s Certificate shall be required in connection with the addition of a Guarantor under this Indenture upon execution and delivery by such Guarantor and the Trustee of a supplemental indenture to this Indenture, the form of which is attached as Exhibit D hereto, provided that the execution thereof shall be deemed a representation by such Guarantor(s) that all conditions precedent and covenants, if any, relating to the execution of such supplemental indenture have been satisfied and the supplemental indenture is enforceable in accordance with its terms subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and similar laws affecting the rights and remedies of creditors generally and (ii) general principles of equity.

 

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SECTION 9.02. With Consent of Holders . Except as provided below in this Section 9.02, the Issuer, the Guarantors (if any) and the Trustee may amend or supplement this Indenture, the Notes and any Guarantees with the consent of the Holders of at least a majority in principal amount of the Notes (including Additional Notes and PIK Notes, if any) then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Guarantees (if any) or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including Additional Notes and PIK Notes, if any) voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes); Section 2.08 hereof and Section 2.09 hereof shall determine which Notes are considered to be “outstanding” for the purposes of this Section 9.02.

Upon the request of the Issuer accompanied by a resolution of its board of directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Issuer (and, in respect of any Guarantee, the applicable Guarantors) in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

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 or waiver, but it shall be sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall deliver to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to deliver such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

Without the consent of each affected Holder of Notes, an amendment or waiver under this Section 9.02 may not, with respect to any Notes held by a non-consenting Holder:

(1) reduce the principal amount of such Notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the principal of or change the fixed final maturity of any such Note or reduce the premium payable upon the redemption of such Notes on any date (other than the provisions relating to Section 3.09, Section 4.10 and Section 4.14 hereof); provided , that any amendment to the notice requirements may be made with the consent of the Holders of a majority in aggregate principal amount of then outstanding Notes;

(3) reduce the rate of or change the time for payment of interest on any Note;

(4) waive a Default in the payment of principal of or premium, if any, or interest on the Notes, except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration, or in respect of a covenant or provision contained in this Indenture or any Guarantee which cannot be amended or modified without the consent of all affected Holders;

(5) make any Note payable in money other than that stated therein;

(6) make any change in the provisions of this Indenture relating to waivers of past Defaults;

(7) make any change in this Article IX that is materially adverse to the Holders;

 

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(8) impair the right of any Holder to receive payment of principal of, or premium, if any, or interest on such Holder’s Notes or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes;

(9) make any change to or modify the ranking of the Notes that would adversely affect the Holders; or

(10) except as expressly permitted by this Indenture, modify the Guarantees of any Significant Subsidiary, in any manner materially adverse to the Holders.

SECTION 9.03. [Reserved] .

SECTION 9.04. Revocation and Effect of Consents . Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, 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 unless the consent of the requisite number of Holders has been obtained.

SECTION 9.05. Notation on or Exchange of Notes . The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

SECTION 9.06. Trustee to Sign Amendments, etc . The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article IX if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Issuer may not sign an amendment, supplement or waiver until the board of directors of the Issuer approves it. In executing any amendment, supplement or waiver, the Trustee shall receive, and shall be fully protected in relying conclusively upon, in addition to the documents required by Section 12.04 hereof, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer and any Guarantors party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof.

Notwithstanding the foregoing, neither an Opinion of Counsel nor an Officer’s Certificate will be required for the Trustee to execute any amendment or supplement adding a new Guarantor under this Indenture.

ARTICLE X

GUARANTEES

SECTION 10.01. Guarantee . If the Notes are Guaranteed pursuant to Section 4.15 hereof, each Guarantor, subject to this Article X and execution of a related supplemental indenture, shall jointly and severally, irrevocably

 

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and unconditionally guarantees, on an unsecured basis, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the Obligations of the Issuer hereunder or thereunder, that (a) the principal of and interest and premium, if any, on the Notes shall be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Issuer to the Holders or the Trustee hereunder or thereunder, including for expenses, indemnification or otherwise, shall be promptly paid in full, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other Obligations, that same shall be promptly paid in full when due in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed for whatever reason, the Guarantors (if any) shall be jointly and severally obligated to pay the same promptly. Each Guarantor executing a supplemental indenture to Guarantee the Notes agrees that this is a guarantee of payment and not a guarantee of collection.

Each Guarantor executing a supplemental indenture to Guarantee the Notes agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (other than payment in full of all of the Obligations of the Issuer hereunder and under the Notes). Each Guarantor executing a supplemental indenture to Guarantee the Notes waives, to the fullest extent permitted by law, diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Guarantee shall not be discharged except by full payment of the obligations contained in the Notes and this Indenture or by release in accordance with the provisions of this Indenture.

Each Guarantor executing a supplemental indenture to Guarantee the Notes also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01.

If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors (if any) or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer or any Guarantor, then any amount paid either to the Trustee or such Holder, then this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

Until terminated in accordance with Section 10.06, each Guarantor executing a supplemental indenture to Guarantee the Notes agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor executing a supplemental indenture to Guarantee the Notes further agrees that, as between the Guarantors (if any), on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article VI hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors (if any) for the purpose of this Guarantee. The Guarantors (if any) shall have the right to seek contribution from any nonpaying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantees.

Each Guarantee (if any) shall remain in full force and effect and continue to be effective should any petition be filed by or against the Issuer for liquidation, reorganization, should the Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Issuer’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes or Guarantees (if any), whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

 

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In case any provision of any Guarantee 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.

The Guarantee issued by any Guarantor shall be a general unsecured senior obligation of such Guarantor and shall be pari passu in right of payment with all existing and future Senior Indebtedness of such Guarantor, if any.

Each payment to be made by a Guarantor (if any) in respect of its Guarantee shall be made without setoff, counterclaim, reduction or diminution of any kind or nature.

SECTION 10.02. Limitation on Guarantor Liability . Each Guarantor executing a supplemental indenture to Guarantee the Notes, and by its acceptance of the Notes, each Holder, hereby confirms that it is the intention of all such parties that the Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and each Guarantor executing a supplemental indenture to Guarantee the Notes irrevocably agree that the obligations of such Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article X, result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law. Each Guarantor that makes a payment under its Guarantee shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.

SECTION 10.03. Execution and Delivery . To evidence its Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that a supplemental indenture in the form of Exhibit D shall be executed on behalf of such Guarantor by one of its authorized Officers.

Each Guarantor executing a supplemental indenture to Guarantee the Notes agrees that its Guarantee set forth in Section 10.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Guarantee of such Guarantor shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantors (if any).

If required by Section 4.15 hereof, the Issuer shall cause any newly created or acquired Restricted Subsidiary to comply with Section 4.15 hereof and this Article X, to the extent applicable.

SECTION 10.04. Subrogation . Subject to the fifth paragraph of Section 10.01 and Section 10.02, each Guarantor that executes a supplemental indenture to Guarantee the Notes shall be subrogated to all rights of Holders against the Issuer in respect of any amounts paid by any Guarantor pursuant to Section 10.01 hereof; provided that, if an Event of Default has occurred and is continuing, no Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Issuer under this Indenture or the Notes shall have been paid in full.

SECTION 10.05. Benefits Acknowledged . Each Guarantor that executes a supplemental indenture to Guarantee the Notes acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Guarantee are knowingly made in contemplation of such benefits.

 

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SECTION 10.06. Release of Guarantees . A Guarantee by a Guarantor will provide by its terms that it shall be automatically and unconditionally released and discharged and shall thereupon terminate and be of no further force and effect, and no further action by such Guarantor, the Issuer or the Trustee is required for the release of such Guarantor’s Guarantee, upon:

(1) (A) any sale, exchange, disposition or transfer (by merger, amalgamation, consolidation or otherwise) of (i) the Capital Stock of such Guarantor, after which the applicable Guarantor is no longer a Restricted Subsidiary, or (ii) all or substantially all of the assets of such Guarantor including if to the Issuer or another Guarantor, in each case if such sale, exchange, disposition or transfer is made in compliance with the applicable provisions of this Indenture;

(B) the release or discharge of the guarantee that resulted in the creation of such Guarantee, except a discharge or release by or as a result of payment under such guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that if any such guarantee is so reinstated, such Guarantee shall also be reinstated to the extent that such Guarantor would then be required to provide a Guarantee pursuant to Section 4.15 hereof);

(C) the designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in compliance with the applicable provisions of this Indenture; or

(D) the exercise by the Issuer of its Legal Defeasance option or Covenant Defeasance option in accordance with Article VIII hereof or the discharge of the Issuer’s obligations under this Indenture in accordance with the terms of this Indenture; and

(2) the Issuer delivering to the Trustee an Officer’s Certificate of such Guarantor and an Opinion of Counsel, each stating that all conditions precedent provided for in this Indenture relating to such transaction have been complied with.

ARTICLE XI

SATISFACTION AND DISCHARGE

SECTION 11.01. Satisfaction and Discharge . This Indenture shall be discharged and shall cease to be of further effect as to all Notes, when either:

(1) all Notes theretofore authenticated and delivered, except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust, have been delivered to the Trustee for cancellation; or

(2) (A) all Notes not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption 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 as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, U.S. dollar-denominated Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption; provided that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of this Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date of the notice of redemption, with any Applicable Premium Deficit only required to be deposited with the Trustee on or prior

 

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to the date of redemption. Any Applicable Premium Deficit shall be set forth in an Officer’s Certificate delivered to the Trustee simultaneously with the deposit of such Applicable Premium Deficit that confirms that such Applicable Premium Deficit shall be applied toward such redemption;

(B) the Issuer has paid or caused to be paid all sums payable by it under this Indenture; and

(C) the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the Redemption Date, as the case may be.

In addition, the Issuer must deliver an Officer’s Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied. Such Opinion of Counsel may rely on such Officer’s Certificate as to matters of fact, including clauses 2(A), (B) and (C) above.

Notwithstanding the satisfaction and discharge of this Indenture, if money shall have been deposited with the Trustee pursuant to subclause (A) of clause (2) of this Section 11.01, Section 11.02 and Section 8.06 hereof shall survive such satisfaction and discharge.

SECTION 11.02. Application of Trust Money . Subject to Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 11.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer or a Guarantor acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 11.01 hereof 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 and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 hereof; provided that if the Issuer has made any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

ARTICLE XII

MISCELLANEOUS

SECTION 12.01. [Reserved] .

SECTION 12.02. Notices . Any notice or communication by the Issuer, any Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), facsimile, electronic mail (in “.pdf” format) or overnight air courier guaranteeing next day delivery, to the others’ address:

If to the Issuer and/or any Guarantor:

Healthcare Technology Intermediate, Inc.

83 Wooster Heights Road

Danbury, Connecticut 06810

Attention: General Counsel

 

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with a copy (which copy shall not constitute notice) to:

TPG Capital, L.P.

345 California Street

Suite 3300

San Francisco, California 94104

Attention: Jack Weingart

CPP Investment Board Private Holdings Inc.

1 Queen Street East

Suite 1500

Toronto, Ontario M5C 2W5

Canada

Attention: Andre Bourbonnais

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, Massachusetts 02199

Attention: Michael Lee, Esq.

If to the Trustee:

Wells Fargo Bank, National Association

45 Broadway, 14th floor

New York, NY 10006

Attention: Corporate Trust Services, Administrator for Healthcare Technology Intermediate, Inc.

Fax: (212) 515-1589

The Issuer, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five calendar days after being deposited in the mail, postage prepaid, if mailed by first-class mail; on the first date on which publication is made or electronic delivery made; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery; provided that any notice or communication delivered to the Trustee shall be deemed effective upon actual receipt thereof.

Any notice or communication to a Holder shall be electronically delivered, mailed by first-class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the Note Register kept by the Registrar.

Failure to deliver 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 or otherwise delivered in the manner provided above within the time prescribed, such notice or communication shall be deemed duly given, whether or not the addressee receives it.

If the Issuer delivers or mails a notice or communication to Holders, it shall deliver or mail a copy to the Trustee and each Agent at the same time.

SECTION 12.03. Communication by Holders with Other Holders . Holders may communicate pursuant to Trust Indenture Act Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and anyone else shall have the protection of Trust Indenture Act Section 312(c).

 

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Notwithstanding any other provision of this Indenture or any Note, where this Indenture or any Note provides for notice of any event or any other communication (including any notice of redemption or repurchase) to a holder of a Global Note (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depository (or its designee) pursuant to the standing instructions from the Depository or its designee, including by electronic mail in accordance with accepted practices at the Depository.

SECTION 12.04. Certificate and Opinion as to Conditions Precedent . Upon any request or application by the Issuer or any Guarantor to the Trustee to take any action under this Indenture (other than as set forth in the last sentence of Section 9.06 and with respect to clause (B) below, in connection with the issuance of the Initial Notes on the Issue Date), the Issuer or such Guarantor, as the case may be, shall furnish to the Trustee:

(A) An Officer’s Certificate in form reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(B) An Opinion of Counsel in form reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

SECTION 12.05. Statements Required in Certificate or Opinion . Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to Section 4.04 hereof) 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 or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officer’s Certificate as to matters of fact); and

(D) a statement as to whether or not, in the opinion of such Person, such condition or covenant 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. Rules by Trustee and Agents . The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

SECTION 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders . No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Issuer or any Guarantor or any of their parent companies or subsidiaries (other than the Issuer and the Guarantors (if any)) shall have any liability for any obligations of the Issuer or the Guarantors (if any) under the Notes, the Guarantees (if any), this Indenture or any supplemental indenture or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

 

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SECTION 12.08. Governing Law . THIS INDENTURE, THE NOTES AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

SECTION 12.09. Waiver of Jury Trial . EACH OF THE ISSUER, THE GUARANTORS (IF ANY), AND THE TRUSTEE 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 NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

SECTION 12.10. Force Majeure . In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable 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 or hardware) services.

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 Restricted 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 in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of each Guarantor (if any) in this Indenture shall bind its successors, except as otherwise provided in Section 10.06 hereof.

SECTION 12.13. Severability . In case any provision in this Indenture or in the Notes 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.

SECTION 12.14. Counterpart 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. This Indenture may be executed in multiple counterparts, which, when taken together, shall constitute one instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmissions 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.

SECTION 12.15. Table of Contents, Headings, etc . The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

SECTION 12.16. [Reserved]..

SECTION 12.17. USA PATRIOT Act . The parties hereto acknowledge that in order to help the government fight the funding of terrorism and money laundering activities, pursuant to federal regulations that became effective on October 1, 2003, Section 326 of the USA PATRIOT Act requires all financial institutions to obtain, verify, and record information that identifies each person establishing a relationship or opening an account with Wells Fargo Bank, National Association. The parties hereto agree that they will provide the Trustee with name, address, tax identification number, if applicable, and other information that will allow the Trustee to identify the individual or entity who is establishing the relationship, and will further provide the Trustee with formation documents such as articles of incorporation or other identifying documents.

[Signatures on following page]

 

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HEALTHCARE TECHNOLOGY INTERMEDIATE, INC.
By:  

/s/ Jeffrey J. Ford

  Name: Jeffrey J. Ford
  Title: Vice President and Treasurer

Signature Page to Indenture (Senior PIK Toggle Notes)


WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By:  

/s/ Yana Kislenko

  Name: Yana Kislenko
  Title: Vice President


EXHIBIT A

CUSIP/ISIN            

[RULE 144A][REGULATION S][IAI] GLOBAL NOTE

representing up to $[        ]

7.375%/8.125% Senior PIK Toggle Notes due 2018

 

No.        US$[        ]

HEALTHCARE TECHNOLOGY INTERMEDIATE, INC.

promises to pay to                      or registered assigns,                                        

the principal sum of [the principal sum set forth on the Schedule of Exchange of Interests in the Global Note attached hereto] [DOLLARS] on September 1, 2018.

Interest Payment Dates: March 1 and September 1, beginning March 1, 2014

Record Dates: February 15 and August 15

 

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IN WITNESS HEREOF, the Issuer has caused this instrument to be duly executed.

 

HEALTHCARE TECHNOLOGY INTERMEDIATE, INC.
By:  

 

  Name:  
  Title:  

 

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This is one of the Notes referred to

in the within-mentioned Indenture:

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Trustee

By:  

 

  Authorized Signatory
Dated:

 

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[Back of Note]

7.375%/8.125% Senior PIK Toggle Note due 2018

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. Healthcare Technology Intermediate, Inc. (the “ Issuer ”), promises to pay interest on the principal amount of this Note at a rate per annum of 7.375% per annum in the case of Cash Interest (as defined below) and 8.125% per annum in the case of PIK Interest (as defined below) from August 6, 2013 until maturity. The Issuer will pay interest on this Note semi-annually in arrears on March 1 and September 1 of each year, beginning March 1, 2014 or, if any such day is not a Business Day, on the next succeeding Business Day (each, an “ Interest Payment Date ”). The Issuer will make each interest payment to the Holder of record of this Note on the immediately preceding February 15 and August 15 (each, a “ Record Date ”). Interest on this Note will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that the first Interest Payment Date shall be March 1, 2014.

Except as provided in the immediately succeeding sentence and the definition of “Applicable Amount,” interest on the Notes shall be payable entirely in cash (“ Cash Interest ”). For any Interest Period after the initial Interest Period (other than the final Interest Period ending at stated maturity), if the Applicable Amount (as defined below) as determined on the Determination Date (as defined below) for such Interest Period shall:

(i) equal or exceed 75%, but be less than 100%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant Interest Payment Date, then the Issuer may, at its option, elect to pay interest on (a) 25% of the then outstanding principal amount of the Notes by increasing the principal amount of the outstanding Notes or by issuing PIK Notes in a principal amount equal to such interest (such increased principal amount or PIK Notes, “ PIK Interest ”) and (b) 75% of the then outstanding principal amount of the Notes as Cash Interest;

(ii) equal or exceed 50%, but be less than 75%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant Interest Payment Date, then the Issuer may, at its option, elect to pay interest on (a) 50% of the then outstanding principal amount of the Notes as PIK Interest and (b) 50% of the then outstanding principal amount of the Notes as Cash Interest;

(iii) equal or exceed 25%, but be less than 50%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant Interest Payment Date, then the Issuer may, at its option, elect to pay interest on (a) 75% of the then outstanding principal amount of the Notes as PIK Interest and (b) 25% of the then outstanding principal amount of the Notes as Cash Interest; or

(iv) be less than 25% of the aggregate amount of Cash Interest that would otherwise be due on the relevant Interest Payment Date, then the Issuer may, at its option, elect to pay interest on the Notes entirely as PIK Interest.

The insufficiency or lack of funds available to the Issuer to pay Cash Interest as required by the preceding paragraph shall not permit the Issuer to pay PIK Interest in respect of any Interest Period and the sole right of the Issuer to elect to pay PIK Interest shall be as (and to the extent) provided in the immediately preceding paragraph.

As used herein:

(1) “ Applicable Amount ” shall be the amount equal to the sum (without duplication) of:

(i) (a) the maximum amount of all dividends and distributions that, as of the applicable Determination Date, would be permitted to be paid to the Issuer for the purpose of paying Cash Interest by all Restricted Subsidiaries (after giving effect to (1) any borrowing or issuance of Indebtedness made or to be made on such date, (2) all corporate, limited liability company, shareholder, member or other comparable actions required in order to make such payment, (3) requirements and considerations of applicable laws as determined in good faith by the officers and directors of each such Restricted Subsidiary, and (4) all restrictions on the ability to make such dividends or distributions that are otherwise permitted by Section 4.08 of the Indenture (including, without limitation, any restrictions

 

A-4


and limitations in the Senior Credit Facilities, the Opco Notes Indentures, all other Indebtedness of the Issuer and its Restricted Subsidiaries in existence on the Issue Date and any future Indebtedness of the Issuer and its Restricted Subsidiaries incurred in accordance with the Indenture or any agreement that amends, modifies, renews, increases, supplements, refunds, replaces or refinances such Indebtedness)) pursuant to the “restricted payments” covenants (including any exceptions or “baskets” in respect thereof) contained in the Senior Credit Facilities, the Opco Notes Indentures and any other instrument or agreement governing Indebtedness of any Restricted Subsidiary of the Issuer, the incurrence of which did not violate the Indenture, net of all taxes attributable solely to such dividend or distribution, if any, and, in each case, without regard to whether any such Restricted Subsidiary shall have any funds available to make any such dividends or distributions, less (b) $20,000,000 (which amount pursuant to this clause (i) shall in no event be less than $0); and

(ii) (a) all cash and Cash Equivalents on hand at the Issuer as of such Determination Date (other than any cash and Cash Equivalents on hand at the Issuer that were distributed to the Issuer by a Subsidiary for a purpose, or are conditioned upon being used for a purpose, other than paying Cash Interest (including, without limitation, any amounts distributed to the Issuer for the purpose of paying taxes, management fees and other corporate and administrative expenses attributable to the Issuer’s consolidated Subsidiaries)) less (b) $5,000,000 (which amount pursuant to this clause (ii) shall in no event be less than $0); provided that there shall be excluded from this clause (ii) any net proceeds from the Notes issued on the Issue Date pending the final application of such proceeds in connection with the 2013 Transactions and there shall be excluded from this clause (ii) any cash and Cash Equivalents on hand to be used for payment of Cash Interest on the Interest Payment Date next succeeding such Determination Date.

If interest on the Notes with respect to an Interest Period will not be paid entirely as Cash Interest, the Applicable Amount shall be calculated by the Issuer and shall be set forth in an Officer’s Certificate delivered to the Trustee (upon which the Trustee may conclusively rely) prior to the first day of the relevant Interest Period in which it is to be applied, which Officer’s Certificate shall set forth in reasonable detail (x) the Issuer’s good faith determination of each component of this definition and (y) in the case of clause (i)(a) identifying the applicable restriction(s) and the Issuer’s good faith determination of the maximum amount of funds that may be paid after giving effect to such restriction. To the extent the Issuer is required pursuant to the second preceding paragraph and the definition of “Applicable Amount” to pay Cash Interest for all or any portion of the interest due on any Interest Payment Date, the Issuer shall and shall cause each of the Restricted Subsidiaries to take all such shareholder, member, corporate, limited liability company and other corporate or similar actions necessary or appropriate to permit the making of any such dividends or distribution, provided that any such shareholder, corporate and other actions would not violate any applicable law or cause a breach of any applicable contract, in each case, as determined in good faith by the officers and directors of each such Restricted Subsidiary;

(2) “ Determination Date ” shall mean, with respect to each Interest Period, the fifteenth calendar day immediately prior to the first day of the relevant Interest Period; and

(3) “ Interest Period ” shall mean the period commencing on and including an Interest Payment Date and ending on and including the day immediately preceding the next succeeding Interest Payment Date, with the exception that the first Interest Period shall commence on and include the Issue Date and end on and include February 28, 2014 (the Interest Payment Date for any Interest Period shall be the Interest Payment Date occurring on the day immediately following the last day of such Interest Period).

In the event that the Issuer shall determine to pay PIK Interest for any Interest Period, then the Issuer shall deliver a written notice (a “ PIK Notice ”) to the Trustee following the Determination Date but prior to the commencement of the relevant Interest Period, which notice shall state the total amount of interest to be paid on such Interest Payment Date and the amount of such interest to be paid as PIK Interest. The Trustee shall promptly deliver a copy of the notice to the Holders. Interest for the first Interest Period commencing on the Issue Date shall be payable entirely in Cash Interest. Interest for the final Interest Period ending at stated maturity shall be payable entirely in Cash Interest.

Notwithstanding anything to the contrary, the payment of accrued interest in connection with any redemption or repurchase of the Notes as described under Sections 3.09, 4.10 and 4.14 of the Indenture will be made solely in cash.

 

A-5


The Issuer will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the rate borne by this Note; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the rate borne by this Note. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

2. METHOD OF PAYMENT. The Issuer will pay interest on this Note to the Person who is the registered Holder of this Note at the close of business on the Record Date (whether or not a Business Day) next preceding the Interest Payment Date, even if this Note is cancelled after such Record Date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest.

If the Issuer pays a portion of the interest on the Notes as PIK Interest in respect of any Interest Period, Cash Interest and PIK Interest in respect of such Interest Period shall be paid to holders pro rata in accordance with their interests subject to the procedures of the DTC. Principal of, premium, if any, and Cash Interest on the Notes will be payable at the office or agency of the Issuer maintained pursuant to Section 4.02 of the Indenture or, at the option of the Issuer, payment of Cash Interest may be made by check mailed to the Holders of the Notes at their respective addresses set forth in the Note Register; provided that all payments of principal, premium, if any, and Cash Interest with respect to the Notes represented by Global Notes registered in the name of or held by the DTC or its nominee will be made by wire transfer of immediately available funds to the accounts specified by the Holder or Holders thereof. If a payment date is on a Legal Holiday, payment will be made on the next succeeding day that is not a Legal Holiday and interest shall accrue for the intervening period. PIK Interest on the Notes will be payable (1) with respect to Notes represented by one or more Global Notes registered in the name of or held by the DTC or its nominee, by increasing the principal amount of each outstanding Global Note by an amount equal to the amount of PIK Interest on such Note for the applicable Interest Period (rounded up to the nearest whole dollar) as provided in writing by the Issuer to the Trustee, which shall be recorded in the Registrar’s books and records and in the Schedule of Exchanges of Interests in the Global Note attached to a Global Note in accordance with the Indenture, and (2) with respect to Notes represented by certificated Notes, by issuing PIK Notes in certificated form in an aggregate principal amount equal to the amount of PIK Interest for the applicable Interest Period (rounded up to the nearest whole dollar), and the Trustee will, at the written order of the Issuer, authenticate and deliver such PIK Notes in certificated form for original issuance to the Holders on the relevant Record Date, as shown by the records of the Note Register. Following an increase in the principal amount of the outstanding Global Notes as a result of a PIK Payment, the Notes will bear interest on such increased principal amount from and after the date of such PIK Payment. Any PIK Notes issued in certificated form will be dated as of the applicable Interest Payment Date and will bear interest from and after such date. All Notes issued pursuant to a PIK Payment will mature on September 1, 2018 and will be governed by, and subject to the terms, provisions and conditions of, the Indenture and will have the same rights and benefits as the Notes issued on the Issue Date.

3. PAYING AGENT AND REGISTRAR. Initially, Wells Fargo Bank, National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuer may change any Paying Agent or Registrar without prior notice to any Holder. The Issuer or any of its domestic Subsidiaries may act in any such capacity.

4. INDENTURE. The Issuer issued the Notes under an Indenture, dated as of August 6, 2013 (the “ Indenture ”), between Healthcare Technology Intermediate, Inc. and the Trustee. The Issuer shall be entitled to issue Additional Notes pursuant to Sections 2.01 and 4.09 of the Indenture and PIK Notes pursuant to Section 2.01 of the Indenture. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION.

(a) At any time prior to September 1, 2014, the Issuer may, at its option and on one or more occasions redeem all or a part of the Notes, upon notice as described under Section 3.03 of the Indenture, at a redemption price equal to the sum of (i) 100.0% of the principal amount of the Notes redeemed, plus (ii) the Applicable Premium as of the Redemption Date plus (iii) accrued and unpaid interest, if any, to the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date. Notice of any redemption, whether in connection with an Equity Offering or otherwise, may be given prior to the completion

 

A-6


thereof, and any such redemption or notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, if in connection with an Equity Offering, the completion of such Equity Offering.

(b) At any time prior to September 1, 2015, the Issuer may, at its option and on one or more occasions, redeem up to 100.0% of the aggregate principal amount of Notes (including any Additional Notes and PIK Notes issued after the Issue Date) with the aggregate principal amount of Notes to be redeemed (the “ Equity Offering Redemption Amount ”) not to exceed an amount equal to the aggregate gross proceeds from one or more Equity Offerings, at a redemption price equal to (i) prior to September 1, 2014, 102.0% of the aggregate principal amount thereof and (ii) from September 1, 2014 to September 1, 2015, 101.0% of the aggregate principal amount thereof, in each case, plus accrued and unpaid interest, if any, to the date of redemption, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date; provided , that each such redemption occurs within 180 days of the date of closing of each such Equity Offering; and provided , further , that an amount equal to or exceeding the applicable Equity Offering Redemption Amount shall be received by, or contributed to the capital of, the Issuer or any Restricted Subsidiary.

(c) Except pursuant to clause (a), (b) or (e) of Section 3.07 of the Indenture, the Notes will not be redeemable at the Issuer’s option prior to September 1, 2014.

(d) On and after September 1, 2014, the Issuer may, at its option redeem the Notes, in whole or in part, on one or more occasions, upon notice in accordance with Section 3.03 of the Indenture, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, to the Redemption Date, subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date, if redeemed during the twelve-month period beginning on September 1 of each of the years indicated below:

 

Year

   Percentage  

2014

     102.000

2015

     101.000

2016 and thereafter

     100.000

(e) If Holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer, purchases all of the Notes validly tendered and not withdrawn by such Holders, the Issuer or such third party will have the right, upon prior notice given not more than 30 days following such purchase pursuant to such Change of Control Offer, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to 101.0% of the principal amount thereof plus accrued and unpaid interest to but excluding the Redemption Date.

(f) Any redemption pursuant to Section 3.07 of the Indenture shall be made pursuant to Sections 3.01 through 3.06 of the Indenture.

6. MANDATORY REDEMPTION; OFFERS TO PURCHASE AND OPEN MARKET PURCHASES. The Issuer will not be required to make any mandatory redemption or sinking fund payments with respect to the Notes. However, under certain circumstances, the Issuer may be required to offer to purchase Notes as described under Sections 4.10 and 4.14 of the Indenture.

7. NOTICE OF REDEMPTION. Subject to Section 3.03 of the Indenture, the Issuer shall deliver electronically, mail or cause to be mailed by first-class mail notices of redemption at least 30 days but not more than 60 days before the Redemption Date to each Holder to be redeemed at such Holder’s registered address or otherwise in accordance with Applicable Procedures, except that redemption notices may be mailed or delivered more than 60 days prior to a Redemption Date if the notice is (a) issued in connection with Article VIII or Article XI of the Indenture or (b) subject to one or more conditions precedent and such Redemption Date is delayed until such time as any or all such conditions shall be satisfied (or waived by the Issuer in its sole discretion). In addition, if any redemption is subject to satisfaction of one or more conditions precedent, the notice of redemption shall describe each such condition,

 

A-7


and if applicable, shall state that, in the Issuer’s discretion, the Redemption Date may be delayed until such time as any or all such conditions shall be satisfied (or waived by the Issuer in its sole discretion), or that 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 (or waived by the Issuer in its sole discretion) by the Redemption Date as stated in such notice, or by the Redemption Date as so delayed.

8. OFFERS TO REPURCHASE. Upon the occurrence of a Change of Control, the Issuer shall make a Change of Control Offer in accordance with Section 4.14 of the Indenture. In connection with certain Asset Sales, the Issuer shall make an Asset Sale Offer as and when provided in accordance with Sections 3.09 and 4.10 of the Indenture.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and any integral multiple of $1,000 in excess of $2,000 (or, in case any PIK Payment has been made, in minimum denominations of $1.00 and any integral multiple of $1.00 in excess thereof). The transfer of Notes shall be registered and Notes may only be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not issue, exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Issuer need not issue, exchange or register the transfer of any Notes during the period of 15 days before the mailing of a notice of redemption of Notes to be redeemed or between a Record Date with respect to such Note and the next succeeding Interest Payment Date with respect to such Note.

10. PERSONS DEEMED OWNERS. The registered Holder shall be treated as its owner for all purposes. Only registered Holders shall have rights hereunder.

11. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees or the Notes may be amended or supplemented as provided in the Indenture.

12. DEFAULTS AND REMEDIES. The Events of Default relating to the Notes are defined in Section 6.01 of the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25.0% in principal amount of the then outstanding Notes by notice to the Issuer may declare the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to the Issuer, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture, the Notes or the Guarantees except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default (except a Default relating to the payment of principal, premium, if any, or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by written notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or and its consequences under the Indenture except a continuing Default in payment of the principal of, premium, if any, or interest on, any of the Notes held by a non-consenting Holder. The Issuer is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Issuer is required within ten (10) Business Days after becoming aware of any Default, to deliver to the Trustee a statement specifying such Default and what action the Issuer proposes to take with respect thereto.

13. AUTHENTICATION. This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.

14. GOVERNING LAW. THE INDENTURE, THIS NOTE AND ANY GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

15. CUSIP AND ISIN NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP and ISIN numbers to be printed on the

 

A-8


Notes and the Trustee may use CUSIP and ISIN numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes 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 upon written request and without charge a copy of the Indenture. Requests may be made to the Issuer at the following address:

Healthcare Technology Intermediate, Inc.

83 Wooster Heights Road

Danbury, Connecticut 06810

Attention: General Counsel

 

A-9


ASSIGNMENT FORM

To assign this Note, fill in the form below:

 

(I) or (we) assign and transfer this Note to:   

 

   (Insert assignee’s legal name)

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                                   to transfer this Note 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 face of this Note)

 

Signature Guarantee*:  

 

 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-10


OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

[    ] Section 4.10 [    ] Section 4.14

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased:

$        

 

Date:  

 

   
    Your Signature:  

 

      (Sign exactly as your name appears on the face of this Note)
    Tax Identification No.:  

 

 

Signature Guarantee*:  

 

 

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-11


SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The initial outstanding principal amount of this Global Note is $        . The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

Date of Exchange

   Amount of
decrease in
Principal
Amount of this
Global Note
   Amount of
increase in
Principal
Amount of this
Global Note
   Principal
Amount of this
Global Note
following such
decrease or
increase
   Signature of
authorized
signatory of
Trustee or
Custodian
           
           

 

* This schedule should be included only if the Note is issued in global form.

 

A-12


EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

Healthcare Technology Intermediate, Inc.

83 Wooster Heights Road

Danbury, Connecticut 06810

Attention: General Counsel

Wells Fargo Bank, National Association

as Trustee and Registrar – DAPS Reorg.

MAC N9303-121

608 2nd Avenue South

Minneapolis, MN 55479

Telephone No.: (877) 872-4605

Fax No.: (866) 969-1290

Email: DAPSReorg@wellsfargo.com

 

  Re: 7.375%/8.125% Senior PIK Toggle Notes due 2018

Reference is hereby made to the Indenture, dated as of August 6, 2013 (the “ Indenture ”), between Healthcare Technology Intermediate, Inc. and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                     (the “ Transferor ”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $ in such Note[s] or interests (the “ Transfer ”), to (the “ Transferee ”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. [    ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT 144A GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “ Securities Act ”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States.

2. [    ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT REGULATION S GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the applicable Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Indenture and the Securities Act.

 

B-1


3. [    ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT IAI GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT TO RULE 501. The Transfer is being effected to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that has furnished to the Trustee a signed letter substantially in the form of Exhibit E of the Indenture, and such Transfer is in compliance with any applicable blue sky laws of any state of the United States.

4. [    ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE RELEVANT DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

(a) [    ] such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or

(b) [    ] such Transfer is being effected to the Issuer or a subsidiary thereof.

5. [    ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

(a) [    ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(b) [    ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(c) [    ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

 

B-2


This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer.

 

      [Insert Name of Transferor]
      By:  

 

        Name:
        Title:
Dated:  

 

     

 

B-3


ANNEX A TO CERTIFICATE OF TRANSFER

 

1. The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

 

(a) [    ] a beneficial interest in the:

 

  (i) [    ] 144A Global Note (CUSIP: 42225X AA6), or

 

  (ii) [    ] Regulation S Global Note (CUSIP: U42204 AA2), or

 

  (iii) [    ] IAI Global Note ([CUSIP:    ]), or

 

(b) [    ] a Restricted Definitive Note.

 

2. After the Transfer the Transferee will hold:

[CHECK ONE]

 

(a) [    ] a beneficial interest in the:

 

  (i) [    ] 144A Global Note (CUSIP: 42225X AA6),, or

 

  (ii) [    ] Regulation S Global Note (CUSIP: U42204 AA2), or

 

  (iii) [    ] IAI Global Note ([CUSIP:    ]), or

 

  (iv) [    ] Unrestricted Global Note ([    ] [    ]), or

 

(b) [    ] a Restricted Definitive Note; or

 

(c) [    ] an Unrestricted Definitive Note, in accordance with the terms of the Indenture.

 

B-4


EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

Healthcare Technology Intermediate, Inc.

83 Wooster Heights Road

Danbury, Connecticut 06810

Attention: General Counsel

Wells Fargo Bank, National Association

as Trustee and Registrar – DAPS Reorg.

MAC N9303-121

608 2nd Avenue South

Minneapolis, MN 55479

Telephone No.: (877) 872-4605

Fax No.: (866) 969-1290

Email: DAPSReorg@wellsfargo.com

 

  Re: 7.375%/8.125% Senior PIK Toggle Notes due 2018

Reference is hereby made to the Indenture, dated as of August 6, 2013 (the “ Indenture ”), between Healthcare Technology Intermediate, Inc. and the Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                     (the “ Owner ”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $ in such Note[s] or interests (the “ Exchange ”). In connection with the Exchange, the Owner hereby certifies that:

1) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE OF THE SAME SERIES

a) [    ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note of the same series in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the “ Securities Act ”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

b) [    ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note of the same series, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

C-1


c) [    ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OF THE SAME SERIES. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note of the same series, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

d) [    ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE OF THE SAME SERIES. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note of the same series, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

2) EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OF THE SAME SERIES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES OF THE SAME SERIES

a) [    ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note of the same series with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.

b) [    ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE OF THE SAME SERIES. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE]:

[    ] 144A Global Note,

[    ] Regulation S Global Note or

[    ] IAI Global Note,

in each case of the same series, with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and are dated                     .

 

C-2


[Insert Name of Transferor]
By:  

 

  Name:
  Title:

 

C-3


EXHIBIT D

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY FUTURE GUARANTORS

Supplemental Indenture (this “ Supplemental Indenture ”), dated as of [                    ], among [                    ] (the “ Guaranteeing Subsidiary ”), a subsidiary of Healthcare Technology Intermediate, Inc., a Delaware corporation (the “ Company ”), and Wells Fargo Bank, National Association, a national banking association, as trustee (the “ Trustee ”).

W I T N E S S E T H

WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture (the “ Indenture ”), dated as of August 6, 2013, providing for the issuance of an unlimited aggregate principal amount of 7.375%/8.125% Senior PIK Toggle Notes due 2018 (the “ Notes ”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “ Guarantee ”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders as follows:

(1) Capitalized Terms . Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Agreement to Guarantee . The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Indenture including, but not limited to, Article X thereof.

(3) No Recourse Against Others . No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Issuer or any Guarantor or any of their parent companies or subsidiaries (other than the Issuer and the Guarantors) shall have any liability for any obligations of the Issuer or the Guarantors under the Notes, the Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting Notes waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

(4) Governing Law . THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(5) 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. This Supplemental Indenture may be executed in multiple counterparts, which, when taken together, shall constitute one instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmissions 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.

 

D-1


(6) Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction hereof.

(7) The Trustee . The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary.

(8) Successors . All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its Successors, except as otherwise provided in this Supplemental Indenture. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

 

D-2


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

 

[GUARANTEEING SUBSIDIARY]
By:  

 

  Name:
  Title:
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By:  

 

  Name:
  Title:

 

D-3


EXHIBIT E

FORM OF

TRANSFEREE LETTER OF REPRESENTATION

Healthcare Technology Intermediate, Inc.

83 Wooster Heights Road

Danbury, Connecticut 06810

Attention: General Counsel

Wells Fargo Bank, National Association

as Trustee and Registrar – DAPS Reorg.

MAC N9303-121

608 2nd Avenue South

Minneapolis, MN 55479

Telephone No.: (877) 872-4605

Fax No.: (866) 969-1290

Email: DAPSReorg@wellsfargo.com

Ladies and Gentlemen:

This certificate is delivered to request a transfer of $[        ] principal amount of the 7.375%/8.125% Senior PIK Toggle Notes due 2018 (the “ Notes ”) of Healthcare Technology Intermediate, Inc. (the “ Issuer ”).

Upon transfer, the Notes 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 Notes, and we are acquiring the Notes, for investment purposes and 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 Notes, and we invest in or purchase securities similar to the Notes 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.

2. We understand that the Notes 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 Notes to offer, sell or otherwise transfer such Notes 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 Notes (or any predecessor thereto) (the “ Resale Restriction Termination Date ”) only (a) to the Issuer or any Subsidiary thereof, (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 to non-U.S. persons that occur outside the United States of America 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

 

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own account or for the account of such an institutional “accredited investor,” in each case in a minimum principal amount of Notes of $250,000, for investment purposes and not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act 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 Notes 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 Notes 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 Notes 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.

 

TRANSFEREE:  

 

  ,

 

By:  

 

 

E-2

Exhibit 4.12

Execution Version

 

 

 

REGISTRATION AND PREEMPTIVE RIGHTS AGREEMENT

by and among

Healthcare Technology Holdings, Inc.,

and

Certain Stockholders of Healthcare Technology Holdings, Inc.

Dated as of February 26, 2010

 

 

 


TABLE OF CONTENTS

 

         Page  

ARTICLE I EFFECTIVENESS; DEFINITIONS

     1   

1.1.

 

Effectiveness

     1   

1.2.

 

Definitions

     1   

ARTICLE II PREEMPTIVE RIGHTS

     2   

2.1.

 

General

     2   

2.2.

 

Preemptive Rights.

     2   

2.3.

 

Post-Issuance Notice

     5   

2.4.

 

Excluded Transactions

     5   

2.5.

 

Certain Provisions Applicable to Options, Warrants, SARs and Convertible Securities

     5   

2.6.

 

Acquired Shares

     6   

2.7.

 

Period

     6   

ARTICLE III REGISTRATION RIGHTS

     6   

3.1.

 

Piggyback Registration Rights.

     6   

3.2.

 

Certain Other Provisions.

     7   

3.3.

 

Indemnification and Contribution.

     14   

ARTICLE IV REMEDIES

     18   

4.1.

 

Generally

     18   

ARTICLE V PERMITTED TRANSFEREES

     19   

ARTICLE VI AMENDMENT, TERMINATION, ETC

     19   

6.1.

 

Oral Modifications

     19   

6.2.

 

Written Modifications

     19   

6.3.

 

Effect of Termination

     19   

ARTICLE VII DEFINITIONS

     20   

7.1.

 

Certain Matters of Construction

     20   

7.2.

 

Definitions

     20   

 

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ARTICLE VIII MISCELLANEOUS

     24   

8.1.

 

Authority: Effect

     24   

8.2.

 

Notices

     25   

8.3.

 

Merger; Binding Effect, Etc

     25   

8.4.

 

Descriptive Headings

     26   

8.5.

 

Counterparts

     26   

8.6.

 

Severability

     26   

8.7.

 

No Recourse

     26   

ARTICLE IX GOVERNING LAW

     26   

9.1.

 

Governing Law

     26   

9.2.

 

Jurisdiction

     27   

9.3.

 

Waiver Of Jury Trial

     27   

9.4.

 

Exercise of Rights and Remedies

     27   

 

ii


REGISTRATION AND PREEMPTIVE RIGHTS AGREEMENT

This Registration and Preemptive Rights Agreement (this “ Agreement ”) is made as of February 26, 2010, by and among:

 

  (i) Healthcare Technology Holdings, Inc. (the “ Company ”);

 

  (ii) each Person executing this Agreement and listed as a “Manager” on the signature pages hereto, together with any other Persons that from time to time become party hereto as Managers (collectively, the “ Managers ”); and

 

  (iii) each Person executing this Agreement and listed as a “Manager Designee” on the signature pages hereto, together with any other Persons that from time to time become party hereto as Manager Designees (collectively, the “ Manager Designees ”).

RECITALS

1. Healthcare Technology Acquisition, Inc., an indirect wholly-owned subsidiary of the Company (“ Merger Sub ”), the Company and IMS have entered into an Agreement and Plan of Merger, dated as of November 5, 2009 (the “ Merger Agreement ”), pursuant to which Merger Sub will merge with and into IMS (the “ Merger ”), with IMS as the surviving corporation.

2. Upon the Closing (as defined below), the Company’s Common Stock, Options and SARs are held as set forth on Schedule I hereto.

3. In connection with the foregoing, the Company and certain stockholders of the Company are entering into a Management Stockholders Agreement dated on or about the date hereof (the “ Stockholders Agreement ”).

4. The parties believe that it is in the best interests of the Company and the other parties hereto to set forth their agreements on certain matters.

AGREEMENT

Therefore, the parties hereto hereby agree as follows:

ARTICLE I

EFFECTIVENESS; DEFINITIONS

1.1. Effectiveness . This Agreement will become effective upon consummation of the closing under the Merger Agreement (the “ Closing ”).

1.2. Definitions . Certain terms are used in this Agreement as specifically defined herein. These definitions are set forth or referred to in Article VII hereof.

 

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ARTICLE II

PREEMPTIVE RIGHTS

2.1. General . The Company may not issue or sell any shares of its capital stock, or any securities convertible into or exchangeable for any shares of its capital stock, and may not issue or grant any options or warrants for the purchase of, or enter into any agreements providing for the issuance (contingent or otherwise) of, its capital stock, or any securities convertible into or exchangeable for any shares of its capital stock, in each case, to any Investor or Affiliated Fund (each an “ Issuance ” of “ Subject Securities ”), except in compliance with the provisions of Sections 2.2 and 2.3.

2.2. Preemptive Rights .

2.2.1 Offer . Not fewer than twenty (20) Business Days prior to the consummation of an Issuance, the Company shall furnish a notice (the “ Preemptive Rights Notice ”) to each holder of record of Eligible Shares (the “ Eligible Offerees ”). The Preemptive Rights Notice shall include:

(a) The principal terms of the proposed Issuance, including: (i) the amount and kind of Subject Securities to be included in the Issuance, (ii) the number of Equivalent Shares represented by the Subject Securities to be included in the Issuance (if applicable), (iii) the percentage of the total number of Equivalent Shares outstanding immediately prior to giving effect to the Issuance which the number of Equivalent Shares held by the Eligible Offeree constitutes (the “ Eligible Portion ”), (iv) the maximum and minimum price (including, if applicable, the maximum and minimum Price Per Equivalent Share) per unit of the Subject Securities, (v) the name and address of the Investor or Affiliated Fund to whom the Subject Securities will be issued (the “ Prospective Subscriber ”) and (vi) the proposed issuance date; and

(b) An offer by the Company to issue, at the option of each Eligible Offeree, to the Eligible Offeree such portion of the Subject Securities to be included in the Issuance as may be requested by the Eligible Offeree (not to exceed the Eligible Offeree’s Eligible Portion of the total amount of Subject Securities to be included in the Issuance), on the same economic terms and conditions, with respect to each unit of Subject Securities issued to the Eligible Offeree, as each Prospective Subscriber will receive with respect to issued units of Subject Securities.

2.2.2 Exercise .

(a) General . Each Eligible Offeree desiring to accept the offer contained in the Preemptive Rights Notice shall send a written notice to the Company by no later than ten (10) Business Days before the anticipated issuance date, specifying the (i) number of Subject Securities (not to exceed the Eligible Portion of the total amount of Subject Securities to be included in the Issuance)

 

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that the Eligible Offeree desires to purchase (each an “ Eligible Buyer ”) and (ii) to the extent that all of the Subject Securities are not subscribed for in such offer, the Eligible Buyer’s election to purchase such unsubscribed Subject Securities (with such unsubscribed Subject Securities to be allocated by the Company to such Eligible Buyer and all such other Eligible Buyers electing to purchase any such unsubscribed securities on a pro rata basis based upon the number of unsubscribed Subject Securities elected to be so purchased by all such Eligible Buyers). Each Eligible Offeree who has not so accepted such offer will be deemed to have waived all of his, her or its rights with respect to the Issuance, and the Company thereafter will be free to issue Subject Securities in the Issuance to the Prospective Subscriber and any Eligible Buyers, at a price no less than the minimum price set forth in the Preemptive Rights Notice and on other principal terms not substantially more favorable to the Prospective Subscriber than those set forth in the Preemptive Rights Notice, without any further obligation to the non-accepting Eligible Offerees. If, prior to consummation, the terms of the Issuance change with the result that the price will be less than the minimum price set forth in the Preemptive Rights Notice or that the other principal terms will be substantially more favorable to the Prospective Subscriber than those set forth in the Preemptive Rights Notice, then the Company must furnish a new, separate Preemptive Rights Notice, and must separately comply with the terms and provisions of this Section 2.2, in order to consummate the Issuance pursuant to this Section 2.2.

(b) Irrevocable Acceptance . The acceptance of each Eligible Buyer will be irrevocable except as hereinafter provided, and each Eligible Buyer will be bound and obligated to acquire in the Issuance, on the same economic terms and conditions, with respect to each unit of Subject Securities issued, as the Prospective Subscriber, such amount of Subject Securities as the Eligible Buyer has specified in his, her or its written commitment.

(c) Time Limitation . If, at the end of the 90 th day following the date of the Preemptive Rights Notice (subject to extension if necessary to permit the expiration or earlier termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, if applicable, and applicable foreign antitrust laws), the Company has not completed the Issuance, each Eligible Buyer will be released from his, her or its obligations under the written commitment, the Preemptive Rights Notice will be null and void and the Company must furnish a separate Preemptive Rights Notice, and must separately comply with the terms and provisions of this Section 2.2, in order to consummate an Issuance pursuant to this Section 2.2.

2.2.3 Other Securities . The Company may condition the participation of the Eligible Offerees in an Issuance upon the purchase by the Eligible Offerees of any securities (including, debt securities) other than Subject Securities (“ Other Securities ”) if the participation of the Prospective Subscriber in the Issuance is likewise so conditioned. In such case, each Eligible Buyer shall acquire in the Issuance, together with the Subject Securities to be acquired by it, Other Securities in the same proportion to the Subject

 

3


Securities to be acquired by it as the proportion of Other Securities to Subject Securities being acquired by the Prospective Subscriber in the Issuance, on the same economic terms and conditions as the Prospective Subscriber, as to each unit of Subject Securities and Other Securities issued to the Eligible Buyers.

2.2.4 Certain Legal Requirements . If the participation in the Issuance by an Eligible Offeree as an Eligible Buyer would require under applicable law (i) the registration or qualification of the securities, or of any person as a broker or dealer or agent with respect to the securities or (ii) the provision to any participant in the Issuance of any information regarding the Company or the securities, then that Eligible Offeree will not have the right to participate in the Issuance. Without limiting the generality of the foregoing, it is understood and agreed that the Company will not be under any obligation to effect a registration of the securities under the Securities Act or similar state statutes.

2.2.5 Further Assurances . Each Eligible Offeree, and each other party hereto to whom the Shares held by that Eligible Offeree were originally issued, shall, whether in his, her or its capacity as an Eligible Buyer, stockholder, officer or director of the Company, or otherwise, take or cause to be taken all such reasonable actions as may be necessary or reasonably desirable in order to expeditiously consummate each Issuance pursuant to this Section 2.2 and any related transactions, including, without limitation: executing, acknowledging and delivering consents, assignments, waivers and other documents or instruments; filing applications, reports, returns, filings and other documents or instruments with governmental authorities; and otherwise cooperating with the Company and the Prospective Subscriber. Without limiting the generality of the foregoing, each Eligible Buyer and Holder agrees to execute and deliver any subscription and other agreements specified by the Company to which the Prospective Subscriber will be party.

2.2.6 Expenses . All reasonable costs and expenses incurred in connection with any proposed Issuance of Subject Securities (whether or not consummated), including, all attorneys’ fees and charges, all accounting fees and charges and all finders, brokerage or investment banking fees, charges or commissions, shall be allocated among the Eligible Buyers and any Investors who purchase Subject Securities in such Issuance pro rata based on the relative number of Subject Securities to be acquired by each of them in the Issuance.

2.2.7 Closing . The closing of an Issuance pursuant to this Section 2.2 will take place at such time and place as the Company specifies by notice to each Eligible Buyer. At the closing of any Issuance pursuant to this Section 2.2.7, each Eligible Buyer will receive the notes, certificates or other instruments evidencing the Subject Securities (and, if applicable, Other Securities) to be issued to the Eligible Buyer, registered in the name of the Eligible Buyer or his, her or its designated nominee, free and clear of any liens or encumbrances, with any transfer tax stamps affixed, against delivery by the Eligible Buyer of the applicable consideration.

 

4


2.3. Post-Issuance Notice . Notwithstanding the notice requirements of Sections 2.2.1 and 2.2.2, the Company may proceed with any Issuance prior to having complied with the provisions of Section 2.2; provided that the Company shall:

2.3.1 provide to each Holder who would have been a Eligible Offeree in connection with such Issuance (i) prompt notice of such Issuance and (ii) a notice containing the information that would have been required to be included in a Preemptive Rights Notice pursuant to Section 2.2.1, in which the actual price per unit of Subject Securities (and, if applicable, actual Price Per Equivalent Share) shall be set forth;

2.3.2 offer to issue to such Holder such number of securities of the type issued in the Issuance as are requested by such Holder (not to exceed the Eligible Portion that such Holder would have been entitled to pursuant to Section 2.2 multiplied by the sum of (i) the number of Subject Securities included in the Issuance and (ii) the aggregate number of shares issued pursuant to this Section 2.3 with respect to the Issuance) on the same economic terms and conditions with respect to such securities as the subscribers in the Issuance received; and

2.3.3 keep such offer open for a period of ten (10) Business Days, during which period, each such Holder may accept such offer by sending a written acceptance to the Company committing to purchase an amount of such securities not to exceed the Eligible Portion that such Holder would have been entitled to pursuant to Section 2.2 multiplied by the sum of (i) the number of Subject Securities included in such issuance and (ii) the aggregate number of shares issued pursuant to this Section 2.3 with respect to such Issuance.

2.4. Excluded Transactions . Notwithstanding the preceding provisions of this Article II, the preceding provisions of this Article II shall not apply to:

2.4.1 Any Issuance of shares of Common Stock upon the exercise or conversion of any Common Stock, Options, Warrants or Convertible Securities outstanding on the date hereof or Issued after the date hereof in compliance with the provisions of this Article II;

2.4.2 The Issuance of Shares to the Investors in connection with the Closing; or

2.4.3 Any Issuance of shares of Common Stock in connection with any stock split, stock dividend, stock combination or stock reclassification.

2.5. Certain Provisions Applicable to Options, Warrants, SARs and Convertible Securities . If the Issuance of Subject Securities will result in any increase in the number of shares of Common Stock issuable upon exercise, conversion or exchange of any Options, Warrants, SARs or Convertible Securities, then the number of shares (or Equivalent Shares, if applicable) of Subject Securities (and Other Securities, if applicable) that the holders of the Options, Warrants or Convertible Securities, as the case may be, are entitled to purchase pursuant to Section 2.2, if any, will be reduced, share for share, by the amount of that increase.

 

5


2.6. Acquired Shares . Any Subject Securities constituting Common Stock acquired by any Holder pursuant to this Article II will be deemed for all purposes hereof to be Eligible Shares hereunder, and will be treated hereunder as the same kind as the Shares then held by the acquiring Holder.

2.7. Period . The foregoing provisions of this Article II will expire upon the earlier of the closing of (i) a Change of Control and (ii) the Initial Public Offering.

ARTICLE III

REGISTRATION RIGHTS

The Company will perform and comply with, and will cause each of its subsidiaries to perform and comply with, such of the following provisions as are applicable to it. Each Holder will perform and comply with such of the following provisions as are applicable to that Holder.

3.1. Piggyback Registration Rights .

3.1.1 Piggyback Registration .

(a) General . Each time the Company proposes to register any shares of Common Stock under the Securities Act on a form that would permit registration of Registrable Securities for sale to the public, for its own account and/or for the account of any other Person for sale in a Public Offering, the Company will give notice to all Holders of its intention to do so. Any Holder may, by written response delivered to the Company within fifteen (15) days after the date of delivery of such notice, request that all or a specified part of the Holder’s Registrable Securities be included in such registration. The Company thereupon will use its best efforts, subject to Section 3.2.1, to cause to be included in the registration under the Securities Act all Registrable Securities that the Company has been so requested to register by Holders, to the extent required to permit the disposition (in accordance with the methods to be used by the Company in such Public Offering) of the Registrable Securities to be so registered; provided , that (i) if, at any time after giving written notice of its intention to register any securities, the Company determines for any reason not to proceed with the proposed registration of the securities to be sold by it, the Company may, at its election, give written notice of this determination to each Holder and, thereupon, will be relieved of the obligation to register any Registrable Securities in connection with the previously proposed registration (but not from the obligation to pay the Registration Expenses in connection therewith), and (ii) if the proposed registration involves an underwritten offering, all Holders requesting to be included in the registration must sell their Registrable Securities to the underwriters selected by the Company on the same terms and conditions as apply to the Company (with such differences as may be customary or appropriate in combined primary and secondary offerings and, in any event, without providing for indemnification or contribution obligations in excess of what is required by Section 3.3) or, in the case of a registration initiated by any Investor, such Investor.

 

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(b) Excluded Transactions . The Company will not be obligated to effect any registration of Registrable Securities under this Section 3.1 or to give any notice to any Holder of the Company’s intent to register Registrable Securities, in each case incidental to the registration of any of the Company’s securities in connection with:

(i) A registration on Form S-4 or S-8 or any successor form to such Forms;

(ii) A registration of securities relating solely to an offering and sale to employees or directors of the Company pursuant to any employee stock option plan or other employee benefit plan arrangement;

(iii) Any Public Offering relating to the acquisition or merger after the date hereof by the Company or any of its subsidiaries of or with any other businesses, except to the extent that the Public Offering is for the sale of securities for cash; or

(iv) The Initial Public Offering.

3.1.2 Payment of Expenses . The Company will pay all Registration Expenses in connection with registrations of Registrable Securities pursuant to this Section 3.1.

3.1.3 Additional Procedures . Holders participating in any Public Offering pursuant to this Section 3.1 shall take all such actions and execute all such documents and instruments as are reasonably requested by the Company to effect the sale of the Holders’ Registrable Securities in the Public Offering, including being parties to the underwriting agreement entered into by the Company and any other selling shareholders in connection therewith and being liable in respect of the representations and warranties and the other agreements (including customary selling stockholder representations, warranties, indemnifications and “lock-up” agreements) for the benefit of the underwriters contained therein; provided , however , that (i) with respect to individual representations, warranties, indemnities and agreements of sellers of Registrable Securities in the Public Offering, the aggregate amount of such liability may not exceed the holder’s net proceeds from the offering and (ii) to the extent selling stockholders give further representations, warranties and indemnities, then with respect to all other representations, warranties and indemnities of sellers of Registrable Securities in the Public Offering, the aggregate amount of such liability may not exceed the lesser of (A) the holder’s pro rata portion of any such liability, in accordance with the holder’s portion of the total number of Registrable Securities included in the offering and (B) the holder’s net proceeds from the offering.

3.2. Certain Other Provisions .

3.2.1 Underwriter’s Cutback . In connection with any registration of shares, the underwriter may determine that marketing factors (including an adverse effect on the per

 

7


share offering price, timing or distribution of the securities) require a limitation of the number of shares to be underwritten. Notwithstanding any contrary provision of this Article III, and subject to the terms of this Section 3.2.1, the underwriter may limit the number of shares which would otherwise be included in the registration by excluding any or all Registrable Securities from the registration, it being understood that, if the registration involves a registration for sale of securities for the Company’s own account, then the number of shares that the Company seeks to have registered in the registration may not be subject to exclusion, in whole or in part, under this Section 3.2.1. Upon receipt of notice from the underwriter of the need to reduce the number of shares to be included in the registration, the Company will advise all holders of the Company’s securities that would otherwise be registered and underwritten pursuant hereto, and the number of shares of such securities, including Registrable Securities, that may be included in the registration will be allocated in the following manner, unless the underwriter determines that marketing factors require a different allocation: (i) first, one hundred percent (100%) of the securities that the Company or any Person (other than a Holder of Registrable Securities) exercising a contractual right to demand registration or to participate in any registration, as the case may be, proposes to sell, and (ii) second, and only if all the securities referred to in clause (i) have been included, the number of Registrable Securities that, in the opinion of such managing underwriter or underwriters, can be sold without having such adverse effect, with such number to be allocated pro rata among the Holders that have requested to participate in such registration based on the relative number of Registrable Securities requested to be included therein then held by each such Holder and (iii) third, and only if all of the Registrable Securities referred to in clause (ii) have been included in such registration, any other securities eligible for inclusion in such registration.

For purposes of any underwriter cutback, all Registrable Securities held by any Holder will also include any Registrable Securities held by the Affiliates of the Holder, or by the estates and family members of the Holder or any trusts for the benefit of any of the foregoing Persons and the Holder, and such other Persons will be deemed to be a single selling Holder, and any pro rata reduction with respect to the selling Holder will be based upon the aggregate amount of Common Stock owned by all entities and individuals included with the selling Holder, as defined in this sentence. No securities excluded from the underwriting by reason of the underwriter’s marketing limitation described herein will be included in such registration. Upon delivery of a written request pursuant to Section 3.1.1(a) that Registrable Securities be sold in an underwritten offering, the Holder thereof may not thereafter elect to withdraw therefrom without the written consent of the Company.

3.2.2 Registration Procedures . If, and in each case when, the Company is required to effect a registration of any Registrable Securities as provided in this Article III, 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:

(a) prepare the required registration statement including all exhibits and financial statements required under the Securities Act to be filed therewith,

 

8


and before filing a registration statement, prospectus or any free writing prospectus, or any amendments or supplements thereto, 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, which documents shall be subject to the review of such underwriters and such Holders and their respective counsel;

(b) as soon as reasonably practicable file with the Commission a registration statement relating to the Registrable Securities including all exhibits and financial statements required by the Commission 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;

(c) prepare and file with the Commission such amendments and post-effective amendments to such registration statement and supplements to the prospectus or any free writing prospectus as may be (i) reasonably requested by any participating Holder (to the extent such request relates to information relating to such Holder) or (ii) necessary to keep such registration effective for a period not in excess of 180 days (or such shorter period that will terminate when all Registrable Securities covered by the registration statement have been sold), and comply with provisions of the applicable securities laws 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;

(d) notify the participating Holders of Registrable Securities and the managing underwriter or underwriters, if any, and (if requested) confirm such notice in writing and provide copies of the relevant documents, as soon as reasonably practicable after notice thereof is received by the Company (i) when the applicable registration statement or any amendment thereto has been filed or becomes effective, and when the applicable prospectus, any amendment or supplement to such prospectus, any free writing prospectus or any amendment or supplement to such free writing prospectus has been filed, (ii) of any written comments by the Commission or any request by the Commission or any other federal or state governmental authority for amendments or supplements to such registration statement, such prospectus, such free writing prospectus or for additional information (whether before or after the effective date of the registration statement), (iii) of the issuance by the Commission of any stop order suspending the effectiveness of such registration statement or any order by the Commission 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, (iv) 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 (v) 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;

 

9


(e) 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 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 or free writing prospectus, in light of the circumstances under which they were made) not misleading, when any free writing prospectus includes information that may conflict with the information contained in the registration statement, or, if for any other reason it shall be necessary during such time period to amend or supplement such registration statement, prospectus or free writing prospectus in order to comply with the Securities Act and, in either case as promptly as reasonably practicable thereafter, prepare and file with the Commission, and furnish without charge to the selling Holders and the managing underwriter or underwriters, if any, an amendment or supplement to such registration statement, prospectus or free writing prospectus which shall correct such misstatement or omission or effect such compliance;

(f) use its reasonable best efforts to prevent, or obtain the withdrawal of, any stop order or other order or notice preventing or suspending the use of any preliminary or final prospectus or any free writing prospectus;

(g) promptly incorporate in a prospectus supplement, free writing prospectus or post-effective amendment such information as the managing underwriter or underwriters and any participating Holder (to the extent such request relates to the identity of or plan of distribution information relating to such Holder) agree should be included therein relating to such Holder or the plan of distribution with respect to such Registrable Securities; and make all required filings of such prospectus supplement, free writing prospectus or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such prospectus supplement, free writing prospectus or post-effective amendment;

(h) 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);

(i) 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, each free writing prospectus and such other documents as such Holder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities by such Holder or underwriter (it being understood that the

 

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Company shall consent to the use of such prospectus or any free writing prospectus or any amendment or supplement 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 or free writing prospectus);

(j) on or prior to the date on which the applicable registration statement becomes 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, provided that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to taxation or general service of process in any such jurisdiction where it is not then so subject;

(k) co-operate 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 enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request at least two (2) Business Days prior to any sale of Registrable Securities to the underwriters;

(l) use its reasonable best efforts to 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;

(m) 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 for the Registrable Securities which are in a form eligible for deposit with The Depository Trust Company;

(n) 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;

(o) use its reasonable best efforts to comply with all applicable securities laws and make available to its security holders, 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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(p) 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;

(q) use its best efforts to cause all Registrable Securities covered by the applicable registration statement to be listed on each securities exchange on which any of the Company’s equity securities are then listed or quoted and on each inter-dealer quotation system on which any of the Company’s equity securities are then quoted;

(r) make available upon reasonable notice at reasonable times and for reasonable periods for inspection by a representative appointed by the Holders of a majority of Registrable Securities covered by the applicable registration statement, by any underwriter participating in any disposition to be effected pursuant to such registration statement and by any one attorney, accountant or other agent retained by such Holders 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 and employees and 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 reasonably requested by any such Person in connection with such registration statement as shall be necessary to enable them to exercise their due diligence responsibility; provided , however , that any such Person gaining access to information regarding the Company pursuant to this Section 3.2.2(r) shall agree to hold in strict confidence and shall not make any disclosure or use any information regarding the Company which the Company determines in good faith to be confidential, and of which determination such Person is notified, unless (i) the release of such information is requested or required (by deposition, interrogatory, requests for information or documents by a governmental entity, subpoena or similar process), (ii) disclosure of such information, in the opinion of counsel to such Person, is otherwise required by law, (iii) such information is or becomes publicly known other than through a breach of this or any other agreement of which such Person has knowledge, (iv) such information is or becomes available to such Person on a non-confidential basis from a source other than the Company or (v) such information is independently developed by such Person;

(s) take no direct or indirect action prohibited by Regulation M under the Exchange Act;

(t) take all reasonable action to ensure that any free writing prospectus 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, 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; and

(u) take all such other commercially reasonable actions as are necessary or advisable in order to expedite or facilitate the disposition of such Registrable Securities.

 

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3.2.3 Selection of Underwriters and Counsel . The underwriters and legal counsel to be retained by the Company in connection with any Public Offering will be selected by the Board, subject to any agreements to which the Company is a party in respect thereof. In connection with any registration of Registrable Securities pursuant to Section 3.1, the Holders may select one counsel to represent all Holders of Registrable Securities covered by the registration.

3.2.4 Holder Lock-Up . Each Holder shall comply with the provisions of Section 3.6 of the Stockholders Agreement applicable to a “Manager” as though that Section were set forth herein. No Holder may Transfer Common Stock, or any securities convertible into or exercisable or exchangeable for Common Stock, pursuant to a waiver from a lock-up agreement described in Section 3.6 of the Stockholders Agreement unless the benefit of that waiver is extended in a pro rata manner to all Holders. In addition, in connection with any Public Offering other than the Initial Public Offering, each Holder shall comply with the provisions of Section 3.6 of the Stockholders Agreement applicable to a “Manager” as though that Section were set forth herein and as though that Section were applicable to Public Offerings other than the Initial Public Offering, except that solely for purposes of this sentence the reference in such Section 3.6 of the Stockholders Agreement to “one hundred eighty (180) days” shall instead be deemed to be a reference to “ninety (90) days”.

3.2.5 Certain Obligations of Sellers of Registrable Securities .

(a) 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 and the Company may exclude from such registration the Registrable Securities of any such Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request. 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.

(b) 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 3.2.2(e), 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 or free writing prospectus, as the case may be, contemplated by Section 3.2.2(e), or until such Holder is advised in writing by the Company that the use of the prospectus or free writing prospectus, as the case may be, may be resumed, and has received copies

 

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of any additional or supplemental filings that are incorporated by reference in the prospectus or such free writing prospectus or any amendments or supplements thereto 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 or any free writing prospectus covering such Registrable Securities current at the time of receipt of such notice.

3.3. Indemnification and Contribution .

3.3.1 Indemnities of the Company . In the event of any registration of any Registrable Securities or other debt or equity securities of the Company or any of its subsidiaries under the Securities Act pursuant to this Article III or otherwise, and in connection with any registration statement or any other disclosure document produced by or on behalf of the Company or any of its subsidiaries, including reports required and other documents filed under the Exchange Act or any free writing prospectus or amendment thereof or supplement thereto, and other documents pursuant to which any debt or equity securities of the Company or any of its subsidiaries are sold (whether or not for the account of the Company or its subsidiaries), the Company will, and hereby does, and will cause each of its subsidiaries, jointly and severally, to indemnify and hold harmless each Holder, any Person who is or might be deemed to be a controlling Person of the Company or any of its subsidiaries or representatives within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, their respective direct and indirect limited and general partners, advisory board members, advisors, directors, officers, employees, trustees, members and shareholders, and each other Person, if any, who controls any such holder or any such controlling Person within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each such Person being referred to herein as a “ Covered Person ”), against any and all losses, penalties, judgments, suits, costs, claims, damages, liabilities and expenses (including reasonable costs of investigation and legal expenses) (collectively “ Losses ”), joint or several, to which the Covered Person may be or become subject under the Securities Act, the Exchange Act, any other securities or other law of any jurisdiction, the common law or otherwise, insofar as such Losses arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained or incorporated by reference in any registration statement under the Securities Act, any preliminary prospectus or final prospectus included therein, or any related summary prospectus, free writing prospectus or any amendment or supplement thereto, or any document incorporated by reference therein, or any other disclosure document (including reports and other documents filed under the Exchange Act and any document incorporated by reference therein) or other document or report, (ii) any omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading or (iii) any violation or alleged violation by the Company or any of its subsidiaries of any federal, state, foreign or common law rule or regulation applicable to the Company or any of its subsidiaries and relating to action or inaction in connection with any such registration, disclosure document or other document or report, and will reimburse the Covered Person for any legal or any other expenses incurred by it in connection with investigating or defending any such Loss whether or not such indemnified party is a party thereto; provided , however , that neither the Company nor any of its subsidiaries will be

 

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liable to any Covered Person in any such case 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 such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement, incorporated document or other disclosure document or other document or report, in reliance upon, and in conformity with, written information furnished to the Company or to any of its subsidiaries through an instrument duly executed by the Covered Person specifically stating that it is for use in the preparation thereof. This indemnity shall be in addition to any liability the Company may otherwise have. The indemnities of the Company and of its subsidiaries contained in this Section 3.3.1 will remain in full force and effect regardless of any investigation made by, or on behalf of, the Covered Person, and will survive any transfer of securities or any termination of this Agreement.

3.3.2 Indemnities to the Company . Subject to Section 3.3.4, the Company and any of its subsidiaries may require, as a condition to including any securities in any registration statement filed pursuant to this Article III, that the Company and any of its subsidiaries receive an undertaking satisfactory to the Company from the prospective seller of such securities, severally and not jointly, to indemnify and hold harmless the Company and any of its subsidiaries, each director of the Company or any of its subsidiaries, each officer of the Company or any of its subsidiaries who will sign such registration statement and each other Person (other than such seller), if any, who controls the Company or any of its subsidiaries within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each other prospective seller of such securities with respect to (i) any untrue statement or alleged untrue statement of any material fact contained or incorporated by reference in any registration statement under the Securities Act, any preliminary prospectus or final prospectus included therein, or any related summary prospectus, free writing prospectus or any amendment or supplement thereto, or any document incorporated by reference therein, or any other disclosure document (including reports and other documents filed under the Exchange Act and any document incorporated by reference therein) or other document or report, or (ii) any omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, in each case under subclauses (i) and (ii), to the extent, but only to the extent, that such untrue statement or omission was made in reliance upon, and in conformity with, written information furnished to the Company or any of its subsidiaries through an instrument executed by such seller specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement, incorporated document or other document or report. 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. Such indemnity will remain in full force and effect regardless of any investigation made by, or on behalf of, the Company, any of its subsidiaries or any such director, officer or controlling Person, and will survive any transfer of securities or any termination of this Agreement.

 

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3.3.3 Contribution . If the indemnification provided for in Section 3.3.1 or 3.3.2 is unavailable to a party that would have been entitled to indemnification pursuant to the foregoing provisions of this Section 3.3 (an “ Indemnitee ”) in respect of any Losses referred to therein, then each party that would have been an indemnifying party thereunder shall, subject to Section 3.3.4 and in lieu of indemnifying such Indemnitee, contribute to the amount paid or payable by such Indemnitee as a result of such Losses in such proportion as is appropriate to reflect the relative fault of such indemnifying party on the one hand and such Indemnitee on the other in connection with the acts, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault will be determined by reference to, among other things, whether the 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 such indemnifying party or such Indemnitee and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties agree that it would not be just or equitable if contribution pursuant to this Section 3.3.3 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 the preceding sentence. The amount paid or payable by a contributing party as a result of the losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to above in this Section 3.3.3 shall include any legal or other expenses reasonably incurred by such Indemnitee in connection with investigating or defending any such action or claim. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. If indemnification is available under this Section 3.3, the indemnifying parties shall indemnify each indemnified party to the full extent provided in Sections 3.3.1 and 3.3.2 without regard to the provisions of this Section 3.3.3. The remedies provided for in this Section 3.3.3 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.

3.3.4 Limitation on Liability of Holders of Registrable Securities . The liability of each Holder in respect of any indemnification or contribution obligation of the Holder arising under this Section 3.3 may not in any event exceed an amount equal to the gross proceeds to the Holder from the disposition of the Registrable Securities disposed of by the Holder pursuant to such registration.

3.3.5 Indemnification Procedures . Promptly after receipt by an Indemnitee of written notice of the commencement of any action or proceeding with respect to which a claim for indemnification may be made pursuant to this Section 3.3, the Indemnitee will, if a claim in respect thereof is to be made against an indemnifying party, give prompt written notice to the latter of the commencement of such action or proceeding; provided , that the failure of the Indemnitee to give notice as provided herein will not relieve the indemnifying party of its obligations under this Section 3.3, except to the extent that the indemnifying party is actually and materially prejudiced by such failure to give notice. In case any such action or proceeding is brought against an Indemnitee, the indemnifying party will be entitled to participate therein, and to assume the defense thereof (at its expense), jointly with any other indemnifying party similarly notified to the extent that it

 

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may wish, with counsel reasonably satisfactory to the Indemnitee, and, after notice from the indemnifying party to the Indemnitee of the indemnifying party’s election so to assume the defense thereof, the indemnifying party will not be liable to such Indemnitee for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation, and the indemnifying party will have no liability for any settlement made by the Indemnitee without the consent of the indemnifying party, such consent not to be unreasonably withheld. Notwithstanding the foregoing, the Indemnitee will have the right to assume or continue its own defense, and the indemnifying party will not be liable for any reasonable expenses therefor, unless (a) the indemnifying party has agreed in writing to pay such fees or expenses, (b) in the Indemnitee’s reasonable judgment, based on the advice of its counsel, 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, (c) in the Indemnitee’s reasonable judgment, based on the advice of its counsel, a conflict of interest between the Indemnitee and the indemnifying parties may exist in respect of such action or proceeding (in which case, if the Indemnitee notifies the indemnifying party in writing that the Indemnitee 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 the Indemnitee), or (d) the indemnifying party does not assume the defense of any such action or proceeding within a reasonable time after notice of commencement. No indemnifying party will settle any action or proceeding, or consent to the entry of any judgment, without the consent of the Indemnitee, unless such settlement or judgment (i) includes as an unconditional term thereof the giving by the claimant or plaintiff of a release to such Indemnitee from all liability in respect of such action or proceeding and (ii) does not involve the imposition of equitable remedies, or the imposition of any obligations on the Indemnitee, and does not otherwise adversely affect the Indemnitee, other than as a result of the imposition of financial obligations for which the Indemnitee will be indemnified hereunder. 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 the indemnifying party or parties shall not, except as specifically set forth in this Section 3.3.5, in connection with any proceeding or related proceedings in the same jurisdiction, bear the expenses for more than one firm of counsel for all Indemnitees in each jurisdiction unless (x) the employment of more than one counsel has been authorized in writing by the indemnifying party or parties, (y) an Indemnitee 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 Indemnitees or (z) a conflict or potential conflict exists or may exist (based upon advice of counsel to an Indemnitee) between such Indemnitee and the other Indemnitees, in each of which cases the indemnifying party shall be obligated to pay the reasonable fees and expenses of such additional counsel or counsels.

3.3.6 Rule 144 Reporting . With a view to making available the benefits of certain rules and regulations of the Commission that may at any time permit the sale of Shares held by Managers to the public without registration, at all times after 90 days after the first underwritten Public Offering of the Company’s securities pursuant to an effective registration (other than on Form S-4, S-8 or a comparable form) under the Securities Act has become effective, the Company agrees to:

(a) make and keep available adequate current public information with respect to the Company, within the meaning of Rule 144;

 

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(b) use its commercially reasonable efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act;

(c) furnish to any Manager, forthwith upon written request, (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 and the Exchange Act and (ii) such other reports and documents so filed by the Company as the Manager may reasonably request in availing itself of any rule or regulation of the Commission allowing the Manager to sell any Shares without registration; and

(d) take such further action as any Holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act in transactions that would otherwise be permitted by this agreement and within the limitation of the exemptions provided by (i) Rules 144 or 144A or Regulation S under the Securities Act, as such Rules may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the Commission.

3.3.7 Limitation on Subsequent Registration Rights . After the date hereof, the Company shall not enter into any agreement with any holder or prospective holder of any securities of the Company (other than the Investors or any transferee thereof or other person or entity who becomes a party to the stockholders agreement among the Investors entered into on the date hereof) that would grant such holder rights to demand the registration of shares of the Company’s capital stock, or to include such shares in a registration statement that would reduce the number of shares includable by the Holders, without the written consent of the holders of a majority of the Shares outstanding on such date.

ARTICLE IV

REMEDIES

4.1. Generally . The parties will have all remedies available at law, in equity or otherwise in the event of any breach or violation of this Agreement or any default hereunder. The parties acknowledge and agree that, in the event of any breach of this Agreement, in addition to any other remedies which may be available, each of the parties hereto will be entitled to specific performance of the obligations of the other parties hereto and, in addition, to such other equitable remedies (including preliminary or temporary relief) as may be appropriate in the circumstances.

 

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ARTICLE V

PERMITTED TRANSFEREES

The rights of a Holder hereunder may be assigned (but only with all related obligations as set forth below) in connection with a Transfer of Shares effected in accordance with the terms of the Stockholders Agreement and this Agreement to a Permitted Transferee of that Holder. Without prejudice to any other or similar conditions imposed hereunder with respect to any such Transfer, no assignment permitted under the terms of this Article V will be effective unless the Permitted Transferee to which the assignment is being made, if not a Holder, has delivered to the Company a written acknowledgment and agreement in form and substance reasonably satisfactory to the Company that the Shares in respect of which the assignment is made will continue to be deemed Shares and be subject to all of the provisions of this Agreement relating to Shares, and that the Permitted Transferee will be bound by, and will be a party to, this Agreement. A Permitted Transferee to whom rights are transferred pursuant to this Article V may not again transfer those rights to any other Permitted Transferee, other than as provided in this Article V.

ARTICLE VI

AMENDMENT, TERMINATION, ETC

6.1. Oral Modifications . This Agreement may not be orally amended, modified, extended or terminated, and no oral waiver of any of its terms may be effective.

6.2. Written Modifications . This Agreement may be amended, modified, extended or terminated, and the provisions hereof may be waived, only by an agreement in writing signed by the Company and the Holders that hold a majority of the Shares held by all Holders; provided , however , that any amendment, modification, extension, termination or waiver (an “ Amendment ”) will also require the consent of any Manager or Manager Designee who would be disproportionately and adversely affected by the Amendment. Each Amendment will be binding upon each party hereto and each holder of Shares subject hereto. In addition, each party hereto and each holder of Shares subject hereto may waive any right hereunder by an instrument in writing signed by that party or holder.

6.3. Effect of Termination . No termination under this Agreement will relieve any Person of liability for breach prior to termination. If this Agreement is terminated, each Covered Person will retain the indemnification and contribution rights pursuant to Section 3.3 with respect to any matter that (i) may be an indemnified liability hereunder and (ii) occurred prior to the termination.

 

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ARTICLE VII

DEFINITIONS

For purposes of this Agreement:

7.1. Certain Matters of Construction . In addition to the definitions referred to or set forth below in this Article VII:

(i) The words “hereof’, “herein”, “hereunder” and words of similar import refer to this Agreement as a whole, and not to any particular Article, Section or subsection of this Agreement, and reference to a particular Article or Section of this Agreement includes all subsections thereof;

(ii) the word “including” is not limiting, and means “including, without limitation”;

(iii) definitions are equally applicable to both nouns and verbs, and to the singular and plural forms of the terms defined;

(iv) the masculine, feminine and neuter genders each include the other; and

(v) references to “Sections” refer to Sections of this agreement, unless otherwise specified.

7.2. Definitions . The following terms have the following meanings:

Affiliate ” means (a) with respect to any specified Person that is not a natural Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For these purposes, “control” shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; provided that no Manager (or Permitted Transferee thereof) shall be deemed an Affiliate of the Company or any of its subsidiaries for purposes of this Agreement and (b) with respect to any natural Person, any Member of the Immediate Family of such natural Person.

Affiliated Fund ” means with respect to any Investor, each corporation, trust, limited liability company, general or limited partnership or other entity under common control with that Investor (including any such entity with the same general partner or principal investment advisor as that Investor or with a general partner or principal investment advisor that is an Affiliate of the general partner or principal investment advisor of that Investor).

Agreement ” has the meaning set forth in the Preamble.

Amendment ” has the meaning set forth in Section 6.2.

Board ” means the board of directors of the Company.

Business Day ” means any day other than a Saturday, a Sunday or day on which banking institutions in New York, New York are authorized or obligated by law or executive order to close.

 

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Change of Control ” means (i) any change in the ownership of the Company’s capital stock, if, immediately after giving effect thereto, any Person (or group of Persons acting in concert) other than the Investors and their Affiliates will have the direct or indirect power to elect a majority of the members of the Board or (ii) any change in the ownership of the Company’s capital stock, if, immediately after giving effect thereto, the Investors and their Affiliates will own less than 25% of the Equivalent Shares.

Closing ” has the meaning set forth in Section 1.1.

Commission ” means the Securities and Exchange Commission.

Common Stock ” means the common stock, $0.01 par value per share, of the Company.

Company ” has the meaning set forth in the Preamble.

Convertible Securities ” means any evidence of indebtedness, shares of stock (other than Common Stock) or other securities (other than Options, Warrants and SARs) that are directly or indirectly convertible into, or exchangeable or exercisable for, shares of Common Stock.

Covered Person ” has the meaning set forth in Section 3.3.1.

CPPIB ” means CPP Investment Board Private Holdings Inc. and any of its Affiliates.

Eligible Buyer ” has the meaning set forth in Section 2.2.2.

Eligible Offeree ” has the meaning set forth in Section 2.2.1.

Eligible Portion ” has the meaning set forth in Section 2.2.1.

Eligible Shares ” means all Vested Shares held by a Manager or Manager Designee.

Equivalent Shares ” means, at any date of determination, (i) as to any outstanding shares of Common Stock, such number of shares of Common Stock and (ii) as to any outstanding Options, Warrants, SARs or Convertible Securities that constitute Shares, the maximum number of shares of Common Stock for which or into which such Options, Warrants, SARs or Convertible Securities that constitute Vested Shares may at the time be exercised, converted or exchanged (or which will become exercisable, convertible or exchangeable on or prior to, or by reason of, the transaction or circumstance in connection with which the number of Equivalent Shares is to be determined).

Exchange Act ” means the Securities Exchange Act of 1934, as amended and as in effect from time to time.

FINRA ” means the Financial Industry Regulatory Authority.

Holders ” means the Managers and Manager Designees holding Registrable Securities under this Agreement.

IMS ” means IMS Health Incorporated, a Delaware corporation.

 

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Indemnitee ” has the meaning set forth in Section 3.3.3.

Initial Public Offering ” means the initial Public Offering registered on Form S-1 (or any successor form under the Securities Act) after the date hereof.

Investors ” means, collectively, TPG, CPPIB and LGP.

Issuance ” has the meaning set forth in Section 2.1.

LGP ” means, collectively, Green Equity Investors V, L.P., Green Equity Investors Side V, L.P. and LGP Iceberg Coinvest, LLC and any of their respective Affiliates.

Losses ” has the meaning set forth in Section 3.3.1.

Manager Designees ” has the meaning set forth in the Preamble.

Managers ” has the meaning set forth in the Preamble.

Member of the Immediate Family ” means, with respect to any individual, each spouse or child or other descendant of such individual, each trust created solely for the benefit of one or more of the aforementioned Persons and their spouses and each custodian or guardian of any property of one or more of the aforementioned Persons in his, her or its capacity as such custodian or guardian.

Merger ” has the meaning set forth in the Recitals.

Merger Agreement ” has the meaning set forth in the Recitals.

Merger Sub ” has the meaning set forth in the Preamble.

Options ” means any options (other than call rights and put rights under Sections 5.1 and 5.2 of the Stockholders Agreement) to subscribe for, purchase or otherwise directly acquire Common Stock, other than any such option held by the Company or any right to purchase shares pursuant to this Agreement.

Other Securities ” has the meaning set forth in Section 2.2.3.

Permitted Transferee ” has the meaning set forth in the Stockholders Agreement.

Person ” means any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.

Preemptive Rights Notice ” has the meaning set forth in Section 2.2.1.

Price Per Equivalent Share ” means the Board’s good faith determination of the price per Equivalent Share of any Convertible Securities or Options, Warrants or SARs that are the subject of an Issuance pursuant to Article II.

 

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Prospective Subscriber ” has the meaning set forth in Section 2.2.1.

Public Offering ” means a public offering and sale of Common Stock for cash pursuant to an effective registration statement under the Securities Act.

Registrable Securities ” means (i) all shares of Common Stock, (ii) all shares of Common Stock issuable upon exercise, conversion or exchange of any Option, Warrant, SAR or Convertible Security and (iii) all shares of Common Stock directly or indirectly issued or issuable with respect to the securities referred to in clauses (i) or (ii) above by way of stock dividend or stock split, or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization, in each case constituting Shares. As to any particular Registrable Securities, such shares will cease to be Registrable Securities when (A) the shares have been Transferred in a Sale to which Sections 4.1 or 4.2 of the Stockholders Agreement apply, (B) a registration statement with respect to the sale of the shares has become effective under the Securities Act and the shares have been disposed of in accordance with the registration statement, (C) the shares have been Transferred pursuant to Rule 144, (D) subject to the provisions of Article V, the shares have been otherwise transferred to a Person other than a Permitted Transferee, new certificates for them not bearing a legend restricting further transfer have been delivered by the Company and subsequent disposition of them does not require registration of them under the Securities Act, (E) the shares may be distributed without volume limitation or other restrictions on transfer under Rule 144 (including without application of paragraphs (c), (e) (f) and (h) of Rule 144) or (F) the shares have ceased to be outstanding.

Registration Expenses ” means any and all expenses incident to performance of, or compliance with, Article III hereof (other than underwriting discounts and commissions paid to underwriters and transfer taxes, if any), including (i) all Commission and securities exchange or FINRA registration and filing fees, (ii) all fees and expenses of complying with securities or blue sky laws (including reasonable fees and disbursements of counsel for the underwriters in connection with blue sky qualifications of the Registrable Securities), (iii) all printing, messenger and delivery expenses, (iv) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange or FINRA pursuant to Section 3.2.2(n) and (q), and all rating agency fees, (v) the fees and charges of counsel for the Company and of its independent public accountants, including the expenses of any special audits and/or “cold comfort” letters required by, or incident to, such performance and compliance, (vi) the reasonable fees and charges of one counsel for the Holders selected pursuant to the terms of Article III hereof, and one counsel for certain Holders selected pursuant to the second proviso of Section 3.2.3, if applicable, (vii) any fees and disbursements customarily paid by the issuers of securities, (viii) expenses incurred in connection with any road show (including the reasonable out-of-pocket expenses of the Holders) and (ix) fees and expenses incurred in connection with the distribution or transfer of Registrable Securities to or by a Holder or its Permitted Transferees in connection with a Public Offering.

Rule 144 ” means Rule 144 under the Securities Act (or any successor Rule).

SAR ” means any stock appreciation rights providing for the right to subscribe for, purchase or otherwise directly acquire Common Stock.

 

23


Securities Act ” means the Securities Act of 1933, as amended and as in effect from time to time.

Shares ” means (i) all shares of Common Stock held by a Manager or Manager Designee, whenever issued, including all shares of Common Stock issued upon the exercise, conversion or exchange of any Options, Warrants, SARs or Convertible Securities and (ii) all Options, Warrants, SARs and Convertible Securities held by a Manager or Manager Designee (treating the Options, Warrants, SARs and Convertible Securities as a number of Shares equal to the number of Equivalent Shares represented by the Options, Warrants, SARs and Convertible Securities for all purposes of this Agreement, except as otherwise specifically set forth herein).

Stockholders Agreement ” has the meaning set forth in the Recitals.

Subject Securities ” has the meaning set forth in Section 2.1.

TPG ” means, collectively, TPG Partners V, TPG FOF V-A, L.P., TPG FOF V-B, L.P., TPG Partners VI, L.P., TPG FOF VI SPV, L.P., TPG Biotechnology Partners III, L.P. and TPG Iceberg Co-Invest LLC, and any of their respective Affiliates.

Transfer ” means any sale, pledge, assignment, encumbrance or other transfer or disposition of any Shares to any other Person, whether directly, indirectly, voluntarily, involuntarily, by operation of law, pursuant to judicial process or otherwise.

Vested Shares ” means, with respect to a Manager or Manager Designee at any time, the Shares held by the Manager or Manager Designee that are not subject to vesting requirements at the time.

Warrants ” means any warrants to subscribe for, purchase or otherwise directly acquire Common Stock.

ARTICLE VIII

MISCELLANEOUS

8.1. Authority: Effect . Each party hereto represents, warrants to and agrees with each other party that the execution and delivery of this Agreement, and the consummation of the transactions contemplated hereby, have been duly authorized on behalf of the party and do not violate any agreement or other instrument applicable to the party or by which the party’s assets are bound. This Agreement does not, and may not be construed to, give rise to the creation of a partnership among any of the parties hereto, or to constitute any of the parties members of a joint venture or other association. The Company shall cause its subsidiaries to be jointly and severally liable for any payment obligation of the Company pursuant to this Agreement.

 

24


8.2. Notices . Any notices, requests, demands, claims and other communications required or permitted to be delivered, given or otherwise provided under this Agreement shall be in writing and shall be (i) delivered or given personally, (ii) sent by facsimile or (iii) sent by overnight courier, in each case, to the address (or facsimile number) listed below:

If to the Company:

c/o TPG Capital Partners, L.P.

301 Commerce Street

Suite 3300

Fort Worth, TX 76102

Attention: Clive Bode

Facsimile: 817-871-4001

with copies (which will not constitute notice) to:

IMS Health Incorporated

901 Main Avenue

Norwalk, Connecticut 06851

Attention: General Counsel

Fax: (203) 845-5356

and

Ropes & Gray LLP

One International Place

Boston, MA 02110

Attention:   

Alfred O. Rose

Amanda McGrady Morrison

Facsimile: 617-951-7050

email:   

alfred.rose@ropesgray.com

amanda.morrison@ropesgray.com

If to a Manager, to the most recent address of that Manager shown on the records of the Company.

If to a Manager Designee, to the most recent address of that Manager Designee shown on the records of the Company.

Notice to the holder of record of any shares of capital stock will be deemed notice to the holder of the shares for all purposes hereof.

Unless otherwise specified herein, such notices or other communications will be deemed effective (i) on the date received, if personally delivered, (ii) on the date received if delivered by facsimile prior to 5:00 p.m. prevailing local time on a Business Day, or if delivered after 5:00 prevailing local time on a Business Day or on other than a Business Day, on the first Business Day thereafter and (iii) two Business Days after being sent by overnight courier. Each of the parties hereto will be entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto.

8.3. Merger; Binding Effect, Etc . This Agreement and the Stockholders Agreement, collectively, constitute the entire agreement of the parties with respect to the agreements’ subject

 

25


matter, supersede all prior or contemporaneous oral or written agreements or discussions with respect to the agreements’ subject matter and will be binding upon, and inure to the benefit of, the parties hereto and thereto and their respective heirs, representatives, successors and permitted assigns. Except as otherwise expressly provided herein, no Holder or other party hereto may assign any of its respective rights, or delegate any of its respective obligations, under this Agreement without the prior written consent of the other parties hereto, and any attempted assignment or delegation in violation of the foregoing will be null and void.

8.4. Descriptive Headings . The descriptive headings of this Agreement are for convenience of reference only, are not to be considered a part hereof and may not be construed to define or limit any of the terms or provisions hereof. This Agreement reflects the mutual intent of the parties, and no rule of construction against the drafting party will apply.

8.5. Counterparts . This Agreement may be executed in multiple counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument.

8.6. Severability . If any provision hereof would, under applicable law, be invalid or unenforceable in any respect, the provision will be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law. The provisions hereof are severable, and if any provision hereof should be held invalid or unenforceable in any respect, it will not invalidate, render unenforceable or otherwise affect any other provision hereof.

8.7. No Recourse . Notwithstanding anything that may be expressed or implied in this Agreement, the Company, each Manager and each Manager Designee covenant, agree and acknowledge that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement may be had against any current or future director, officer, employee, general or limited partner, manager, member or stockholder of any stockholder of the Company, or of any Affiliate or assignee thereof, as such, whether by the enforcement of any assessment, or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever will attach to, be imposed on or otherwise be incurred by any current or future director, officer, employee, general or limited partner, manager, member or stockholder of any stockholder of the Company, or of any Affiliate or assignee thereof, as such, for any obligation of the Company or any Manager or Manager Designee under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.

ARTICLE IX

GOVERNING LAW

9.1. Governing Law . This Agreement and any related dispute shall be governed by and construed in accordance with the laws of the State of Delaware.

 

26


9.2. Jurisdiction . Any action or proceeding against the parties relating in any way to this Agreement may be brought exclusively in the courts of the State of Delaware or (to the extent subject matter jurisdiction exists therefore) the United States District Court for the District of Delaware, and the parties irrevocably submit to the jurisdiction of both such courts in respect of any such action or proceeding. Any actions or proceedings to enforce a judgment issued by one of the foregoing courts may be enforced in any jurisdiction.

9.3. Waiver Of Jury Trial . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF, OR BASED UPON, THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, OR IN ANY WAY CONNECTED WITH, OR RELATED OR INCIDENTAL TO, THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 9.3 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THE PARTIES ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 9.3 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

9.4. Exercise of Rights and Remedies . No delay of, or omission in, the exercise of any right, power or remedy accruing to any party as a result of any breach or default by any other party under this Agreement will impair that right, power or remedy, nor will any such delay or omission be construed as a waiver of, or acquiescence in, any such breach or default, or of any similar breach or default occurring later, nor will any delay, omission or waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after that waiver.

[remainder of page intentionally left blank]

 

27


IN WITNESS WHEREOF , each of the undersigned has duly executed this Agreement (or caused this Agreement to be executed on its behalf by its officer or representative thereunto duly authorized) as of the date and year first above written.

 

THE COMPANY:     HEALTHCARE TECHNOLOGY HOLDINGS, INC.
    By:  

/s/ Clive D. Bode

      Name:   Clive D. Bode
      Title:   Vice President and Secretary

[Signature Page to Registration and Preemptive Rights Agreement]


MANAGER:

[SIGNATURES ON FILE WITH COMPANY]

[Signature Page to Registration and Preemptive Rights Agreement]


MANAGER DESIGNEE:

[SIGNATURES ON FILE WITH COMPANY]

[Signature Page to Registration and Preemptive Rights Agreement]


Schedule I

to Registration and Preemptive Rights Agreement

STOCK OWNERSHIP AT CLOSING

 

Name of Manager

   Common
Stock
     Purchase
Price Per
Share
     Options      SARs      DC ERP
notional

shares
 

Murray L. Aitken

     261,404       $ 1.00         —           533,659.61         —     

Adel B. Al-Saleh

     —              —           537,053.33         170,000   

Harvey A. Ashman

     115,544       $ 1.00         —           235,435.04         —     

Jeffrey T. Baker

     13,552       $ 1.00         —           —           —     

Richard A. Bartolotta

     —              —           267,384.00         —     

Elisabeth Beck

     —              —           117,717.52         —     

Catherine Blachere

     100,012       $ 1.00         —           —           —     

David R. Carlucci

     —              —           2,668,309.49         —     

Paul J. Crotty

     —              —           268,526.67         —     

Margaret F. Cupp

     47,322       $ 1.00         —           —           —     

David J. Desch

     13,728       $ 1.00         —           48,391.93         —     

Christine J. Dusek

     5,830       $ 1.00         —           —           —     

Jose Luis Fernandez

     —              —           263,681.76         212,536   

Jeff Ford

     —              —           274,240.00         —     

Alistair Grenfell

     —              —           166,863.61         —     

Alex Guizzetti

     —              —           205,680.00         —     

Raymond H. Hill

     —              —           93,333.01         280,496.65   

Andrew C. Jackson

     —              —           266.824.09         —     

Leslye G. Katz

     —              —           784,794.89         —     

Kevin C. Knightly

     —              —           155,996.85         483,494   

Deborah Kobewka

     —              —           74,273.33         —     

Mary Beth Lawrence

     —              —           —           125,000   

Sergio Liberatore

     —              —           117,717.52         —     

James R. Mahon

     —              —           —           100,000   

Kevin S. McKay

     —              —           —           295,600   

Seyed A. Mortazavi

     —              —           —           300,000   

Alandra C. Murphy

     13,970       $ 1.00         —           —           —     

William J. Nelligan

     —              —           266,664.12         300,000   

Christopher S. Nickum

     —              —           133,337.77         —     

Donald G. Otterbein

     —              —           400,001.89         —     

Karla L. Packer

     —              —           213,335.87         140,000   

Hossam A. Sadek

     —              —           400,001.89         —     

Tatsuyuki Saeki

     —              —           565,048.67         —     

Joseph Satili

     24,574       $ 1.00         —           —           —     

Satwinder Sian

     —              —           159,973.33         280,274   

Marie A. Sonde

     —              —           200,000.95         150,000   

Hector Valle

     24,574       $ 1.00         —           —           —     

John R. Walsh

     —              —           —           387,900   
              
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL

     620,510            —           9,418,247.17         3,225,300.65   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Exhibit 10.2

Execution Version

MANAGEMENT STOCKHOLDERS AGREEMENT

by and among

Healthcare Technology Holdings, Inc.,

Healthcare Technology Acquisition, Inc.,

IMS Health Incorporated

and

the Investors and Managers Named Herein

Dated as of February 26, 2010


TABLE OF CONTENTS

 

              Page  
1.  

EFFECTIVENESS; DEFINITIONS.

     2   
 

1.1.

  

Closing

     2   
 

1.2.

  

Definitions

     2   
2.  

VOTING AGREEMENT.

     2   
 

2.1.

  

Election of Directors

     2   
 

2.2.

  

Significant Transactions

     2   
 

2.3.

  

Consent to Amendment

     2   
 

2.4.

  

Grant of Proxy

     2   
 

2.5.

  

The Company

     2   
 

2.6.

  

Period

     2   
3.  

TRANSFER RESTRICTIONS

     3   
 

3.1.

  

Permitted Transferees

     3   
 

3.2.

  

Tag Alongs, Drag Alongs, Etc

     3   
 

3.3.

  

Transfers Pursuant to Section 5

     3   
 

3.4.

  

Impermissible Transfer

     3   
 

3.5.

  

Transfers of Options and SARs

     4   
 

3.6.

  

Manager Lock-Up

     4   
 

3.7.

  

Period

     4   
4.  

“TAG ALONG” AND “DRAG ALONG” RIGHTS.

     4   
 

4.1.

  

Tag Along

     4   
 

4.2.

  

Drag Along

     6   
 

4.3.

  

Miscellaneous

     8   
 

4.4.

  

Period

     9   
5.  

OPTIONS TO PURCHASE AND SELL SHARES.

     9   
 

5.1.

  

Call Options

     9   
 

5.2.

  

Put Options.

     12   
 

5.3.

  

Closing.

     13   
 

5.4.

  

Investor Call Option

     15   
 

5.5.

  

Acknowledgment

     15   
 

5.6.

  

Call and Put Period

     16   
6.  

REMEDIES.

     16   
 

6.1.

  

Generally

     16   
 

6.2.

  

Deposit

     16   
7.  

LEGENDS.

     16   
 

7.1.

  

Restrictive Legend

     16   
 

7.2.

  

1933 Act Legends

     17   
 

7.3.

  

Stop Transfer Instruction

     17   
 

7.4.

  

Termination of 1933 Act Legend

     17   
8.  

AMENDMENT, TERMINATION, ETC.

     17   
 

8.1.

  

Oral Modifications

     17   
 

8.2.

  

Written Modifications

     18   

 

i


 

8.3.

  

Effect of Termination

     18   
9.  

DEFINITIONS

     18   
 

9.1.

  

Certain Matters of Construction

     18   
 

9.2.

  

Definitions

     18   
10.  

CONFIDENTIALITY; RESTRICTIVE COVENANT AGREEMENT

     27   
 

10.1.

  

Nondisclosure; Return of Documents; Ownership of Work

     27   
 

10.2.

  

Non-Competition and Non-Solicitation

     27   
11.  

MISCELLANEOUS.

     27   
 

11.1.

  

Authority; Effect

     27   
 

11.2.

  

Notices

     27   
 

11.3.

  

Binding Effect, Etc

     29   
 

11.4.

  

Descriptive Headings, Etc

     30   
 

11.5.

  

Counterparts

     30   
 

11.6.

  

Severability

     30   
 

11.7.

  

No Recourse

     30   
12.  

GOVERNING LAW.

     30   
 

12.1.

  

Governing Law

     30   
 

12.2.

  

Jurisdiction

     31   
 

12.3.

  

WAIVER OF JURY TRIAL

     31   
 

12.4.

  

Exercise of Rights and Remedies

     31   

 

ii


MANAGEMENT STOCKHOLDERS AGREEMENT

This Management Stockholders Agreement (this “ Agreement ”) is made as of February 26, 2010 by and among:

 

  (i) Healthcare Technology Holdings, Inc. (the “ Company ”);

 

  (ii) Healthcare Technology Acquisition, Inc.;

 

  (iii) IMS Health Incorporated (“ IMS ”);

 

  (iv) TPG, CPPIB and LGP (each as defined herein) (together with their Permitted Transferees, the “ Investors ”); and

 

  (v) such other Persons who from time to time become party hereto by executing a counterpart signature page hereof and are designated by the Board as “Managers” (together with their Permitted Transferees, the “ Managers ”).

Recitals

1. Healthcare Technology Acquisition Inc., an indirect wholly-owned subsidiary of the Company (“ Merger Sub ”), the Company and IMS have entered into an Agreement and Plan of Merger, dated as of November 5, 2009 (the “ Merger Agreement ”, pursuant to which Merger Sub will merge with and into IMS (the “ Merger ”), with IMS as the surviving corporation;

2. As a result of the Merger, the Company will indirectly hold one hundred percent (100%) of the issued and outstanding common stock of IMS;

3. Upon the Closing (as defined below), the Company’s Common Stock, Options and SARs are held as set forth on Schedule I hereto;

4. Each Manager has purchased or otherwise acquired shares of the Company’s Common Stock and/or SARs, in each case for cash or in exchange for IMS common stock or stock appreciation rights entitling the holder to acquire shares of common stock of IMS that were outstanding prior to the Merger and that are being rolled over in connection with the Merger;

5. Each Manager has been and/or may hereafter be granted Options pursuant to the Company’s equity incentive plan or may otherwise purchase or acquire shares of Common Stock;

6. As a condition to the issuance of any shares of Common Stock, any Options or any SARs by the Company prior to the earlier of the closing of (i) a Change of Control and (ii) an Initial Public Offering to any Person who is (or would be designated by the Board as) a Manager hereunder, to the extent that such Person is not already a party to this Agreement as a Manager hereunder, such Person shall execute this Agreement as a Manager hereunder; and

7. The parties believe that it is in the best interests of the Company and the Managers to set forth their agreements on certain matters and to have this Agreement apply to all Shares.


Agreement

Therefore, the parties hereto hereby agree as follows:

1. EFFECTIVENESS; DEFINITIONS.

1.1. Closing . This Agreement will become effective upon consummation of the closing under the Merger Agreement (the “ Closing ”).

1.2. Definitions . Certain terms are used in this Agreement as specifically defined herein. These definitions are set forth or referred to in Section 9.2 hereof.

2. VOTING AGREEMENT.

2.1. Election of Directors . Each Manager hereby agrees to cast all votes to which such Manager is entitled in respect of the Shares, whether at any annual or special meeting, by written consent or otherwise, (a) to fix the number of members of the board of directors of the Company (the “ Board ”) at such number as may be specified from time to time by the Majority Investors and (b) to elect as members of the Board such individuals as have been nominated from time to time by the Majority Investors.

2.2. Significant Transactions . Each Manager agrees to cast all votes to which such Manager is entitled in respect of the Shares, whether at any annual or special meeting, by written consent or otherwise, in the same proportion as Investor Shares are voted by the Investors to approve any sale, recapitalization, merger, consolidation, reorganization or any other transaction or series of transactions involving the Company or its subsidiaries (or all or any portion of their respective assets) in connection with, or in furtherance of, the exercise by the Majority Investors of their rights under Section 4.2.

2.3. Consent to Amendment . Each Manager agrees to cast all votes to which such Manager is entitled in respect of the Shares, whether at any annual or special meeting, by written consent or otherwise, in the same proportion as Investor Shares are voted by the Majority Investors to increase the number of authorized shares of Common Stock to the extent necessary to permit the Company to comply with the provisions of its Certificate of Incorporation or any agreement to which the Company is a party.

2.4. Grant of Proxy . Each Manager hereby grants to each Investor an irrevocable proxy coupled with an interest to vote his, her or its Shares in accordance with his, her or its agreements contained in this Section 2, which proxy will be valid and remain in effect until the provisions of this Section 2 expire pursuant to Section 2.6.

2.5. The Company . The Company agrees not to give effect to any action by any Manager or any other Person which is in contravention of this Section 2.

2.6. Period . The foregoing provisions of this Section 2 will expire on the earliest of (a) the closing of a Change of Control, (b) the closing of an Initial Public Offering, and (c) the last date permitted by law.

 

- 2 -


3. TRANSFER RESTRICTIONS. Subject to the provisions of Section 3.1, Section 4.1, Section 4.2, Section 5.1 and Section 5.2, as applicable, no Manager may transfer any or all of its Shares other than to a Permitted Transferee.

3.1. Permitted Transferees . No Transfer permitted under the terms of this Section 3 will be effective unless the Permitted Transferee has delivered to the Company a written acknowledgment and agreement in form and substance reasonably satisfactory to the Company that such Shares to be received by such Permitted Transferee will remain subject to all of the provisions of this Agreement relating to Shares held by Managers and that such Permitted Transferee will be bound by, and will be a party to, this Agreement as the holder of such Shares and as a “Manager” hereunder; provided , however , that no Transfer by any Manager to a Permitted Transferee will relieve such Manager of any of its obligations hereunder.

3.2. Tag Alongs, Drag Alongs, Etc . In addition to Transfers in compliance with this Section 3, any Manager may Transfer any or all of such Shares in accordance with the provisions, terms and conditions of Sections 4.1 and 4.2 hereof. Any Shares Transferred after compliance with the terms of Sections 4.1 or 4.2 hereof will conclusively be deemed thereafter not to be Shares under this Agreement and not to be subject to any of the provisions hereof or entitled to the benefit of any of the provisions hereof.

3.3. Transfers Pursuant to Section 5 . Shares may be transferred pursuant to the terms of Section 5 of this Agreement. Any Shares Transferred to the Company pursuant to this Agreement (in accordance with Section 5 or otherwise) will conclusively be deemed thereafter not to be Shares under this Agreement and not to be subject to any of the provisions hereof or entitled to the benefit of any of the provisions hereof.

3.4. Impermissible Transfer . Notwithstanding any other provision of this Section 3 or otherwise and except as provided in Section 4, in no event will any Manager be entitled to Transfer his, her or its Shares (i) to any Person (whether or not to an Affiliate) considered by the Majority Investors in their good faith reasonable judgment to be a potential competitor of, or otherwise adverse to, the Company or IMS without the consent of the Majority Investors or (ii) to any Person who (directly or indirectly) (a) holds an ownership interest in any such competitor equal to five percent (5%) or more, (b) has invested $5,000,000 or more in such competitor or (c) has designated, or has the right to designate, a member of the board of directors of any such competitor, in each case without the approval of the Majority Investors, except, in or following the Initial Public Offering and the expiration of any applicable lock-up period, in any bona fide underwritten public offering or in any Rule 144 Sale. In addition, no Manager will be entitled to Transfer Shares at any time if such Transfer would: (i) violate the Securities Act or any state (or other jurisdiction) securities or “blue sky” laws applicable to the Company or the Shares; (ii) cause the Company to be required to register Common Stock under Section 12(g) of the Exchange Act; (iii) cause the Company to become subject

 

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to the registration requirements of the U.S. Investment Company Act of 1940, as amended from time to time; or (iv) be a non-exempt “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. Any attempted Transfer of Shares in violation of the provisions of this Agreement shall be null and void, and the Company shall not in any way give effect to any such impermissible Transfer.

3.5. Transfers of Options and SARs . Any Transfer of Options or SARs by a Manager or Permitted Transferee that has become a party hereto will be governed by and subject to the terms and conditions of the applicable equity incentive plan and applicable award agreement.

3.6. Manager Lock-Up . In connection with the Initial Public Offering each Manager hereby agrees to be bound by and, if requested, to execute and deliver a lock-up agreement with the underwriter(s) of such Initial Public Offering (the “ Principal Lock-Up Agreement ”) restricting such Manager’s right to (i) Transfer any Shares or (ii) enter into any swap or other arrangement that transfers to another any of the economic consequences of ownership of Shares, in each case to the extent that such restrictions are agreed to (A) in the case of an Initial Public Offering that is not a demand registration initiated by an Investor, by the Board, (B) in the case of a demand registration initiated by an Investor, by the Investors holding a majority of the Investor Shares proposed to be offered and (C) otherwise, by the holders of a majority of the shares of Common Stock participating in the Initial Public Offering; provided , however , that no Manager may be required by this Section 3.6 to be bound by a lock-up agreement covering a period beginning more than seven (7) days prior to or ending one hundred eighty (180) days following the effectiveness of the related registration statement plus such additional period of up to 17 days as may be required by the underwriters to satisfy FINRA regulations and permit the managing underwriters’ analysts to publish research updates, which period shall in no event be longer than any such period included in any lock-up agreement to which any Investor is subject. Notwithstanding the foregoing, such lock-up agreement shall not apply to (i) transactions relating to shares of Common Stock or other securities acquired in (A) open market transactions or block purchases after the completion of the Initial Public Offering (or other Public Offering, as applicable) or (B) a Public Offering, (ii) Transfers to Permitted Transferees of such Manager in accordance with the terms of this Agreement (including the obligations of such Permitted Transferee to execute and deliver a Principal Lock-Up Agreement), and (iii) conversions of shares of Common Stock into other classes of Common Stock without change of holder.

3.7. Period . The foregoing provisions of this Section 3 will expire upon the Initial Public Offering.

4. “TAG ALONG” AND “DRAG ALONG” RIGHTS.

4.1. Tag Along . Until the earlier of the closing of (x) a Change of Control described in clause (b) or (c) of the definition thereof and (y) an Initial Public Offering, if one or more Investor(s) (each such Investor, a “ Prospective Selling Investor ”), proposes to Transfer any Investor Shares to any Person proposing to purchase such Investor Shares from a Prospective Selling Investor (a “ Prospective Buyer ”), other than (i) to an Affiliate, (ii) a Transfer by LGP

 

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to a third party in respect of which the other Investors have elected to not participate, (iii) Transfers pursuant to a registered public offering or to the public pursuant to Rule 144 under the Securities Act, or (iv) pursuant to or consequent upon the exercise of the drag along rights set forth in Section 4.2 (a “ Proposed Transfer ”), each Manager that exercises its rights under this Section 4.1 (a “ Tag Along Seller ”) shall have the right to Transfer its Pro Rata Portion of Shares to the Prospective Buyer on the same terms and conditions as those proposed by the Prospective Selling Investor.

4.1.1 Notice . The Prospective Selling Investor shall promptly give written notice (a “ Tag Along Notice ”) to each Manager of a Proposed Transfer, setting forth the number of Investor Shares proposed to be Transferred, the name of the Prospective Selling Investor, the name and address of the Prospective Buyer, the proposed amount and form of consideration for such Investor Shares and any other material terms and conditions of the Proposed Transfer (subject to Section 4.3.4 hereof in the case of Options, Warrants, SARs and Convertible Securities). Each Manager shall have a period of fifteen (15) Business Days from the date of the Tag Along Notice within which to elect to sell up to its Pro Rata Portion of Shares in connection with such Proposed Transfer. Any Manager may exercise such right by delivery of an irrevocable written notice to the Prospective Selling Investor specifying the portion of its Pro Rata Portion it desires to include in the Proposed Transfer (a “ Tag Along Offer ”). If the Prospective Buyer fails to purchase all Investor Shares proposed to be Transferred by the Prospective Selling Investor and other Investors who exercise tag along rights and all Shares proposed to be Transferred by the Tag Along Sellers, then the number of Investor Shares and Shares the Investors and each Tag Along Seller is permitted to sell in such Tag Along Transfer shall be reduced pro rata based on the relative number of Investor Shares and Shares held by all Company stockholders participating in such Proposed Transfer, excluding for purposes of such calculation all Shares underlying any outstanding Options, Warrants, SARs or Convertible Securities. The Prospective Selling Investor shall have a period of ninety (90) days following the expiration of the fifteen (15) Business Day period to sell such Investor Shares to the Prospective Buyer, on the payment terms specified in the Tag Along Notice, and thereafter the Prospective Selling Investor may not Transfer any such Investor Shares without first following the procedures set forth in this Section 4.1.

4.1.2 Terms of Transfer . Each Tag Along Seller shall agree (i) to make the same representations, warranties, covenants, indemnities and agreements to the Prospective Buyer as made by the Prospective Selling Investor in connection with the Proposed Transfer (other than any non-competition, non-solicitation or similar non-transaction consideration related financial agreements or covenants that would bind such Tag Along Seller or its Affiliates without such Tag Along Seller’s prior written consent), and (ii) except as provided in the preceding subclause (i), to the same terms and conditions to the Transfer as the Prospective Selling Investor agrees. Notwithstanding the foregoing, however, all such representations, warranties, covenants, indemnities and agreements shall be made by each Tag Along Seller and the Prospective Selling Investor severally and not jointly, and, except with respect to individual representations, warranties, covenants, indemnities and other agreements of the Prospective Selling Investor, other

 

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Investors who exercise tag along rights or any Tag Along Seller as to the unencumbered title to its Shares and the power, authority and legal right to Transfer such Shares, any liability for breach of any such representations and warranties or under any indemnities shall be allocated among each Tag Along Seller, the Prospective Selling Investor and other Investors who exercise tag along rights pro rata based on the relative number of Investor Shares or Shares, as applicable, to be Transferred by each of them compared to the total number of Investor Shares and Shares being Transferred, and the aggregate amount of liability for each such Tag Along Seller, the Prospective Selling Investor and other Investors who exercise tag along rights shall not exceed the U.S. dollar value of the net proceeds received by such Tag Along Seller, the Prospective Selling Investor or other Investors who exercise tag along rights, respectively, from the Prospective Buyer. Any Transfer of Shares by a Tag Along Seller pursuant to the terms hereof shall be at the price per share of Common Stock specified in the Tag-Along Notice, and all shareholders of the Company shall receive the same relative proportion of cash and Marketable Securities.

4.2. Drag Along . If the Majority Investors agree at any time to Transfer, in any single transaction or series of related transactions, at least eighty percent (80%) of the Majority Investors’ Investor Shares to a non-affiliated third party (a “ Drag Along Transfer ” and such purchaser, the “ Prospective Buyer ”) for cash and/or Marketable Securities, the Majority Investors may exercise drag along rights with respect to all Managers in accordance with the terms, conditions and procedures set forth herein.

4.2.1 Notice . The Majority Investors shall promptly give notice (a “ Drag Along Notice ”) to each Manager (each, a “ Drag Along Seller ”) of any election by the Majority Investors to exercise their drag along rights under this Section 4.2, setting forth the name and address of the Prospective Buyer, the total number of Investor Shares proposed to be Transferred by the Majority Investors, the proposed amount and form of consideration for such Investor Shares, and all other material terms and conditions of the Drag Along Transfer. Such notice shall also specify the number of Shares such Drag Along Seller shall be required to Transfer, up to such Drag Along Seller’s Pro Rata Portion of its Shares; provided that the portion of Shares with respect to each Drag Along Seller is the same relative proportion for all Drag Along Sellers. Any Transfer of Shares by a Drag Along Seller pursuant to the terms hereof shall be at the same price per Share sold by the Majority Investors and specified in the Drag Along Notice and each Drag Along Seller shall receive the same relative proportion of cash and Marketable Securities.

4.2.2 Each Drag Along Seller must agree (i) to make the same representations, warranties, covenants, indemnities and agreements as made by the Majority Investors in connection with the Drag Along Transfer (other than any non-competition, non-solicitation or similar non-transaction consideration related financial agreements or covenants that would bind such Drag Along Seller or its Affiliates without the prior written consent of such Drag Along Seller), and (ii) except as provided in the preceding subclause (i), to the same terms and conditions to the Transfer as the Majority Investors agree. Notwithstanding the foregoing, however, all such representations, warranties, covenants, indemnities and agreements shall be made by the Majority Investors and each

 

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Drag Along Seller severally and not jointly and, except with respect to individual representations, warranties, covenants, indemnities and other agreements of the Majority Investors, any other Investors who Sell shares of Common Stock to such Prospective Buyer or any of the Drag Along Sellers as to the unencumbered title to its Shares and the power, authority and legal right to Transfer such Shares, any liability for breach of any such representations and warranties shall be allocated among the Majority Investors, any other Investors who Sell shares of Common Stock to such Prospective Buyer and such Drag Along Sellers pro rata based on the relative number of Investor Shares or Shares Transferred by each of them, and the aggregate amount of liability for the Majority Investors, any other Investors who Sell Shares to such Prospective Buyer and such Drag Along Shareholders shall not exceed the U.S. dollar value of the net proceeds received by the Majority Investors, any other Investors who Sell shares of Common Stock to such Prospective Buyer and such Drag Along Sellers, respectively.

4.2.3 Mergers, etc . In the event that any such Transfer is structured as a merger, consolidation, or similar business combination, each Drag Along Seller agrees to (i) vote in favor of the transaction, (ii) take such other action as may be required to effect such transaction (subject to Section 4.2.1, and other than becoming subject to any non-competition, non-solicitation or similar non-transaction consideration related financial agreement or covenant without prior written consent of such Drag Along Seller) and (iii) take all action to waive any dissenters, appraisal or other similar rights with respect thereto.

4.2.4 Grant of Proxy . Solely for purposes of Section 4.2.3(i) and in order to secure the performance of each Manager’s obligations under Section 4.2.3(i), each Manager hereby irrevocably appoints the Majority Investors the attorney-in-fact and proxy of such Manager (with full power of substitution) to vote or provide a written consent with respect to its Shares as described in this paragraph if, and only in the event that, such Manager fails to vote or provide a written consent with respect to its Shares in accordance with the terms of 4.2.3(i) (each such Manager, a “ Breaching Drag Along Seller ”) within three (3) days of a request for such vote or written consent. Upon such failure, the Majority Investors shall have and are hereby irrevocably granted a proxy to vote or provide a written consent with respect to each such Breaching Drag Along Seller’s Shares for the purposes of taking the actions required by Section 4.2.3(i). Each Manager intends this proxy to be, and it shall be, irrevocable and coupled with an interest, and each Manager will take such further action and execute such other instruments as may be necessary to effectuate the intent of this proxy and hereby revokes any proxy previously granted by it with respect to the matters set forth in Section 4.2.3(i) with respect to the Shares owned by such Manager. Notwithstanding the foregoing, the conditional proxy granted by this Section 4.2.4 shall be deemed to be revoked upon the termination of this Section 4 in accordance with its terms.

 

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4.3. Miscellaneous . The following provisions will apply to any proposed Sale to which Sections 4.1 or 4.2 apply:

4.3.1 Certain Legal Requirements . In the event the consideration to be paid in exchange for Shares in a proposed Sale pursuant to Section 4.1 or Section 4.2 hereof includes any securities, and the receipt thereof by a Tag Along Seller or Drag Along Seller (each, a “ Participating Seller ”) would require under applicable law (a) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities or (b) the provision to any Tag Along Seller or Drag Along Seller of any information regarding the Company, such securities or the issuer thereof, such Participating Seller will not have the right or obligation to sell Shares in such proposed Sale. In such event, the Prospective Selling Investor (in a Sale pursuant to Section 4.1 hereof) or the Majority Investors (in a Sale pursuant to Section 4.2 hereof) shall cause to be paid to such Participating Seller in lieu thereof, against surrender of the Shares (in accordance with Section 4.3.6 hereof) which would have otherwise been sold by such Participating Seller to the Prospective Buyer in the proposed Sale, an amount in cash equal to the Fair Market Value of such Shares as of the date such securities would have been issued in exchange for such Shares.

4.3.2 Further Assurances . Each Participating Seller, whether in his, her or its capacity as a Participating Seller, stockholder, officer or director of the Company, or otherwise, shall take or cause to be taken all such actions as may be necessary or reasonably desirable in order expeditiously to consummate each Sale pursuant to Section 4.1 or Section 4.2 hereof and any related transactions, including, without limitation, executing, acknowledging and delivering consents, assignments, waivers and other documents or instruments; furnishing information and copies of documents; filing applications, reports, returns, filings and other documents or instruments with governmental authorities; and otherwise cooperating with the Prospective Selling Investor (in a Sale pursuant to Section 4.1 hereof) or the Majority Investors (in a Sale pursuant to Section 4.2 hereof), as applicable, and the Prospective Buyer.

4.3.3 Sale Process . The Majority Investors and the Prospective Selling Investors, as applicable, may, in their sole discretion, decide whether or not to pursue, consummate, postpone or abandon any proposed Sale and the terms and conditions thereof. No Investor or any Affiliate of any Investor will have any liability to any Manager arising from, relating to or in connection with the pursuit, consummation, postponement, abandonment or terms and conditions of any proposed Sale except to the extent such Investor has failed to comply with the provisions of this Section 4.

4.3.4 Treatment of Options, Warrants, SARs and Convertible Securities . Each Participating Seller agrees that to the extent he, she or it desires to include vested and exercisable Options, Warrants, SARs or Convertible Securities in any Sale of Shares pursuant to this Section 4, he, she or it will be deemed to have exercised, converted or exchanged such vested and exercisable Options, Warrants, SARs or Convertible Securities immediately prior to the closing of such Sale to the extent necessary to Sell Common Stock to the Prospective Buyer, except to the extent permitted under the terms

 

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of any such Option, Warrant, SAR or Convertible Security and agreed to by the Board and the Prospective Buyer. In the event that Options, Warrants, SARs, or Convertible Securities are deemed exercised pursuant to the preceding sentence, payment of any purchase or exercise price, if applicable, and minimum statutory withholding tax amount, if any, shall be satisfied through payment of Shares of Common Stock otherwise deliverable upon such exercise, conversion, or exchange. If any Participating Seller Sells Options, Warrants, SARs or Convertible Securities in any Sale pursuant to this Section 4, such Participating Seller shall receive in exchange for such Options, Warrants, SARs or Convertible Securities consideration equal to the amount (if greater than zero) determined by multiplying (a) the purchase price per Share of Common Stock received by the Prospective Selling Investor in such Sale less the unpaid exercise or conversion price, if any, per Share of such Option, Warrant, SAR or Convertible Security by (b) the number of Shares of Common Stock issuable upon exercise, conversion or exchange of such Option, Warrant, SAR or Convertible Security (to the extent exercisable, convertible or exchangeable at the time of such Sale), subject to reduction for any tax or other amounts required to be withheld under applicable law.

4.3.5 Expenses . All reasonable costs and expenses incurred in connection with any proposed Sale pursuant to Section 4.1 or Section 4.2 hereof (whether or not consummated), including all attorneys fees and charges, all accounting fees and charges and all finders, brokerage or investment banking fees, charges or commissions, shall be allocated among the Prospective Selling Investor (in a Sale pursuant to Section 4.1 hereof) or the Majority Investors (in a Sale pursuant to Section 4.2 hereof), each Participating Seller and any other Investor who participates in such Sale pro rata based on the relative number of Investor Shares or Shares to be Transferred by each of them compared to the total number of Investor Shares and Shares being Transferred.

4.3.6 Closing . The closing of a Sale to which Sections 4.1 or 4.2 hereof apply will take place at such time and place as the Prospective Selling Investor specifies (in a Sale pursuant to Section 4.1 hereof) or the Majority Investors (in a Sale pursuant to Section 4.2 hereof) specify by notice to each Participating Seller. At the closing of such Sale, each Participating Seller shall deliver the certificates evidencing the Shares to be Sold by such Participating Seller, duly endorsed, or with stock (or equivalent) powers duly endorsed, for transfer with signature guaranteed, free and clear of any Adverse Claim, with any stock (or equivalent) transfer tax stamps affixed, against delivery of the applicable consideration.

4.4. Period . The foregoing provisions of this Section 4 will expire upon the earlier of the closing of (x) a Change of Control described in clause (b) or (c) of the definition thereof and (y) an Initial Public Offering.

5. OPTIONS TO PURCHASE AND SELL SHARES.

5.1. Call Options . Except as the Company may otherwise agree in writing with any Manager with respect to Shares held by such Manager (or any Person to whom any shares of Common Stock were originally issued at the request of such Manager) or originally issued to

 

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such Manager (or other Person at the request of such Manager) but held by one or more direct or indirect Permitted Transferees (collectively, the “ Management Call Group ”), upon any termination of the employment by the Company and its subsidiaries of any Manager (whether such termination is by the Company, by such Manager or otherwise), the Company will have the right to purchase for cash all or any portion of Purchased Management Shares held by the Management Call Group on the following terms (the “ Management Call Option ”):

5.1.1 General . For all Purchased Management Shares, the following terms will apply:

(a) Termination other than for Cause . If, prior to the fifth (5th) anniversary of the Closing, a Manager’s employment is terminated for any reason other than for Cause (including as a result of death, Disability, Retirement or resignation for Good Reason), but excluding if a Manager resigns his or her employment without Good Reason, the Company (or its designated assignee) will have the right, on one or more occasions, at any time up to and including the date that is ninety (90) days following the later to occur of (x) the termination of such Manager’s employment and (y) the date that is six (6) months plus one (1) day following the most recent acquisition of Purchased Management Shares from the Company by any member of such Manager’s Management Call Group, to purchase from such Management Call Group, and upon the exercise of such call right each member of such Management Call Group shall sell to the Company (or its designated assignee), all (or a portion, as designated by the Company, or its designated assignee) of the Purchased Management Shares (other than Rollover Equity) held by such member of the Management Call Group as of the date as of which such call right is exercised at a price equal to the Fair Market Value of the Purchased Management Shares being sold, determined as of the date specified in such Management Call Notice (as defined below), which date shall be no earlier than the date that is six (6) months plus one (1) day following the most recent acquisition from the Company by any member of such Manager’s Management Call Group of any such Purchased Management Shares that are to be purchased by the Company pursuant to such exercised call right and shall be no later than the last date on which the Company is permitted to issue a Management Call Notice in respect of such Purchased Management Shares under this Section 5.1.1(a).

(b) Termination for Cause . If a Manager’s employment is terminated for Cause (or it is determined that such Manager’s employment could have been terminated for Cause at the time such Manager resigned or his or her employment was otherwise terminated), the Company (or its designated assignee) will have the right, on one or more occasions, at any time up to and including the date that is ninety (90) days following the later to occur of (x) the termination of such Manager’s employment and (y) the date that is six (6) months plus one (1) day following the most recent acquisition of Purchased Management Shares from the Company by any member of such Manager’s Management Call Group, to purchase from such Manager’s Management Call Group, and upon the exercise of such call right each member of such Management Call Group shall sell to the Company (or its designated assignee),

 

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all (or a portion, as designated by the Company or its designated assignee) of the Purchased Management Shares (including Rollover Equity) held by such member of the Management Call Group as of the date as of which such call right is exercised at a price (the “ Bad Leaver Price ”) equal to the lesser of (i) the Fair Market Value of the Purchased Management Shares being sold, determined as of the date specified in such Management Call Notice, which date shall be no earlier than the date that is six (6) months plus one (1) day following the most recent acquisition from the Company by any member of such Manager’s Management Call Group of any such Purchased Management Shares that are to be purchased by the Company pursuant to such exercised call right and shall be no later than the last date on which the Company is permitted to issue a Management Call Notice in respect of such Purchased Management Shares under this Section 5.1.1(b), and (ii) the price paid, if any, by such Manager for such Purchased Management Shares (the “ Original Purchase Price ”); provided , that for purposes of the foregoing clause (ii), the price paid by a Manager for a share acquired upon exercise of an Option, SAR or Warrant will be deemed to be equal to the exercise price of such Option, SAR or Warrant, except that in the case of a share acquired upon exercise of a Rollover SAR, such price will be equal to the difference between the Fair Market Value of a share of Common Stock upon the Closing (which is equal to $1.00 as of the Closing) and the applicable exercise price per share (in each case, as appropriately adjusted to reflect stock splits and similar events); provided further, that for purposes of the foregoing clause (ii), the price paid by a Manager for each DC ERP Rollover Share will be equal to the Fair Market Value of a share of Common Stock upon the Closing (which is equal to $1.00 as of the Closing) (as appropriately adjusted to reflect stock splits and similar events).

(c) Violation of Non-Competition Obligations . If a Manager’s employment is terminated for any reason or if a Manager resigns his or her employment for any reason and, within eighteen (18) months of such termination or resignation, such Manager Competes, the Company (or its designated assignee) will have the right, on one or more occasions, at any time up to and including the date that is one hundred eighty (180) days following the later to occur of (x) the first date on which the Company receives notice that such Manager Competed and (y) the date that is six (6) months plus one (1) day following the most recent acquisition of Purchased Management Shares from the Company by any member of such Manager’s Management Call Group, to purchase from such Management Call Group, and upon the exercise of such call right each member of such Management Call Group shall sell to the Company (or its designated assignee), all (or a portion, as designated by the Company or its designated assignee) of the Purchased Management Shares (including Rollover Equity) held by such member of the Management Call Group as of the date as of which such call right is exercised at a price equal to the Bad Leaver Price.

(d) Resignation without Good Reason . If, prior to the fifth (5th) anniversary of the Closing, a Manager resigns his or her employment without Good Reason (and, for the avoidance of doubt, other than upon death, Disability or Retirement), the Company (or its designated assignee) will have the right, on one or more occasions, at

 

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any time up to and including the date that is ninety (90) days following the later to occur of (x) termination of such Manager’s employment and (y) the date that is six (6) months plus one (1) day following the most recent acquisition of Purchased Management Shares from the Company by any member of such Manager’s Management Call Group, to purchase from such Management Call Group, and upon the exercise of such call right each member of such Management Call Group shall sell to the Company (or its designated assignee), all (or a portion, as designated by the Company, or its designated assignee) of the Purchased Management Shares (including Rollover Equity) held by such member of the Management Call Group as of the date as of which such call right is exercised at a price equal to the Fair Market Value of the Purchased Management Shares being sold, determined as of the date specified in such Management Call Notice (as defined below), which date shall be no later than the last date on which the Company is permitted to issue a Management Call Notice in respect of such Purchased Management Shares under this Section 5.1.1(d).

5.1.2 Notices, Etc. Any Management Call Option may be exercised by delivery of written notice thereof (the “ Management Call Notice ”) to all members of the applicable Management Call Group from whom the Company has elected to purchase Purchased Management Shares no later than the end of the applicable 90 or 180 day period specified in Section 5.1.1. The Management Call Notice shall state that the Company has elected to exercise the Management Call Option, the number of Purchased Management Shares with respect to which the Management Call Option is being exercised and the price or date for determining the price of such shares.

5.1.3 Vesting . The rights of the Company and the Investors to purchase Shares under this Section 5 are in addition to, and do not modify, any vesting or exercisability requirements that may be included in the terms of any such Shares.

5.2. Put Options .

5.2.1 Death or Disability . Except as otherwise agreed in writing by the Company and a Manager, if any Manager ceases to be employed by the Company or any of its subsidiaries as a result of such Manager’s death or Disability (and if and to the extent permitted by the Code (including Section 409A thereof)), such Manager (or such Manager’s estate or legal representatives) and each member of such Manager’s Management Call Group that (a) has become a party hereto and (b) holds Purchased Management Shares shall have the right to require the Company, upon thirty (30) days prior notice, out of funds legally available therefor, to repurchase all or any portion of such Management Call Group’s Purchased Management Shares (including Rollover Equity) on a date that is (x) at least six (6) months after the date on which such Manager or such member of such Manager’s Management Call Group acquired such Purchased Management Shares from the Company and (y) less than eighteen (18) months after such Manager ceases to be employed by the Company or any of its subsidiaries. The purchase price per Share for each such Purchased Management Share shall be equal to the Fair Market Value of a Share of Common Stock, determined as of the date as of which such put right is exercised.

 

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5.2.2 Termination other than for Cause . Except as otherwise agreed in writing by the Company and a Manager, if a Manager’s employment is terminated by the Company within eighteen (18) months (twenty four (24) months for Managers party to a change of control agreement with the Company or any of its subsidiaries) of Closing for any reason other than for Cause (excluding as a result of death or Disability), or if a Manager resigns his or her employment for Good Reason or Retirement, such Manager and each member of such Manager’s Management Call Group that (a) has become a party hereto and (b) holds Shares shall have the right to require the Company, upon thirty (30) days prior notice, out of funds legally available therefor, to repurchase all or any portion of such Management Call Group’s Rollover Equity on a date that is (x) at least six (6) months after the date on which such Manager or such member of such Manager’s Management Call Group acquired such Rollover Equity from the Company (to the extent necessary to avoid adverse accounting treatment under United States generally accepted accounting principles) and (y) less than one (1) year after such Manager ceases to be employed by the Company or any of its subsidiaries. The purchase price per Share for each such Rollover Equity shall be equal to (i) the Original Purchase Price in respect of all Shares other than Shares acquired upon the exercise of Rollover SARs (and the Bad Leaver Price in respect of all Shares acquired upon the exercise of Rollover SARs), if such termination occurs within twelve (12) months of Closing or (ii) the Bad Leaver Price, if such termination occurs between twelve (12) months and twenty four (24) months following the Closing.

5.2.3 Notices, Etc. The put options set forth in Sections 5.2.1 and 5.2.2 hereof (“ Management Put Option ”) may be exercised by delivery of written notice thereof (the “ Management Put Notice ”) which shall state (a) that such exercising Manager (or such Manager’s estate or legal representatives in the case of a Management Put Notice delivered pursuant to Section 5.2.1 hereof, if applicable) and each member of such Manager’s Management Call Group that (i) has become a party hereto and (ii) holds Shares subject to such put right has elected to exercise the Management Put Option and (b) the number of eligible Shares with respect to which the Management Put Option is being exercised.

5.3. Closing .

5.3.1 The closing of any purchase and sale of Shares pursuant to this Section 5 shall occur on such date as the Company shall specify, which date shall not be later than ninety (90) days after the fiscal quarter-end immediately following the date of delivery of the Management Call Notice or Management Put Notice ( provided , that such time may be extended as necessary to comply with requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or applicable foreign antitrust laws or other applicable legal requirements) at the principal office of the Company, or at such other time and location as the parties to such purchase may mutually determine.

 

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5.3.2 At the closing of any purchase and sale of Shares following the exercise of any Management Call Option or Management Put Option, the holders of Shares to be sold shall deliver to the Company a certificate or certificates representing the Shares to be purchased by the Company, duly endorsed, or with stock (or equivalent) powers duly endorsed, for transfer with signature guaranteed, free and clear of any lien or encumbrance, with any necessary stock (or equivalent) transfer tax stamps affixed, and the Company shall pay to such holder by certified or bank check or wire transfer of immediately available federal funds the purchase price of the Shares being purchased by the Company. The delivery of a certificate or certificates for Shares by any Person selling Shares pursuant to any Management Call Option or Management Put Option will be deemed a representation and warranty by such Person that: (i) such Person has full right, title and interest in and to such Shares; (ii) such Person has all necessary power and authority and has taken all necessary action to sell such Shares as contemplated; (iii) such Shares are free and clear of any and all liens or encumbrances; and (iv) there is no Adverse Claim with respect to such Shares.

5.3.3 If (i) any payment of cash is required upon the purchase of Shares by the Company upon the exercise of any Management Call Option or Management Put Option or (ii) any payment on a promissory note issued under this Section 5.3.3 comes due, and, in either case, such payment (or any dividend to fund such payment) would (or with notice or the lapse of time or both would) constitute, result in or give rise to a breach or violation of the terms or provisions of, or result in a default, event of default or right or cause of action under, any guarantee, financing or security agreement, indenture or document entered into by the Company or any of its subsidiaries and in effect on such date in respect of indebtedness for borrowed money or debt security, would be prohibited under Section 160 (“ Section 160 ”) of the General Corporation Law of the State of Delaware (the “ DGCL ”), or would otherwise violate the DGCL (or if the Company or any such subsidiary reincorporates in another jurisdiction, the applicable business corporation law of such jurisdiction), then, to the extent permitted by Section 160:

(a) in the case of a cash payment due at a closing of any purchase of Shares by the Company upon the exercise of any Management Call Option or Management Put Option, the Company will issue a promissory note in the aggregate principal amount of such payment, the principal amount of which note will be due and payable on demand (subject to subsection 5.3.3(c) below) and interest will accrue thereon at a rate equal to (i) in the case of the exercise of a Management Call Option, the prime rate (as reported in the Wall Street Journal Eastern Edition) plus three percent (3%) or (ii) in the case of the exercise of a Management Put Option, the prime rate (as reported in the Wall Street Journal Eastern Edition) plus one percent (1%);

(b) in the case of a cash payment in respect of a promissory note issued under this Section 5.3.3, notwithstanding any of the provisions of such note, including without limitation, the stated maturity of such note and the stated date on which interest payments are due, such payment will not become due and payable until such time as such payment can be made without violating any such agreement; and

 

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(c) notwithstanding the terms of any promissory note issued pursuant to this Section 5.3.3, the Company must pay off the promissory note at the earliest of (i) a Sale Transaction, (ii) the Initial Public Offering (but only to the extent of the net proceeds received by the Company in such Initial Public Offering), (iii) five (5) Business Days after the date on which a cash payment paying off such promissory note could be made (1) without (immediately or with notice or the lapse of time or both) constituting, resulting in or giving rise to any breach or violation of the terms or provisions of, or result in a default, event of default or right or cause of action under, any guarantee, financing or security agreement, indenture or document entered into by the Company or any of its subsidiaries and in effect on such date in respect of indebtedness for borrowed money or debt security, (2) that would not be prohibited under Section 160, and (3) that would not otherwise violate the DGCL (or if the Company or any such subsidiary reincorporates in another jurisdiction, the applicable business corporation law of such jurisdiction), (iv) the date on which any cash dividend or distribution is made in respect of Shares, and (v) immediately following a Senior Debt Repayment Event. At any such time, the Company shall promptly notify the holder of such promissory note and make a payment on each such promissory note. If more than one such promissory note is outstanding at the time of payment, payment shall be made to the holders of all such promissory notes on a pro rata basis.

5.3.4 In the event that the Company has exercised its call right pursuant to Section 5.1 with respect to Shares held by (i) a Manager who (A) Competes within eighteen (18) months of such Manager’s termination of employment or resignation as described in Section 5.1.1(c) or (B) is determined to have been eligible for termination for Cause, in either case following the Company’s exercise of such call right, and/or (ii) one or more members of such Manager’s Management Call Group that held Shares, such Manager and/or such members of such Manager’s Management Call Group will be obligated to deliver to the Company, within five (5) days following notice from the Company that such amount is due, an amount equal to the product of (x) the number of Shares purchased in connection with the exercise of the call right, multiplied by (y) the excess, if any, of the price paid for such Shares over the Bad Leaver Price for such Shares.

5.4. Investor Call Option . If the Company elects not to purchase (pursuant to Section 5.1 hereof) any or all Purchased Management Shares held by a Manager or one or more members of such Manager’s Management Call Group, the Company shall notify the Investors and the Investors may purchase any or all of the remaining Purchased Management Shares held by such Persons for the purchase price identified in Section 5.1.1 hereof; provided , that nothing in this Section 5.4 will operate to extend the time within which the Management Call Notice may be delivered pursuant to Section 5.1.2 hereof. The right to purchase such Shares shall be allocated pro rata among the Investors (unless the Investors agree otherwise).

5.5. Acknowledgment . Each holder of Shares acknowledges and agrees that neither the Company, nor any Person directly or indirectly affiliated with the Company (in each case whether as a director, officer, manager, employee, agent or otherwise), will have any duty or

 

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obligation to affirmatively disclose to him, her or it, and he, she or it will not have any right to be advised of, any material information regarding the Company or otherwise at any time prior to, upon, or in connection with any termination of his, her or its employment by the Company and its subsidiaries upon the exercise of any Management Call Option or any purchase of the Shares in accordance with the terms hereof.

5.6. Call and Put Period . The foregoing provisions of this Section 5 will expire with respect to any Management Share not called or put, if not earlier expired in accordance with the provisions of this Section 5, prior to the earlier of the closing of (a) a Change of Control and (b) the Initial Public Offering.

6. REMEDIES.

6.1. Generally . The Company and each holder of Shares will have all remedies available at law, in equity or otherwise in the event of any breach or violation of this Agreement or any default hereunder by the Company or any holder of Shares. The parties acknowledge and agree that in the event of any breach of this Agreement, in addition to any other remedies which may be available, each of the parties hereto will be entitled to specific performance of the obligations of the other parties hereto and, in addition, to such other equitable remedies (including, without limitation, preliminary or temporary relief) as may be appropriate in the circumstances.

6.2. Deposit . Without limiting the generality of Section 6.1 hereof, if any holder of Shares fails to deliver to the purchaser thereof the certificate or certificates evidencing Shares to be Sold pursuant to Section 4 or 5 hereof, such purchaser may, at its option, in addition to all other remedies it may have, deposit the purchase price (including any promissory note constituting all or any portion thereof) for such Shares with any national bank or trust company having combined capital, surplus and undivided profits in excess of One Hundred Million Dollars ($100,000,000) (the “ Escrow Agent ”) and the Company will cancel on its books the certificate or certificates representing such Shares and thereupon all of such holder’s rights in and to such Shares will terminate. Thereafter, upon delivery to the Escrow Agent by such holder of the certificate or certificates evidencing such Shares (duly endorsed, or with stock powers duly endorsed, for transfer, with signature guaranteed, free and clear of any liens or encumbrances, and with any transfer tax stamps affixed), such purchaser and such holder shall jointly instruct the Escrow Agent to deliver the purchase price (without any interest from the date of the closing to the date of such delivery, any such interest to accrue to such purchaser) to such holder and the certificate or certificates to such purchaser.

7. LEGENDS.

7.1. Restrictive Legend . Each certificate representing Shares will have the following legend endorsed conspicuously thereupon:

THE VOTING OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE, AND THE SALE, ENCUMBRANCE OR OTHER DISPOSITION THEREOF, ARE SUBJECT TO THE PROVISIONS OF A MANAGEMENT STOCKHOLDERS AGREEMENT TO WHICH THE ISSUER AND CERTAIN OF ITS

 

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STOCKHOLDERS ARE PARTY, A COPY OF WHICH MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE ISSUER OR OBTAINED FROM THE ISSUER WITHOUT CHARGE. NO SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE SHALL BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND CONDITIONS OF SUCH MANAGEMENT STOCKHOLDERS AGREEMENT HAVE BEEN COMPLIED WITH IN FULL.

THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED TO, OR ISSUED WITH RESPECT TO SHARES ORIGINALLY ISSUED TO OR AT THE REQUEST OF, THE FOLLOWING MANAGER:             .

Any person who acquires Shares which are not subject to any of the terms of this Agreement will have the right to have such legend (or the applicable portion thereof) removed from certificates representing such Shares.

7.2. 1933 Act Legends . Each certificate representing Shares will have the following legend endorsed conspicuously thereupon:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A PRIVATE PLACEMENT, WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), AND MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE ACT COVERING THE TRANSFER OR AN OPINION OF COUNSEL, SATISFACTORY TO THE ISSUER, THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.

7.3. Stop Transfer Instruction . The Company will instruct any transfer agent not to register the Transfer of any Shares until the conditions specified in the foregoing legends are satisfied.

7.4. Termination of 1933 Act Legend . The requirement imposed by Section 7.2 hereof will cease and terminate as to any particular Shares (a) when, in the opinion of Ropes & Gray LLP, or other counsel reasonably acceptable to the Company, such legend is no longer required in order to assure compliance by the Company with the Securities Act or (b) when such Shares have been effectively registered under the Securities Act or transferred pursuant to Rule 144. Wherever (x) such requirement ceases and terminates as to any Shares or (y) such Shares become transferable under Rule 144 without volume limitation or other restrictions on transfer (including without application of paragraphs (c), (e), (f) and (h) of Rule 144), the holder thereof will be entitled to receive from the Company, without expense, new certificates not bearing the legend set forth in Section 7.2 hereof.

8. AMENDMENT, TERMINATION, ETC.

8.1. Oral Modifications . This Agreement may not be orally amended, modified, extended or terminated, and no oral waiver of any of its terms may be effective.

 

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8.2. Written Modifications . This Agreement may be amended, modified, extended or terminated, and the provisions hereof may be waived, only by an agreement in writing signed by the Company, the Majority Investors and the Majority Managers; provided , however , that any amendment, modification, extension, termination or waiver (an “ Amendment ”) will also require the consent of any Manager who would be disproportionately and adversely affected by the Amendment (other than solely with respect to the number of Shares held by such Manager). Each Amendment will be binding upon each party hereto and each holder of Shares subject hereto. In addition, each party hereto and each holder of Shares subject hereto may waive any right hereunder by an instrument in writing signed by that party or holder.

8.3. Effect of Termination . No termination under this Agreement will relieve any Person of liability for breach prior to termination.

9. DEFINITIONS. For purposes of this Agreement:

9.1. Certain Matters of Construction . In addition to the definitions referred to or set forth below in this Section 9:

(a) The words “hereof”, “herein”, “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular Section or provision of this Agreement, and reference to a particular Section of this Agreement includes all subsections thereof;

(b) Definitions are equally applicable to both nouns and verbs and the singular and plural forms of the terms defined;

(c) The word “including” or any variation thereof means (unless the context of its usage otherwise requires) “including, without limitation” and may not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it; and

(d) The masculine, feminine and neuter genders each include the other.

9.2. Definitions . The following terms have the following meanings:

Adverse Claim ” has the meaning set forth in Section 8-302 of the applicable Uniform Commercial Code.

Affiliate ” means (a) with respect to any specified Person that is not a natural Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person (For these purposes, “control” shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; provided that no Company stockholder shall be deemed an Affiliate of the Company or any of its subsidiaries for purposes of this Agreement.); and (b) with respect to any natural Person, any Member of the Immediate Family of such natural Person.

 

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Agreement ” has the meaning set forth in the Preamble.

Amendment ” has the meaning set forth in Section 8.2.

Bad Leaver Price ” has the meaning set forth in Section 5.1.1.

Board ” has the meaning set forth in Section 2.1 hereof.

Breaching Drag Along Seller ” has the meaning set forth in Section 4.2.4 hereof.

Business Day ” means any day other than a Saturday, a Sunday or day on which banking institutions in New York, New York are authorized or obligated by law or executive order to close.

Cause ” with respect to any Manager, means (i) a material breach by the Manager of his or her employment agreement with the Company or an Affiliate, any equity grant agreement, or any policy of the Company or its Affiliates; (ii) the failure by the Manager to reasonably and substantially perform his or her duties to the Company or any of its Affiliates, which failure is materially damaging to the financial condition or reputation of the Company or its Affiliates; (iii) the Manager’s willful misconduct or gross negligence which is injurious to the Company or an Affiliate; or (iv) the commission by the Manager of a felony or other serious crime involving moral turpitude. In the case of clauses (i) and (ii) above, the Company shall permit the Manager up to fifteen days to cure such breach or failure if reasonably susceptible to cure. If, subsequent to the Manager’s termination of employment for other than Cause, it is determined that the Manager’s employment could have been terminated for Cause, the Manager’s employment shall be deemed to have been terminated for Cause retroactively to the date the events giving rise to such Cause occurred. Notwithstanding the foregoing, if a Manager is party to an employment, severance-benefit, or change in control agreement with the Company or any subsidiary of the Company that contains a definition of cause, such definition will apply (in the case of such Manager) in lieu of the definition set forth above during the term of such agreement.

Change of Control ” means (a) any change in the ownership of the capital stock of the Company if, immediately after giving effect thereto, any Person (or group of Persons acting in concert) other than the Investors and their Affiliates will have the direct or indirect power to elect a majority of the members of the Board; (b) any change in the ownership of the capital stock of the Company if, immediately after giving effect thereto, the Investors and their Affiliates own less than 25% of the Equivalent Shares; or (c) the sale of all or substantially all of the assets of the Company and its subsidiaries.

Closing ” has the meaning set forth in Section 1.1 hereof.

Code ” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time, and any successor statute of similar import, in each case as in effect from time to time and shall include any regulations promulgated thereunder. References to sections of the Code also refer to any successor sections.

 

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Common Stock ” means the common stock, $0.001 par value per share, of the Company.

Company ” has the meaning set forth in the Preamble.

Compete ” means, with respect to a Manager, the breach by such Manager of any non-competition or non-solicitation covenant or a material breach of any confidentiality, non-disclosure or other similar covenant made by such Manager in favor of the Company or any subsidiary of the Company, and “ Competes ”, “ Competed ” and “ Competition ” will each have a correlative meaning. With respect to each Manager who is a party to a change in control agreement that provides that the non-competition agreement is not applicable following a termination without cause or resignation for good reason within twenty-four months following the Merger, solely for purposes of the Company’s rights and remedies in Section 5 of this Agreement, “Compete” shall be defined with reference to the non-competition agreement as if it remained in effect.

Convertible Securities ” means any evidence of indebtedness, shares of stock (other than Common Stock) or other securities (other than Options, Warrants and SARs) which are directly or indirectly convertible into or exchangeable or exercisable for shares of Common Stock.

CPPIB ” means CPP Investment Board Private Holdings Inc. and each of its Affiliates.

Credit Agreement ” means that certain Credit and Guaranty Agreement, dated as of February 26, 2010, entered into by and among IMS, Healthcare Technology Intermediate Holdings, Inc., IMS AG, a Swiss corporation and a subsidiary of IMS, and IMS Japan K.K., a Japanese stock corporation (kabushiki kaisha) and a subsidiary of IMS, as borrowers, certain subsidiaries of IMS party thereto as guarantors, the lenders party thereto from time to time, Goldman Sachs Lending Partners LLC, as syndication agent, Bank of America, N.A., as administrative agent and collateral agent, and each of Barclays Capital, the investment banking division of Barclays Bank PLC, HSBC Securities (USA) Inc. and RBC Capital Markets (which is the marketing name of the investment banking activities of the Royal Bank of Canada), as co-documentation agents, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements or refundings thereof and any one or more indentures or credit facilities or commercial paper facilities with banks or other institutional lenders or investors that replace, refund or refinance any part of the loans, notes, credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof.

DC ERP ” means the IMS Health Incorporated Defined Contribution Executive Retirement Plan, as amended and restated effective February 26, 2010.

DC ERP Rollover Shares ” means those Shares that are distributed to a DC ERP participant pursuant to an election by such participant, prior to the Closing, to have all or any portion of his or her retirement account in the DC ERP at the time of Closing be notionally invested in the Shares of the Company.

 

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DGCL ” has the meaning set forth in Section 5.3.3 hereof.

Disability ” means a disability that would entitle a Manager to long-term disability benefits under the Company’s long-term disability plan in which the Participant participates. Notwithstanding the foregoing, if a Manager is a party to an employment or severance-benefit agreement that contains a definition of “Disability,” the definition set forth in such agreement will apply (in the case of such Manager) in lieu of the definition set forth above during the term of such agreement.

Documents ” has the meaning set forth in Section 10.2 hereof.

Drag Along Notice ” has the meaning set forth in Section 4.2.1 hereof.

Drag Along Sellers ” has the meaning set forth in Section 4.2.1 hereof.

Drag Along Transfer ” has the meaning set forth in Section 4.2 hereof.

Equivalent Shares ” means, at any date of determination, (a) as to any outstanding shares of Common Stock, such number of shares of Common Stock and (b) as to any outstanding Options, Warrants, SARs or Convertible Securities which constitute Shares, the maximum number of shares of Common Stock for which or into which such Options, Warrants, SARs or Convertible Securities may at the time be exercised, converted or exchanged (or which will become exercisable, convertible or exchangeable on or prior to, or by reason of, the transaction or circumstance in connection with which the number of Equivalent Shares is to be determined).

ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, in each case as in effect from time to time.

Escrow Agent ” has the meaning set forth in Section 6.2 hereof.

Exchange Act ” means the Securities Exchange Act of 1934, as in effect from time to time.

Fair Market Value ” means, as of any date, as to any share of Common Stock, the Board’s determination of the fair value of such shares based upon the reasonable application of a reasonable valuation method and taking into account the most recent annual valuation conducted by an independent valuation firm and, as to any Option, Warrant or SAR, such fair value reduced by any applicable exercise price. Such determination shall be made in a manner that is consistent with the manner in which the Company determines the fair market value of shares of Common Stock held by the Investors. For the avoidance of doubt, upon the Closing, Fair Market Value per share of Common Stock shall be equal to the purchase price per share paid by the Investors.

FINRA ” means the Financial Industry Regulatory Authority.

Good Reason, ” with respect to any Manager, means any of the following events or conditions occurring without such Manager’s express written consent, provided that the Manager

 

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shall have given notice of such event or condition within a period not to exceed ninety (90) days of the initial existence of such event or condition and the Company shall not have remedied such event or condition within thirty (30) days after receipt of such notice: (i) a materially adverse alteration in the nature or status of the Manager’s responsibilities or the conditions of employment; (ii) a material reduction in the Manager’s annual base salary or any target bonus; (iii) a change of fifty (50) miles or more in the Manager’s principal place of employment, except for required travel on business to an extent substantially consistent with the Manager’s business travel obligations; or (iv) the failure by the Company or its Affiliates, as applicable, to pay to the Manager any material portion of the Manager’s compensation or to pay any material portion of an installment of deferred compensation under any deferred compensation program of the Company or its Affiliates, as applicable, within a reasonable time after the date such compensation is due. Notwithstanding the foregoing, if a Manager is party to an employment, severance-benefit, or change in control agreement with the Company or any subsidiary of the Company that contains a definition of good reason, such definition will apply (in the case of such Manager) in lieu of the definition set forth in the preceding sentence during the term of such agreement.

IMS ” has the meaning set forth in the Preamble.

Initial Public Offering ” means the initial Public Offering registered on Form S-1 (or any successor form under the Securities Act) following which the equity securities of the Company are being actively traded on a national securities exchange or interdealer quotation system.

Investor Shares ” means (a) all shares of Common Stock originally issued to, or issued with respect to shares originally issued to, or held by, an Investor, whenever issued, including all shares of Common Stock issued upon the exercise, conversion or exchange of any Options, Warrants, SARs or Convertible Securities and (b) all Options, Warrants, SARs and (except for purposes of Section 4.1 hereof) Convertible Securities originally granted or issued to an Investor (treating all such Options, Warrants, SARs and Convertible Securities as a number of shares equal to the number of Equivalent Shares represented by such Options, Warrants, SARs and Convertible Securities for all purposes of this Agreement except as otherwise specifically set forth herein). The term “Investor Shares” shall also include securities of any kind whatsoever distributed with respect to any shares of the Common Stock, Options, Warrants, SARs or Convertible Securities referred to in the immediately preceding sentence to the extent that such Common Stock, Options, Warrants, SARs or Convertible Securities constitute Investor Shares held by an Investor and any securities issued or issuable with respect to any such Common Stock by way of a stock dividend or distribution payable thereon or stock split, reverse stock split, recapitalization, reclassification, reorganization, exchange, subdivision or combination thereof.

Investors ” has the meaning set forth in the Preamble.

LGP ” means, collectively, Green Equity Investors V, L.P., Green Equity Investors Side V, L.P. and LGP Iceberg Coinvest, LLC and each of their respective Affiliates.

Majority Investors ” means, as of any date, (a) Investors holding a number of shares of Common Stock sufficient to take the specified action (or provide the specified approval or

 

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consent) pursuant to any shareholder agreement (excluding this Agreement) governing the rights of Investors among themselves, (b) solely for the purposes of Section 4.2 hereof, TPG, and (c) solely for purposes of Section 8.2 hereof, as of any date, the holders of a majority of the shares of Common Stock outstanding on such date and held by Investors. The Managers shall be entitled to rely upon written notice from TPG specifying that the Investors constituting the “Majority Investors” for purposes of the action, approval, consent or other provision in question have approved or consented to such matter or authorized such action.

Majority Managers ” means, as of any date, the holders of a majority of the Shares outstanding on such date.

Management Call Group ” has the meaning set forth in Section 5.1 hereof.

Management Call Notice ” has the meaning set forth in Section 5.1.2 hereof.

Management Call Option ” has the meaning set forth in Section 5.1 hereof.

Management Put Notice ” has the meaning set forth in Section 5.2.3 hereof.

Management Put Option ” has the meaning set forth in Section 5.2.3 hereof.

Managers ” has the meaning set forth in the Preamble.

Marketable Securities ” means securities that are (i) traded on a national securities exchange in the United States or on an established stock exchange in Europe or Asia, or (ii) reported through an established automated inter-dealer quotation system in the United States, Europe or Asia and, in each case, are not subject to any restrictions on transfer as a result of applicable contract provisions, the provisions of the Securities Act (or regulations thereunder other than the volume and method-of-sale restrictions applicable to affiliates of an issuer pursuant to Rule 144 promulgated thereunder or any successor thereto), or other applicable law.

Member of the Immediate Family ” means, with respect to any individual, each spouse or child or other descendant of such individual, each trust created solely for the benefit of one or more of the aforementioned Persons and their spouses and each custodian or guardian of any property of one or more of the aforementioned Persons in his, her or its capacity as such custodian or guardian.

Merger ” has the meaning set forth in the Recitals.

Merger Agreement ” has the meaning set forth in the Recitals.

Merger Sub ” has the meaning set forth in the Recitals.

Option Shares ” means, with respect to a Manager or direct or indirect Permitted Transferee of a Manager, all or any portion of the Shares which were issued upon exercise of an Option held by such Manager (or Permitted Transferee, if applicable).

 

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Options ” means any options (other than pursuant to Section 5 hereof) to subscribe for, purchase or otherwise directly acquire Common Stock.

Original Purchase Price ” has the meaning set forth in Section 5.1.1(b) hereof.

Participating Seller ” has the meaning set forth in Sections 4.3.1 hereof.

Permitted Transferee ” means, (a) with respect to a Manager or a Permitted Transferee of a Manager that is a natural person, (i) a Member of the Immediate Family of such Manager, (ii) on such Manager’s or such Permitted Transferee’s death, such Manager’s or Permitted Transferee’s executors, administrators, testamentary trustees, legatees or beneficiaries, and (iii) a Person the applicable Transfer to whom or to which has been specifically approved by the Board; (b) with respect to a Manager’s Permitted Transferee that is not a natural person, an Affiliate of such Manager and (c) with respect to any Manager, the Company pursuant to an agreement between such Manager and the Company set forth in the manager stock rollover agreement pursuant to which such Manager subscribed for Shares from the Company.

Person ” means any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.

Principal Lock-Up Agreement ” has the meaning set forth in Section 3.6 hereof.

Pro Rata Portion ” means:

(a) for purposes of Section 4.1 (with respect to tag along rights), a number of Shares determined by multiplying (i) the number of Shares held by the Tag Along Seller by (ii) a fraction, the numerator of which is the number of Investor Shares proposed to be Transferred by the Prospective Selling Investor in connection with the Proposed Transfer and the denominator of which is the aggregate number of Investor Shares held by such Prospective Selling Investor, excluding for purposes of such calculation all Shares underlying any unvested Options, Warrants or SARs); and

(b) for purposes of Section 4.2 (with respect to drag along rights), a number of Shares determined by multiplying (i) the number of Shares held by a Drag Along Seller by (ii) a fraction, the numerator of which is the number of Investor Shares proposed to be Transferred by the Majority Investors to the Prospective Buyer and the denominator of which is the aggregate number of Investor Shares held by the Majority Investors, excluding for purposes of such calculation all Shares underlying any outstanding unvested Options, Warrants or SARs.

Proposed Transfer ” has the meaning set forth in Section 4.1 hereof.

Prospective Buyer ” has the meaning set forth in Sections 4.1 and 4.2 hereof

Prospective Selling Investor ” has the meaning set forth in Section 4.1 hereof.

 

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Public Offering ” means a public offering and sale of Common Stock for cash pursuant to an effective registration statement under the Securities Act.

Purchased Management Shares ” means, with respect to a Manager (or a Person to whom any shares of Common Stock were originally issued at the request of such Manager) or direct or indirect Permitted Transferee of a Manager (or any such Person to whom any shares of Common Stock were originally issued at the request of such Manager), all of the Shares which are not Options, Warrants, SARs or Convertible Securities held by such Manager (or Permitted Transferee, if applicable).

Retirement ” means retirement from active employment with the Company or an Affiliate after age 65, or after age 55 and completion of at least 5 years of employment with the Company or an Affiliate, as applicable (including employment with IMS prior to February 26, 2010).

Rollover Equity ” means Rollover Shares, DC ERP Rollover Shares and Shares acquired upon the exercise of Rollover SARs.

Rollover SARs ” means those SARs granted to certain Managers in substitution for SARs of IMS granted to such Managers by IMS prior to the Merger and outstanding immediately prior to the Merger.

Rollover Shares ” means those shares purchased or otherwise acquired by certain Managers in exchange for shares of IMS held by such Managers immediately prior to the Merger or shares purchased for cash in connection with the Closing.

Rule 144 ” means Rule 144 under the Securities Act (or any successor Rule).

Sale ” means a Transfer for value.

Sale Transaction ” means (i) any change in the ownership of the capital stock of the Company if, immediately after giving effect thereto, any Person (or group of Persons acting in concert) other than the Investors and their Affiliates will have the direct or indirect power to elect a majority of the members of the Board, or (ii) a sale or transfer of all or substantially all of the Company’s assets to a Person who is not an Affiliate of the Company.

SAR ” means any stock appreciation right entitling the holder thereof to subscribe for, purchase or otherwise acquire Common Stock, including Rollover SARs.

Section 160 ” has the meaning set forth in Section 5.3.3 hereof.

Securities Act ” means the Securities Act of 1933, as in effect from time to time.

Senior Debt Repayment Event ” means the date that all money borrowed by IMS and its related borrowers, if any, under the Credit Agreement is paid in full and all liens associated therewith have been discharged.

 

- 25 -


Shares ” means (a) all shares of Common Stock originally issued to, or issued with respect to shares originally issued to, or held by, a Manager (or a Person to whom such shares of Common Stock were issued at the request of a Manager), whenever issued, including without limitation all Rollover Equity and all shares of Common Stock issued upon the exercise, conversion or exchange of any Options, Warrants, SARs or Convertible Securities and (b) all Options, Warrants, SARs and (except for purposes of Section 4.1 hereof) Convertible Securities originally granted or issued to a Manager (treating all such Options, Warrants, SARs and Convertible Securities as a number of shares equal to the number of Equivalent Shares represented by such Options, Warrants, SARs and Convertible Securities for all purposes of this Agreement except as otherwise specifically set forth herein). The term “Shares” shall also include securities of any kind whatsoever distributed with respect to any shares of the Common Stock, Options, Warrants, SARs or (except for purposes of Section 4.1 hereof) Convertible Securities referred to in the immediately preceding sentence to the extent that such Common Stock, Options, Warrants, SARs or Convertible Securities constitute Shares held by a Manager and any securities issued or issuable with respect to any such Common Stock by way of a stock dividend or distribution payable thereon or stock split, reverse stock split, recapitalization, reclassification, reorganization, exchange, subdivision or combination thereof.

Tag Along Notice ” has the meaning set forth in Section 4.1.1 hereof.

Tag Along Offer ” has the meaning set forth in Section 4.1.1 hereof.

Tag Along Seller ” has the meaning set forth in Section 4.1 hereof.

Third-Party Documents ” has the meaning set forth in Section 10.2 hereof.

TPG ” means, collectively, TPG Partners V, TPG FOF V-A, L.P., TPG FOF V-B, L.P., TPG Partners VI, L.P., TPG FOF VI SPV, L.P., TPG Biotechnology Partners III, L.P. and TPG Iceberg Co-Invest LLC, and each of their respective Affiliates.

Transfer ” means any sale, pledge, assignment, encumbrance or other transfer or disposition of any Shares to any other Person, whether directly, indirectly, voluntarily, involuntarily, by operation of law, pursuant to judicial process or otherwise.

Warrants ” means any warrants to subscribe for, purchase or otherwise directly acquire Common Stock.

 

- 26 -


10. CONFIDENTIALITY; RESTRICTIVE COVENANT AGREEMENT. To protect the interests of the Company and its direct and indirect subsidiaries (collectively, the “IMS Companies”), including the confidential information of the IMS Companies and the confidential information of their respective customers, data suppliers, prospective customers and other companies with which the IMS Companies have a business relationship, and in consideration of the covenants and promises and other valuable consideration described in this Agreement, the Company and Manager agree as follows:

10.1. Nondisclosure; Return of Documents; Ownership of Work . Manager acknowledges and agrees that he or she remains bound by the confidentiality and other covenants contained in the restrictive covenant and confidentiality agreements that he or she has executed with an IMS Company, and that any covenants in such agreements shall remain in full force and effect in accordance with their terms. Manager also acknowledges and agrees that the Company shall be an affiliate for purposes of such restrictive covenant and confidentiality agreements.

10.2. Non-Competition and Non-Solicitation . Manager acknowledges the opportunity to participate in the Company’s Option or Common Stock investment programs, as the case may be, and the financial benefits that may accrue from such participation, is good, valuable and sufficient consideration for the following:

10.2.1 Manager acknowledges and agrees that he or she remains bound by the non-competition and non-solicitation covenants contained in the restrictive covenant agreement(s) that he or she has executed with any of the IMS Companies.

10.2.2 Manager further acknowledges and agrees that the period during which the non-competition and non-solicitation covenants will apply following a termination of employment shall be extended from twelve months to eighteen months; provided , however , that the remedies available for breach of any non-competition or non-solicitation covenants during such extended six month period shall be limited to the rights and remedies of Company set forth in Section 5 of this Agreement.

11. MISCELLANEOUS.

11.1. Authority; Effect . Each party hereto represents and warrants to and agrees with each other party that the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized on behalf of such party and do not violate any agreement or other instrument applicable to such party or by which its assets are bound. This Agreement does not, and may not be construed to, give rise to the creation of a partnership among any of the parties hereto, or to constitute any of such parties members of a joint venture or other association. The Company shall cause its subsidiaries to be jointly and severally liable for any payment obligation of the Company pursuant to this Agreement.

11.2. Notices . Any notices, requests, demands, claims and other communications required or permitted to be delivered, given or otherwise provided under this Agreement shall be in writing and shall be (a) delivered or given personally, (b) sent by facsimile, or (c) sent by overnight courier, in each case, to the address (or facsimile number) listed below:

If to the Company:

Healthcare Technology Holdings, Inc.

c/o TPG Capital Partners, L.P.

301 Commerce Street

 

- 27 -


Suite 3300

Fort Worth, Texas 76102

Attention: Clive Bode

Facsimile: 817-871-4001

with a copy (which will not constitute notice) to:

Ropes & Gray LLP

One International Place

Boston, Massachusetts 02110

Attention:

  Alfred O. Rose
  Amanda McGrady Morrison

Facsimile:

  617-951-7050

If to IMS:

IMS Health Incorporated

901 Main Avenue

Norwalk, Connecticut 06851

Attention: General Counsel

Fax: (203) 845-5356

If to the Investors:

TPG Capital Partners, L.P.

3301 Commerce Street

Suite 3300

Fort Worth, Texas 76102

Attention: Clive Bode

Facsimile: 817-871-4001

and

CPP Investment Board Private Holdings Inc.

One Queen Street East

Suite 2700

Toronto, Ontario M5C 2W5

Canada

Attention: Andre Bourbonnais

Facsimile: 416-868-8684

and

Leonard Green & Partners, L.P.

11111 Santa Monica Boulevard

Suite 2000

 

- 28 -


Los Angeles, California 90025

Attention: John Baumer

Facsimile: 310-954-0404

with copies (which will not constitute notice) to:

Ropes & Gray LLP

One International Place

Boston, Massachusetts 02110

Attention:

  Alfred O. Rose
  Amanda McGrady Morrison

Facsimile:

  617-951-7050

and

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022

Attention: Howard A. Sobel

Facsimile: 212-751-4864

If to a Manager, to the most recent address of such Manager shown on the records of the Company.

Notice to the holder of record of any shares of capital stock will be deemed to be notice to the holder of such shares for all purposes hereof.

Unless otherwise specified herein, such notices or other communications will be deemed effective (a) on the date received, if personally delivered, (b) on the date received if delivered by facsimile prior to 5:00 p.m. prevailing local time on a Business Day, or if delivered after 5:00 p.m. prevailing local time on a Business Day or on other than a Business Day, on the first Business Day thereafter and (c) 2 Business Days after being sent by overnight courier. Each of the parties hereto will be entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto.

11.3. Binding Effect, Etc . Except for restrictions on Transfer of Shares set forth in other agreements, plans or other documents, this Agreement constitutes the entire agreement of the parties with respect to its subject matter, supersedes all prior or contemporaneous oral or written agreements or discussions with respect to such subject matter, and will be binding upon and inure to the benefit of the parties hereto and their respective heirs, representatives, successors and assigns. Except as otherwise expressly provided herein, no Investor, Manager or other party hereto may assign any of its respective rights or delegate any of its respective obligations under this Agreement without the prior written consent of the other parties hereto, and any attempted assignment or delegation in violation of the foregoing will be null and void.

 

- 29 -


11.4. Descriptive Headings, Etc . The descriptive headings of this Agreement are for convenience of reference only, are not to be considered a part hereof and may not be construed to define or limit any of the terms or provisions hereof. This Agreement reflects the mutual intent of the parties and no rule of construction against the drafting party will apply.

11.5. Counterparts . This Agreement may be executed in multiple counterparts, each of which will be deemed an original, but all of which taken together will constitute one instrument.

11.6. Severability . In the event that any provision hereof would, under applicable law, be invalid or unenforceable in any respect, such provision will be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law. The provisions hereof are severable, and in the event any provision hereof should be held invalid or unenforceable in any respect, it will not invalidate, render unenforceable or otherwise affect any other provision hereof.

11.7. No Recourse . Notwithstanding anything that may be expressed or implied in this Agreement, the Company, Merger Sub, IMS and each holder of Shares hereunder covenant, agree and acknowledge that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement may be had against any current or future director, officer, employee, general or limited partner, manager, member or stockholder of any Company stockholder or of any Affiliate or assignee thereof, as such, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever will attach to, be imposed on or otherwise be incurred by any current or future director, officer, employee, general or limited partner, manager, member or stockholder of any Company stockholder or of any Affiliate or assignee thereof, as such, for any obligation of any Company stockholder under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation. Each Manager acknowledges that it is not relying upon any person, firm or corporation (including without limitation any other Manager or any Investor), other than the Company and its officers, directors and other representatives (acting solely in their capacity as representatives of the Company), in deciding to invest and in making its investment in the Company. Each Manager agrees that no other Manager or Investor nor the respective controlling persons, officers, directors, partners, members, agents or employees of any other Manager or Investor shall be liable to such Manager for any losses incurred by such Manager in connection with its investment in the Company.

12. GOVERNING LAW.

12.1. Governing Law . This Agreement and any related dispute shall be governed by and construed in accordance with the laws of the State of Delaware.

 

- 30 -


12.2. Jurisdiction . Any action or proceeding against the parties relating in any way to this Agreement may be brought exclusively in the courts of the State of Delaware or (to the extent subject matter jurisdiction exists therefore) the United States District Court for the District of Delaware, and the parties irrevocably submit to the jurisdiction of both such courts in respect of any such action or proceeding. Any actions or proceedings to enforce a judgment issued by one of the foregoing courts may be enforced in any jurisdiction.

12.3. WAIVER OF JURY TRIAL . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 12.3 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 12.3 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

12.4. Exercise of Rights and Remedies . No delay of or omission in the exercise of any right, power or remedy accruing to any party as a result of any breach or default by any other party under this Agreement will impair any such right, power or remedy, nor will it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or default occurring later; nor will any such delay, omission nor waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after that waiver.

[The remainder of this page is intentionally left blank]

 

- 31 -


IN WITNESS WHEREOF, each of the undersigned has duly executed this Agreement (or caused this Agreement to be executed on its behalf by its officer or representative thereunto duly authorized) as of the date and year first above written.

 

THE COMPANY:     HEALTHCARE TECHNOLOGY HOLDINGS, INC.
    By:  

/s/ Clive D. Bode

    Name:   Clive D. Bode
    Title:   Vice President and Secretary
MERGER SUB:     HEALTHCARE TECHNOLOGY ACQUISITION, INC.
    By:  

/s/ Clive D. Bode

    Name:   Clive D. Bode
    Title:   Vice President and Secretary

 

[Signature Page to Management Stockholders Agreement]


IMS:     IMS HEALTH INCORPORATED
    By:  

/s/ Harvey A. Ashman

    Name:   Harvey A. Ashman
    Title:   Senior Vice President, General Counsel, External Affairs & Corporate Secretary

 

[Signature Page to Management Stockholders Agreement]


INVESTORS:    
TPG PARTNERS VI, L.P.     TPG FOF V-A, L.P.
By: TPG GENPAR VI, L.P., its General     By: TPG GENPAR V, L.P., its General Partner
Partner      
    By: TPG ADVISORS V, INC., its General
By: TPG ADVISORS VI, INC., its General     Partner
Partner      
By:  

/s/ Clive D. Bode

    By:  

/s/ Clive D. Bode

  Name: Clive D. Bode       Name: Clive D. Bode
  Title:   Vice President       Title:   Vice President
TPG PARTNERS V, L.P.     TPG FOF V-B, L.P.
By: TPG GENPAR V, L.P., its General Partner     By: TPG GENPAR V, L.P., its General Partner
By: TPG ADVISORS V, INC., its General     By: TPG ADVISORS V, INC., its General
Partner     Partner
By:  

/s/ Clive D. Bode

    By:  

/s/ Clive D. Bode

  Name: Clive D. Bode       Name: Clive D. Bode
  Title:   Vice President       Title:   Vice President
TPG BIOTECHNOLOGY PARTNERS III,     TPG ICEBERG CO-INVEST LLC
L.P.        
By: TPG BIOTECHNOLOGY GENPAR III,     By: TPG ADVISORS VI, INC.,
L.P., its General Partner     its Managing Member
By: TPG BIOTECH ADVISORS III, LLC,      
its General Partner     By:  

/s/ Clive D. Bode

        Name: Clive D. Bode
        Title:   Vice President
By:  

/s/ Clive D. Bode

     
  Name: Clive D. Bode      
  Title:   Vice President      
TPG FOF VI SPV, L.P.      
By: TPG ADVISORS VI, INC., its General      
Partner      
By:  

/s/ Clive D. Bode

     
  Name: Clive D. Bode      
  Title:   Vice President      

 

[Signature Page to Management Stockholders Agreement]


     

CPP INVESTMENT BOARD
PRIVATE HOLDINGS INC.

      By:  

/s/ André Bourbonnais

        Name: André Bourbonnais
        Title:   Authorized Signatory
      By:  

/s/ Mark Wiseman

        Name: Mark Wiseman
        Title:   Authorized Signatory

 

[Signature Page to Management Stockholders Agreement]


GREEN EQUITY INVESTORS V, L.P.
By: GEI CAPITAL V, LLC, its General Partner
By:  

/s/ John Baumer

Name:   John Baumer
Title:  
GREEN EQUITY INVESTORS SIDE V, L.P.
By: GEI CAPITAL V, LLC, its General Partner
By:  

/s/ John Baumer

Name:   John Baumer
Title:  
LGP ICEBERG COINVEST, LLC

By: LEONARD GREEN & PARTNERS, L.P., its

Manager

By: LGP MANAGEMENT, INC., its General

Partner

By:  

/s/ John Baumer

Name:   John Baumer
Title:  

 

[Signature Page to Management Stockholders Agreement]


MANAGER:

[SIGNATURES ON FILE WITH COMPANY]

 

[Signature Page to Management Stockholders Agreement]


Schedule I

to Management Stockholders Agreement

STOCK OWNERSHIP AT CLOSING

 

Name of Manager

   Common
Stock
     Purchase
Price Per
Share
     Options      SARs      DC ERP
notional

shares
 

Murray L. Aitken

     261,404       $ 1.00         —           533,659.61         —     

Adel B. Al-Saleh

     —              —           537,053.33         170,000   

Harvey A. Ashman

     115,544       $ 1.00         —           235,435.04         —     

Jeffrey T. Baker

     13,552       $ 1.00         —           —           —     

Richard A. Bartolotta

     —              —           267,384.00         —     

Elisabeth Beck

     —              —           117,717.52         —     

Catherine Blachere

     100,012       $ 1.00         —           —           —     

David R. Carlucci

     —              —           2,668,309.49         —     

Paul J. Crotty

     —              —           268,526.67         —     

Margaret F. Cupp

     47,322       $ 1.00         —           —           —     

David J. Desch

     13,728       $ 1.00         —           48,391.93         —     

Christine J. Dusek

     5,830       $ 1.00         —           —           —     

Jose Luis Fernandez

     —              —           263,681.76         212,536   

Jeff Ford

     —              —           274,240.00         —     

Alistair Grenfell

     —              —           166,863.61         —     

Alex Guizzetti

     —              —           205,680.00         —     

Raymond H. Hill

     —              —           93,333.01         280,496.65   

Andrew C. Jackson

     —              —           266.824.09         —     

Leslye G. Katz

     —              —           784,794.89         —     

Kevin C. Knightly

     —              —           155,996.85         483,494   

Deborah Kobewka

     —              —           74,273.33         —     

Mary Beth Lawrence

     —              —           —           125,000   

Sergio Liberatore

     —              —           117,717.52         —     

James R. Mahon

     —              —           —           100,000   

Kevin S. McKay

     —              —           —           295,600   

Seyed A. Mortazavi

     —              —           —           300,000   

Alandra C. Murphy

     13,970       $ 1.00         —           —           —     

William J. Nelligan

     —              —           266,664.12         300,000   

Christopher S. Nickum

     —              —           133,337.77         —     

Donald G. Otterbein

     —              —           400,001.89         —     

Karla L. Packer

     —              —           213,335.87         140,000   

Hossam A. Sadek

     —              —           400,001.89         —     

Tatsuyuki Saeki

     —              —           565,048.67         —     

Joseph Satili

     24,574       $ 1.00         —           —           —     

Satwinder Sian

     —              —           159,973.33         280,274   

Marie A. Sonde

     —              —           200,000.95         150,000   

Hector Valle

     24,574       $ 1.00         —           —           —     

John R. Walsh

     —              —           —           387,900   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
              
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL

     620,510            —           9,418,247.17         3,225,300.65   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Exhibit 10.4

Execution Version

SECOND AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT

dated as of October 24, 2012

among

IMS HEALTH INCORPORATED,

as a Borrower and a Guarantor,

IMS AG,

as a Borrower,

IMS JAPAN K.K.,

as a Borrower,

HEALTHCARE TECHNOLOGY INTERMEDIATE HOLDINGS, INC.,

as a Guarantor,

CERTAIN SUBSIDIARIES OF IMS HEALTH INCORPORATED,

as Guarantors,

VARIOUS LENDERS,

BANK OF AMERICA, N.A.

and

GOLDMAN SACHS LENDING PARTNERS LLC

as Joint Lead Arrangers and Joint Lead Bookrunners

BANK OF AMERICA, N.A.,

as Administrative Agent, Collateral Agent,

Swing Line Lender and Issuing Bank

GOLDMAN SACHS LENDING PARTNERS LLC,

as Syndication Agent,

BARCLAYS BANK PLC

DEUTSCHE BANK SECURITIES INC.

HSBC SECURITIES (USA) INC.

JPMORGAN CHASE BANK, N.A.

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Co-Documentation Agents

and

FIFTH THIRD BANK

MIZUHO CORPORATE BANK, LTD.

RBC CAPITAL MARKETS

SUNTRUST BANK,

as Senior Managing Agents

 

 

Senior Secured Credit Facilities

 

 


TABLE OF CONTENTS

 

         Page  

SECTION 1. DEFINITIONS AND INTERPRETATION

     1   

1.1.

 

Definitions.

     1   

1.2.

 

Accounting Terms.

     53   

1.3.

 

Interpretation, Etc.

     53   

1.4.

 

Exchange Rates; Currency Equivalents.

     53   

1.5.

 

Redenomination of Certain Foreign Currencies and Computation of Dollar Equivalents.

     54   

1.6.

 

Additional Foreign Currencies.

     54   

1.7.

 

Letter of Credit Amounts.

     55   

1.8.

 

Rounding.

     55   

1.9.

 

References to Agreements, Laws, Etc.

     55   

1.10.

 

Certain Calculations.

     55   

1.11.

 

Effect of this Agreement on the Original Credit Agreement and other Existing Credit Documents.

     56   

SECTION 2. LOANS AND LETTERS OF CREDIT

     57   

2.1.

 

Term Loans.

     57   

2.2.

 

Revolving Loans.

     58   

2.3.

 

Swing Line Loans.

     59   

2.4.

 

Issuance of Letters of Credit and Purchase of Participations Therein.

     62   

2.5.

 

Pro Rata Shares; Availability of Funds.

     70   

2.6.

 

Use of Proceeds.

     70   

2.7.

 

Evidence of Debt; Register; Lenders’ Books and Records; Notes.

     71   

2.8.

 

Interest on Loans.

     71   

2.9.

 

Conversion/Continuation.

     74   

2.10.

 

Default Interest.

     74   

2.11.

 

Fees.

     75   

2.12.

 

Scheduled Payments.

     76   

2.13.

 

Voluntary Prepayments/Commitment Reductions.

     76   

2.14.

 

Mandatory Prepayments.

     77   

2.15.

 

Application of Prepayments.

     79   

2.16.

 

General Provisions Regarding Payments.

     81   

2.17.

 

Ratable Sharing.

     82   

2.18.

 

Making or Maintaining Eurocurrency Rate Loans.

     82   

2.19.

 

Increased Costs; Capital Adequacy.

     84   

2.20.

 

Taxes; Withholding, Etc.

     85   

2.21.

 

Obligation to Mitigate.

     88   

2.22.

 

Removal or Replacement of a Lender.

     89   

 

i


2.23.

 

Incremental Facilities.

     90   

2.24.

 

Refinancing Amendments.

     91   

2.25.

 

Extensions of Revolving Loans and Revolving Commitments.

     92   

2.26.

 

Extension of Term Loans.

     94   

SECTION 3. CONDITIONS PRECEDENT

     95   

3.1.

 

Second Restatement Effective Date.

     95   

3.2.

 

Conditions to Each Credit Extension.

     96   

SECTION 4. REPRESENTATIONS AND WARRANTIES

     96   

4.1.

 

Organization; Requisite Power and Authority; Qualification.

     96   

4.2.

 

Equity Interests and Ownership.

     97   

4.3.

 

Due Authorization.

     97   

4.4.

 

No Conflict.

     97   

4.5.

 

Governmental Consents.

     97   

4.6.

 

Binding Obligation.

     97   

4.7.

 

Historical Financial Statements.

     97   

4.8.

 

Projections.

     98   

4.9.

 

No Material Adverse Change.

     98   

4.10.

 

Adverse Proceedings, Etc.

     98   

4.11.

 

Taxes.

     98   

4.12.

 

Properties.

     98   

4.13.

 

Environmental Matters.

     98   

4.14.

 

No Defaults.

     99   

4.15.

 

Governmental Regulation.

     99   

4.16.

 

Margin Stock.

     99   

4.17.

 

Employee Matters.

     99   

4.18.

 

Employee Benefit Plans.

     99   

4.19.

 

Certain Fees.

     100   

4.20.

 

Solvency.

     100   

4.21.

 

Creation, Perfection, Etc.

     100   

4.22.

 

Compliance with Statutes, Etc.

     100   

4.23.

 

Disclosure.

     100   

4.24.

 

First Lien Senior Indebtedness.

     101   

4.25.

 

PATRIOT Act.

     101   

4.26.

 

Related Agreements.

     101   

SECTION 5. AFFIRMATIVE COVENANTS

     101   

5.1.

 

Financial Statements and Other Reports.

     101   

5.2.

 

Existence.

     104   

5.3.

 

Payment of Taxes and Claims.

     104   

5.4.

 

Maintenance of Properties.

     104   

 

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5.5.

 

Insurance.

     104   

5.6.

 

Books and Records; Inspections.

     104   

5.7.

 

Lenders Meetings.

     105   

5.8.

 

Compliance with Laws.

     105   

5.9.

 

Environmental.

     105   

5.10.

 

Subsidiaries.

     106   

5.11.

 

Additional Material Real Estate Assets.

     106   

5.12.

 

Interest Rate Protection.

     107   

5.13.

 

Further Assurances.

     107   

5.14.

 

Miscellaneous Covenants.

     107   

5.15.

 

Designation of Restricted and Unrestricted Subsidiaries.

     107   

5.16.

 

Intentionally Omitted.

     108   

5.17.

 

Swiss Withholding Tax Rules.

     108   

SECTION 6. NEGATIVE COVENANTS

     108   

6.1.

 

Indebtedness.

     108   

6.2.

 

Liens.

     113   

6.3.

 

No Further Negative Pledges.

     116   

6.4.

 

Restricted Junior Payments.

     117   

6.5.

 

Restrictions on Subsidiary Distributions.

     119   

6.6.

 

Investments.

     120   

6.7.

 

Financial Covenants.

     122   

6.8.

 

Fundamental Changes; Dispositions.

     123   

6.9.

 

Disposal of Subsidiary Interests.

     126   

6.10.

 

Sales and Lease-Backs.

     126   

6.11.

 

Transactions with Affiliates.

     126   

6.12.

 

Conduct of Business.

     128   

6.13.

 

Permitted Activities of Holdings.

     128   

6.14.

 

Amendments or Waivers of Organizational Documents and Certain Related Agreements.

     128   

6.15.

 

Amendments or Waivers with respect to Certain Indebtedness.

     128   

6.16.

 

Fiscal Year.

     128   

SECTION 7. GUARANTY

     129   

7.1.

 

Guaranty of the Obligations.

     129   

7.2.

 

Contribution by Guarantors.

     129   

7.3.

 

Payment by Guarantors.

     129   

7.4.

 

Liability of Guarantors Absolute.

     130   

7.5.

 

Waivers by Guarantors.

     131   

7.6.

 

Guarantors’ Rights of Subrogation, Contribution, Etc.

     132   

7.7.

 

Subordination of Other Obligations.

     132   

7.8.

 

Continuing Guaranty.

     132   

 

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7.9.

 

Authority of Guarantors or Borrowers.

     133   

7.10.

 

Financial Condition of Parent Borrower.

     133   

7.11.

 

Bankruptcy, Etc.

     133   

7.12.

 

Discharge of Guaranty upon Sale or Designation of Guarantor Subsidiary.

     133   

SECTION 8. EVENTS OF DEFAULT

     134   

8.1.

 

Events of Default.

     134   

8.2.

 

Parent Borrower’s Right to Cure.

     136   

SECTION 9. AGENTS

     137   

9.1.

 

Appointment and Authority.

     137   

9.2.

 

Rights as a Lender.

     137   

9.3.

 

Exculpatory Provisions.

     137   

9.4.

 

Reliance by Administrative Agent.

     138   

9.5.

 

Delegation of Duties.

     138   

9.6.

 

Resignation of Administrative Agent.

     138   

9.7.

 

Non-Reliance on Agents and Other Lenders.

     139   

9.8.

 

No Other Duties, Etc.

     139   

9.9.

 

Collateral and Guaranty Matters.

     139   

9.10.

 

Lenders’ Representations, Warranties and Acknowledgment.

     140   

9.11.

 

Right to Indemnity.

     140   

9.12.

 

Withholding Taxes.

     140   

9.13.

 

Administrative Agent May File Proofs of Claim.

     141   

SECTION 10. MISCELLANEOUS

     141   

10.1.

 

Notices.

     141   

10.2.

 

Expenses.

     142   

10.3.

 

Indemnity.

     143   

10.4.

 

Set-Off.

     144   

10.5.

 

Amendments and Waivers.

     144   

10.6.

 

Successors and Assigns; Participations.

     146   

10.7.

 

Independence of Covenants.

     150   

10.8.

 

Survival of Representations, Warranties and Agreements.

     150   

10.9.

 

No Waiver; Remedies Cumulative.

     151   

10.10.

 

Marshalling; Payments Set Aside.

     151   

10.11.

 

Severability.

     151   

10.12.

 

Obligations Several; Independent Nature of Lenders’ Rights.

     151   

10.13.

 

Headings.

     151   

10.14.

 

APPLICABLE LAW.

     151   

10.15.

 

CONSENT TO JURISDICTION.

     151   

10.16.

 

WAIVER OF JURY TRIAL.

     152   

10.17.

 

Confidentiality.

     152   

 

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10.18.

 

Usury Savings Clause.

     153   

10.19.

 

Counterparts.

     153   

10.20.

 

Effectiveness; Entire Agreement.

     153   

10.21.

 

PATRIOT Act.

     153   

10.22.

 

Electronic Execution of Assignments.

     154   

10.23.

 

No Fiduciary Duty.

     154   

10.24.

 

Judgment Currency.

     154   

APPENDICES:

 

A    Revolving Commitments
B    Notice Addresses

SCHEDULES:

 

6.1    Certain Indebtedness
6.2    Certain Liens
6.6    Certain Investments
6.11    Certain Affiliate Transactions

 

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SECOND AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT

This SECOND AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT , dated as of October 24, 2012, is entered into by and among IMS HEALTH INCORPORATED , a Delaware corporation (“ Parent Borrower ”), HEALTHCARE TECHNOLOGY INTERMEDIATE HOLDINGS, INC. , a Delaware corporation (“ Holdings ”), IMS AG , a Swiss corporation and a subsidiary of Parent Borrower (“ Swiss Subsidiary Borrower ”), IMS JAPAN K.K. , a Japanese stock corporation ( kabushiki kaisha ) and a subsidiary of Parent Borrower (“ Japanese Subsidiary Borrower ”; and together with Parent Borrower and Swiss Subsidiary Borrower, each a “ Borrower ” and collectively, “ Borrowers ”), CERTAIN SUBSIDIARIES OF PARENT BORROWER , as Guarantors, the Lenders party hereto from time to time, BANK OF AMERICA, N.A. and GOLDMAN SACHS LENDING PARTNERS LLC (“ GSLP ”), as Joint Lead Arrangers and Joint Lead Bookrunners, BANK OF AMERICA, N.A. , as Administrative Agent (together with its permitted successors in such capacity, “ Administrative Agent ”) and as Collateral Agent (together with its permitted successors in such capacity, “ Collateral Agent ”), Swing Line Lender and Issuing Bank, GOLDMAN SACHS LENDING PARTNERS LLC , as Syndication Agent (in such capacity, “ Syndication Agent ”), and each of BARCLAYS BANK PLC (“ Barclays Capital ”), DEUTSCHE BANK SECURITIES INC. (“ DB ”) , HSBC SECURITIES (USA) INC. (“ HSBC Securities ”), JPMORGAN CHASE BANK, N.A. (“ JPM ”) and WELLS FARGO BANK, NATIONAL ASSOCIATION (“ Wells ”), as Co-Documentation Agent (in such capacities, “ Co-Documentation Agents ”).

RECITALS:

WHEREAS , capitalized terms used in these Recitals shall have the respective meanings set forth for such terms in Section 1.1 hereof;

WHEREAS , Borrowers and Holdings were party to that certain Credit and Guaranty Agreement, dated as of February 26, 2010 (as amended, supplemented or otherwise modified from time to time prior to the First Restatement Effective Date, the “ Original Credit Agreement ”), with the lenders party thereto from time to time (the “ Original Lenders ”) and Bank of America, N.A., as administrative agent, collateral agent, swingline lender and issuing bank and the other agents party thereto, pursuant to which the Original Lenders extended or committed to extend certain credit facilities to Borrowers;

WHEREAS , Borrowers, Holdings, the Administrative Agent and the lenders party thereto entered into the First Amendment, dated as of March 16, 2011 under which the Original Credit Agreement was amended and restated (as amended, supplemented or otherwise modified from time to time prior to the Second Restatement Effective Date, the “ Amended and Restated Credit Agreement ”);

WHEREAS , pursuant to that Amendment No. 1 to Amended and Restated Credit and Guaranty Agreement, dated as of October 24, 2012 (the “ Amendment ”), among Borrowers, Administrative Agent and the Lenders party thereto and upon satisfaction of the conditions set forth therein, the Amended and Restated Credit Agreement is being amended and restated in the form of this Agreement;

NOW , THEREFORE , in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

 

SECTION 1. DEFINITIONS AND INTERPRETATION

1.1. Definitions . The following terms used herein, including in the preamble, recitals, exhibits and schedules hereto, shall have the following meanings:

“2010 Reduction Amount ” as defined in Section 2.14(e).

Acquisition ” means the acquisition of Parent Borrower pursuant to the Acquisition Agreement.

Acquisition Agreement ” means the Agreement and Plan of Merger, dated November 5, 2009, among Parent Borrower, Healthcare Technology Holdings, Inc. and Healthcare Technology Acquisition, Inc., together with all exhibits, schedules, documents, agreements, and instruments executed and delivered in connection therewith, as the same may be amended, or modified in accordance with the terms and provisions thereof.

 

- 1 -


Acquisition Consideration ” means the purchase consideration for any Permitted Acquisition paid by Holdings or any of its Subsidiaries (excluding any such consideration paid in the form of Equity Interests (other than Disqualified Stock) of Holdings or any direct or indirect parent thereof), whether payable at or prior to the consummation of such Permitted Acquisition or deferred for payment at any future time, whether or not any such future payment is subject to the occurrence of any contingency, and including any and all payments representing the purchase price and any assumptions of Indebtedness, “earn-outs” and other agreements to make any payment the amount of which is, or the terms of payment of which are, in any respect subject to or contingent upon the revenues, income, cash flow or profits (or the like) of any person or business; provided , that the Acquisition Consideration in respect of any Permitted Acquisition automatically shall be deemed to be reduced by the amount of any such deferred or contingent payments that cease to be payable by Holdings or any of its Subsidiaries under the terms of such Permitted Acquisition as of the date on which such amount ceases to be payable.

Additional Refinancing Lender ” means, at any time, any bank, financial institution or other institutional lender or investor (other than any such bank, financial institution or other institutional lender or investor that is a Lender at such time) that agrees to provide any portion of Credit Agreement Refinancing Indebtedness pursuant to a Refinancing Amendment in accordance with Section 2.24; provided that each Additional Refinancing Lender shall be subject to the consent of (i) Administrative Agent to the extent that such consent would be required under Section 10.6 (such consent not to be unreasonably withheld), and (ii) Parent Borrower.

Additional Tranche B Dollar Term Lender ” as defined in the Amendment.

Additional Tranche B Euro Term Lender ” as defined in the Amendment.

“A dditional Tranche B Term Lender ” as defined in the Amendment.

Administrative Agent ” as defined in the preamble hereto.

Administrative Questionnaire ” means an Administrative Questionnaire in substantially the form of Exhibit P to the Original Credit Agreement or any other form approved by Administrative Agent.

Adverse Proceeding ” means any action, suit, proceeding, hearing (in each case, whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of Holdings or any of its Subsidiaries) at law or in equity, or before or by any Governmental Authority, domestic or foreign (including any Environmental Claims), whether pending or, to the knowledge of Holdings or any of its Subsidiaries, threatened in writing against Holdings or any of its Subsidiaries or any property of Holdings or any of its Subsidiaries.

Affected Lender ” as defined in Section 2.18(b).

Affected Loans ” as defined in Section 2.18(b).

Affiliate ” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power (i) other than for purposes of the definition of “Change of Control”, to vote 10% or more of the Securities having ordinary voting power for the election of directors of such Person or (ii) to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

Affiliated Lender ” shall mean a Lender that is a Sponsor or Affiliate of a Sponsor (excluding, in each case, any Credit Party).

 

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Agent ” means each of (a) Administrative Agent, (b) Syndication Agent, (c) Collateral Agent, (d) each Co-Documentation Agent, (e) the Arranger and (f) any other Person appointed under the Credit Documents to serve in an agent or similar capacity including, without limitation, any auction manager.

Agent Affiliates ” as defined in Section 10.1(b).

Aggregate Amounts Due ” as defined in Section 2.17.

Aggregate Payments ” as defined in Section 7.2.

Agreement ” means this Second Amended and Restated Credit and Guaranty Agreement, dated as of October 24, 2012, as it may be amended, restated, supplemented or otherwise modified from time to time.

Amended and Restated Credit Agreement ” as defined in the recitals hereto.

Amendment ” as defined in the recitals hereto.

Applicable Margin ” means with respect to Revolving Loans, (i) from the First Restatement Effective Date until one Business Day after the date of delivery of the Compliance Certificate and the financial statements for the period ending March 31, 2011, the applicable percentage, per annum, set forth below determined by reference to Pricing Level 1; and (ii) thereafter, the applicable percentage, per annum, set forth below determined by reference to the Leverage Ratio as set forth in the most recent Compliance Certificate received by Administrative Agent pursuant to Section 5.1(c):

 

Pricing Level

  

Leverage Ratio

   Applicable Margin for
Eurocurrency Rate
Loans
    Applicable
Margin for Base Rate
Loans
 

1

   ³  4.00:1.00      3.25     2.25

2

   < 4.00:1.00 but  ³  2.75:1.00      3.00     2.00

3

   < 2.75:1.00      2.75     1.75

No change in the Applicable Margin shall be effective until one Business Day after the date on which Administrative Agent shall have received the applicable financial statements and a Compliance Certificate pursuant to Section 5.1(c) calculating the Leverage Ratio. At any time Parent Borrower has not submitted to Administrative Agent the applicable information as and when required under Section 5.1(c), the Applicable Margin shall be determined as if Pricing Level 1 shall have applied until one Business Day after the delivery of such information. Promptly upon receipt of the applicable information under Section 5.1(c), Administrative Agent shall give each Lender telefacsimile or telephonic notice (confirmed in writing) of the Applicable Margin and the Applicable Revolving Commitment Fee Percentage in effect from such date. If at a time when this Agreement is in effect and unpaid Obligations under this Agreement are outstanding (other than Obligations under any Cash Management Agreement or Hedge Agreement and indemnities and other contingent obligations not yet due and payable), as a result of any restatement of or other adjustment to the financial statements of Holdings or Parent Borrower or for any other reason, Parent Borrower, Holdings or the Lenders determine that (i) the Leverage Ratio as calculated by Holdings as of any applicable date was inaccurate and (ii) a proper calculation of the Leverage Ratio would have resulted in higher pricing for such period, the applicable Borrower shall immediately and retroactively be obligated to pay to Administrative Agent for the account of the applicable Lenders or Issuing Bank, as the case may be, promptly on demand by Administrative Agent (or, after the occurrence of any Event of Default described in Section 8.1(f) or 8.1(g), automatically and without further action by Administrative Agent, any Lender or Issuing Bank), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period; provided , that non-payment as a result of such inaccuracy shall not in any event be deemed retroactively to be an Event of Default pursuant to Section 8.1(a), and such amount payable shall be calculated without giving effect to any additional interest payable on overdue amounts under Section 2.10 if paid promptly on demand. Nothing in this paragraph shall limit the right of Administrative Agent, Issuing Bank or any Lender under Section 2.10 or Section 8.

 

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Notwithstanding the foregoing, (x) the Applicable Margin in respect of Permitted Replacement Revolving Commitments or Extended Term Loans of any Extension Series or Permitted Replacement Revolving Commitments or Refinancing Term Loans of any Refinancing Series shall be the applicable percentages per annum provided pursuant to the relevant Permitted Replacement Revolving Amendment, Joinder Agreement, Extension Amendment or Refinancing Amendment, as the case may be and (y) the Applicable Margin of certain Loans shall be increased as, and to the extent, necessary to comply with the provisions of 2.23(e).

Applicable Revolving Commitment Fee Percentage ” means 0.75%.

Applicable Time ” means, with respect to any borrowings and payments in any Foreign Currency, the local time in the place of settlement for such Foreign Currency as reasonably determined by Administrative Agent or Issuing Bank, as the case may be, to be necessary for timely settlement on the relevant date in accordance with normal banking procedures in the place of payment.

Approved Electronic Communications ” means any notice, demand, communication, information, document or other material that any Credit Party provides to Administrative Agent pursuant to any Credit Document or the transactions contemplated therein which is distributed to Agents or to Lenders by means of electronic communications pursuant to Section 10.1(b).

Arranger ” means Goldman Sachs Lending Partners LLC, in its capacity as sole lead arranger under the Original Credit Agreement, each of the Restatement Arrangers and each of the Second Restatement Arrangers.

Asset Sale ” means a sale, lease or sub-lease (as lessor or sublessor) other than operating leases entered into in the ordinary course of business, sale and leaseback, assignment, conveyance, Specified IP Licenses, transfer or other disposition to, or any exchange of property with, any Person (other than Parent Borrower or any Guarantor Subsidiary), in one transaction or a series of related transactions, of all or any part of Holdings’ or any of its Subsidiaries’ businesses, assets or properties of any kind, whether real, personal, or mixed and whether tangible or intangible, whether now owned or hereafter acquired, leased or licensed, or an issuance or sale of Equity Interests of any of Holdings’ Subsidiaries, other than any such disposition of assets or issuance or sale of Equity Interests in any transaction or series of related transactions with an aggregate Fair Market Value of less than $10,000,000.

Assignment Agreement ” means an Assignment and Assumption Agreement substantially in the form of Exhibit B to the Amended and Restated Credit Agreement, with such amendments or modifications as may be approved by Administrative Agent.

Assignment Effective Date ” as defined in Section 10.6(b).

Attributable Debt ” means, in respect of a sale and leaseback transaction, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended); provided , however , that if such sale and leaseback transaction results in a Capital Lease, the amount of Indebtedness represented thereby shall be determined in accordance with the definition of “Capital Lease”.

Authorized Officer ” means, as applied to any Person, any individual holding the position of chairman of the board (if an officer), chief executive officer, president, vice president (or the equivalent thereof), chief financial officer or treasurer of such Person; provided that, at the request of Administrative Agent, (x) with respect to Holdings and its Domestic Subsidiaries, the secretary or assistant secretary of such Person shall have delivered an incumbency certificate to Administrative Agent as to the authority of such Authorized Officer and (y) with respect to Japanese Subsidiary Borrower, a director of such Person shall have delivered an incumbency certificate to Administrative Agent as to the authority of such Authorized Officer.

 

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Bank of America ” means Bank of America, N.A. and its successors.

Bankruptcy Code ” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.

Barclays Capital ” as defined in the preamble hereto.

Base Rate ” means, for any day, a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate” and (c) so long as such published rate is available, the rate of interest determined in accordance with clause (b) of the definition of “Eurocurrency Base Rate” plus 1.0%. The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’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 announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change. Notwithstanding the foregoing, in no event shall the Base Rate with respect to any Tranche B Dollar Term Loan at any time be less than 2.25%.

Base Rate Loan ” means a Loan bearing interest at a rate determined by reference to the Base Rate.

Beneficiary ” means each Agent, Issuing Bank, Lender and Lender Counterparty.

Board of Governors ” means the Board of Governors of the United States Federal Reserve System, or any successor thereto.

Borrowers ” as defined in the preamble hereto.

Business Day ” means 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, the state where Administrative Agent’s Principal Office with respect to Obligations denominated in Dollars is located and:

(a) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in Dollars, any fundings, disbursements, settlements and payments in Dollars in respect of any such Eurocurrency Rate Loan, or any other dealings in Dollars to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market;

(b) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in Euro, any fundings, disbursements, settlements and payments in Euro in respect of any such Eurocurrency Rate Loan, or any other dealings in Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means a TARGET Day;

(c) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in a currency other than Dollars or Euro, means any such day on which dealings in deposits in the relevant currency are conducted by and between banks in the London or other applicable offshore interbank market for such currency; and

(d) if such day relates to any fundings, disbursements, settlements and payments in a currency other than Dollars or Euro in respect of a Eurocurrency Rate Loan denominated in a currency other than Dollars or Euro, or any other dealings in any currency other than Dollars or Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate 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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Capital Lease ” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person; provided, that for all purposes hereunder the amount of obligations under any Capital Lease shall be the amount thereof accounted for as a liability in accordance with GAAP.

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) prepared in accordance with GAAP.

Capitalized Software Expenditures ” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by Parent Borrower and its Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of Parent Borrower and its Subsidiaries.

Capital Stock ” means:

(1) in the case of a corporation, corporate stock or shares in the capital of such corporation;

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

Cash ” means money, currency or a credit balance in any demand or Deposit Account.

Cash Collateralize ” as defined in Section 2.4(g).

Cash Equivalents ” means:

(1) United States dollars;

(2) (a) Pounds Sterling, Yen, Swiss Francs, Euros, or any national currency of any Participating Member State of the EMU; and

(b) such local currencies held by Parent Borrower or any Subsidiary from time to time in the ordinary course of business;

(3) securities issued or directly and fully and unconditionally guaranteed or insured by the United States Government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of the United States Government with maturities of 24 months or less from the date of acquisition;

(4) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus of not less than $500,000,000 in the case of U.S. banks and $100,000,000 (or the U.S. dollar equivalent as of the date of determination) in the case of non-U.S. banks;

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

 

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(6) commercial paper rated at least P-1 by Moody’s or at least A-1 by S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 24 months after the date of creation thereof;

(7) marketable short-term money market and similar securities having a rating of at least P-1 or A-1 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency), and in each case maturing within 24 months after the date of creation thereof;

(8) readily marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision or taxing authority thereof rated at least P-1 by Moody’s or at least A-1 by S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency), with maturities of 24 months or less from the date of acquisition;

(9) Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA- (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency);

(10) readily marketable direct obligations issued by any foreign government or any political subdivision or public instrumentality thereof rated at least P-1 by Moody’s or at least A-1 by S&P (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency), with maturities of 24 months or less from the date of acquisition; and

(11) investment funds investing substantially all of their assets in securities of the types described in clauses (1) through (10) above.

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (1) and (2) above; provided that such amounts are converted into any currency listed in clauses (1) and (2) as promptly as practicable and in any event within ten Business Days following the receipt of such amounts. In the case of Investments by any Foreign Subsidiary or Investments made in a country outside the United States of America, Cash Equivalents shall also include other short-term investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash management in investments analogous to the foregoing investments in clauses (1) through (11) above.

Cash Management Agreement ” shall mean any agreement or arrangement to provide treasury, depository, overdraft, credit or debit card, purchase card, electronic funds transfer (including automated clearing house fund transfer services) and other cash management services.

Certificate re Non-Bank Status ” means a certificate substantially in the form of Exhibit F to the Original Credit Agreement.

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

(i) prior to the first Qualified Public Offering to occur after the Original Closing Date, (x) Sponsors directly or indirectly cease to beneficially own (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) Capital Stock of Holdings representing more than 50% of the total voting power and economic power of all of the outstanding Capital Stock of Holdings (for avoidance of doubt, exclusive of debt securities which are convertible into Capital Stock until converted), or (y) TPG Group directly or indirectly ceases to beneficially own (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) Capital Stock of Holdings representing 33.33% or more of the total voting power and economic power of all of the outstanding Capital Stock of Holdings (for avoidance of doubt, exclusive of debt securities which are convertible into Capital Stock until converted); or

 

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(ii) at any time on or after the first Qualified Public Offering to occur after the Original Closing Date, (A) Parent Borrower becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) that both (x) any Person (other than any Sponsor) or Persons (other than any Sponsor) that are together a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any such 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), has acquired, directly or indirectly, 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) 40% or more of the total voting power or economic power of all of the outstanding Capital Stock of Holdings (for avoidance of doubt, exclusive of debt securities which are convertible into Capital Stock until converted) and (y) the Sponsors do not directly or indirectly beneficially own (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) a greater percentage of both the voting and economic power of all of such outstanding Capital Stock of Holdings than the Person or group referred to in the foregoing clause (ii)(x), or (B) during any period of twelve consecutive months, the majority of the seats (other than vacant seats) on the board of directors (or similar governing body) of Holdings cease to be occupied by Persons who either (a) were members of the board of directors of Holdings on the Original Closing Date or (b) were nominated for election by the board of directors of Holdings, a majority of whom were directors on the Original Closing Date or whose election or nomination for election was previously approved by a majority of such directors, in each case other than any person whose initial nomination or appointment occurred as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors on the board of directors of Holdings (other than any such solicitation made by the board of directors of Holdings);

(iii) Parent Borrower shall cease to beneficially own and control 100% on a fully diluted basis of the economic and voting interest in the Equity Interests of (x) the Japanese Subsidiary Borrower or (y) the Swiss Subsidiary Borrower (in each case, excluding any director’s qualifying shares or shares owned by foreign nationals to the extent mandated by applicable Law);

(iv) Holdings shall cease to beneficially own and control 100% on a fully diluted basis of the economic and voting interest in the Equity Interests of Parent Borrower; or

(v) any “change of control” or similar event under the Senior Notes Indenture shall occur.

Class ” means (i) with respect to Lenders, each of the following classes of Lenders: (a) Lenders having Tranche B Dollar Term Loan Exposure, (b) Lenders having Tranche B Euro Term Loan Exposure, (c) Lenders having U.S. Revolving Exposure (including Swing Line Lender), (d) Lenders having Japanese Revolving Exposure, (e) Lenders having Swiss/Multicurrency Revolving Exposure, (f) Lenders having New Term Loan Exposure of each applicable Series, (g) Lenders having Permitted Replacement Revolving Exposure, (h) Extending Term Lenders of each applicable Extension Series and (i) Refinancing Term Lenders of each applicable Refinancing Series, (ii) with respect to Loans, each of the following classes of Loans: (a) Tranche B Dollar Term Loans, (b) Tranche B Euro Term Loans, (c) U.S. Revolving Loans (including Swing Line Loans), (d) Japanese Revolving Loans, (e) Swiss/Multicurrency Revolving Loans, (f) each Series of New Term Loans, (g) Permitted Replacement Revolving Loans, (h) each Refinancing Series and (i) each Extension Series and (iii) with respect to Commitments, each of the following classes of Commitments: (a) Tranche B Dollar Term Loan Commitments, (b) Tranche B Euro Term Loan Commitments, (c) U.S. Revolving Commitments, (d) Japanese Revolving Commitments, (e) Swiss/Multicurrency Revolving Commitments, (f) each Series of New Term Loans, (g) Permitted Replacement Revolving Commitments, (h) Refinancing Term Commitments of each applicable Refinancing Series and (i) Extended Term Commitments of each applicable Extension Series.

Co-Documentation Agents ” as defined in the preamble hereto.

Collateral ” means, collectively, all of the real, personal and mixed property (including Equity Interests) in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Obligations.

Collateral Agent ” as defined in the preamble hereto.

 

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Collateral Documents ” means the Pledge and Security Agreement, the Mortgages, the Intellectual Property Security Agreements, the Landlord Personal Property Collateral Access Agreements, if any, the Loss Sharing Agreement, the Foreign Collateral Documents and all other instruments, documents and agreements delivered by any Credit Party pursuant to this Agreement or any of the other Credit Documents in order to grant to Collateral Agent, for the benefit of Secured Parties, or to grant to Secured Parties, a Lien on any real, personal or mixed property of that Credit Party as security for the Obligations.

Collateral Questionnaire ” means the collateral disclosure schedule attached to the Pledge and Security Agreement that provides information with respect to the personal or mixed property of each Credit Party.

Commitment ” means any Revolving Commitment or Term Loan Commitment.

Commitment Letter ” as defined in Section 10.20.

Commitment Parties ” as defined in Section 10.20

Commodity Agreement ” means any agreement (including each confirmation pursuant to any master agreement) or transaction providing for one or more swaps, caps, collars, floors, futures, options, spots, forwards, derivative, any physical or financial commodity contracts or agreements, netting agreements, capacity agreements or commercial or trading agreements and any other similar agreements, each of which is for the purpose of hedging the commodity price exposure associated with the operations of any Credit Party or Subsidiary thereof and not for speculative purposes.

Compliance Certificate ” means a Compliance Certificate substantially in the form of Exhibit C to the Original Credit Agreement.

Consent Solicitation and Exchange Offer ” means the consent solicitation and exchange offer as set forth in the offering circular and consent solicitation statement dated October 10, 2012 relating to the Senior Exchange Notes.

Consolidated Adjusted EBITDA ” means, for any period, an amount determined for Parent Borrower and its Subsidiaries on a consolidated basis equal to Consolidated Net Income:

(1) increased (without duplication) by:

(a) provision for taxes based on income or profits or capital, including, without limitation, federal, state, franchise, excise or similar taxes paid or accrued during such period, including any penalties and interest related to such taxes or arising from any tax examinations, to the extent the same were deducted (and not added back) in computing Consolidated Net Income; plus

(b) total interest expense for such period net of interest income, plus bank fees and costs of surety bonds in connection with financing activities, to the extent the same was deducted (and not added back) in calculating Consolidated Net Income; plus

(c) Consolidated Depreciation and Amortization Expense for such period to the extent the same were deducted (and not added back) in computing Consolidated Net Income; plus

(d) any fees, expenses or charges (other than depreciation or amortization expense) related to any Equity Offering, Investment permitted by Section 6.6, Asset Sale or other disposition permitted by Section 6.8, incurrence or repayment of Indebtedness (including such fees, expenses or charges related to the incurrence of the Indebtedness under the Original Credit Agreement, the issuance of the Senior Notes, the First Restatement Transactions and the Second Restatement Transactions), or refinancing transaction or amendment or modification of any debt instrument (including any amendment or other modification of this Agreement and the Senior

 

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Notes Indenture), including in each case, any such transaction consummated prior to the Original Closing Date and any such transaction undertaken but not completed, and any nonrecurring charges and costs incurred in connection with acquisitions or mergers after the Original Closing Date, in each case, deducted (and not added back) in computing Consolidated Net Income; plus

(e) the amount of any restructuring charges, accruals or reserves, in each case, actually incurred in any period and to the extent deducted (and not added back) in such period in computing Consolidated Net Income; plus

(f) any non-cash charges, including any write offs or write downs, reducing (and not added back in computing) Consolidated Net Income for such period, including (x) any non-cash impairment charge or asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets, investments in debt and equity securities or as a result of a change in law or regulation, in each case, pursuant to GAAP and (y) the amortization of intangibles arising pursuant to GAAP (excluding for purposes of this clause (f) any such non-cash item to the extent that it represents an accrual or reserve for potential cash items in any future period or 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 and related expenses paid in cash or accrued in such period to the Sponsors pursuant to the Management Agreement (including termination fees but excluding any indemnities paid in such period under the Management Agreement) to the extent otherwise permitted under Section 6.11(j) hereof and to the extent deducted (and not added back) in computing Consolidated Net Income; plus

(i) in connection with any material restructuring of the business of Parent Borrower and its Subsidiaries outside of the ordinary course of business and described in reasonable detail in the officer’s certificate referred to below (each a “ Specified Restructuring ”) the amount of expected cost savings that result or are expected to result from actions taken, committed to be taken or planned to be taken pursuant to a factually supported plan in connection with such Specified Restructuring prior to the Specified Calculation Date that (x) are factually supportable and determined in good faith by Parent Borrower, as certified in an officer’s certificate executed by the Chief Financial Officer of Parent Borrower to Administrative Agent, and (y) do not exceed the actual cost savings expected in good faith to be realized by Parent Borrower and its Subsidiaries over such 12 month period commencing with the Specified Calculation Date (as opposed, for the avoidance of doubt, to the annualized impact of such cost savings); plus

(j) any costs or expense incurred 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, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of Parent Borrower or net cash proceeds of an issuance of Equity Interests of Parent Borrower (other than Disqualified Stock) and to the extent deducted (and not added back) in computing Consolidated Net Income; plus

(k) any net loss from discontinued operations;

(2) decreased by (without duplication), in each case to the extent included in computing Consolidated Net Income for such period any net income from discontinued operations; and

 

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(3) increased (by losses) or decreased (by gains), as applicable, without duplication in each case, except for the adjustments set forth in the proviso in this clause (3), to the extent included in computing Consolidated Net Income for such period:

(a) any net gain or loss resulting in such period from Hedge Agreements and the application of Statement of Financial Accounting Standards No. 133;

(b) any realized or unrealized gains or losses in such period from (i) balance sheet currency translation, (ii) currency translation of assets or liabilities that are not denominated in the functional currency of a Person into the functional currency of that Person and (iii) Hedge Agreements that are designated by a Person as a hedge of an asset or liability in clause (b)(i) or (ii);

(c) any adjustments resulting from the application of FASB Interpretation No. 45 (Guarantees);

provided , that, notwithstanding the foregoing, Consolidated Adjusted EBITDA shall include (without duplication): (i) any net realized gain or loss from any Hedge Agreements accounted for as cash flow hedges of intercompany royalties and (ii) any net realized gain or loss from any Hedge Agreements that are designated by Parent Borrower as EBITDA hedges, except to the extent any such Hedge Agreements are terminated prior to their scheduled maturity.

Consolidated Capital Expenditures ” means, for any period, the aggregate of all expenditures of Parent Borrower and its Subsidiaries during such period determined on a consolidated basis that, in accordance with GAAP, are or should be included in “purchase of property and equipment” or similar items reflected in the consolidated statement of cash flows of Parent Borrower and its Subsidiaries; provided that Consolidated Capital Expenditures shall not include:

(i) any expenditures for replacements, restorations, repairs and substitutions for fixed assets, capital assets or equipment to the extent made with Net Insurance/Condemnation Proceeds invested pursuant to Section 2.14(b) or with Net Asset Sale Proceeds invested pursuant to Section 2.14(a);

(ii) any expenditures which constitute the SDI Acquisition or a Permitted Acquisition permitted under Section 6.6;

(iii) the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment; provided , that (x) the gross amount of such purchase price is reduced by the credit granted by the seller of such equipment for the equipment being traded in at such time and (y) this exclusion is limited to the value of such credit;

(iv) any expenditures relating to the construction or acquisition of any property which has been transferred to a Person other than Parent Borrower or a Subsidiary during the same Fiscal Year in which such expenditures were made pursuant to a disposition permitted under Section 6.8(b) or a sale-leaseback transaction permitted under Section 6.10;

(v) any expenditures that are accounted for as capital expenditures by Parent Borrower or any Subsidiary thereof and that actually are paid for, or reimbursed to Parent Borrower or such Subsidiary in Cash or Cash Equivalents by a Person other than Parent Borrower or any Subsidiary thereof and for which neither Parent Borrower nor any Subsidiary thereof has provided or is required to provide or incur, directly or indirectly, any consideration or obligation in respect of such expenditures (other than rent) to such Person or any other Person (whether before, during or after such period);

(vi) interest capitalized during such period; or

(vii) expenditures financed by the Cash proceeds of issuances of (or capital contributions in respect of) Equity Interests (other than Disqualified Stock).

 

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Consolidated Current Assets ” means, as at any date of determination, the total assets of a Person and its Subsidiaries on a consolidated basis that may properly be classified as current assets in conformity with GAAP, excluding (i) Cash and Cash Equivalents, (ii) the current portion of income taxes, including prepaid income taxes and income tax refunds receivable, and deferred income taxes and (iii) the effects of adjustments pursuant to GAAP resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition.

Consolidated Current Liabilities ” means, as at any date of determination, the total liabilities of a Person and its Subsidiaries on a consolidated basis that may properly be classified as current liabilities in conformity with GAAP, excluding (i) the current portion of long-term debt, (ii) all Indebtedness consisting of Revolving Loans, Swing Line Loans and L/C Obligations, in each case to the extent otherwise included therein, (iii) the current portion of interest, (iv) the current portion of current and deferred income taxes, (v) the current portion of any Capital Leases, (vi) liabilities in respect of unpaid earn-outs, (vii) the current portion of any other long-term liabilities and (viii) the effects of adjustments pursuant to GAAP resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition.

Consolidated Depreciation and Amortization Expense ” means with respect to Parent Borrower and its Subsidiaries for any period, the total amount of depreciation and amortization expense including the amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and Capitalized Software Expenditures for such period on a consolidated basis and otherwise determined in accordance with GAAP.

Consolidated Excess Cash Flow ” means, for any period, an amount (if positive) equal to:

(i) the sum, without duplication, of the amounts for such period of (a) Consolidated Net Income, plus (b) to the extent reducing Consolidated Net Income, the sum, without duplication, of amounts for non-cash charges reducing Consolidated Net Income, including for depreciation and amortization (excluding any such non-cash charge to the extent that it represents an accrual or reserve for a potential cash charge in any future period or amortization of a prepaid cash charge that was paid in a prior period), plus (c) the Consolidated Working Capital Adjustment, plus (d) expenses deducted from Consolidated Net Income during such period in respect of expenditures made during any prior period for which a deduction from Consolidated Excess Cash Flow was made in such period pursuant to clauses (ii)(f), (g), (i) or (j) below, plus (e) any cash income or gain (actually received in cash) excluded from the calculation of Consolidated Net Income in such period by virtue of the definition thereof, minus

(ii) the sum, without duplication, of:

(a) the amounts for such period paid from Internally Generated Cash of (1) scheduled repayments of Indebtedness for borrowed money (excluding repayments of Revolving Loans or Swing Line Loans except to the extent the Revolving Commitments are permanently reduced in connection with such repayments) and scheduled repayments of obligations under Capital Leases (excluding any interest expense portion thereof), (2) Consolidated Capital Expenditures, (3) mandatory prepayments of Term Loans pursuant to Section 2.14(h) and (4) voluntary permanent prepayments of other Indebtedness for borrowed money, plus

(b) other non-cash gains increasing Consolidated Net Income for such period (excluding any such non-cash gain to the extent it represents the reversal of an accrual or reserve for a potential cash item that reduced Consolidated Net Income or Consolidated Excess Cash Flow in any prior period), plus

(c) Restricted Junior Payments permitted under Sections 6.4(e), 6.4(i), 6.4(j) and 6.4(k) for such period paid from Internally Generated Cash, plus

 

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(d) Permitted Acquisitions and Investments permitted under Sections 6.6(d) (for the avoidance of doubt, without duplication of any amounts deducted from Consolidated Excess Cash Flow in such period pursuant to the last sentence of Section 2.14(e)), 6.6(f), 6.6(h), 6.6(j), 6.6(k) and 6.6(l) for such period paid from Internally Generated Cash, plus

(e) cash payments during such period from Internally Generated Cash in respect of long-term liabilities (other than Indebtedness) to the extent such payments are not expensed during such period or are not deducted in calculating Consolidated Net Income, plus

(f) the aggregate amount of expenditures actually made during such period from Internally Generated Cash (including expenditures for the payment of financing fees) to the extent that such expenditures are not expensed during such period or are not deducted in calculating Consolidated Net Income, plus

(g) the aggregate amount of any premium, make-whole or penalty payments actually paid in cash during such period from Internally Generated Cash that are made in connection with any prepayment of Indebtedness to the extent such payments are not expensed during such period or are not deducted in calculating Consolidated Net Income, plus

(h) without duplication of amounts deducted from Consolidated Excess Cash Flow in prior periods, the aggregate consideration required to be paid in cash pursuant to binding contracts (the “ Contract Consideration ”) entered into prior to or during such period relating to Permitted Acquisitions, Consolidated Capital Expenditures or acquisitions of intellectual property to be consummated or made during the first Fiscal Quarter of Parent Borrower following the end of such period; provided , that to the extent the aggregate amount of Internally Generated Cash actually utilized to finance such Permitted Acquisitions, Consolidated Capital Expenditures or acquisitions of intellectual property during such subsequent Fiscal Quarter is less than the Contract Consideration, the amount of such shortfall shall be added to the calculation of Consolidated Excess Cash Flow at the end of the year in which such Fiscal Quarter occurs, plus

(i) the amount of cash taxes paid from Internally Generated Cash in such period to the extent they exceed the amount of tax expense deducted in determining Consolidated Net Income for such period, plus

(j) cash expenditures from Internally Generated Cash in respect of Hedge Agreements during such Fiscal Year to the extent not deducted in arriving at such Consolidated Net Income, plus

(k) cash expenses, charges and losses (actually paid in cash from Internally Generated Cash) that are excluded from the calculation of Consolidated Net Income in such period by virtue of the definition thereof.

As used in this clause (ii), “scheduled repayments of Indebtedness” do not include mandatory prepayments or voluntary prepayments of any Term Loans (other than the amount of any mandatory prepayment of Term Loans pursuant to Section 2.14(a) to the extent required due to an Asset Sale (x) that resulted in an increase to Consolidated Net Income during such period (to the extent of such increase) or (y) the proceeds of which are included in clause (i)(e) in respect of such period and the amount of any mandatory prepayment of Term Loans pursuant to Section 2.14(h)).

Consolidated Interest Expense ” means, with respect to any Person for any period, without duplication, the sum of:

(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

 

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commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, (c) all commissions, discounts, yield and other fees and charges (including any interest expense) related to any Receivables Facility, (d) 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), (e) the interest component of Capitalized Lease Obligations, and (f) net payments, if any, made (less net payments, if any received), pursuant to interest rate Hedging Obligations with respect to Indebtedness and excluding (x) any expense resulting from the discounting of any Indebtedness in connection with the application of recapitalization accounting or purchase accounting, as the case may be, in connection with the Transaction or any acquisition, (y) the amortization of deferred financing fees, debt issuance costs and similar fees and expenses (other than, for avoidance of doubt, the amortization of original issue discount referred to in clause (a) above), and (z) the expensing of bridge, commitment and other financing fees; 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.

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

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

(1) any net after-tax effect of extraordinary, non-recurring or unusual gains or losses, costs, charges or expenses and Transaction Costs, First Restatement Transaction Costs and Second Restatement Transaction Costs shall be excluded,

(2) any net after-tax effect of gains or losses (less all fees, expenses and charges) attributable to asset dispositions other than in the ordinary course of business, as determined in good faith by Parent Borrower, shall be excluded,

(3) 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 shall be excluded,

(4) the Net Income for such period of any Person that is not a Subsidiary or that is accounted for by the equity method of accounting, shall be excluded; provided that Consolidated Net Income of Parent Borrower shall be increased by the amount of dividends or distributions or other payments that are actually paid in Cash Equivalents (or to the extent converted into Cash Equivalents) to Parent Borrower or any of its Subsidiaries thereof in respect of such period,

(5) effects of all non-cash adjustments (including the effects of such adjustments pushed down to Parent Borrower and its Subsidiaries) in such Person’s consolidated financial statements pursuant to GAAP (including in the inventory, property and equipment, software, goodwill, intangible assets, in-process research and development, deferred revenue and debt line items thereof) resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to the Transactions or any consummated acquisition, or the amortization or write-off of any amounts thereof, net of taxes, shall be excluded,

(6) any after-tax effect of income (loss) from the early extinguishment of Indebtedness or Hedge Agreements or other derivative instruments shall be excluded,

(7) any impairment charge or asset write-off pursuant to Financial Accounting Standards Board Statement No. 142—“Goodwill and Other Intangible Assets” or Financial Accounting Standards

 

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Board Statement No. 144—“Accounting for the Impairment or Disposal of Long-Lived Assets”, any impairment charges or asset writeoffs for equity and debt securities, and the amortization of intangibles arising pursuant to Financial Accounting Standards Board Statement No. 141—“Business Combinations” shall be excluded, and

(8) any non-cash compensation charge or expense, including any such charge or expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights or equity incentive programs for any future, present, or former employee, director, officer or consultant of Parent Borrower and any of its Subsidiaries shall be excluded.

Consolidated Senior Secured Debt ” means, as of any date of determination, Consolidated Total Debt outstanding on such date that is secured by a Lien on any asset or property of Parent Borrower or any Restricted Subsidiary.

Consolidated Total Assets ” shall mean, with respect to any Person, as of any date of determination, the amount that would, in conformity with GAAP, be set forth opposite the caption “total assets” (or any like caption) on a consolidated balance sheet of such Person at such date.

Consolidated Total Debt ” means, as of any date of determination, (a) the aggregate stated balance sheet amount of all Indebtedness of Parent Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of Indebtedness resulting from the application of purchase accounting in connection with the Transactions, the SDI Acquisition or any Permitted Acquisition), consisting of Indebtedness described in clauses (i), (ii) and (iii) and, to the extent relating to Indebtedness of the type described in clauses (i), (ii) or (iii), clauses (viii), (ix) and (x) of the definition thereof, minus (b) the lesser of (i) the aggregate amount of Unrestricted Cash as of such date and (ii) $300,000,000; provided that Consolidated Total Debt shall not include Indebtedness in respect of (i) any letter of credit, except to the extent of unreimbursed amounts thereunder provided that any unreimbursed amount under commercial letters of credit shall not be counted as Consolidated Total Debt until 1 day after such amount is drawn, (ii) obligations under Hedge Agreements and (iii) any non-recourse debt.

Consolidated Working Capital ” means, as at any date of determination, the excess of Consolidated Current Assets of Parent Borrower and its Subsidiaries over Consolidated Current Liabilities of Holdings and its Subsidiaries.

Consolidated Working Capital Adjustment ” means, 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) Consolidated Working Capital as of the end of such period. In calculating the Consolidated Working Capital Adjustment there shall be excluded the effect of reclassification during such period of current assets to long-term assets and current liabilities to long-term liabilities and the effect of the SDI Acquisition, any Asset Sale or other disposition or Permitted Acquisition during such period; provided that there shall be included with respect to the SDI Acquisition or any Permitted Acquisition during such period an amount (which may be a negative number) by which the Consolidated Working Capital acquired in the SDI Acquisition or such Permitted Acquisition as at the time of such acquisition exceeds (or is less than) Consolidated Working Capital at the end of such period.

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, without limitation, 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

 

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(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 ” means, as applied to any Person, any provision of any Security issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.

Contributing Guarantors ” as defined in Section 7.2.

Controlled Investment Affiliate ” means, as to any future, present, or former employee, director, officer or consultant of Parent Borrower and its Subsidiaries, any other Person, which directly or indirectly is in control of, is controlled by, or is under common control with such Person and is organized by such Person (or any Person controlling such Person) primarily for making direct or indirect equity investments in Parent Borrower.

Conversion/Continuation Date ” means the effective date of a continuation or conversion, as the case may be, as set forth in the applicable Conversion/Continuation Notice.

Conversion/Continuation Notice ” means a Conversion/Continuation Notice substantially in the form of Exhibit A-2 to the Original Credit Agreement.

Counterpart Agreement ” means a Counterpart Agreement substantially in the form of Exhibit H to the Original Credit Agreement delivered by a Credit Party pursuant to Section 5.10.

CPP ” means CPP Investment Board Private Holdings Inc. and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt, their portfolio companies or other operating companies affiliated with CPP Investment Board Private Holdings Inc.).

Credit Agreement Refinancing Indebtedness ” means Indebtedness 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, then existing Term Loans (including any successive Credit Agreement Refinancing Indebtedness) (“ Refinanced Debt ”); provided that (i) such Indebtedness has a later maturity and a Weighted Average Life to Maturity equal to or greater than the Refinanced Debt (except by virtue of amortization or prepayment of the Refinanced Debt prior to the time of incurrence of such Credit Agreement Refinancing Indebtedness), and (ii) unless such Credit Agreement Refinancing Indebtedness is incurred solely by means of extending or renewing then existing Refinanced Debt without resulting in any Net Cash Proceeds, such Refinanced Debt shall be repaid, defeased or satisfied and discharged with 100% of the Net Cash Proceeds from any Credit Agreement Refinancing Indebtedness, on the date such Credit Agreement Refinancing Indebtedness is issued, incurred or obtained.

Credit Date ” means the date of a Credit Extension.

Credit Document ” means any of this Agreement, the Notes, if any, the Collateral Documents, the Amendment, on and after the execution thereof, the Intercreditor Agreements, any documents or certificates executed by Parent Borrower in favor of Issuing Bank relating to Letters of Credit, and each other document, instrument or agreement executed and delivered by a Credit Party for the benefit of any Agent, Issuing Bank or any Lender in connection herewith that is referred to as a Credit Document by its terms.

Credit Extension ” means the making of a Loan or the issuing of a Letter of Credit.

 

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Credit Party ” means each Borrower, each Guarantor and each Swiss Guarantor.

Cumulative Consolidated Net Income Amount ” means, as of any date of determination, (a) 50.0% of the Consolidated Net Income of the Parent Borrower for the period (taken as one accounting period) beginning from October 1, 2012 to the end of Parent Borrower’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Junior Payment (or, in the case such Consolidated Net Income for such period is a deficit, minus 100.0% of such deficit), minus (b) the aggregate amount as of the date of determination of, without duplication, Restricted Junior Payments made since the Second Restatement Effective Date using the Cumulative Consolidated Net Income Amount pursuant to Section 6.4(m).

Cumulative Growth Amount ” shall mean, on any date of determination, the sum of, without duplication,

(A) the sum of Consolidated Excess Cash Flow (but not less than zero in any period) commencing with the Fiscal Year ending December 31, 2010 that was not required to be applied to prepay the Loans pursuant to Section 2.14(e), plus

(B) the amount of Cash proceeds of issuances of Equity Interests (other than Disqualified Stock) after the Original Closing Date to the extent that such proceeds shall have been actually received by Parent Borrower (including through capital contribution of such proceeds by Holdings to Parent Borrower) on or prior to such date of determination and to the extent not used to reduce Consolidated Capital Expenditures pursuant to clause (vii) of the definition thereof, plus

(C) an amount equal to any repayments, interest, returns, profits, distributions, income and similar amounts actually theretofore received in cash in respect of any Investment made since the Original Closing Date pursuant to Section 6.6(o), minus

(D) the sum at the time of determination of (i) the aggregate amount of Investments made since the Original Closing Date pursuant to Section 6.6(o) and (ii) the aggregate amount of Consolidated Capital Expenditures made pursuant to the second proviso in Section 6.7(c).

Currency Agreement ” means any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement, each of which is for the purpose of hedging the foreign currency risk associated with the Credit Parties’ and their Subsidiaries’ operations and not for speculative purposes.

DB ” as defined in the preamble hereto.

Debtor Relief Laws ” means the Bankruptcy Code, 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.

Default ” means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.

Defaulting Lender ” means any Lender that (a) has failed to fund any portion of the Term Loans, Revolving Loans, participations in L/C Obligations or participations in Swing Line Loans required to be funded by it hereunder within one (1) Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to 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, (c) is a Revolving Lender and has defaulted in fulfilling its funding obligations (as a lender, agent or letter of credit or bank guarantee issuer) under one or more other syndicated credit facilities generally, unless the subject of a good faith dispute or (d) is a Revolving Lender and has admitted in writing that it is insolvent or such Lender becomes subject to a Lender-Related Distress Event.

 

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Deposit Account ” means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a negotiable certificate of deposit.

Designated Sale and Leaseback Transaction ” means a sale and leaseback transaction of any property located at (x) 7 Harewood Avenue, London, United Kingdom and (y) 660 West Germantown Pike, Plymouth Meeting, Pennsylvania (the “Plymouth Meeting Property”).

Disqualified Stock ” means any class or series of Capital Stock of any Person that by its terms or otherwise is:

(1) required to be redeemed or is redeemable at the option of the holder of such class or series of Capital Stock at any time prior to the date that is 91 days after the Latest Maturity Date of the outstanding Term Loans at the time such Capital Stock is first issued; or

(2) convertible into or exchangeable at the option of the holder thereof at any time prior to the date that is 91 days after Latest Maturity Date of the outstanding Term Loans for Capital Stock referred to in clause (1) above or Indebtedness.

Notwithstanding the preceding sentence, (A) if such Capital Stock is issued to any plan for the benefit of employees or by any such plan to such employees, in each case in the ordinary course of business of Parent Borrower or its Subsidiaries, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by Parent Borrower in order to satisfy applicable statutory or regulatory obligations; (B) any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require Parent Borrower to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that Parent Borrower may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 6.4; and (C) no Capital Stock held by any future, present or former employee, director, officer or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of Parent Borrower (or any of its direct or indirect parents or Subsidiaries) shall be considered Disqualified Stock because such stock is redeemable or subject to repurchase pursuant to any management equity subscription agreement, stock option, stock appreciation right or other stock award agreement, stock ownership plan, put agreement, stockholder agreement or similar agreement that may be in effect from time to time.

Disregarded Domestic Subsidiary ” means a Domestic Subsidiary that is a disregarded entity for U.S. federal income tax purposes and a material asset of which is Equity Interests of any Foreign Subsidiary.

Dollar Equivalent ” means, at any time, (a) with respect to Dollars or an amount denominated in Dollars, such amount and (b) with respect to an amount of any Foreign Currency or an amount denominated in such Foreign Currency, the equivalent amount thereof in Dollars as determined by Administrative Agent or Issuing Bank, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Dollars with such Foreign Currency.

Dollars ” and the sign “ $ ” mean the lawful money of the United States of America.

Domestic Subsidiary ” means any Subsidiary organized under the laws of the United States of America, any State thereof or the District of Columbia (other than any such Subsidiary that is Wholly-Owned by one or more Foreign Subsidiaries). For the avoidance of doubt, for purposes of this Agreement, Japanese Subsidiary Borrower shall not be considered a Domestic Subsidiary.

Effective Yield ” means, as to any Loans of any Class, the effective yield on such Loans, taking into account the applicable interest rate margins, any interest rate floors or similar devices and all fees, including upfront or similar fees or original issue discount (amortized over the shorter of (x) the original stated life of such Loans and (y) the four years following the date of incurrence thereof) payable generally to Lenders making such Loans, but excluding any arrangement, structuring or other fees payable in connection therewith that are not generally shared with the relevant Lenders and customary consent fees paid generally to consenting Lenders.

 

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Electing Revolving Lender ” as defined in the Amendment.

Eligible Assignee ” means any Person other than a natural Person that is (i) with respect to an assignment or funding of (x) Term Loans, a Lender, an Affiliate of any Lender or a Related Fund and (y) Revolving Loans, Revolving Commitments, Permitted Replacement Revolving Loans, Permitted Replacement Revolving Commitments, New Revolving Loans and New Revolving Commitments, a Lender holding Revolving Commitments or Permitted Replacement Revolving Commitments, an Affiliate of any Lender holding Revolving Commitments or Permitted Replacement Revolving Commitments or a Related Fund of a Lender holding Revolving Commitments or Permitted Replacement Revolving Commitments (in the case of both clause (x) and (y) above, any two or more Related Funds being treated as a single Eligible Assignee for all purposes hereof), and (ii) a commercial bank, insurance company, 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 loans in the ordinary course of business, provided , that none of any Credit Party, Sponsor or any of their respective Affiliates may be an Eligible Assignee, except that Affiliated Lenders may be Eligible Assignees with respect to Term Loans to the extent permitted pursuant to Section 10.6(i).

Eligible Japanese Investor ” means any Person receiving, under any of the Credit Documents, interest, all of which is not subject to withholding of Japanese income tax ( gensen shotokuzei ) under the Laws of Japan, excluding Japanese Tax Treaties, which Person includes a Japanese permanent establishment of a non-Japanese Person receiving, under any of the Credit Documents, interest, all of which becomes exempt from withholding of Japanese income tax ( gensen shotokuzei ) under the Laws of Japan, excluding Japanese Tax Treaties, by presenting a withholding tax exemption certificate ( gensenchyoushyuu no menjvo shoumeisho ) (“ Japanese PE ”), or any Person receiving, under any of the Credit Documents, interest, all which may not be taxed by Japan by virtue of the provisions of an applicable Japanese Tax Treaty (“ Japanese Treaty Person ”).

Eligible Swiss Bank ” means any Lender or participant who carries out genuine banking activities with its own infrastructure and staff as its principal business purpose and qualifies as a bank and has a banking license in full force and effect in the jurisdiction of incorporation, or if acting through a branch, of the office where its Loans, Notes or Commitments or any participating interests therein are booked, as set forth in the respective regulations of the Swiss Federal Tax Administration.

Employee Benefit Plan ” means any “employee benefit plan” as defined in Section 3(3) of ERISA which is sponsored, maintained or contributed to by, or required to be contributed by, Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates.

EMU ” means the economic and monetary union in accordance with the Treaty of Rome 1957, as amended by the Single European Act 1986, the Maastricht Treaty of 1992 and the Amsterdam Treaty of 1998.

EMU Legislation ” means the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency.

Environmental Claim ” means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law; (ii) in connection with any Hazardous Material or any actual or alleged Hazardous Materials Activity; or (iii) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.

Environmental Laws ” means any and all current or future foreign or domestic, federal or state (or any subdivision of either of them), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other requirements of Governmental Authorities relating to (i) environmental matters, including those relating to any Hazardous Materials Activity; (ii) the generation, use, storage, transportation or

 

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disposal of Hazardous Materials; or (iii) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare, in any manner applicable to Holdings or any of its Subsidiaries or any Facility.

Equity Contribution ” means cash common equity investments in Holdings directly or indirectly by the Sponsors, in an amount equal to not less than 40% of the sum of (1) the aggregate stated principal amount of the loans borrowed on the Original Closing Date under this Agreement, (2) the aggregate stated principal amount of the Senior Notes issued, (3) the aggregate stated principal amount of Surviving Indebtedness (as defined in the Original Credit Agreement), (4) the amount of cash of Parent Borrower and its Subsidiaries on hand as of the Original Closing Date, and (5) the amount of such cash equity contributed, in each case on the Original Closing Date, of which, (i) TPG Group (including, for the avoidance of doubt, any co-invest vehicles controlled by TPG Group) and (ii) LGP (including, for the avoidance of doubt, any co-invest vehicles controlled by LGP) shall have contributed at least 50.1% on or prior to the Original Closing Date.

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 issuance or sale in a public offering of Capital Stock of Holdings or any of Holdings’ direct or indirect parent companies (excluding, in any such case, Disqualified Stock), other than public offerings with respect to Holdings or any direct or indirect parent company’s common stock registered on Form S-8.

ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto.

ERISA Affiliate ” means, as applied to any Person, (i) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member. Any former ERISA Affiliate of Holdings or any of its Subsidiaries shall continue to be considered an ERISA Affiliate of Holdings or any such Subsidiary within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of Holdings or such Subsidiary and with respect to liabilities arising after such period for which Holdings or such Subsidiary could be liable under the Internal Revenue Code or ERISA.

ERISA Event ” means (i) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30-day notice to the PBGC has been waived by regulation); (ii) the failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Internal Revenue Code) or the failure to make by its due date a required installment under Section 430(j) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors not under common control or the termination of any such Pension Plan resulting in liability to Holdings, any of its Subsidiaries or any of their respective Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which may reasonably be expected to constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer any Pension Plan; (vi) the imposition of liability on Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any liability therefore, or the receipt by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates of written notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or

 

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4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or omission which could give rise to the imposition on Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a lien pursuant to Section 430(k) of the Internal Revenue Code or ERISA or a violation of Section 436 of the Internal Revenue Code.

Euro ” and “ EUR ” mean the lawful currency of the Participating Member States introduced in accordance with the EMU Legislation.

Euro Unit ” means the currency unit of the Euro.

Eurocurrency Rate ” means for any Interest Period with respect to a Eurocurrency Rate Loan, a rate per annum determined by Administrative Agent pursuant to the following formula:

 

  Eurocurrency Rate =   

Clause (a) of Eurocurrency Base Rate

  
     1.00 – Eurocurrency Reserve Percentage   

Eurocurrency Base Rate ” means:

(a) for any Interest Period with respect to a Eurocurrency Rate Loan, the rate per annum equal to (i) the British Bankers Association LIBOR Rate (“ BBA LIBOR ”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for deposits in the relevant currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, or (ii) if such rate is not available at such time for any reason, then the “Eurocurrency Base Rate” for such Interest Period shall be the rate per annum determined by Administrative Agent to be the rate at which deposits in the relevant currency for delivery on the first day of such Interest Period in Same Day Funds in the approximate amount of the Eurocurrency Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch (or other Bank of America branch or Affiliate) to major banks in the London or other offshore interbank market for such currency at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period; provided that, notwithstanding the foregoing, (i) in no event shall the Eurocurrency Base Rate with respect to any Tranche B Euro Term Loan at any time be less than 1.50% and (ii) in no event shall the Eurocurrency Base Rate with respect to any Tranche B Dollar Term Loan at any time be less than 1.25%; and (b) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London time determined two Business Days prior to such date for Dollar deposits being delivered in the London interbank market for a term of one month commencing that day or (ii) if such published rate is not available at such time for any reason, the rate per annum determined by Administrative Agent to be the rate at which deposits in Dollars for delivery on the date of determination in same day funds in the approximate amount of the Base Rate Loan being made or maintained by Bank of America and with a term equal to one month would be offered by Bank of America’s London Branch to major banks in the London interbank Eurodollar market at their request at the date and time of determination.

Eurocurrency Rate Loan ” means a Loan bearing interest at a rate determined by reference to the Eurocurrency Rate.

 

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Eurocurrency Reserve Percentage ” means, 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 Board of Governors 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 Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurocurrency Reserve Percentage.

Event of Default ” means each of the conditions or events set forth in Section 8.1.

Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

Excluded Taxes ” as defined in Section 2.20(b).

Existing Revolving Commitment ” as defined in Section 2.25(a).

Existing Revolving Lender ” means Lenders holding Existing Revolving Commitments.

Existing Revolving Loans ” as defined in Section 2.25(a).

Existing Term Loan Tranche ” as defined in Section 2.26(a).

Expiring Commitment ” as defined in Section 2.3(k).

Extended Term Commitments ” means one or more commitments hereunder to convert Term Loans under an Existing Term Loan Tranche to Extended Term Loans of a given Extension Series pursuant to an Extension Amendment.

Extended Term Loans ” as defined in Section 2.26(a).

Extending Term Lender ” as defined in Section 2.26(b).

Extension ” means any establishment of Extended Term Commitments and Extended Term Loans pursuant to Section 2.26 and the applicable Extension Amendment.

Extension Amendment ” as defined in Section 2.26(c).

Extension Election ” as defined in Section 2.26(b).

Extension Request ” means any Term Loan Extension Request.

Extension Series ” means any Term Loan Extension Series.

Extension Series Exposure ” means any Term Loan Extension Series Exposure.

Facility ” means any real property (including all buildings, fixtures, equipment or other improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by Holdings or any of its Subsidiaries or any of their respective predecessors.

FATCA ” means current Sections 1471 through 1474 of the Internal Revenue Code (and any similar amended or successor versions that are substantively comparable) and any applicable Treasury Regulations promulgated thereunder or published administrative guidance implementing such Sections, whether in existence on the date hereof or promulgated or published thereafter.

 

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Fair Market Value ” means, with respect to any property, asset or liability, the fair market value of such property, asset or liability as determined by Parent Borrower in good faith; provided that, (i) solely for purposes of Section 5.15(b), the determination of fair market value of property or assets shall be confirmed by (x) in the case of any transaction or series of related transactions exceeding $15,000,000, a resolution adopted by the majority of the board of directors of Parent Borrower as certified by a certificate of an Authorized Officer of Parent Borrower delivered to Administrative Agent and (y) in the case of any transaction or series of related transactions exceeding $50,000,000, a written opinion from an Independent Financial Advisor delivered to Administrative Agent and (ii) solely for purposes of Section 6.8(b), the determination of fair market value of property or assets shall be confirmed by, in the case of any transaction or series of related transactions exceeding $50,000,000, a resolution adopted by the majority of the board of directors of Parent Borrower as certified by a certificate of an Authorized Officer of Parent Borrower delivered to Administrative Agent.

Fair Share ” as defined in Section 7.2.

Fair Share Contribution Amount ” as defined in Section 7.2.

Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, 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 (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by Administrative Agent.

Financial Officer Certification ” means, with respect to the financial statements for which such certification is required, the certification of the chief financial officer of Parent Borrower that such financial statements fairly present, in all material respects, the financial position of Parent Borrower and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated, subject to changes resulting from audit and normal year-end adjustments.

Financial Plan ” as defined in Section 5.1(h).

First Amendment ” means that Amendment No. 1 to Credit and Guaranty Agreement, dated as of March 16, 2011, among Borrowers, Administrative Agent and the Lenders party thereto.

First Lien Intercreditor Agreement ” means a First Lien Intercreditor Agreement among Administrative Agent and one or more Senior Representatives for holders of Permitted First Priority Refinancing Debt and/or Incremental Equivalent Debt secured by the Collateral on a pari passu basis with the Obligations, in form and substance reasonably satisfactory to Administrative Agent.

First Priority ” means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that such Lien is the only Lien to which such Collateral is subject, other than any Permitted Lien.

First Restatement Effective Date ” means March 16, 2011.

First Restatement Transaction Costs ” means all fees, expenses and other amounts incurred or paid by or on behalf of Parent Borrower or any other Credit Parties in connection with the First Restatement Transactions.

First Restatement Transactions ” means, collectively, (a) the amendment and restatement of the Original Credit Agreement, including the execution and delivery of the First Amendment and any Credit Documents contemplated thereby, including (i) borrowing of the Term Loans under the Amended and Restated Credit Agreement, (ii) the refinancing, repayment or replacement of the term loans under the Original Credit Agreement, and (iii) the amendment and extension of the revolving credit commitments under the Original Credit Agreement, and (b) all other transactions contemplated by the First Amendment or in connection with any of the foregoing.

 

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First-Tier Foreign Subsidiary ” means a Foreign Subsidiary that is the direct Subsidiary of Parent Borrower, Japanese Subsidiary Borrower or a Wholly-Owned Domestic Subsidiary (other than a Disregarded Domestic Subsidiary).

Fiscal Quarter ” means a fiscal quarter of any Fiscal Year.

Fiscal Year ” means the fiscal year of Holdings (or Parent Borrower, as applicable) and its Subsidiaries ending on December 31 of each calendar year.

Fixed Charge Coverage Ratio ” means, as of any date of determination, the ratio of (1) Consolidated EBITDA for the most recently ended Test Period prior to such date to (2) the Fixed Charges for such Test Period, in each case for the Parent Borrower and its Restricted Subsidiaries.

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

(1) Consolidated Interest Expense of such Person for such period;

(2) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Preferred Stock of any Restricted Subsidiary during such period; and

(3) all dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Disqualified Stock during such period.

Flood Hazard Property ” means any Real Estate Asset subject to a mortgage in favor of Collateral Agent, for the benefit of Secured Parties, and located in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards.

Foreign Collateral Documents ” means each of the documents set forth on Schedule 1.1(b) to the Original Credit Agreement.

Foreign Currency ” means (a) Euros, (b) Swiss Francs, (c) Yen and (d) each other currency that is approved in accordance with Section 1.6.

Foreign Currency Equivalent ” means, at any time, with respect to any amount denominated in Dollars, the equivalent amount thereof in the applicable Foreign Currency as determined by Administrative Agent or Issuing Bank, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of such Foreign Currency with Dollars.

Foreign Currency Loan ” means any Loan denominated in a Foreign Currency.

Foreign Guaranteed Obligations ” as defined in Section 7.1(b).

Foreign Obligations ” means all Obligations of Subsidiary Borrowers.

Foreign Subsidiary ” means any Subsidiary that is not a Domestic Subsidiary.

Funding Guarantors ” as defined in Section 7.2.

Funding Notice ” means a notice substantially in the form of Exhibit A-1 to the Original Credit Agreement.

 

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GAAP ” means, subject to the limitations on the application thereof set forth in Section 1.2, United States generally accepted accounting principles in effect as of the date of determination thereof.

Governmental Acts ” means any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority.

Governmental Authority ” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity, officer or examiner exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government.

Governmental Authorization ” means any permit, license, authorization, directive, consent order or consent decree of or from any Governmental Authority.

Grantor ” as defined in the Pledge and Security Agreement.

GSLP ” as defined in the preamble hereto.

GSMP Agreement ” means the agreement, dated as of the Original Closing Date, by and among Parent Borrower, GS Mezzanine Partners V Onshore Fund, L.P. and other members of the GSMP Group, relating to the issuance of the Senior Notes to certain members of the GSMP Group.

GSMP Group ” means, collectively, (i) GS Mezzanine Partners V Onshore Fund, L.P., (ii) any other Affiliate thereof or of The Goldman Sachs Group, Inc., and (iii) any Subsidiaries of the foregoing.

Guaranteed Obligations ” as defined in Section 7.1.

Guarantor ” means each of Holdings, Parent Borrower and each Wholly-Owned Domestic Subsidiary of Holdings (other than Disregarded Domestic Subsidiaries) that, as of the Original Closing Date, shall have guaranteed the Obligations pursuant to the Guaranty and each other Subsidiary of Holdings that, pursuant to Section 5.10, shall have guaranteed the Obligations pursuant to the Guaranty.

Guarantor Subsidiary ” means each Guarantor other than Holdings or Parent Borrower.

Guaranty ” means the guaranty of each Guarantor set forth in Section 7.

Guidelines ” means, together, (i) Guideline S-02.123 in relation to interbank loans of September 22, 1986 ( Circulaire relative à l’impôt anticipé sur les intérêts des avoirs en banque dont les créanciers sont des banques – avoirs interbancaires –, du 22 septembre 1986 ), (ii) Guideline S-02.122.1 in relation to bonds of April 1999 ( Circulaire sur les obligations, d’avril 1999 ), (iii) Guideline S-02.128 in relation to syndicated credit facilities of January 2000 ( Circulaire sur le traitement fiscal des prêts consortiaux, reconnaissances de dette, effets de change et sous-participations, de janvier 2000 ), and (iv) Guideline S-02.122.2 in relation to deposits of April 1999 ( Circulaire sur les avoirs de clients, d’avril 1999 ), in each case as issued, amended or substituted from time to time by the Swiss Federal Tax Administration.

Hazardous Materials ” means any chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority or which may or could pose a hazard to the health and safety of the owners, occupants or any Persons in the vicinity of any Facility or to the indoor or outdoor environment.

Hazardous Materials Activity ” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.

 

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Hedge Agreement ” means an Interest Rate Agreement, a Currency Agreement or a Commodity Agreement entered into by any Credit Party or any Subsidiary thereof.

Hedging Obligations ” means, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar agreement providing for the transfer, modification or mitigation of interest rate, commodity or currency risks either generally or under specific contingencies.

Highest Lawful Rate ” means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received under the laws applicable to any Lender which are presently in effect, including the Interest Rate Restriction Law (Law No. 100 of 1954) of Japan and the Law Concerning Regulations of Acceptance of Contribution, Deposit and Interest, Etc. (Law No. 195 of 1954) of Japan, or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws now allow.

Historical Financial Statements ” means as of the Second Restatement Effective Date, the audited financial statements of Parent Borrower and its Subsidiaries, for the immediately preceding three Fiscal Years ended December 31, 2011, consisting of consolidated balance sheets and the related statements of income and cash flows for such Fiscal Years, certified by the chief financial officer of Parent Borrower that they fairly present, in all material respects, the financial position of Parent Borrower and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated.

Holdings ” as defined in the preamble hereto.

Honor Date ” as defined in Section 2.4(c).

HSBC Securities ” as defined in the preamble hereto.

Immediate Family Member ” means with respect to any individual, such individual’s child, stepchild, grandchild or more remote descendant, parent, stepparent, grandparent, spouse, former spouse, qualified domestic partner, sibling, mother-in-law, father-in-law, son-in-law and daughter-in-law (including adoptive relationships) and any trust, partnership or other bona fide estate-planning vehicle the only beneficiaries of which are any of the foregoing individuals or any private foundation or fund that is controlled by any of the foregoing individuals or any donor-advised fund of which any such individual is the donor.

Increased Amount Date ” as defined in Section 2.23(a).

Increased-Cost Lenders ” as defined in Section 2.22.

Incremental Equivalent Debt ” as defined in Section 6.1(x).

Indebtedness ” means, as applied to any Person, without duplication:

(i) all indebtedness for borrowed money;

(ii) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP;

(iii) indebtedness evidenced by bonds, notes, debentures or similar instruments;

(iv) any obligation owed for all or any part of the deferred purchase price of property or services (excluding (a) trade accounts and accrued expenses payable in the ordinary course of business, (b) any earn-out obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and if not paid within 30 days after becoming due and payable);

 

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(v) all indebtedness (excluding prepaid interest thereon) secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person;

(vi) the maximum amount (after giving effect to any prior drawings or reductions that may have been reimbursed) of any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings;

(vii) Disqualified Stock;

(viii) the direct or indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of another Person to the extent such obligation would constitute Indebtedness pursuant to any of clauses (i) through (vii) or clause (xi) hereof;

(ix) any obligation of such Person the primary purpose or intent of which is to provide assurance to an obligee that the obligation constituting Indebtedness pursuant to clauses (i) through (vii) or clause (xi) hereof of the obligor thereof will be paid or discharged, or any agreement relating thereto will be complied with, or the holders thereof will be protected (in whole or in part) against loss in respect thereof;

(x) any liability of such Person for an obligation constituting Indebtedness pursuant to clauses (i) through (vii) or clause (xi) hereof of another through any agreement (contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (b) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (a) or (b) of this clause (x), the primary purpose or intent thereof is as described in clause (ix) above; and

(xi) all obligations of such Person in respect of any exchange traded or over the counter derivative transaction, including any Interest Rate Agreement, any Currency Agreement and any Commodity Agreement, in each case, on a net basis in respect of all such transactions under a single master agreement to the extent such netting is provided for therein and whether entered into for hedging or speculative purposes;

For all purposes hereof, the amount of Indebtedness of any Person for purposes of clause (v), to the extent constituting non-recourse Indebtedness, shall be deemed to be equal to the lesser of (i) the aggregate unpaid amount of such Indebtedness and (ii) the Fair Market Value of the property encumbered thereby as determined by such Person in good faith. The amount of any net obligation of any Person under any derivative transaction described in clause (xi) above on any date shall be deemed to be the Termination Value as of such date.

Indemnified Liabilities ” means, collectively, any and all liabilities, obligations, losses, damages (including natural resource damages), penalties, claims (including Environmental Claims), actions, judgments, suits, costs (including the costs of any investigation, study, sampling, testing, abatement, cleanup, removal, remediation or other response action necessary to remove, remediate, clean up or abate any Hazardous Materials Activity), expenses and disbursements of any kind or nature whatsoever (including the reasonable fees and disbursements of external counsel for Indemnitees in connection with any investigative, administrative or judicial proceeding or hearing commenced or threatened by any Person (including any Sponsor, any Credit Party or any of their respective Affiliates), whether or not any such Indemnitee shall be designated as a party or a potential party thereto, and any fees or expenses incurred by Indemnitees in enforcing this indemnity; provided , that so long as a Default or Event of Default shall not have occurred and be continuing, in connection with any one action or proceeding or separate but substantially similar actions or proceedings arising out of the same general allegations, reasonable attorney’s fees shall be limited to one primary external counsel and, if reasonably required, local or specialist counsel, for all indemnified persons and; provided further , that such limitation shall not apply in the case of Administrative Agent, Syndication Agent or the Collateral Agent and each of Administrative Agent, Syndication Agent and the Collateral Agent shall be entitled to its own separate representation in all instances), whether direct, indirect, special or

 

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consequential and whether based on any federal, state or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations and Environmental Laws), on common law or equitable cause or on contract or otherwise, that may be incurred by (other than in the case of indirect, special or consequential damages), imposed on or asserted against any such Indemnitee, in any manner relating to or arising out of (i) this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby (including the Lenders’ agreement to make Credit Extensions, the syndication of the credit facilities provided for herein or the use or intended use of the proceeds thereof, or any enforcement of any of the Credit Documents (including any sale of, collection from, or other realization upon any of the Collateral or the enforcement of the Guaranty or any other Credit Document)); (ii) the commitment letter (and any related fee or engagement letter) delivered by any Agent or any Lender to Parent Borrower or any Sponsor with respect to the transactions contemplated by this Agreement; (iii) any Environmental Claim or any Hazardous Materials Activity relating to or arising from, directly or indirectly, any past or present activity, operation, land ownership, or practice of Holdings or any of its Subsidiaries or any of their respective predecessors in interest; or (iv) (A) the issuance of any Letter of Credit by Issuing Bank, or (B) the failure of Issuing Bank to honor a drawing under any such Letter of Credit as a result of any Governmental Act. For the avoidance of doubt, the parties agree that an Indemnified Liability does not include the outstanding principal amount of any Loan or the amount of any interest accrued on, or fees relating to, such Loan, in each case, payable by any Credit Party.

Indemnitee ” as defined in Section 10.3.

Independent Financial Advisor ” means any accounting, appraisal, investment banking firm or consultant of nationally recognized standing that is, in the good faith judgment of Parent Borrower, qualified to perform the task for which it has been engaged. Promptly after receipt thereof, Parent Borrower shall deliver to Administrative Agent a copy of any opinion or letter required to be provided by an Independent Financial Advisor pursuant to the terms of this Agreement.

Installment ” as defined in Section 2.12.

Intellectual Property ” as defined in the Pledge and Security Agreement.

Intellectual Property Security Agreements ” has the meaning assigned to that term in the Pledge and Security Agreement.

Intercompany Note ” means a promissory note substantially in the form of Exhibit L to the Original Credit Agreement evidencing Indebtedness owed among Credit Parties and their Subsidiaries.

Intercreditor Agreements ” means the First Lien Intercreditor Agreement and the Second Lien Intercreditor Agreement, collectively, in each case to the extent then in effect.

Interest Payment Date ” means with respect to (i) any Loan that is a Base Rate Loan, the last Business Day of each March, June, September and December of each year, commencing on the first such date to occur after the Second Restatement Effective Date and the final maturity date of such Loan; and (ii) any Loan that is a Eurocurrency Rate Loan, the last day of each Interest Period applicable to such Loan; provided , in the case of each Interest Period of longer than three months, “Interest Payment Date” shall also include each date that is three months, or an integral multiple thereof, after the commencement of such Interest Period.

Interest Period ” means, in connection with a Eurocurrency Rate Loan, an interest period of one, two, three or six months, or, upon request of the applicable Borrower not less than one Business Day prior to the date that the applicable Borrower would be required to provide the Funding Notice or Conversion/Continuation Notice pursuant to Section 2.2 or Section 2.9, as applicable, to the extent available to each applicable Lender, one or two weeks, with respect to Loans denominated in Dollars only, and nine or twelve months, as selected by the applicable Borrower in the applicable Funding Notice or Conversion/Continuation Notice, (i) initially, commencing on the Credit Date or Conversion/Continuation Date thereof, as the case may be; and (ii) thereafter, commencing on the day on which the immediately preceding Interest Period expires; provided , (a) if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day

 

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unless no further Business Day occurs in such month, in which case such Interest Period shall expire on the immediately preceding Business Day; (b) 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, subject to clauses (c) and (d) of this definition, end on the last Business Day of a calendar month; (c) no Interest Period with respect to any portion of any Class of Term Loans shall extend beyond such Class’s Term Loan Maturity Date; and (d) no Interest Period with respect to any portion of any Class of Revolving Loans shall extend beyond the Revolving Commitment Termination Date of such Class.

Interest Rate Agreement ” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement, each of which is for the purpose of hedging the interest rate exposure associated with the operations of the Credit Parties and their Subsidiaries and not for speculative purposes.

Interest Rate Determination Date ” means, with respect to any Interest Period, the date that is two Business Days prior to the first day of such Interest Period.

Internal Revenue Code ” means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.

Internally Generated Cash ” means, with respect to any period, any cash of Holdings or any Subsidiary generated during such period, excluding Net Asset Sale Proceeds, Net Insurance/Condemnation Proceeds and any cash constituting proceeds from an incurrence of Indebtedness, an issuance of Equity Interests or a capital contribution, in each case, except to the extent such proceeds are included in clause (i)(e) of the definition of Consolidated Excess Cash Flow.

Investment ” means, with respect to any Person, (i) all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, advances to customers and distributors and trade credit made in the ordinary course of business), (ii) all purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and (iii) all acquisitions by purchase, merger or otherwise (other than purchases or other acquisitions of inventory, materials and equipment and Consolidated Capital Expenditures in the ordinary course of business) of all or substantially all of the business, property or fixed assets of, or stock or other evidence of beneficial ownership of, any other Person or any division or line of business or other business unit of any other Person. For purposes of Section 5.15 and Section 6.6 hereof:

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

(a) Parent Borrower’s “Investment” in such subsidiary at the time of such redesignation; less

(b) the portion (proportionate to Parent Borrower’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.

The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by the aggregate amount of any dividends, distributions, interest payments, returns of capital, repayments or other amounts received in Cash Equivalents by Parent Borrower or a Subsidiary in respect of such Investment.

 

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ISP ” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

Issuer Documents ” means, with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by Issuing Bank and Parent Borrower (or any Subsidiary) or in favor of Issuing Bank and relating to such Letter of Credit.

Issuing Bank ” means Bank of America as Issuing Bank hereunder, together with its permitted successors and assigns in such capacity.

Japanese LOB Tax Treaty ” means the Convention between Japan and the United States for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income signed on November 6, 2003 or any other Japanese Tax Treaty with a limitation of benefits clause similar to Article 22 of said Convention.

Japanese Obligations ” means all Obligations of Japanese Subsidiary Borrower.

Japanese PE ” as defined in “Eligible Japanese Investor” in this Section 1.1.

Japanese Revolving Commitment ” means the commitment of a Lender to make or otherwise fund any Japanese Revolving Loan and “ Japanese Revolving Commitments ” means such commitments of all Lenders in the aggregate. The amount of each Lender’s Japanese Revolving Commitment, if any, is set forth on Appendix A or in the applicable Assignment Agreement or Joinder Agreement, as applicable, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate Dollar Equivalent of the Japanese Revolving Commitments as of the Second Restatement Effective Date is $100,000,000.

Japanese Revolving Exposure ” means, with respect to any Lender as of any date of determination, (i) prior to the termination of the Japanese Revolving Commitments, that Lender’s Japanese Revolving Commitment, and (ii) after the termination of the Japanese Revolving Commitments, the Dollar Equivalent of the aggregate outstanding principal amount of the Japanese Revolving Loans of that Lender.

Japanese Revolving Lender ” means each Lender with a Japanese Revolving Commitment.

Japanese Revolving Loan ” means a Loan made by a Lender pursuant to its Japanese Revolving Commitment to Parent Borrower or Japanese Subsidiary Borrower pursuant to the terms hereof, including Section 2.2(a)(iii).

Japanese Revolving Loan Note ” means a promissory note in the form of Exhibit A-4 to the Amended and Restated Credit Agreement (with such modifications thereto as may be necessary to reflect different Classes of Revolving Loans), as it may be amended, restated, supplemented or otherwise modified from time to time.

Japanese Secured Parties ” means Collateral Agent and each Japanese Revolving Lender.

Japanese Subsidiary Borrower ” as defined in the preamble hereto.

Japanese Tax Treaty ” means any bilateral convention for the avoidance of double taxation to which the Government of Japan is a party.

Japanese Treaty Person ” as defined in “ Eligible Japanese Investor ” in this Section 1.1.

Joinder Agreement ” means an agreement substantially in the form of Exhibit M to the Original Credit Agreement.

 

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Joint Venture ” means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form.

JPM ” as defined in the preamble hereto.

Landlord Consent and Estoppel ” means, with respect to any Leasehold Property, a letter, certificate or other instrument in writing from the lessor under the related lease, pursuant to which, among other things, the landlord consents to the granting of a Mortgage on such Leasehold Property by the Credit Party tenant, such Landlord Consent and Estoppel to be in form and substance acceptable to Collateral Agent in its reasonable discretion, but in any event sufficient for Collateral Agent to obtain a Title Policy with respect to such Mortgage.

Landlord Personal Property Collateral Access Agreement ” means a Landlord Waiver and Consent Agreement, in form and substance reasonably satisfactory to Collateral Agent.

Latest Maturity Date ” means, at any date of determination, the latest Maturity Date applicable to any Loan or Commitment hereunder at such time, including the latest maturity date of any Refinancing Term Loan, any Refinancing Term Commitment, any Extended Term Loan, any Permitted Replacement Revolving Commitment or any New Revolving Loan Commitment, in each case as extended in accordance with this Agreement from time to time.

Law(s) ” means, 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.

L/C Borrowing ” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed by 11:00 a.m. (New York City time) on the first Business Day following the date when made or refinanced as a U.S. Revolving Loan. All L/C Borrowings shall be denominated in Dollars.

L/C Obligations ” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. 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 1.7. For all purposes of this Agreement, 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.

Leasehold Property ” means any leasehold interest of any Credit Party as lessee under any lease of real property, other than any such leasehold interest which is not required to be included in the Collateral.

Lender ” means each financial institution listed on the signature pages hereto as a Lender, and any other Person that becomes a party hereto pursuant to an Assignment Agreement, a Joinder Agreement, a Refinancing Amendment or Permitted Replacement Revolver Amendment.

Lender Counterparty ” means each Lender, each Agent and each of their respective Affiliates counterparty to a Hedge Agreement or Cash Management Agreement (including any Person who was an Agent or a Lender (and any Affiliate thereof) as of the date such Person entered into such Hedge Agreement or Cash Management Agreement but subsequently ceased to be an Agent or a Lender (or an affiliate thereof), as the case may be).

Lender-Related Distress Event ” means with respect to any Lender or any person that directly or indirectly controls such Lender (each, a “ Distressed Person ”), as the case may be, a voluntary or involuntary case with respect to such Distressed Person under any Debtor Relief Law, or a custodian, conservator, receiver, examiner or similar official is appointed for such Distressed Person or any substantial part of such Distressed Person’s assets,

 

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or such Distressed Person or any person that directly or indirectly controls such Distressed Person is subject to a forced liquidation, merger, sale or other change of control supported in whole or in part by guaranties or other support of (including without limitation the nationalization or assumption of ownership or operating control by) the U.S. government or other Governmental Authority, or such Distressed Person 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 Distressed Person or its assets to be, insolvent or bankrupt; provided that a Lender-Related Distress Event shall not be deemed to have occurred solely by virtue of the ownership or acquisition of any Equity Interest in any Lender or any person that directly or indirectly controls such Lender by a Governmental Authority or an instrumentality thereof.

Lending Office ” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify Parent Borrower and Administrative Agent.

Letter of Credit ” means a standby letter of credit issued or to be issued by Issuing Bank pursuant to this Agreement.

Letter of Credit Application ” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by Issuing Bank.

Letter of Credit Expiration Date ” means the day that is five days prior to the Revolving Commitment Termination Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

Letter of Credit Sublimit ” means the lesser of (i) $75,000,000 and (ii) the aggregate unused amount of the U.S. Revolving Commitments then in effect.

Leverage Ratio ” means the ratio as of any date of determination of (i) Consolidated Total Debt as of such date of determination to (ii) Consolidated Adjusted EBITDA for the most recent Test Period ended prior to such date.

LGP ” means Leonard Green & Partners, L.P. and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt, their portfolio companies or other operating companies affiliated with Leonard Green & Partners, L.P.).

Licensed Intellectual Property ” means any interest of any Credit Party as licensee or sublicensee under any license of Intellectual Property material to the ongoing or planned operations of such Credit Party’s business, other than any such interest that has been designated from time to time by Collateral Agent as not being required to be included in the Collateral.

Lien ” means with respect to any asset, any mortgage, lien (statutory or otherwise), 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 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 be deemed to constitute a Lien.

Loan ” means a Term Loan, a Revolving Loan, a Permitted Replacement Revolving Loan or a Swing Line Loan.

Loss Sharing Agreement ” means the Loss Sharing Agreement to be executed by the Lenders substantially in the form of Exhibit C to the Amended and Restated Credit Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.

 

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Management Agreement ” means the management agreement dated as of the Original Closing Date between one or more of the Sponsors or their advisors, if applicable, and Holdings, as amended, restated, supplemented or otherwise modified.

Mandatory Cost ” means, with respect to any period, the percentage rate per annum determined in accordance with Schedule 1.1(c) to the Original Credit Agreement.

Margin Stock ” as defined in Regulation U of the Board of Governors as in effect from time to time.

Material Adverse Effect ” means a material adverse effect on (i) the business, operations, assets or financial condition of Holdings and its Subsidiaries taken as a whole; (ii) the ability of any Credit Party to fully and timely pay its Obligations; (iii) the legality, validity, binding effect or enforceability against a Credit Party of a material Credit Document to which it is a party; or (iv) rights and remedies available to, or conferred upon, any Agent and any Lender or any Secured Party under any Credit Document.

Material Real Estate Asset ” means (i) any fee-owned Real Estate Asset having a Fair Market Value in excess of $20,000,000 as of the date of the acquisition thereof and (ii) all Leasehold Properties other than those with respect to which the aggregate payments under the term of the lease are less than $2,500,000 per annum; provided that a Leasehold Property shall only be considered a Material Real Estate Asset if Administrative Agent reasonably determines, in consultation with Parent Borrower, that the practical benefits to the Secured Parties of a Mortgage on such Leasehold Property outweigh the costs and administrative burden to Parent Borrower of providing such Mortgage. For all purposes under this Agreement, the Plymouth Meeting Property shall not be deemed a Material Real Estate Asset prior to the date that is 18 months following the Original Closing Date; provided, however, that, if on or prior to the date that is 18 months following the Original Closing Date, a Designated Sale and Leaseback Transaction or Asset Sale shall not have been consummated with respect to the Plymouth Meeting Property, then on such date the Plymouth Meeting Property shall be deemed a Material Real Estate Asset, and, for the avoidance of doubt, Parent Borrower shall be required to comply with the provisions of Section 5.11 with respect to the Plymouth Meeting Property.

Maturity Date ” means (a) with respect to any Revolving Commitments or Revolving Loans, the Revolving Commitment Termination Date and (b) with respect to any Term Loans, the applicable Term Loan Maturity Date.

Merrill Lynch ” means Merrill Lynch, Pierce, Fenner & Smith Incorporated.

Moody’s ” means Moody’s Investors Service, Inc.

Mortgage ” means a Mortgage, in form and substance reasonably satisfactory to Collateral Agent, as it may be amended, restated, supplemented or otherwise modified from time to time.

Multiemployer Plan ” means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA.

NAIC ” means The National Association of Insurance Commissioners, and any successor thereto.

Narrative Report ” means, with respect to the financial statements for which such narrative report is required, a narrative report describing the results of operations of Parent Borrower and its Subsidiaries for the applicable Fiscal Quarter or Fiscal Year and for the period from the beginning of the then current Fiscal Year to the end of such period to which such financial statements relate.

National Currency Unit ” means a fraction or multiple of one Euro Unit expressed in units of the former national currency of a Participating Member State.

Net Asset Sale Proceeds ” means, with respect to any Asset Sale (other than any Asset Sale made pursuant to clause (1), (2), (3), (4), (5), (6), (7), (8), (11), (13) or (14) of Section 6.8(b)) an amount equal to: (i)

 

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Cash payments (including any Cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) received by Holdings or any of its Subsidiaries from such Asset Sale, minus (ii) (a) any out-of-pocket costs (including attorney’s fees, investment banking fees, survey costs, title insurance premiums and related search and recording charges, transfer taxes, deed or mortgage recording taxes, other customary expenses and brokerage, consultant or other customary fees) incurred in connection with such Asset Sale, (b) any taxes or distributions made pursuant to Section 6.4(j) payable or estimated to be payable in connection with such Asset Sale (including withholding taxes imposed on the repatriation of any such Net Asset Sale Proceeds), (c) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question and that is required to be repaid under the terms thereof as a result of such Asset Sale, (d) in the case of any Asset Sale by a non-Wholly-Owned Subsidiary, the pro rata portion of the Net Asset Sale Proceeds thereof (calculated without regard to this clause (d)) attributable to minority interests and not available for distribution to or for the account of Parent Borrower or a Wholly-Owned Subsidiary as a result thereof and (e) a reasonable reserve for adjustment in respect of (i) the sale price of such assets or assets established in accordance with GAAP and (ii) any liabilities associated with such asset or assets and retained by Holdings or its Subsidiaries after such sale or other disposition thereof, including pension and other post-employment liabilities and liabilities related to environmental matters or for any indemnification obligations (fixed or contingent) associated with such Asset Sale; provided that no net cash proceeds shall constitute Net Asset Sale Proceeds in any Fiscal Year until the aggregate amount of all such net cash proceeds in such Fiscal Year shall exceed $25,000,000 (and thereafter all net cash payments and proceeds in such Fiscal Year (and not just the amount in excess thereof) shall constitute Net Asset Sale Proceeds).

Net Cash Proceeds ” means any Cash payments received by Holdings or any of its Subsidiaries from the incurrence of Indebtedness of Holdings or any of its Subsidiaries net of underwriting discounts and commissions and other fees, costs and expenses associated therewith, including legal fees and expenses.

Net Insurance/Condemnation Proceeds ” means an amount equal to: (i) any Cash payments or proceeds received by Holdings or any of its Subsidiaries (a) under any casualty insurance policy in respect of a covered loss thereunder, (b) as a result of the taking of any assets of Holdings or any of its Subsidiaries by any Person pursuant to the power of eminent domain, condemnation or otherwise or (c) under any title insurance policy in respect of a covered loss thereunder, or pursuant to a sale of any such assets to a purchaser with such power under threat of such a taking, minus (ii) (a) any out-of-pocket costs incurred by Holdings or any of its Subsidiaries in connection with the adjustment or settlement of any claims of Holdings or such Subsidiary in respect thereof, (b) any out-of-pocket costs (including attorney’s fees, investment banking fees, survey costs, title insurance premiums and related search and recording charges, transfer taxes, deed or mortgage recording taxes, other customary expenses and brokerage, consultant or other customary fees) incurred in connection with any sale of such assets as referred to in clause (i)(b) of this definition, (c) any taxes or distributions made pursuant to Section 6.4(j) payable or estimated to be payable by the seller in connection with any sale of such assets as referred to in clause (i)(b) of this definition (including withholding taxes imposed on the repatriation of any such Net Insurance/Condemnation Proceeds), (d) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question and that is required to be repaid under the terms thereof as a result of such loss or taking or sale as referred to in clause (i)(b) of this definition, (e) in the case of any such loss or taking or sale as referred to in clause (i)(b) of this definition of any asset owned by a non-Wholly-Owned Subsidiary, the pro rata portion of the Net Insurance/Condemnation Proceeds thereof (calculated without regard to this clause (e)) attributable to minority interests and not available for distribution to or for the account of Parent Borrower or a Wholly-Owned Subsidiary as a result thereof and (f) a reasonable reserve for adjustment in respect of (i) the sale price of such assets or assets established in accordance with GAAP and (ii) any liabilities associated with such asset or assets and retained by Holdings or its Subsidiaries after such sale or other disposition thereof, including pension and other post-employment liabilities and liabilities related to environmental matters or for any indemnification obligations (fixed or contingent) associated with any sale of assets as referred to in clause (i)(b) of this definition; provided, that no net cash payment or proceeds shall constitute Net Insurance/Condemnation Proceeds in any Fiscal Year until the aggregate amount of all such net cash payments and proceeds in such Fiscal Year shall exceed $25,000,000 (and thereafter all such net cash payments and proceeds in such Fiscal Year (and not just the amount in excess thereof) shall constitute Net Insurance/Condemnation Proceeds).

New Revolving Loan Commitments ” as defined in Section 2.23(a).

 

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New Revolving Loan Lender ” as defined in Section 2.23(a).

New Revolving Loans ” as defined in Section 2.23(b).

New Senior Notes ” means Parent Borrower’s 6% Senior Notes due 2020.

New Senior Notes Indenture ” means the indenture dated as of October 24, 2012, by and among Parent Borrower, the guarantors party thereto and the trustee party thereto relating to the issuance of New Senior Notes, as the same may be amended, supplemented or modified.

New Term Loan Commitments ” as defined in Section 2.23(a).

New Term Loan Exposure ” means, with respect to any Lender, as of any date of determination, the outstanding principal amount of the New Term Loans of such Lender.

New Term Loan Lender ” as defined in Section 2.23(a).

New Term Loan Maturity Date ” means the date on which New Term Loans of a Series shall become due and payable in full hereunder, as specified in the applicable Joinder Agreement, including by acceleration or otherwise.

New Term Loan Note ” means, for each Series of New Term Loans, a promissory note in substantially the form of Exhibit A-1 or Exhibit A-2, as applicable, to the Amended and Restated Credit Agreement, with, subject to Section 2.23, such changes as shall be agreed to by Parent Borrower and the New Term Loan Lenders providing such Series of New Term Loans and reasonably satisfactory to Administrative Agent, as it may be amended, restated, supplemented or otherwise modified from time to time.

New Term Loans ” as defined in Section 2.23(c).

Non-Eligible Swiss Bank ” or “ Non-Eligible Swiss Banks ” means any Person who does not qualify as an Eligible Swiss Bank.

non-Expiring Commitments ” as defined in Section 2.3(k).

Non-Extended Revolving Commitments ” is defined in Section 2.25(c).

Non-Japanese Lender ” as defined in Section 2.20(h).

Non-Public Information ” means information which has not been disseminated in a manner making it available to investors generally, within the meaning of Regulation FD.

Non-US Lender ” as defined in Section 2.20(f).

Note ” means a Tranche B Dollar Term Loan Note, a Tranche B Euro Term Loan Note, a New Term Loan Note, a Japanese Revolving Loan Note, a Swiss/Multicurrency Revolving Loan Note, a U.S. Revolving Loan Note, a Swing Line Note or a Permitted Replacement Revolving Loan Note.

Notice ” means a Funding Notice, a Letter of Credit Application, or a Conversion/Continuation Notice.

Obligations ” means all obligations of every nature of each Credit Party, including obligations from time to time owed to Agents (including former Agents), Lenders or any of them and Lender Counterparties, under any Credit Document, Hedge Agreement or Cash Management Agreement, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such Credit Party, would have accrued on any Obligation, whether or not a claim is allowed against such Credit Party for such interest in the related bankruptcy proceeding), reimbursement of amounts drawn under Letters of Credit, payments for early termination of Hedge Agreements or Cash Management Agreements, fees, expenses, indemnification or otherwise.

 

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Obligee Guarantor ” as defined in Section 7.7.

Organizational Documents ” means (i) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its by-laws, as amended, (ii) with respect to any limited partnership, its certificate of limited partnership, as amended, and its partnership agreement, as amended, (iii) with respect to any general partnership, its partnership agreement, as amended, (iv) with respect to any limited liability company, its articles of organization or certificate of formation, as amended, and its operating agreement, as amended and (v) with respect to any Foreign Subsidiary, the most closely comparable documents to those set forth in clauses (i) through (iv) above. In the event any term or condition of this Agreement or any other Credit Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official.

Original Closing Date ” means February 26, 2010.

Original Credit Agreement ” as defined in the recitals hereto.

Original Lenders ” as defined in the recitals hereto.

Other Taxes ” means all present or future stamp or documentary taxes or any other excise, property or similar taxes, similar charges or similar levies arising from any payment made hereunder or under any other Credit Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Credit Document (and any interest or penalties related thereto).

Outstanding Amount ” means (i) with respect to Loans on any date, the Dollar Equivalent amount of the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of such Loans (including any refinancing of outstanding Unreimbursed Amounts or related L/C Borrowings as Revolving Loans) occurring on such date; and (ii) with respect to any L/C Obligations on any date, the Dollar Equivalent amount of the aggregate outstanding amount of such L/C Obligations on such date after giving effect to any L/C Borrowings occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by Parent Borrower of Unreimbursed Amounts or any reductions in the maximum amount available for drawing under related Letters of Credit taking effect on such date.

Overall Net Income Tax ” means, with respect to Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of any Borrower hereunder, (a) taxes imposed on or measured by its net income (however denominated), and franchise and similar taxes imposed on it (in lieu of net income taxes), (b) any Taxes imposed by a jurisdiction as a result of any connection between the recipient and such jurisdiction other than any connections arising from executing, delivering, being a party to, receiving or perfecting a security interest under, engaging in any transactions pursuant to, performing its obligations under, or enforcing, any Credit Document, (c) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which the applicable Borrower is located and (d) any United States federal withholding Tax imposed pursuant to FATCA.

Overnight Rate ” means, for any day, (a) with respect to any amount denominated in Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by Administrative Agent, Issuing Bank, or Swing Line Lender, as the case may be, in accordance with banking industry rules on interbank compensation, and (b) with respect to any amount denominated in a Foreign Currency, the rate of interest per annum at which overnight deposits in the applicable Foreign 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 Bank of America in the applicable offshore interbank market for such currency to major banks in such interbank market.

 

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Parent Borrower ” as defined in the preamble hereto.

Participating Member State ” means each state so described in any EMU Legislation.

PATRIOT Act ” as defined in Section 4.25.

PBGC ” means the Pension Benefit Guaranty Corporation or any successor thereto.

Pension Plan ” means any Employee Benefit Plan other than a Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code, Section 302 of ERISA or Title IV of ERISA.

Permitted Acquisition ” means any acquisition by Parent Borrower or any of its Wholly-Owned Subsidiaries, whether by purchase, merger or otherwise, of all or substantially all of the assets of, all of the Equity Interests of, or a business line or unit or a division of, any Person; provided ,

(i) immediately prior to, and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing or would result therefrom;

(ii) all transactions in connection therewith shall be consummated, in all material respects, in accordance with all applicable laws;

(iii) in the case of the acquisition of Equity Interests, all of the Equity Interests (except for any such Securities in the nature of directors’ qualifying shares and shares issued to foreign nationals to the extent required pursuant to applicable Law) acquired or otherwise issued by such Person or any newly formed Subsidiary of Parent Borrower in connection with such acquisition shall be owned 100% by Parent Borrower or a Wholly-Owned Subsidiary thereof, and Parent Borrower shall have taken, or caused to be taken, within 45 days of the date such Person becomes a Subsidiary of Parent Borrower, each of the actions set forth in Sections 5.10 and/or 5.11, as applicable;

(iv) Holdings and its Subsidiaries shall be in compliance with the financial covenant set forth in Section 6.7 (b) on a pro forma basis after giving effect to such acquisition as of the last day of the Test Period most recently ended (as determined in accordance with Section 1.10);

(v) (A) With respect to any individual acquisition for which the Acquisition Consideration exceeds $50,000,000, Parent Borrower shall have delivered to Administrative Agent, at least 10 Business Days (or such shorter number of days as determined by Administrative Agent in its sole discretion) prior to such proposed acquisition, (i) a Compliance Certificate evidencing pro forma compliance with Section 6.7(b) as required under clause (iv) above and (ii) all other relevant financial information with respect to such acquired assets, including the aggregate Acquisition Consideration and any other information required to demonstrate such compliance with Section 6.7 (b) and (B) with respect to any individual acquisition for which the Acquisition Consideration exceeds $100,000,000, Parent Borrower shall have delivered to Administrative Agent, promptly upon the reasonable request by Administrative Agent, (i) a copy of the purchase agreement (which may be in the most recent draft form then available in the case of an acquisition to be consummated on the same date as the execution of such purchase agreement) related to the proposed Permitted Acquisition (and any related documents reasonably requested by Administrative Agent) and (ii) quarterly and annual financial statements of the Person whose Equity Interests or assets are being acquired for the most recent four quarter period prior to such proposed Permitted Acquisition for which financial statements are available, including any audited financial statements that are available;

(vi) any Person or assets or division as acquired in accordance herewith shall be in a Similar Business; and

(vii) the sum of (x) aggregate unused Dollar Equivalent portion of the Revolving Commitments at such time (after giving effect to the consummation of the respective Permitted Acquisition and any financing thereof) and (y) the aggregate amount of Unrestricted Cash as of such date shall equal or exceed $100,000,000.

 

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Permitted First Priority Refinancing Debt ” means any secured Indebtedness incurred by Parent Borrower in the form of one or more series of senior secured notes or loans secured on a pari passu basis (but without regard to control of remedies) with the Obligations; provided that (i) such Indebtedness is secured by the Collateral and is not secured by any property or assets of Parent Borrower or any Subsidiary other than the Collateral, (ii) such Indebtedness constitutes Credit Agreement Refinancing Indebtedness, (iii) such Indebtedness does not mature or have scheduled amortization or payments of principal (other than customary offers to repurchase upon a change of control, asset sale or event of loss and a customary acceleration right after an event of default) prior to the date that is the Latest Maturity Date of any Loan outstanding at the time such Indebtedness is incurred or issued, (iv) the security agreements relating to such Indebtedness are substantially the same as the Collateral Documents (with such differences as are reasonably satisfactory to Administrative Agent), (v) such Indebtedness is not guaranteed by any Subsidiaries other than any Credit Party, and (vi) a Senior Representative acting on behalf of the holders of such Indebtedness shall have become party to the First Lien Intercreditor Agreement, provided that if such Indebtedness is the initial Permitted First Priority Refinancing Debt incurred by Parent Borrower, then Parent Borrower, Administrative Agent and the Senior Representative for such Indebtedness shall have executed and delivered the First Lien Intercreditor Agreement. Permitted First Priority Refinancing Debt will include any Registered Equivalent Notes issued in exchange therefor.

Permitted Foreign Subsidiary Restructuring ” means one or more internal restructuring transactions among Parent Borrower and/or any of its Wholly-Owned Subsidiaries in which (i) any assets of, or Equity Interests in, a Wholly-Owned Foreign Subsidiary (other than a Subsidiary Borrower) are sold, contributed or otherwise transferred to Parent Borrower or to a Wholly-Owned Subsidiary, (ii) no Credit Party makes an Investment in connection with such transactions other than (x) a sale, contribution or other transfer of Equity Interests in a Foreign Subsidiary as described in clause (i) or (y) as otherwise permitted by Section 6.6 (without giving effect to the parenthetical in clause (a) thereof) and (iii) the applicable requirements of Sections 5.10 and 5.11 shall be complied with in respect of any Equity Interests or other assets acquired by a Credit Party.

Permitted Liens ” means each of the Liens permitted pursuant to Section 6.2.

Permitted Non-Eligible Swiss Bank ” means any lender that is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets, that is (A) not an Eligible Swiss Bank and (B) by virtue of being a Lender as of the date hereof, by its accession to this Agreement pursuant to Section 10.6 as an additional Lender or through the receipt of a participation or sub-participation under Section 10.6 or otherwise does not increase the number of Persons that are not Eligible Swiss Banks with respect to Loans to the Swiss Subsidiary Borrower under this Agreement to a number that is greater than ten (10).

Permitted Replacement Revolving Amendment ” as defined in Section 2.25(d).

Permitted Replacement Revolving Commitment Request ” as defined in Section 2.25(a).

Permitted Replacement Revolving Commitments ” as defined in Section 2.25(a).

Permitted Replacement Revolving Effective Date ” as defined in Section 2.25(e).

Permitted Replacement Revolving Election ” as defined in Section 2.25(b).

Permitted Replacement Revolving Exposure ” means, with respect to any Lender as of any date of determination, (i) prior to the termination of the Permitted Replacement Revolving Commitments, that Lender’s Permitted Replacement Revolving Commitment and (ii) after termination of the Permitted Replacement Revolving Commitments, the sum of (a) the aggregate outstanding principal amount of the Permitted Replacement Revolving Loans of that Lender, (b) the aggregate amount of all participations by that Lender in any outstanding Letters of Credit or any unreimbursed drawing under any Letter of Credit and (c) the aggregate amount of all participations therein by that Lender in any outstanding Swing Line Loans.

 

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Permitted Replacement Revolving Lender ” as defined in Section 2.25(b).

Permitted Replacement Revolving Loan Note ” means, with respect to each Class of Permitted Replacement Revolving Loans, a promissory note in substantially the form of Exhibit A-3, A-4 or A-5, as applicable, to the Amended and Restated Credit Agreement, with, subject to Section 2.25, such changes as shall be agreed to by Parent Borrower and the Permitted Replacement Revolving Lenders providing such Class of Permitted Replacement Revolving Loans, as it may be amended, restated, supplemented or otherwise modified from time to time.

Permitted Replacement Revolving Loans ” as defined in Section 2.25(a).

Permitted Second Priority Refinancing Debt ” means any secured Indebtedness incurred by Parent Borrower in the form of one or more series of second lien secured notes or second lien secured loans; provided that (i) such Indebtedness is secured by the Collateral on a second lien, subordinated basis to the Obligations and the obligations in respect of any Permitted First Priority Refinancing Debt and is not secured by any property or assets of Parent Borrower or any Subsidiary other than the Collateral, (ii) such Indebtedness constitutes Credit Agreement Refinancing Indebtedness, (iii) such Indebtedness does not mature or have scheduled amortization or payments of principal prior to the Latest Maturity Date at the time such Indebtedness is incurred, (iv) the security agreements relating to such Indebtedness are substantially the same as the Collateral Documents (with such differences as are necessary or appropriate to reflect the second lien nature of the security interests and as are otherwise reasonably satisfactory to Administrative Agent), (v) such Indebtedness is not guaranteed by any Subsidiaries other than any Credit Party and (vi) a Senior Representative acting on behalf of the holders of such Indebtedness shall have become party to the Second Lien Intercreditor Agreement; provided that if such Indebtedness is the initial Permitted Second Priority Refinancing Debt incurred by Parent Borrower, then Parent Borrower, Administrative Agent and the Senior Representatives for such Indebtedness shall have executed and delivered the Second Lien Intercreditor Agreement. Permitted Second Priority Refinancing Debt will include any Registered Equivalent Notes issued in exchange therefor.

Permitted Unsecured Refinancing Debt ” means unsecured Indebtedness incurred by Parent Borrower in the form of one or more series of senior unsecured notes or loans; provided that (i) such Indebtedness constitutes Credit Agreement Refinancing Indebtedness, (ii) such Indebtedness does not mature or have scheduled amortization or payments of principal (other than customary offers to repurchase upon a change of control, asset sale or event of loss and a customary acceleration right after an event of default) prior to the date that is ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred or issued, (iii) such Indebtedness is not guaranteed by any Subsidiaries other than any Credit Party, and (iv) such Indebtedness is not secured by any Lien on any property or assets of Parent Borrower or any Subsidiary. Permitted Unsecured Refinancing Debt will include any Registered Equivalent Notes issued in exchange therefor.

Person ” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.

Platform ” as defined in Section 5.1(n).

Pledge and Security Agreement ” means the Pledge and Security Agreement to be executed by Parent Borrower and each other Guarantor substantially in the form of Exhibit I to the Original Credit Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.

Plymouth Meeting Property ” as defined in the definition of “Designated Sale and Leaseback Transaction.”

Pounds Sterling ” and the sign “ £ ” mean the lawful money of the United Kingdom.

 

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Pre-Restatement Revolving Commitments ” means the “Revolving Commitments” under the Amended and Restated Credit Agreement as in effect immediately prior to the Second Restatement Effective Date.

Pre-Restatement Revolving Loans ” means the “Revolving Loans” under the Amended and Restated Credit Agreement as in effect immediately prior to the Second Restatement Effective Date.

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

Principal Office ” means, for each of Administrative Agent, Swing Line Lender and Issuing Bank, such Person’s “Principal Office” (which, in the case of Administrative Agent, may include one or more separate offices with respect to Foreign Currencies) as set forth on Appendix B, or such other office or office of a third party or sub-agent, as appropriate, as such Person may from time to time designate in writing to Parent Borrower, Administrative Agent and each Lender.

Pro Rata Share ” means (i) with respect to all payments, computations and other matters relating to the Tranche B Dollar Term Loan of any Lender, the percentage obtained by dividing (a) the Tranche B Dollar Term Loan Exposure of that Lender by (b) the aggregate Tranche B Dollar Term Loan Exposure of all Lenders; (ii) with respect to all payments, computations and other matters relating to the Tranche B Euro Term Loan of any Lender, the percentage obtained by dividing (a) the Tranche B Euro Term Loan Exposure of that Lender by (b) the aggregate Tranche B Euro Term Loan Exposure of all Lenders; (iii) with respect to all payments, computations and other matters relating to the U.S. Revolving Commitment or U.S. Revolving Loans of any Lender or any Letters of Credit issued or participations purchased therein by any Lender or any participations in any Swing Line Loans purchased by any Lender, the percentage obtained by dividing (a) the U.S. Revolving Exposure of that Lender by (b) the aggregate U.S. Revolving Exposure of all Lenders; (iv) with respect to all payments, computations and other matters relating to the Japanese Revolving Commitment or Japanese Revolving Loans of any Lender or any participations purchased therein by any Lender, the percentage obtained by dividing (a) the Japanese Revolving Exposure of that Lender by (b) the aggregate Japanese Revolving Exposure of all Lenders; (v) with respect to all payments, computations and other matters relating to the Swiss/Multicurrency Revolving Commitment or Swiss/Multicurrency Revolving Loans of any Lender or any participations purchased therein by any Lender, the percentage obtained by dividing (a) the Swiss/Multicurrency Revolving Exposure of that Lender by (b) the aggregate Swiss/Multicurrency Revolving Exposure of all Lenders; (vi) with respect to all payments, computations, and other matters relating to New Term Loan Commitments or New Term Loans of a particular Series of any Lender, the percentage obtained by dividing (a) the New Term Loan Exposure of that Lender with respect to that Series by (b) the aggregate New Term Loan Exposure of all Lenders with respect to that Series; (vii) with respect to all payments, computations and other matters relating to Permitted Replacement Revolving Commitments or Permitted Replacement Revolving Loans of a particular Class of any Lender, the percentage obtained by dividing (a) the Permitted Replacement Revolving Exposure of that Lender by (b) the aggregate Permitted Replacement Revolving Exposure of all Lenders with respect to that Class and (viii) with respect to all payments, computations and other matters relating to Extension Series of a particular Class of any Lender, the percentage obtained by dividing (a) the Extension Series Exposure of that Lender by (b) the aggregate Extension Series Exposure of all Lenders with respect to that Class. For all other purposes with respect to each Lender, “Pro Rata Share” means the percentage obtained by dividing (A) an amount equal to the sum of the Tranche B Term Loan Exposure, the Revolving Exposure, the New Term Loan Exposure, the Permitted Replacement Revolving Exposure and the Extension Series Exposure of that Lender, by (B) an amount equal to the sum of the aggregate Tranche B Term Loan Exposure, the aggregate Revolving Exposure, the aggregate New Term Loan Exposure, the aggregate Permitted Replacement Revolving Exposure and the aggregate Extension Series Exposure of all Lenders.

Public Lenders ” means Lenders that do not wish to receive material non-public information with respect to Holdings, its Subsidiaries or their securities and who are engaged in investment or other market-related activities with respect to such Persons and/or such securities.

Qualified Public Offering ” means the initial underwritten public offering of common Equity Interests of Holdings or any of Holdings’ direct or indirect parent companies, in each case, pursuant to an effective registration statement filed with the Securities and Exchange Commission in accordance with the Securities Act (other than a registration statement on Form S-8 or any successor form) generating gross proceeds to Parent Borrower of not less than $150,000,000.

 

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Rating Agency ” means a nationally recognized statistical rating agency or agencies, as the case may be, selected by Parent Borrower.

Real Estate Asset ” means, at any time of determination, any interest (fee, leasehold or otherwise) of any Credit Party in any real property.

Receivables Facility ” means any of one or more receivables financing facilities as amended, supplemented, modified, extended, renewed, restated or refunded from time to time, the obligations of which are non-recourse (except for customary representations, warranties, covenants and indemnities made in connection with such facilities) to the Parent Borrower or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) pursuant to which the Parent Borrower or any of its Restricted Subsidiaries sells its accounts receivable to either (a) a Person that is not a Restricted Subsidiary or (b) a Receivables Subsidiary that in turn sells its accounts receivable to a Person that is not a Restricted Subsidiary.

Receivables Subsidiary ” means any Subsidiary of the Parent Borrower formed for the purpose of, and that solely engages only in one or more Receivables Facilities and other activities reasonably related thereto.

Record Document ” means, with respect to any Leasehold Property, (i) the lease evidencing such Leasehold Property or a memorandum thereof, executed and acknowledged by the owner of the affected real property, as lessor, or (ii) if such Leasehold Property was acquired or subleased from the holder of a Recorded Leasehold Interest, the applicable assignment or sublease document, executed and acknowledged by such holder, in each case in form sufficient to give such constructive notice upon recordation and otherwise in form reasonably satisfactory to Collateral Agent.

Recorded Leasehold Interest ” means a Leasehold Property with respect to which a Record Document has been recorded in all places necessary or desirable, in Collateral Agent’s reasonable judgment, to give constructive notice of such Leasehold Property to third party purchasers and encumbrances of the affected real property.

Refinanced Debt ” as defined in the definition of “Credit Agreement Refinancing Indebtedness”.

Refinanced Indebtedness ” as defined in Section 6.1(k).

Refinancing Amendment ” means an amendment to this Agreement executed by each of (a) Borrowers, (b) Administrative Agent, (c) each Additional Refinancing Lender and (d) each Lender that agrees to provide any portion of the Credit Agreement Refinancing Indebtedness being incurred pursuant thereto, in accordance with Section 2.24.

Refinancing Indebtedness ” as defined in Section 6.1(k).

Refinancing Series ” shall mean all Refinancing Term Loans or Refinancing Term Commitments that are established pursuant to the same Refinancing Amendment (or any subsequent Refinancing Amendment to the extent such Refinancing Amendment expressly provides that the Refinancing Term Loans or Refinancing Term Commitments provided for therein are intended to be a part of any previously established Refinancing Series) and that provide for the same maturity, Effective Yield and amortization schedule.

Refinancing Term Commitments ” means one or more term loan commitments hereunder that fund Refinancing Term Loans of the applicable Refinancing Series hereunder pursuant to a Refinancing Amendment.

Refinancing Term Lenders ” means, at any time, any Lender that has a Refinancing Term Commitment of a given Refinancing Series or a Refinancing Term Loan of a given Refinancing Series at such time.

 

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Refinancing Term Loans ” means one or more term loans hereunder that result from a Refinancing Amendment.

Refunding Capital Stock ” as defined in Section 6.4(c).

Register ” as defined in Section 2.7(b).

Registered Equivalent Notes ” means, with respect to any notes originally issued in an offering pursuant to Rule 144A under the Securities Act or other private placement transaction under the Securities Act, substantially identical notes (having the same guarantees) issued in a dollar for dollar exchange therefor pursuant to an exchange offer registered with the SEC.

Regulation D ” means Regulation D of the Board of Governors, as in effect from time to time.

Regulation FD ” means Regulation FD as promulgated by the U.S. Securities and Exchange Commission under the Securities Act and Exchange Act as in effect from time to time.

Reimbursement Date ” as defined in Section 2.4(c).

Related Agreements ” means, collectively, the Acquisition Agreement, the New Senior Notes Indenture, the Senior Exchange Notes Indenture, the Senior Notes Indenture, the GSMP Agreement and the Management Agreement, in each case, including related exhibits, schedules, amendments, supplements and waivers thereto.

Related Fund ” means, with respect to any Lender that is an investment fund, any other investment fund that invests in commercial loans and that is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

Related Parties ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person’s Affiliates.

Release ” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater.

Relevant Four Fiscal Quarter Period ” as defined in Section 8.2.

Replacement Lender ” as defined in Section 2.22.

Required Real Estate Documents ” means, with respect to any Real Estate Asset:

(i) fully executed and notarized Mortgages, in proper form for recording in all appropriate places in all applicable jurisdictions, encumbering such Real Estate Asset;

(ii) an opinion of counsel (which counsel shall be reasonably satisfactory to Collateral Agent) in each state in which such Real Estate Asset is located with respect to the enforceability of the form(s) of Mortgages to be recorded in such state and such other customary matters as Collateral Agent may reasonably request, in each case in form and substance reasonably satisfactory to Collateral Agent;

(iii) in the case of a Leasehold Property, (1) a Landlord Consent and Estoppel and (2) evidence that such Leasehold Property is a Recorded Leasehold Interest;

(iv) (A) ALTA mortgagee title insurance policies or unconditional commitments therefor issued by one or more title companies reasonably satisfactory to Collateral Agent with respect to such Real

 

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Estate Asset (each, a “ Title Policy ”), in amounts not less than the Fair Market Value of each such Real Estate Asset, each in form and substance reasonably satisfactory to Collateral Agent and (B) evidence reasonably satisfactory to Collateral Agent that such Credit Party has paid to the title company or to the appropriate governmental authorities all expenses and premiums of the title company and all other sums required in connection with the issuance of each Title Policy and all recording and stamp taxes (including mortgage recording and intangible taxes) payable in connection with recording the Mortgages for such Real Estate Asset in the appropriate real estate records;

(v) flood certifications with respect to such Real Estate Asset and evidence of flood insurance with respect to each Flood Hazard Property that is located in a community that participates in the National Flood Insurance Program, in each case in compliance with any applicable regulations of the Board of Governors, in form and substance reasonably satisfactory to Collateral Agent;

(vi) ALTA surveys of such Real Estate Asset in a form reasonably acceptable to Collateral Agent, to the extent not a Leasehold Property, certified to Collateral Agent; and

(vii) in the case of a Real Estate Asset held by Japanese Subsidiary Borrower, documentation analogous to the documentation described in clauses (i) through (vi) above.

Requisite Lenders ” means one or more Lenders having or holding Tranche B Term Loan Exposure, New Term Loan Exposure, Revolving Exposure, Permitted Replacement Revolving Exposure and/or Extension Series Exposure and representing more than 50% of the sum of (i) the aggregate Tranche B Term Loan Exposure of all Lenders, (ii) the aggregate Revolving Exposure of all Lenders, (iii) the aggregate New Term Loan Exposure of all Lenders, (iv) the aggregate Permitted Replacement Revolving Exposure of all Lenders and (v) the aggregate Extension Series Exposure of all Lenders; provided that the unused Revolving Commitment and/or Permitted Replacement Revolving Exposure of and the portion of the total Outstanding Amounts held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Requisite Lenders; provided , further , that for all purposes under this Agreement and each other Credit Document, the “Requisite Lenders” shall be calculated in accordance with Section 10.5(d).

Requisite U.S. Revolving Lenders ” means one or more Lenders having or holding more than 50% of the sum of (i) the aggregate U.S. Revolving Exposure of all Lenders and (ii) the aggregate U.S. Permitted Replacement Revolving Exposure; provided that the U.S. Revolving Exposure and the U.S. Permitted Replacement Revolving Exposure held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Requisite U.S. Revolving Lenders; provided , further , that for all purposes under this Agreement and each other Credit Document, the “Requisite U.S. Revolving Lenders” shall be calculated in accordance with Section 10.5(d).

Restatement Arrangers ” means GSLP and Merrill Lynch, each in its capacity as a Joint Lead Arranger under the First Amendment.

Restricted Junior Payment ” means (i) any dividend or other distribution on account of any shares of any class of stock of Holdings or Parent Borrower now or hereafter outstanding, except a dividend payable solely in shares of that class of stock to the holders of that class; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value of any shares of any class of stock of Holdings or Parent Borrower now or hereafter outstanding; (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of stock of Holdings, Parent Borrower or any direct or indirect parent of Parent Borrower or Holdings now or hereafter outstanding; (iv) management or similar fees payable to any Sponsor or any of its Affiliates and (v) any Cash payment or prepayment of principal of, premium, if any, or Cash interest on, or redemption, purchase, retirement, defeasance (including in substance or legal defeasance), sinking fund or similar payment with respect to any Subordinated Indebtedness.

Revaluation Date ” means (a) with respect to any Loan, each of the following: (i) each date of a borrowing of a Eurocurrency Rate Loan denominated in a Foreign Currency, (ii) each date of a continuation of a Eurocurrency Rate Loan denominated in a Foreign Currency pursuant to Section 2.9, and (iii) such additional dates as Administrative Agent shall reasonably determine or the Requisite Lenders shall require; and (b) with respect to any Letter of Credit, each of the following: (i) each date of issuance of a Letter of Credit denominated in a Foreign

 

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Currency, (ii) each date of an amendment of any such Letter of Credit having the effect of increasing the amount thereof (solely with respect to the increased amount), (iii) each date of any payment by Issuing Bank under any Letter of Credit denominated in a Foreign Currency, and (iv) such additional dates as Administrative Agent or Issuing Bank shall reasonably determine or the Requisite Lenders shall require.

Revolving Commitment ” means the U.S. Revolving Commitments, the Japanese Revolving Commitments, the Swiss/Multicurrency Revolving Commitments, the New Revolving Loan Commitments and the Permitted Replacement Revolving Commitments of a Lender, as the context may require, and “ Revolving Commitments ” means such commitments of all Lenders in the aggregate. The aggregate Dollar Equivalent of the Revolving Commitments as of the Second Restatement Effective Date is $375,000,000.

Revolving Commitment Period ” means the period from the Original Closing Date to but excluding the Revolving Commitment Termination Date.

Revolving Commitment Termination Date ” means the earliest to occur of (i) August 26, 2017, (ii) the date the Revolving Commitments are permanently reduced to zero pursuant to Section 2.13(b) or 2.14, and (iii) the date of the termination of the Revolving Commitments pursuant to Section 8.1.

Revolving Exposure ” means, with respect to any Lender, as of any date of determination, the sum of such Lender’s U.S. Revolving Exposure, such Lender’s Japanese Revolving Exposure and such Lender’s Swiss/Multicurrency Revolving Exposure.

Revolving Lender ” means each Lender with a Revolving Commitment or that holds a Revolving Loan.

Revolving Loan Note ” means a U.S. Revolving Loan Note, a Japanese Revolving Loan Note or a Swiss/Multicurrency Revolving Loan Note.

Revolving Loans ” means the U.S. Revolving Loans, the Japanese Revolving Loans and the Swiss/Multicurrency Revolving Loans.

S&P ” means Standard & Poor’s, a Division of The McGraw-Hill Companies, Inc.

Same Day Funds ” means (a) with respect to disbursements and payments in Dollars, immediately available funds, and (b) with respect to disbursements and payments in a Foreign Currency, same day or other funds as may be determined by Administrative Agent or Issuing Bank, as the case may be, to be customary in the place of disbursement or payment for the settlement of international banking transactions in the relevant Foreign Currency.

SDI ” as defined in the definition of SDI Acquisition Agreement.

SDI Acquisition ” means the acquisition by Parent Borrower of SDI pursuant to the SDI Acquisition Agreement.

SDI Acquisition Agreement ” means the Membership Interest Purchase Agreement, dated January 13, 2011, among Parent Borrower, SDI Holdings LLC (“ SDI ”), and certain Members of SDI together with all exhibits, schedules, documents, agreements, and instruments executed and delivered in connection therewith, as the same may be amended, or modified.

SDI Amount ” as defined in Section 2.14(e).

SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

Second Lien Intercreditor Agreement ” means a Second Lien Intercreditor Agreement among Administrative Agent and one or more Senior Representatives for holders of Permitted Second Priority Refinancing Debt and/or Incremental Equivalent Debt secured by the Collateral on a junior basis to the Obligations, in form and substance reasonably satisfactory to Administrative Agent.

 

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Second Restatement Arrangers ” means Bank of America and GSLP, each in its capacity as a Joint Lead Arranger under this Agreement.

Second Restatement Effective Date ” means the date on which this Agreement becomes effective pursuant to Section 3.1.

Second Restatement Transaction Costs ” means all fees, expenses and other amounts incurred or paid by or on behalf of Parent Borrower or any other Credit Parties in connection with the Second Restatement Transactions.

Second Restatement Transactions ” means, collectively, (a) the amendment and restatement of the Amended and Restated Credit Agreement, including the execution and delivery of Amendment and any Credit Documents contemplated thereby, and upon effectiveness thereof, borrowing of the Tranche B Term Loans pursuant to Section 2.01(a)(i) of this Agreement, (b) the issuance of the New Senior Notes, (c) the Consent Solicitation and Exchange Offer and the exchange of all or a portion of the Senior Notes for the Senior Exchange Notes pursuant thereto, (d) the making of Restricted Payments pursuant to Section 6.4(l) on or about the Second Restatement Effective Date and (e) all other transactions contemplated by the Amendment or in connection with any of the foregoing.

Secured Parties ” has the meaning assigned to that term in the Pledge and Security Agreement.

Securities ” means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

Securities Act ” means the Securities Act of 1933, as amended from time to time, and any successor statute.

Senior Exchange Notes ” means Parent Borrower’s 12.50% Senior Exchange Notes due 2018.

Senior Exchange Notes Indenture ” means the indenture dated as of October 24, 2012, by and among Parent Borrower, the guarantors party thereto and the trustee party thereto relating to the issuance of Senior Exchange Notes, as the same may be amended, supplemented or modified.

Senior Facilities Fee Letter ” as defined in the Commitment Letter.

Senior Notes ” means Parent Borrower’s 12.50% Senior Notes due 2018.

Senior Notes Indenture ” means the indenture dated as of February 26, 2010, by and among Parent Borrower, the guarantors party thereto and the trustee party thereto relating to the issuance of Senior Notes, as the same may be amended, supplemented or modified.

Senior Representative ” means, with respect to any series of Incremental Equivalent Debt secured by the Collateral, Permitted First Priority Refinancing Debt or Permitted Second Priority Refinancing Debt, 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.

 

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Senior Secured Leverage Ratio ” means the ratio as of any date of determination of (i) Consolidated Senior Secured Debt as of such date of determination to (ii) Consolidated Adjusted EBITDA for the most recent Test Period ended prior to such date.

Series ” as defined in Section 2.23(a).

Significant Subsidiary ” means any Subsidiary of Parent Borrower that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the Original Closing Date.

Similar Business ” means any business conducted or proposed to be conducted by Parent Borrower and its Subsidiaries on the Original Closing Date and any business or other activities that are complementary, similar, reasonably related, incidental or ancillary thereto.

Solvency Certificate ” means a Solvency Certificate of the chief financial officer of Holdings substantially in the form of Exhibit G-2 to the Original Credit Agreement.

Solvent ” means, with respect to any Person, that as of the date of determination, (i) the present fair salable value of the property (including goodwill and other intangibles) of such Person and its Subsidiaries (on a consolidated basis), is greater than the total amount of liabilities, including contingent liabilities, of such Person and its Subsidiaries (on a consolidated basis), (ii) the present fair salable value of the assets (including goodwill and other intangibles) of such Person and its Subsidiaries (on a consolidated basis), is not less than the amount that will be required to pay the probable liability of such Person and its Subsidiaries (on a consolidated basis) on their debts as they become absolute and matured, (iii) such Person and its Subsidiaries have not incurred and do not intend to incur, or believe that they will incur, debts or liabilities beyond the ability of such Person and its Subsidiaries (on a consolidated basis) to pay such debts and liabilities as they mature and (iv) such Person and its Subsidiaries (on a consolidated basis) do not have unreasonably small capital in relation to its business on the Second Restatement Effective Date or with respect to any transaction about to be undertaken. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

Special Notice Currency ” means at any time a Foreign Currency, other than the currency of a country that is a member of the Organization for Economic Cooperation and Development at such time located in North America or Europe.

Specified Calculation ” means the calculation of any Leverage Ratio, Senior Secured Leverage Ratio or Fixed Charge Coverage Ratio, including pursuant to Sections 2.23, 6.1, 6.4, 6.6, 6.7 or 6.8, as applicable.

Specified Calculation Date ” means the date on which the event for which a Specified Calculation is made shall occur.

Specified Default ” means any Default of the type that could become an Event of Default under Section 8.1(a), (f) or (g).

Specified Equity Contribution ” as defined in Section 8.2.

Specified IP License(s) ” means a written exclusive license to an unaffiliated third party whereby the licensor is precluded from further practice or utilization of a material Intellectual Property right in any field of use or overall and the licensee is granted the rights to sublicense, take action against third party infringers, or otherwise exercise the material hallmarks of ownership.

Specified Restructuring ” as defined in the definition of Consolidated Adjusted EBITDA.

 

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Specified Transaction ” means (x) any Investment that results in a Person becoming a Subsidiary, (y) any purchase or other acquisition of a business of any Person or of assets constituting a business unit, line of business or division of such Person or (z) any Asset Sale (i) that results in a Subsidiary ceasing to be a subsidiary of Parent Borrower or (ii) of a business, business unit, line of business or division of Parent Borrower or a Subsidiary, in each case whether by merger, consolidation, amalgamation or otherwise.

Sponsors ” means each of (1) TPG Group, (2) CPP and (3) LGP and their respective Affiliates, including for the avoidance of doubt, any co-investment vehicle controlled by any of the foregoing (but excluding any portfolio company or other operating company which is an Affiliate of any of the Sponsors).

Spot Rate ” for a currency means the rate determined by Administrative Agent or Issuing Bank, as applicable, to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. (New York City time) on the date two Business Days prior to the date as of which the foreign exchange computation is made; provided that Administrative Agent or Issuing Bank may obtain such spot rate from another financial institution designated by Administrative Agent or Issuing Bank if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency; and provided further that Issuing Bank may use such spot rate quoted on the date as of which the foreign exchange computation is made in the case of any Letter of Credit denominated in a Foreign Currency.

Stub Period ” as defined in Section 1.10(b).

Subordinated Indebtedness ” means, with respect to the Obligations, any Indebtedness of any Credit Party (other than Indebtedness among the Credit Parties and their Subsidiaries) which is by its terms subordinated in right of payment to any of the Obligations.

Subsidiary ” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity 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 is 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; provided , in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding. Any subsidiary designated as an Unrestricted Subsidiary pursuant to Section 5.15 shall cease to be a Subsidiary under this Agreement until redesignated as a Subsidiary pursuant to Section 5.15.

Subsidiary Borrowers ” means Japanese Subsidiary Borrower and Swiss Subsidiary Borrower.

Swing Line Lender ” means Bank of America in its capacity as Swing Line Lender hereunder, together with its permitted successors and assigns in such capacity.

Swing Line Loan ” means a Loan made by Swing Line Lender to Parent Borrower pursuant to Section 2.3.

Swing Line Note ” means a promissory note in the form of Exhibit A-6 to the Amended and Restated Credit Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.

Swing Line Sublimit ” means the lesser of (i) $60,000,000, and (ii) the aggregate unused amount of U.S. Revolving Commitments then in effect.

Swiss Credit Party ” means Swiss Subsidiary Borrower and each Swiss Guarantor.

Swiss Federal Tax Administration ” means the Swiss federal tax authorities referred to in Article 34 of the Swiss Withholding Tax Act.

 

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Swiss Franc ” and the abbreviation “ CHF ” mean the lawful money of the Swiss Confederation and the Principality of Liechtenstein.

Swiss Guarantor ” means each Wholly-Owned Subsidiary of Swiss Subsidiary Borrower that is organized under the laws of Switzerland that, as of the Original Closing Date, shall have guaranteed the Swiss Obligations pursuant to the Swiss Guaranty and each other Subsidiary of Swiss Subsidiary Borrower that, pursuant to Section 5.10, shall have guaranteed the Swiss Obligations pursuant to the Swiss Guaranty.

Swiss Guaranty ” means the Guaranty Agreement to be executed by each Swiss Guarantor, in form and substance reasonably satisfactory to Collateral Agent, as it may be amended, restated, supplemented or otherwise modified from time to time.

Swiss/Multicurrency Revolving Commitment ” means the commitment of a Lender to make or otherwise fund any Swiss/Multicurrency Revolving Loan and “ Swiss/Multicurrency Revolving Commitments ” means such commitments of all Lenders in the aggregate. The amount of each Lender’s Swiss/Multicurrency Revolving Commitment, if any, is set forth on Appendix A or in the applicable Assignment Agreement or Joinder Agreement, as applicable, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate Dollar Equivalent of the Swiss/Multicurrency Revolving Commitments as of the Second Restatement Effective Date is $100,000,000.

Swiss/Multicurrency Revolving Exposure ” means, with respect to any Lender as of any date of determination, (i) prior to the termination of the Swiss/Multicurrency Revolving Commitments, that Lender’s Swiss/Multicurrency Revolving Commitment, and (ii) after the termination of the Swiss/Multicurrency Revolving Commitments, the Dollar Equivalent of the aggregate outstanding principal amount of the Swiss/Multicurrency Revolving Loans of that Lender.

Swiss/Multicurrency Revolving Lender ” means each Lender with a Swiss/Multicurrency Revolving Commitment.

Swiss/Multicurrency Revolving Loan ” means a Loan made by a Lender pursuant to its Swiss/Multicurrency Revolving Commitment to Parent Borrower or Swiss Subsidiary Borrower pursuant to the terms hereof, including Section 2.2(a)(iv).

Swiss/Multicurrency Revolving Loan Note ” means a promissory note in the form of Exhibit A-5 to the Amended and Restated Credit Agreement (with such modifications thereto as may be necessary to reflect different Classes of Revolving Loans), as it may be amended, restated, supplemented or otherwise modified from time to time.

Swiss Obligations ” means all Obligations of the Swiss Credit Parties.

Swiss Secured Parties ” means Collateral Agent and each Swiss/Multicurrency Revolving Lender.

Swiss Subsidiary Borrower ” as defined in the preamble hereto.

Swiss Tax Deduction ” means a deduction or withholding for or on account of Swiss Withholding Tax from a payment under this Agreement.

Swiss Withholding Tax ” means the Taxes levied pursuant to the Swiss Withholding Tax Act.

Swiss Withholding Tax Act ” means the Swiss federal act on withholding tax, of October 13, 1965.

Swiss Withholding Tax Rules ” means, together, the Ten Non-Bank Rule and/or the Twenty Non-Bank Rule.

Syndication Agent ” as defined in the preamble hereto.

 

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TARGET Day ” means 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 Administrative Agent to be a suitable replacement) is open for the settlement of payments in Euro.

Tax ” means any present or future tax, levy, impost, duty, assessment, charge, fee, deduction or withholding of any nature and whatever called, by any Governmental Authority, on whomsoever and wherever imposed, levied, collected, withheld or assessed (and any interest and penalties related thereto).

Ten Non-Bank Rule ” means the rule according to which the aggregate number of Lenders, participants and/or sub-participants under this Agreement which are not Eligible Swiss Banks must not at any time exceed ten (10), in each case in accordance with the meaning of the Guidelines.

Term Lender ” means each Lender with a Term Loan Commitment or that holds a Term Loan.

Term Loan ” means a Tranche B Term Loan, a New Term Loan, Refinancing Term Loan, or Extended Term Loan, as applicable.

Term Loan Commitment ” means the Tranche B Dollar Term Loan Commitment, the Tranche B Euro Term Loan Commitment, the New Term Loan Commitment, Refinancing Term Commitments of a given Refinancing Series or Extended Term Commitments of a given Extension Series of a Lender, as the context may require, and “Term Loan Commitments” means such commitments of all Lenders.

Term Loan Extension Request ” has the meaning provided in Section 2.26(a).

Term Loan Extension Series ” has the meaning provided in Section 2.26(a).

Term Loan Extension Series Exposure ” means, with respect to any Lender, as of any date of determination, the outstanding principal amount of the Term Loans of the applicable Term Loan Extension Series of such Lender.

Term Loan Maturity Date ” means the Tranche B Term Loan Maturity Date and the New Term Loan Maturity Date of any Series of New Term Loans, as applicable.

Terminated Lender ” as defined in Section 2.22.

Termination Value ” means, in respect of any one or more exchange traded or over the counter derivative transaction entered into by Holdings or any Subsidiary thereof, including any Interest Rate Agreement, any Currency Agreement and any Commodity Agreement, after taking into account the effect of any legally enforceable netting agreement relating to such derivative transactions, (a) for any date on or after the date such transactions have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined in good faith by Parent Borrower as the mark-to-market value(s) for such transactions.

Test Period ” in effect at any time means (a) for purposes of determining the Leverage Ratio for purposes of the definitions of “Applicable Margin” and “Applicable Revolving Commitment Fee Percentage,” and Sections 2.14 and 6.7, the most recent period of four consecutive Fiscal Quarters of Parent Borrower ended on or prior to such time in respect of which financial statements for each Fiscal Quarter or Fiscal Year in such period have been or are required to be delivered pursuant to Section 5.1(a) or (b); and (b) for all other purposes hereunder, the most recent period of four consecutive Fiscal Quarters of Parent Borrower ended on or prior to such time in respect of which internal financial statements of Parent Borrower are available.

Title Policy ” as defined in the definition of “Required Real Estate Documents”.

 

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Total Utilization ” means, with respect to any Class of Revolving Commitments, as at any date of determination, the sum of (i) the Dollar Equivalent of the aggregate principal amount of all outstanding Revolving Loans of such Class (other than Revolving Loans made for the purpose of repaying any refunded Swing Line Loans or reimbursing Issuing Bank for any amount drawn under any Letter of Credit, but not yet so applied), (ii) in the case of any U.S. Revolving Commitment, to the extent Lenders of such Class are required by this Agreement to purchase risk participations therein, the aggregate principal amount of all outstanding Swing Line Loans, and (iii) in the case of any U.S. Revolving Commitment, to the extent Lenders of such Class are required by this Agreement to purchase risk participations therein, the L/C Obligations.

TPG ” means TPG Capital, L.P.

TPG Group ” means TPG and its Affiliates and all investment funds advised by any of the foregoing (excluding, for the avoidance of doubt their portfolio companies or other operating companies affiliated with TPG).

Tranche B Dollar Term Loan ” means a Tranche B Dollar Term Loan made (x) by a Lender to Parent Borrower pursuant to Section 2.1(a)(i) of the Amended and Restated Credit Agreement and (y) by any Additional Tranche B Dollar Term Lender to Parent Borrower pursuant to Section 2.1(a)(i).

Tranche B Dollar Term Loan Commitment ” means the commitment of a Lender to make or otherwise fund a Tranche B Dollar Term Loan on the First Restatement Effective Date, or in the case of any Additional Tranche B Dollar Term Lender, on the Second Restatement Effective Date and “ Tranche B Dollar Term Loan Commitments ” means such commitments of all Lenders in the aggregate. The initial amount of each Lender’s Tranche B Dollar Term Loan Commitment, if any, on the First Restatement Effective Date was set forth on such Lender’s Lender Addendum (as defined in the First Amendment) or in the applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof, and the initial amount of each Additional Tranche B Dollar Term Lender Commitment on the Second Restatement Effective Date set forth on such Additional Tranche B Dollar Term Lender’s Lender Addendum (as defined in the Amendment) or in the applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Tranche B Dollar Term Loan Commitments (i) was $1,290,000,000 as of the First Restatement Effective Date, and (ii) is $500,000,000 as of the Second Restatement Effective Date.

Tranche B Dollar Term Loan Exposure ” means, with respect to any Lender, as of any date of determination, the outstanding principal amount of the Tranche B Dollar Term Loans of such Lender; provided , at any time prior to the making of any Tranche B Dollar Term Loans, the Tranche B Dollar Term Loan Exposure of any Lender shall be equal to such Lender’s Tranche B Dollar Term Loan Commitment.

Tranche B Dollar Term Loan Note ” means a promissory note in the form of Exhibit A-1 to the Amended and Restated Credit Agreement (with such modifications thereto as may be necessary to reflect different Classes of Term Loans), as it may be amended, restated, supplemented or otherwise modified from time to time.

Tranche B Euro Term Loan ” means a Tranche B Euro Term Loan made (x) by a Lender to Parent Borrower pursuant to Section 2.1(a)(ii) of the Amended and Restated Credit Agreement and (y) by any Additional Tranche B Euro Term Lender to Parent Borrower pursuant to Section 2.1(a)(ii).

Tranche B Euro Term Loan Commitment ” means the commitment of a Lender to make or otherwise fund a Tranche B Euro Term Loan on the First Restatement Effective Date, or in the case of any Additional Tranche B Term Euro Lender, on the Second Restatement Effective Date and “ Tranche B Euro Term Loan Commitments ” means such commitments of all Lenders in the aggregate. The initial amount of each Lender’s Tranche B Euro Term Loan Commitment, if any, on the First Restatement Effective Date was set forth on such Lender’s Lender Addendum (as defined in the First Amendment) or in the applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof and the initial amount of each Additional Tranche B Euro Term Lender Commitment on the Second Restatement Effective Date set forth on such Additional Tranche B Euro Term Lender’s Lender Addendum (as defined in the Amendment) or in the applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Tranche B Euro Term Loan Commitments (i) was €565,000,000 as of the First Restatement Effective Date and (ii) is €200,000,000 as of the Second Restatement Effective Date.

 

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Tranche B Euro Term Loan Exposure ” means, with respect to any Lender, as of any date of determination, the outstanding principal amount of the Tranche B Euro Term Loans of such Lender; provided , at any time prior to the making of any Tranche B Euro Term Loans, the Tranche B Euro Term Loan Exposure of any Lender shall be equal to such Lender’s Tranche B Euro Term Loan Commitment.

Tranche B Euro Term Loan Note ” means a promissory note in the form of Exhibit A-2 to the Amended and Restated Credit Agreement (with such modifications thereto as may be necessary to reflect different Classes of Term Loans), as it may be amended, restated, supplemented or otherwise modified from time to time.

Tranche B Term Loan Exposure ” means, with respect to any Lender, as of any date of determination, the sum of such Lender’s Tranche B Dollar Term Loan Exposure and such Lender’s Tranche B Euro Term Loan Exposure.

Tranche B Term Loan Maturity Date ” means the earlier of (i) August 26, 2017, and (ii) the date on which all Tranche B Term Loans shall become due and payable in full hereunder, whether by acceleration or otherwise.

Tranche B Term Loans ” means the Tranche B Dollar Term Loans and the Tranche B Euro Term Loans.

Transaction Costs ” means the fees, costs and expenses payable by Holdings, Parent Borrower or any of Parent Borrower’s Subsidiaries on or before the date that is 24 months after the Original Closing Date in connection with the Transactions, including payments to officers, employees and directors as change of control payments, severance payments, special or retention bonuses and charges for repurchase or rollover of, or modifications to, stock options.

Transactions ” means the incurrence of the Indebtedness under the Original Credit Agreement on the Original Closing Date and the issuance of the Senior Notes, the Equity Contribution, the Acquisition and the refinancing of Parent Borrower’s existing debt (other than Indebtedness set forth in Schedule 6.1 to the Original Credit Agreement) and other transactions contemplated thereby.

Treasury Capital Stock ” as defined in Section 6.4(c).

Twenty Non-Bank Rule ” means the rule according to which the aggregate number of (a) where such qualification is relevant, Lenders, participants and/or sub-participants which are Non-Eligible Swiss Banks, under all interest bearing loans made or deemed to be made to the Swiss Subsidiary Borrower (including intra-group loans), and (b) where the number of debt instruments (as defined in the Guidelines) is relevant, the number of such debt instruments, being understood that for purposes hereof the maximum number of ten Non-Eligible Swiss Banks permitted under this Agreement shall be taken into account (whether or not 10 Non-Eligible Swiss Banks do so participate at any given time), must not at any time exceed twenty (20), in each of (a) and (b) in accordance with the meaning of the Guidelines.

Type of Loan ” means (i) with respect to either Term Loans or Revolving Loans, a Base Rate Loan or a Eurocurrency Rate Loan, and (ii) with respect to Swing Line Loans, a Base Rate Loan.

UCC ” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

Unreimbursed Amount ” as defined in Section 2.4(c).

Unrestricted Cash ” means the aggregate amount of Cash and Cash Equivalents held in accounts of Parent Borrower and its Subsidiaries (and included in the consolidated balance sheet of Parent Borrower) to the extent that (i) the use of such Cash for application to payment of the Obligations or other Indebtedness is not prohibited by law or any contract or other agreement and (ii) such Cash and Cash Equivalents are free and clear of all Liens (other than nonconsensual Liens permitted by Section 6.2, and Liens permitted by Sections 6.2(a), (u)(iii), (w)(i) and (ii), and (y)).

 

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Unrestricted Subsidiary ” as defined in Section 5.15.

U.S. Guaranteed Obligations ” as defined in Section 7.1.

U.S. Guarantor ” means Holdings and each Guarantor Subsidiary.

U.S. Lender ” as defined in Section 2.20(f).

U.S. Permitted Replacement Revolving Commitment ” means the Permitted Replacement Revolving Commitment of a Lender to the extent replacing a U.S. Revolving Commitment.

U.S. Permitted Replacement Revolving Exposure ” means, with respect to any Lender as of any date of determination, (i) prior to the termination of the U.S. Permitted Replacement Revolving Commitments, that Lender’s U.S. Permitted Replacement Revolving Commitment and (ii) after termination of the U.S. Permitted Replacement Revolving Commitments, the sum of (a) the aggregate outstanding principal amount of the U.S. Permitted Replacement Revolving Loans of that Lender, (b) the aggregate amount of all participations by that Lender in any outstanding Letters of Credit or any unreimbursed drawing under any Letter of Credit and (c) the aggregate amount of all participations therein by that Lender in any outstanding Swing Line Loans.

U.S. Permitted Replacement Revolving Lender ” means each Lender with a U.S. Permitted Replacement Revolving Commitment.

U.S. Permitted Replacement Revolving Loans ” means a Loan made by a Lender pursuant to its U.S. Permitted Replacement Revolving Commitment to Parent Borrower.

U.S. Revolving Commitment ” means the commitment of a Lender to make or otherwise fund any U.S. Revolving Loan and to acquire participations in Letters of Credit and Swing Line Loans hereunder and “ U.S. Revolving Commitments ” means such commitments of all Lenders in the aggregate. The amount of each Lender’s U.S. Revolving Commitment, if any, is set forth on Appendix A or in the applicable Assignment Agreement or Joinder Agreement, as applicable, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the U.S. Revolving Commitments as of the Second Restatement Effective Date is $175,000,000.

U.S. Revolving Exposure ” means, with respect to any Lender as of any date of determination, (i) prior to the termination of the Revolving Commitments, that Lender’s U.S. Revolving Commitment; and (ii) after the termination of the U.S. Revolving Commitments, the sum of (a) the aggregate outstanding principal amount of the U.S. Revolving Loans of that Lender, (b) in the case of Issuing Bank, the aggregate L/C Obligations in respect of all Letters of Credit issued by that Lender (net of any participations by Lenders in such Letters of Credit), (c) the aggregate amount of all participations by that Lender in any outstanding Letters of Credit or any unreimbursed drawing under any Letter of Credit, (d) in the case of Swing Line Lender, the aggregate outstanding principal amount of all Swing Line Loans (net of any participations therein by other Lenders), and (e) the aggregate amount of all participations therein by that Lender in any outstanding Swing Line Loans.

U.S. Revolving Lender ” means each Lender with a U.S. Revolving Commitment.

U.S. Revolving Loan ” means a Loan made by a Lender pursuant to its U.S. Revolving Commitment to Parent Borrower pursuant to the terms hereof, including Section 2.2(a)(ii).

U.S. Revolving Loan Note ” means a promissory note in the form of Exhibit A-3 to the Amended and Restated Credit Agreement (with such modifications thereto as may be necessary to reflect different Classes of Revolving Loans), as it may be amended, restated, supplemented or otherwise modified from time to time.

Weighted Average Life to Maturity ” means, when applied to any Indebtedness or Disqualified Stock, as the case may be, at any date, the quotient obtained by dividing

 

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(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 multiplied by the amount of such payment; by

(2) the sum of all such payments.

Wells ” as defined in the preamble hereto.

Wholly-Owned ” means, with respect to a Subsidiary of any Person, all of the outstanding Equity Interests of which Subsidiary (other than any director’s qualifying shares or shares owned by foreign nationals to the extent mandated by applicable Law) is owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person.

Withholding Exemption Document ” as defined in Section 2.20(h).

Yen ” and the sign “ ¥ ” mean the lawful money of Japan.

1.2. Accounting Terms. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP. Financial statements and other information required to be delivered by Holdings to Lenders pursuant to Sections 5.1(a) and 5.1(b) shall be prepared in accordance with GAAP as in effect at the time of such preparation (and delivered together with the reconciliation statements provided for in Section 5.1(d), if applicable). Subject to the foregoing, calculations in connection with the definitions, covenants and other provisions hereof shall utilize accounting principles and policies in conformity with those used to prepare the Historical Financial Statements.

1.3. Interpretation, Etc. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. References herein to any Section, Appendix, Schedule or Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof unless otherwise specifically provided. The use herein of the word “include” or “including,” when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter. The terms lease and license shall include sub-lease and sub-license, as applicable.

1.4. Exchange Rates; Currency Equivalents.

(a) Administrative Agent or Issuing Bank, as applicable, shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar Equivalent amounts of Credit Extensions and amounts outstanding hereunder denominated in Foreign Currencies. Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur. Except for purposes of financial statements delivered by the Credit Parties hereunder or calculating incurrence or financial covenant hereunder (including baskets related thereto) or except as otherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Credit Documents shall be such Dollar Equivalent as so determined by Administrative Agent or Issuing Bank, as applicable.

(b) Wherever in this Agreement in connection with a borrowing, conversion, continuation or prepayment of a Eurocurrency Rate Loan or the issuance, amendment or extension of a Letter of Credit, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such borrowing, Eurocurrency Rate Loan or Letter of Credit is denominated in a Foreign Currency, such amount shall be the relevant Foreign Currency Equivalent of such Dollar amount (rounded to the nearest unit of such Foreign Currency, with 0.5 of a unit being rounded upward), as determined by Administrative Agent or Issuing Bank, as the case may be.

 

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(c) Notwithstanding the foregoing, for purposes of determining compliance with Sections 6.1, 6.2, 6.4, 6.6 and 6.8 with respect to any amount of Indebtedness, Investment, Restricted Junior Payment, Lien or Asset Sale in a currency other than Dollars, no Default shall be deemed to have occurred solely as a result of changes in rates of exchange occurring after the time such Indebtedness, Investment, Restricted Junior Payment, Lien or Asset Sale is incurred or made; provided, that, for the avoidance of doubt, the foregoing provisions of this Section 1.4 shall otherwise apply to such Sections, including with respect to determining whether any Indebtedness, Investment, Restricted Junior Payment, Lien or Asset Sale may be incurred or made at any time under such Sections.

(d) For purposes of calculating the Leverage Ratio or the Senior Secured Leverage Ratio, the Dollar equivalent of any Indebtedness denominated in a currency other than Dollars will be converted into Dollars based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred; provided , however , that the U.S. dollar-equivalent principal amount of all Term Loans and Revolving Loans denominated in a foreign currency, including for the avoidance of doubt, any such Term Loans incurred prior to the Second Restatement Effective Date and any Revolving Loans incurred under Revolving Commitments provided prior to the Second Restatement Effective Date, shall be calculated based on the relevant currency exchange rate in effect on the Second Restatement Effective Date.

(e) For the avoidance of doubt, in the case of a Loan denominated in a Foreign Currency, all interest shall accrue and be payable thereon based on the actual amount outstanding in such Foreign Currency (without any translation into the Dollar Equivalent thereof).

1.5. Redenomination of Certain Foreign Currencies and Computation of Dollar Equivalents.

(a) Each obligation of a Borrower 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 Original 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 Credit Extension in the currency of such member state is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Credit Extension, 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 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 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.

1.6. Additional Foreign Currencies.

(a) Parent Borrower may from time to time request that Swiss/Multicurrency Revolving Loans that are Eurocurrency Rate Loans be made and/or Letters of Credit be issued in a currency other than those specifically listed in the definition of “Foreign Currency”; provided that such requested currency is a lawful currency (other than Dollars) that is readily available and freely transferable and convertible into Dollars. In the case of any such request with respect to the making of Eurocurrency Rate Loans, such request shall be subject to the approval of Administrative Agent and each Swiss/Multicurrency Revolving Lender; 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 Administrative Agent and Issuing Bank.

(b) Any such request shall be made to Administrative Agent not later than 11:00 a.m. (New York City time), twenty Business Days prior to the date of the desired Credit Extension (or such other time or date as may be agreed by Administrative Agent and, in the case of any such request pertaining to Letters of Credit, Issuing Bank, in

 

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its or their sole discretion). In the case of any such request pertaining to Eurocurrency Rate Loans, Administrative Agent shall promptly notify each Swiss/Multicurrency Revolving Lender thereof; and in the case of any such request pertaining to Letters of Credit, Administrative Agent shall promptly notify Issuing Bank thereof. Each Swiss/Multicurrency Revolving Lender (in the case of any such request pertaining to Eurocurrency Rate Loans) or Issuing Bank (in the case of a request pertaining to Letters of Credit) shall notify 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 Eurocurrency Rate Loans or the issuance of Letters of Credit, as the case may be, in such requested currency.

(c) Any failure by a Lender or Issuing Bank, as the case may be, to respond to such request within the time period specified in the preceding sentence shall be deemed to be a refusal by such Lender or Issuing Bank, as the case may be, to permit Eurocurrency Rate Loans to be made or Letters of Credit to be issued in such requested currency. If Administrative Agent and all the Swiss/Multicurrency Revolving Lenders consent to making Eurocurrency Rate Loans in such requested currency, Administrative Agent shall so notify Parent Borrower and such currency shall thereupon be deemed for all purposes to be a Foreign Currency hereunder for purposes of any borrowings of Swiss/Multicurrency Revolving Loans; and if Administrative Agent and Issuing Bank consent to the issuance of Letters of Credit in such requested currency, Administrative Agent shall so notify Parent Borrower and such currency shall thereupon be deemed for all purposes to be a Foreign Currency hereunder for purposes of any Letter of Credit issuances. If Administrative Agent shall fail to obtain consent to any request for an additional currency under this Section 1.6, Administrative Agent shall promptly so notify Parent Borrower.

1.7. Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar Equivalent of 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 Issuer Document related thereto, 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 Dollar Equivalent of 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.

1.8. Rounding. Any financial ratios required to be maintained by Parent Borrower pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

1.9. References to Agreements, Laws, Etc. Unless otherwise expressly provided herein, (a) references to Organizational Documents, agreements (including the Credit Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Credit Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

1.10. Certain Calculations.

(a) Notwithstanding anything to the contrary herein, each Specified Calculation shall be calculated in the manner prescribed by this Section.

(b) In the event that Parent Borrower or any of its Subsidiaries incurs, assumes, guarantees, redeems, repays, retires or extinguishes any Indebtedness during the period (the “ Stub Period ”) subsequent to the end of the Test Period for which the Leverage Ratio or Senior Secured Leverage Ratio, as the case may be, is being calculated but prior to or simultaneously with the Specified Calculation Date, then the Leverage Ratio or Senior Secured Leverage Ratio, as the case may be, shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, repayment, retirement or extinguishment of Indebtedness as if the same had occurred on the last day of the applicable Test Period; provided , that Indebtedness incurred or repaid under any revolving credit facility in the ordinary course of business for working capital purposes during the Stub Period shall only be treated as having been incurred or repaid during such period if the average daily balances of such Indebtedness during the Stub Period exceeds or is less than the amount of such Indebtedness outstanding as of the last day of the applicable Test Period.

 

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(c) In the event that Parent Borrower or any of its Subsidiaries incurs, assumes, guarantees, redeems, repays, retires or extinguishes any Indebtedness subsequent to the commencement of the Test Period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the Specified Calculation Date, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, repayment, retirement or extinguishment of Indebtedness had occurred on the first day of the Test Period.

(d) For purposes of making any Specified Calculation, Specified Transactions that have been made by Parent Borrower or any of its Subsidiaries during the applicable Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Specified Calculation Date (a) shall be calculated in good faith by the Chief Financial Officer of Parent Borrower on a pro forma basis assuming that all such Specified Transactions had occurred on the first day of the applicable Test Period and (b) in connection with any such Specified Transactions (other than, for avoidance of doubt, the Transactions), there shall be given pro forma effect to (A) expected cost savings resulting therefrom permitted to be reflected in pro forma financial information with respect to any such Specified Transactions under Rule 11.02 of Regulation S-X under the Securities Act and (B) additional cost savings that result or are expected to result from actions taken, committed to be taken or planned to be taken pursuant to a factually supported plan in connection with such Specified Transaction prior to the Specified Calculation Date; provided , that such cost savings referred to in this clause (B) (x) are factually supportable and determined in good faith by Parent Borrower, as certified in an officer’s certificate executed by the Chief Financial Officer of Parent Borrower to Administrative Agent, and (y) do not exceed the actual cost savings expected in good faith to be realized by Parent Borrower and its Subsidiaries over such 12 month period commencing with the Specified Calculation Date (as opposed, for the avoidance of doubt, to the annualized impact of such cost savings). If since the beginning of any such Test Period any Person that subsequently became a Subsidiary or was merged, amalgamated or consolidated with or into Parent Borrower or any of its Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this definition, then the Specified Calculation shall be calculated giving pro forma effect thereto for such period as if such Specified Transaction had occurred at the beginning of the applicable Test Period.

(e) 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 Specified Calculation Date had been the applicable rate for the entire period (taking into account any Hedge Agreements applicable to such Indebtedness). Interest on a Capital Lease shall be deemed to accrue at an interest rate reasonably determined by the Chief Financial Officer of Parent Borrower to be the rate of interest implicit in such Capital Lease in accordance with GAAP. For purposes of the computation above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed on the average daily balances 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 Parent Borrower may designate.

(f) Any Person that is a Subsidiary on the Specified Calculation Date will be deemed to have been a Subsidiary at all times during the applicable Test Period, and any Person that is not a Subsidiary on the Specified Calculation Date will be deemed not to have been a Subsidiary at any time during the applicable Test Period.

Notwithstanding the foregoing, when calculating the Leverage Ratio for purposes of the definitions of “Applicable Margin” and Sections 2.14 and 6.7, the events described in Sections 1.10(b), 1.10(c) and 1.10(d) above that occurred subsequent to the end of the Test Period shall not be given pro forma effect.

1.11. Effect of this Agreement on the Amended and Restated Credit Agreement and other Existing Credit Documents.

Upon satisfaction of the conditions precedent to the effectiveness of this Agreement set forth in Section 5 of the Amendment, this Agreement shall be binding on Borrowers, the Agents, the Lenders and the other parties

 

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hereto, and the Amended and Restated Credit Agreement and the provisions thereof shall be replaced in their entirety by this Agreement and the provisions hereof; provided that (a) the Obligations (as defined in the Amended and Restated Credit Agreement) of Borrowers and the other Credit Parties under the Amended and Restated Credit Agreement and the other Credit Documents (in each case, as further amended from time to time) that remain unpaid and outstanding as of the date of this Agreement shall continue to exist under and be evidenced by this Agreement and the other Loan Documents, (b) all Letters of Credit existing immediately prior to the Second Restatement Effective Date shall continue as Letters of Credit under this Agreement, (c) the Collateral and the Credit Documents shall continue to secure, guarantee, support and otherwise benefit the Obligations (as defined in the Amended and Restated Credit Agreement) and the Obligations of Borrowers and the other Credit Parties under this Agreement and the other Credit Documents, (d) all Hedge Agreements entered into prior to the Second Restatement Effective Date that constitute Obligations (as defined in the Amended and Restated Credit Agreement) and remain outstanding as of the date of this Agreement shall continue to constitute Obligations hereunder and (e) any Person entitled to the benefits of Sections 2.18(c), 2.19, 10.2 and 10.3 of the Amended and Restated Credit Agreement shall continue to be entitled to the benefits of the corresponding provisions of this Agreement. Upon the effectiveness of this Agreement, each Credit Document that was in effect immediately prior to the date of this Agreement shall continue to be effective and, unless the context otherwise requires, any reference to the Original Credit Agreement or the Amended and Restated Credit Agreement contained therein shall be deemed to refer to this Agreement.

 

SECTION 2. LOANS AND LETTERS OF CREDIT

2.1. Term Loans.

(a) Term Commitments .

(i) Subject to the terms and conditions hereof, each Additional Tranche B Dollar Term Lender severally agrees to make, on the Second Restatement Effective Date, a Tranche B Dollar Term Loan to Parent Borrower in an amount equal to such Lender’s Tranche B Dollar Term Loan Commitment.

(ii) Subject to the terms and conditions hereof, each Additional Tranche B Euro Term Lender severally agrees to make, on the Second Restatement Effective Date, a Tranche B Euro Term Loan to Parent Borrower in an amount equal to such Lender’s Tranche B Euro Term Loan Commitment.

(iii) Any amounts borrowed under this Section 2.1(a) and subsequently repaid or prepaid may not be reborrowed. Subject to Sections 2.13(a) and 2.14, all amounts owed hereunder with respect to the Tranche B Term Loans shall be paid in full no later than the Tranche B Term Loan Maturity Date. Each Lender’s Tranche B Dollar Term Loan Commitment and/or Tranche B Euro Term Loan Commitment, as applicable, in respect to Tranche B Term Loans funded on the First Restatement Effective Date was terminated on the First Restatement Effective Date upon the funding of such Tranche B Term Loans. Each Additional Tranche B Term Lender’s Tranche B Dollar Term Loan Commitment or Tranche B Euro Term Loan Commitment shall terminate immediately and without further action on the Second Restatement Effective Date after giving effect to the funding of such Lender’s Tranche B Dollar Term Loan Commitment or Tranche B Euro Term Loan Commitment, as applicable, on such date.

(b) Borrowing Mechanics for Term Loans .

(i) Parent Borrower shall deliver to Administrative Agent and Syndication Agent a fully executed Funding Notice no later than two (2) Business Days prior to the Second Restatement Effective Date. Promptly upon receipt by Administrative Agent and Syndication Agent of such Funding Notice, Administrative Agent or Syndication Agent shall notify each Additional Tranche B Term Lender with a Tranche B Dollar Term Loan Commitment or a Tranche B Euro Term Loan Commitment of the proposed borrowing.

(ii) Each Additional Tranche B Term Lender shall make its Tranche B Dollar Term Loans or Tranche B Euro Term Loans, as applicable, available to Administrative Agent not later than 10:00 a.m. (New York City time) on the Second Restatement Effective Date by wire transfer of Same Day Funds in Dollars at the principal office designated by Administrative Agent. Upon satisfaction or waiver of the conditions precedent specified

 

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herein, Administrative Agent shall make the proceeds of the Tranche B Dollar Term Loans and Tranche B Euro Term Loans available to Parent Borrower on the Second Restatement Effective Date by causing an amount of Same Day Funds equal to the proceeds of all such Loans received by Administrative Agent from Lenders to be credited to such accounts as may be designated in writing to Administrative Agent by Parent Borrower.

2.2. Revolving Loans.

(a) Revolving Commitments .

(i) Special Provisions Relating to Reclassifications of Pre-Restatement Revolving Commitments.

(A) On the Second Restatement Effective Date, any U.S. Revolving Commitments, Japanese Revolving Commitments and Swiss/Multicurrency Commitments, as applicable, outstanding immediately prior to the Second Restatement Effective Date as Pre-Restatement Revolving Commitments shall continue hereunder as U.S. Revolving Commitments, Japanese Revolving Commitments or Swiss/Multicurrency Commitments, as applicable.

(B) On and after the Second Restatement Effective Date, each Revolving Lender which holds a Revolving Loan Note shall be entitled to surrender such Revolving Loan Note to Parent Borrower against delivery of a new Revolving Loan Note completed in conformity with Section 2.7 evidencing the Revolving Loans, respectively, into which the applicable Pre-Restatement Revolving Loans of such Lender were reclassified on the Second Restatement Effective Date; provided that if any such Revolving Loan Note is not so surrendered, then from and after the Second Restatement Effective Date such Note shall be deemed to evidence the Revolving Loans into which the Loans outstanding immediately prior to the Second Restatement Effective Date theretofore evidenced by such Note have been reclassified.

(C) No costs shall be payable under Section 2.18(c) in connection with transactions consummated under Section 2.2(a)(i).

(ii) U.S. Revolving Commitments . During the Revolving Commitment Period, subject to the terms and conditions hereof, each U.S. Revolving Lender severally agrees to make U.S. Revolving Loans in Dollars to Parent Borrower; provided , that after giving effect to the making of any U.S. Revolving Loans in no event shall the Total Utilization of U.S. Revolving Commitments exceed the U.S. Revolving Commitments then in effect.

(iii) Japanese Revolving Commitments . During the Revolving Commitment Period, subject to the terms and conditions hereof, each Japanese Revolving Lender severally agrees to make (x) Japanese Revolving Loans in Dollars and/or Yen to Parent Borrower and (y) Japanese Revolving Loans in Dollars and/or Yen to Japanese Subsidiary Borrower; provided , that after giving effect to the making of any Japanese Revolving Loans in no event shall the Total Utilization of Japanese Revolving Commitments exceed the Japanese Revolving Commitments then in effect.

(iv) Swiss/Multicurrency Commitments . During the Revolving Commitment Period, subject to the terms and conditions hereof, each Swiss/Multicurrency Revolving Lender severally agrees to make (x) Swiss/Multicurrency Revolving Loans in Dollars and/or Foreign Currencies (other than Yen) to Parent Borrower and (y) Swiss/Multicurrency Revolving Loans in Dollars and/or Foreign Currencies (other than Yen) to Swiss Subsidiary Borrower; provided , that after giving effect to the making of any Swiss/Multicurrency Revolving Loans in no event shall (1) the Total Utilization of Swiss/Multicurrency Revolving Commitments exceed the Swiss/Multicurrency Revolving Commitments then in effect or (2) more than the Dollar Equivalent amount of $50,000,000 of Swiss/Multicurrency Revolving Loans be denominated in Swiss Francs.

(v) Amounts borrowed pursuant to this Section 2.2(a) may be repaid and reborrowed during the Revolving Commitment Period. Each Lender’s Revolving Commitment shall expire on the Revolving Commitment Termination Date, and all Revolving Loans and all other amounts owed hereunder with respect to the Revolving Loans and the Revolving Commitments shall be paid in full no later than such date.

 

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(b) Borrowing Mechanics for Revolving Loans .

(i) Except pursuant to Section 2.4(c), Revolving Loans that are Base Rate Loans shall be made in an aggregate minimum Dollar Equivalent amount of $500,000 and integral Dollar Equivalent multiples of $100,000 in excess of that amount, and Revolving Loans that are Eurocurrency Rate Loans shall be in an aggregate minimum Dollar Equivalent amount of $1,000,000 and integral Dollar Equivalent multiples of $100,000 in excess of that amount.

(ii) Subject to Section 3.2(b), whenever a Borrower desires that Lenders make Revolving Loans, such Borrower shall deliver to Administrative Agent a fully executed and delivered Funding Notice no later than 12:00 p.m. (New York City time) at least three Business Days (or at least four Business Days in the case of a Foreign Currency Loan not denominated in a Special Notice Currency or five Business Days in the case of a Foreign Currency Loan Denominated in a Special Notice Currency) in advance of the proposed Credit Date in the case of a Eurocurrency Rate Loan, and no later than 12:00 Noon (New York City time) at least one Business Day in advance of the proposed Credit Date in the case of a Revolving Loan that is a Base Rate Loan. Except as otherwise provided herein, a Funding Notice for a Revolving Loan that is a Eurocurrency Rate Loan shall be irrevocable on and after the related Interest Rate Determination Date, and such Borrower shall be bound to make a borrowing in accordance therewith.

(iii) Notice of receipt of each Funding Notice in respect of Revolving Loans, together with the amount of each Lender’s Pro Rata Share thereof, if any, together with the applicable interest rate, shall be provided by Administrative Agent promptly to each applicable Lender by telefacsimile.

(iv) Each Lender shall make the amount of its Revolving Loan available to Administrative Agent on the applicable Credit Date by wire transfer of Same Day Funds in the currency such Revolving Loan is to be made, at the Principal Office designated by Administrative Agent not later than (x) 12:00 p.m. (New York City time) in the case of any Revolving Loan denominated in Dollars and (y) the Applicable Time specified by Administrative Agent in the case of any Revolving Loan denominated in a Foreign Currency. Except as provided herein, upon satisfaction or waiver of the conditions precedent specified herein, Administrative Agent shall make the proceeds of such Revolving Loans available to the applicable Borrower on the applicable Credit Date by causing an amount of Same Day Funds in the currency in which such Revolving Loan is to be made equal to the proceeds of all such Revolving Loans received by Administrative Agent from Lenders to be credited to the account of such Borrower at the Principal Office designated by Administrative Agent or such other account as may be designated in writing to Administrative Agent by such Borrower; provided , however , that if, on the Credit Date, there are L/C Borrowings outstanding, then the proceeds of such Revolving Loans, first, shall be applied to the payment in full of any such L/C Borrowings, and, second, shall be made available to the applicable Borrower as provided above.

2.3. Swing Line Loans.

(a) Swing Line Loans . Subject to the terms and conditions set forth herein, Swing Line Lender hereby agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.3, to make Swing Line Loans in Dollars to Parent Borrower from time to time on any Business Day during the Revolving Commitment Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit; provided , however , that after giving effect to any Swing Line Loan, the Total Utilization of U.S. Revolving Commitments shall not exceed the aggregate U.S. Revolving Commitments and provided , further , that Parent Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, Parent Borrower may borrow under this Section 2.3, prepay under Section 2.13, and reborrow under this Section 2.3. Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each U.S. Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Lender’s Pro Rata Share times the amount of such Swing Line Loan.

 

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(b) Borrowing Procedures . Each borrowing of Swing Line Loans shall be made upon Parent Borrower’s irrevocable notice to Swing Line Lender and Administrative Agent, which may be given by telephone. Each such notice must be received by Swing Line Lender and Administrative Agent not later than 1:00 p.m. (New York City time) on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $500,000 and integral multiples of $100,000 in excess of that amount, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to Swing Line Lender and Administrative Agent of a written Funding Notice, appropriately completed and signed by an Authorized Officer of Parent Borrower. Promptly after receipt by Swing Line Lender of any telephonic notice, Swing Line Lender will confirm with Administrative Agent (by telephone or in writing) that Administrative Agent has also received such notice and, if not, Swing Line Lender will notify Administrative Agent (by telephone or in writing) of the contents thereof. Unless Swing Line Lender has received notice (by telephone or in writing) from Administrative Agent (including at the request of any U.S. Revolving Lender) prior to 2:00 p.m. (New York City time) on the date of the proposed Swing Line Loan borrowing (A) directing Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.3(a), or (B) that one or more of the applicable conditions specified in Section 3.2(a) is not then satisfied, then, subject to the terms and conditions hereof, Swing Line Lender will, in accordance with Section 2.3(a), not later than 3:00 p.m. (New York City time) on the borrowing date specified in such Funding Notice, make the amount of its Swing Line Loan available to Parent Borrower at its office by crediting the account of Parent Borrower on the books of Swing Line Lender in Same Day Funds. Notwithstanding anything to the contrary contained in this Section 2.3 or elsewhere in this Agreement, at a time when (i) a U.S. Revolving Lender is a Defaulting Lender or has experienced a Lender-Related Distress Event or (ii) Swing Line Lender shall have reasonably determined that (A) there has occurred a material adverse change in the financial condition of any such U.S. Revolving Lender, or a material impairment in the ability of any such U.S. Revolving Lender to perform its obligations hereunder, as compared to such condition or ability as of the date that any such U.S. Revolving Lender became a U.S. Revolving Lender or (B) there is a material impairment in the ability of any such U.S. Revolving Lender to perform, or a material risk that any such U.S. Revolving Lender will not perform (in each case within this clause (B), other than a U.S. Revolving Lender on the Original Closing Date or First Restatement Effective Date or which became a U.S. Revolving Lender in an assignment consented to pursuant to Section 10.6(c)) its obligations hereunder, Swing Line Lender shall be entitled to enter into reasonably satisfactory arrangements with Parent Borrower to eliminate Swing Line Lender’s risk with respect to such U.S. Revolving Lender or such U.S. Revolving Lender’s participation in such Swing Line Loans, including by cash collateralizing, or obtaining a backstop letter of credit from an issuer reasonably satisfactory to Swing Line Lender to support, such Defaulting Lender’s or Defaulting Lenders’ Pro Rata Share of the outstanding Swing Line Loans.

(c) Refinancing of Swing Line Loans .

(i) Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of Parent Borrower (which hereby irrevocably authorizes Swing Line Lender to so request on its behalf), that each U.S. Revolving Lender make a U.S. Revolving Loan that is a Base Rate Loan in an amount equal to such Lender’s Pro Rata Share of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Funding Notice for purposes hereof) and in accordance with the requirements of Section 2.2, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the U.S. Revolving Commitments and the conditions set forth in Section 3.2(a). Swing Line Lender shall furnish Parent Borrower with a copy of the applicable Funding Notice promptly after delivering such notice to Administrative Agent. Each U.S. Revolving Lender shall make an amount equal to its Pro Rata Share of the amount specified in such Funding Notice available to Administrative Agent in Same Day Funds for the account of Swing Line Lender at Administrative Agent’s Principal Office for Dollar-denominated payments not later than 1:00 p.m. (New York City time) on the day specified in such Funding Notice, whereupon, subject to Section 2.3(c)(ii), each U.S. Revolving Lender that so makes funds available shall be deemed to have made a U.S. Revolving Loan that is a Base Rate Loan to Parent Borrower in such amount. Administrative Agent shall remit the funds so received to Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by a borrowing of U.S. Revolving Loans in accordance with Section 2.3(c)(i), the request for U.S. Revolving Loans submitted by Swing Line Lender as set forth herein shall be deemed to be a request by Swing Line Lender that each of the U.S. Revolving Lenders fund its risk participation in the relevant Swing Line Loan and each Lender’s payment to Administrative Agent for the account of Swing Line Lender pursuant to Section 2.3(c)(i) shall be deemed payment in respect of such participation.

 

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(iii) If any U.S. Revolving Lender fails to make available to Administrative Agent for the account of Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.3(c) by the time specified in Section 2.3(c)(i), Swing Line Lender shall be entitled to recover from such Lender (acting through Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to Swing Line Lender at a rate per annum equal to the applicable Overnight Rate from time to time in effect, plus any administrative, processing or similar fees customarily charged by Swing Line Lender in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s U.S. Revolving Loan included in the relevant borrowing of U.S. Revolving Loans or funded participation in the relevant Swing Line Loan, as the case may be. A certificate of Swing Line Lender submitted to any Lender (through Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

(iv) Each Lender’s obligation to make U.S. Revolving Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.3(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against Swing Line Lender, Parent Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided , however , that each Lender’s obligation to make U.S. Revolving Loans pursuant to this Section 2.3(c) is subject to the conditions set forth in Section 3.2(a). No such funding of risk participations shall relieve or otherwise impair the obligation of Parent Borrower to repay Swing Line Loans, together with interest as provided herein.

(d) Repayment of Participations .

(i) At any time after any Lender has purchased and funded a risk participation in a Swing Line Loan, if Swing Line Lender receives any payment on account of such Swing Line Loan, Swing Line Lender will distribute to such Lender its Pro Rata Share thereof in the same funds as those received by Swing Line Lender.

(ii) If any payment received by Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by Swing Line Lender under any of the circumstances described in Section 10.10 (including pursuant to any settlement entered into by Swing Line Lender in its discretion), each U.S. Revolving Lender shall pay to Swing Line Lender its Pro Rata Share thereof on demand of Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the applicable Overnight Rate. Administrative Agent will make such demand upon the request of Swing Line Lender. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e) Interest for Account of Swing Line Lender . Swing Line Lender shall be responsible for invoicing Parent Borrower for interest on the Swing Line Loans. Until each U.S. Revolving Lender funds its U.S. Revolving Loan or risk participation pursuant to this Section 2.3 to refinance such Lender’s Pro Rata Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for the account of Swing Line Lender.

(f) Payments Directly to Swing Line Lender . Parent Borrower shall make all payments of principal and interest in respect of the Swing Line Loans directly to Swing Line Lender.

(g) Repayments of Swing Line Loans . Parent Borrower shall repay each Swing Line Loan on the earlier to occur of (i) the date ten Business Days after such Loan is made and (ii) the Revolving Commitment Termination Date.

(h) Resignation and Removal of Swing Line Lender .

 

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(i) Swing Line Lender may be replaced by a successor Swing Line Lender at any time by written agreement among Parent Borrower, Administrative Agent, the replaced Swing Line Lender ( provided that no consent will be required if the replaced Swing Line Lender has no Swing Line Loans outstanding) and the successor Swing Line Lender. Administrative Agent shall notify the Lenders of any such replacement of Swing Line Lender. At the time any such replacement shall become effective, (a) Parent Borrower shall prepay any outstanding Swing Line Loans made by the removed Swing Line Lender, (b) upon such prepayment, the removed Swing Line Lender shall surrender any Swing Line Note held by it to Parent Borrower for cancellation, and (c) Parent Borrower shall issue, if so requested by the successor Swing Line Loan Lender, a new Swing Line Note to the successor Swing Line Lender, in the principal amount of the Swing Line Sublimit then in effect and with other appropriate mutually agreed insertions. From and after the effective date of any such replacement, (x) any successor Swing Line Lender shall have all the rights and obligations of a Swing Line Lender under this Agreement with respect to Swing Line Loans made thereafter and (y) references herein to the term “Swing Line Lender” shall be deemed to refer to such successor or to any previous Swing Line Lender, or to such successor and all previous Swing Line Lenders, as the context shall require.

(ii) Notwithstanding anything to the contrary contained herein, Swing Line Lender may, upon sixty (60) days’ prior notice to Parent Borrower and the Lenders, after use of commercially reasonable efforts to identify a successor Swing Line Lender reasonably satisfactory to Parent Borrower, resign as Swing Line Lender. In the event of any such resignation of Swing Line Lender, Parent Borrower shall be entitled to appoint from among the Lenders willing to accept such appointment a successor Swing Line Lender hereunder; provided that no failure by Parent Borrower to appoint any such successor shall affect the resignation of Swing Line Lender. If Swing Line Lender resigns as Swing Line Lender, it shall retain all the rights of Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.3(c).

(i) U.S. Permitted Replacement Revolving Lenders . At any time that there are U.S. Permitted Replacement Commitments outstanding, each reference in this Section 2.3 to U.S. Revolving Lenders, U.S. Revolving Loans and U.S. Revolving Commitments shall be deemed to include U.S. Permitted Replacement Revolving Lenders, U.S. Permitted Replacement Revolving Loans and U.S. Permitted Replacement Revolving Commitments, respectively.

(j) [Reserved] .

(k) [Reserved] .

(l) Provisions Related to Permitted Replacement Revolving Commitments . If the maturity date shall have occurred in respect of any tranche of Revolving Commitments (the “ Expiring Commitment ”) at a time when another tranche or tranches of Revolving Commitments is or are in effect with a longer maturity date (each a “ non-Expiring Commitment ” and collectively, the “ non-Expiring Commitments ”), then on the earliest occurring maturity date all then outstanding Swing Line Loans shall be deemed reallocated to the tranche or tranches of the non-Expiring Commitments on a pro rata basis; provided that (x) to the extent that the amount of such reallocation would cause the aggregate credit exposure to exceed the aggregate amount of such non-Expiring Commitments, immediately prior to such reallocation the amount of Swing Line Loans equal to such excess shall be repaid and (y) there shall be no such reallocation of participations in Swing Line Loans to the Revolving Lenders holding the non-Expiring Commitments if a Default or Event of Default has occurred and is continuing (in which case the applicable Borrower shall still be obligated to pay Swing Line Loans allocated to the Revolving Lenders holding the Expiring Commitments at the maturity date of the Expiring Commitment) or if the Loans have been accelerated prior to the maturity date of the Expiring Commitment.

2.4. Issuance of Letters of Credit and Purchase of Participations Therein.

(a) The Letter of Credit Commitment .

(i) Subject to the terms and conditions set forth herein, (A) Issuing Bank agrees, in reliance upon the agreements of the Lenders with a U.S. Revolving Commitment set forth in this Section 2.4, (1) from time

 

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to time on any Business Day during the period from the Original Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit denominated in Dollars or in one or more Foreign Currencies for the account of Parent Borrower or its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.4(b), and (2) to honor drawings under the Letters of Credit; and (B) the Lenders with a U.S. Revolving Commitment severally agree to participate in Letters of Credit issued for the account of Parent Borrower or its Subsidiaries and any drawings thereunder; provided that after giving effect to any such issuance with respect to any Letter of Credit, (x) the Total Utilization of U.S. Revolving Commitments shall not exceed the U.S. Revolving Commitments then in effect and (y) the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by Parent Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by Parent Borrower that the Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, Parent Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly Parent Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

(ii) Issuing Bank shall not issue any Letter of Credit if:

(A) subject to Section 2.4(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last extension; or

(B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders with any U.S. Revolving Exposure have approved such expiry date or the Outstanding Amount of the L/C Obligations in respect of such requested Letter of Credit has been Cash Collateralized.

(iii) Issuing Bank shall not be under any obligation to issue any Letter of Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain Issuing Bank from issuing such Letter of Credit, or any Law applicable to Issuing Bank or any directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over Issuing Bank shall prohibit, or direct that Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which Issuing Bank is not otherwise compensated hereunder) not in effect on the Original Closing Date, or shall impose upon Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Original Closing Date and which Issuing Bank in good faith deems material to it;

(B) the issuance of such Letter of Credit would violate one or more policies of Issuing Bank applicable to letters of credit generally;

(C) except as otherwise agreed by Administrative Agent and Issuing Bank, such Letter of Credit is in an initial stated amount less than $250,000;

(D) except as otherwise agreed by Administrative Agent and Issuing Bank, such Letter of Credit is to be denominated in a currency other than Dollars or a Foreign Currency; or

(E) (1) any U.S. Revolving Lender is at such time a Defaulting Lender hereunder or has experienced a Lender-Related Distress Event or (2) Issuing Bank shall have reasonably determined that (x) there has occurred a material adverse change in the financial condition of any such U.S. Revolving Lender, or a material impairment in the ability of any such U.S. Revolving Lender to perform its obligations hereunder, as compared to such condition or ability as of the date that any such U.S. Revolving Lender became a U.S. Revolving Lender or (y) there is a material impairment in the ability of any such U.S. Revolving Lender to perform, or a material risk that any such U.S. Revolving Lender will not perform (in each case within this clause (y), other than a U.S. Revolving Lender on the Original Closing Date or the Second Restatement Effective Date or which became a U.S. Revolving Lender in an assignment consented

 

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to pursuant to Section 10.6(c)) its obligations hereunder, unless Issuing Bank has entered into reasonably satisfactory arrangements with Parent Borrower or such Lender to eliminate Issuing Bank’s risk with respect to the participation in Letters of Credit by such Defaulting Lender, including by cash collateralizing, or obtaining a backstop letter of credit from an issuer reasonably satisfactory to Issuing Bank to support, such Defaulting Lender’s Pro Rata Share of any Unreimbursed Amount.

(iv) Issuing Bank shall be under no obligation to amend any Letter of Credit if (A) Issuing Bank would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

(v) Issuing Bank shall act on behalf of the Lenders with U.S. Revolving Commitments with respect to any Letters of Credit issued by it and the documents associated therewith, and Issuing Bank shall have all of the benefits and immunities (A) provided to Administrative Agent in Section 9 with respect to any acts taken or omissions suffered by Issuing Bank in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Section 9 included Issuing Bank with respect to such acts or omissions, and (B) as additionally provided herein with respect to Issuing Bank.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit .

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of Parent Borrower delivered to Issuing Bank (with a copy to Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by an Authorized Officer of Parent Borrower. Such Letter of Credit Application must be received by Issuing Bank and Administrative Agent not later than 11:00 a.m. (New York City time) at least two Business Days (or such later date and time as Issuing Bank may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to Issuing Bank: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the currency in which the requested Letter of Credit will be denominated; (H) the purpose and nature of the requested Letter of Credit; and (I) such other matters as Issuing Bank may reasonably require and (J) such other matters as Issuing Bank may reasonably require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to Issuing Bank (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as Issuing Bank may reasonably require. Additionally, Parent Borrower shall furnish to Issuing Bank and Administrative Agent such other Issuer Documents pertaining to such requested Letter of Credit issuance or amendment, as Issuing Bank or Administrative Agent may reasonably require.

(ii) Promptly after receipt of any Letter of Credit Application, Issuing Bank will confirm with Administrative Agent (by telephone or in writing) that Administrative Agent has received a copy of such Letter of Credit Application from Parent Borrower and, if not, Issuing Bank will provide Administrative Agent with a copy thereof. Unless Issuing Bank has received written notice from any U.S. Revolving Lender, Administrative Agent or any Credit Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Section 3.2(a) shall not then be satisfied, then, subject to the terms and conditions hereof, Issuing Bank shall, on the requested date, issue a Letter of Credit for the account of Parent Borrower (or the applicable Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with Issuing Bank’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each U.S. Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from Issuing Bank a risk participation in such Letter of Credit in an amount equal to such Lender’s Pro Rata Share of such Letter of Credit.

 

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(iii) If Parent Borrower so requests in any applicable Letter of Credit Application, Issuing Bank agrees to issue a Letter of Credit that has automatic extension provisions (each, an “ Auto-Extension Letter of Credit ”); provided that any such Auto-Extension Letter of Credit must permit Issuing Bank to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “ Non-Extension Notice Date ”) in each such twelve-month period to be agreed upon by Issuing Bank and Parent Borrower at the time such Letter of Credit is issued. Unless otherwise directed by Issuing Bank, Parent Borrower shall not be required to make a specific request to Issuing Bank for any such extension. Once an Auto-Extension Letter of Credit has been issued, the U.S. Revolving Lenders shall be deemed to have authorized (but may not require) Issuing Bank to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided , however , that Issuing Bank shall not permit any such extension if (A) Issuing Bank has determined that it would not be permitted, or would have no obligation at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.4(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date (1) from Administrative Agent that the Requisite U.S. Revolving Lenders have elected not to permit such extension or (2) from Administrative Agent, any U.S. Revolving Lender or Parent Borrower that one or more of the applicable conditions specified in Section 3.2(a) is not then satisfied, and in each such case directing Issuing Bank not to permit such extension.

(iv) If Parent Borrower so requests in any applicable Letter of Credit Application, Issuing Bank may, in its sole and absolute discretion, agree to issue a Letter of Credit that permits the automatic reinstatement of all or a portion of the stated amount thereof after any drawing thereunder (each, an “ Auto-Reinstatement Letter of Credit ”). Unless otherwise directed by Issuing Bank, Parent Borrower shall not be required to make a specific request to Issuing Bank to permit such reinstatement. Once an Auto-Reinstatement Letter of Credit has been issued, except as provided in the following sentence, the U.S. Revolving Lenders shall be deemed to have authorized (but may not require) Issuing Bank to reinstate all or a portion of the stated amount thereof in accordance with the provisions of such Letter of Credit. Notwithstanding the foregoing, if such Auto-Reinstatement Letter of Credit permits Issuing Bank to decline to reinstate all or any portion of the stated amount thereof after a drawing thereunder by giving notice of such non-reinstatement within a specified number of days after such drawing (the “ Non-Reinstatement Deadline ”), Issuing Bank shall not permit such reinstatement if it has received a notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Reinstatement Deadline (A) from Administrative Agent that the Requisite U.S. Revolving Lenders have elected not to permit such reinstatement or (B) from Administrative Agent, any Lender or Parent Borrower that one or more of the applicable conditions specified in Section 3.2(a) is not then satisfied (treating such reinstatement as a Credit Extension for purposes of this clause) and, in each case, directing Issuing Bank not to permit such reinstatement.

(v) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, Issuing Bank will also deliver to Parent Borrower and Administrative Agent a true and complete copy of such Letter of Credit or amendment.

(c) Drawings and Reimbursements; Funding of Participations .

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, Issuing Bank shall promptly notify Parent Borrower and Administrative Agent thereof. In the case of a Letter of Credit denominated in a Foreign Currency, Parent Borrower shall reimburse Issuing Bank in such Foreign Currency, unless (A) Issuing Bank (at its option) shall have specified in such notice that it will require reimbursement in Dollars, or (B) in the absence of any such requirement for reimbursement in Dollars, Parent Borrower shall have notified Issuing Bank promptly following receipt of the notice of drawing that Parent Borrower will reimburse Issuing Bank in Dollars. In the case of any such reimbursement in Dollars of a drawing under a Letter of Credit denominated in a Foreign Currency, Issuing Bank shall notify Parent Borrower of the Dollar Equivalent of the amount of the drawing promptly following the determination thereof. Not later than 11:00 a.m. (New York City time) on the first Business Day (each such date a “ Reimbursement Date ”) following the date of any payment by Issuing Bank under a Letter of Credit to be reimbursed in Dollars, or the Applicable Time on the first Business Day following the date of any payment by Issuing Bank under a Letter of Credit to be reimbursed in a Foreign Currency (each such date of payment by Issuing Bank, an “ Honor Date ”), Parent Borrower shall reimburse

 

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Issuing Bank through Administrative Agent in an amount equal to the amount of such drawing and in the applicable currency. If Parent Borrower fails to so reimburse Issuing Bank by such time, Administrative Agent shall promptly notify each U.S. Revolving Lender of the Honor Date, the amount of the unreimbursed drawing (expressed in Dollars in the amount of the Dollar Equivalent thereof in the case of a Letter of Credit denominated in a Foreign Currency) (the “ Unreimbursed Amount ”), and the amount of such Lender’s Pro Rata Share thereof. In such event, Parent Borrower shall be deemed to have requested a borrowing of U.S. Revolving Loans in the form of a Base Rate Loans to be disbursed on the Reimbursement Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.2 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the U.S. Revolving Commitments and the conditions set forth in Section 3.2(a) (other than the delivery of a Funding Notice). Parent Borrower shall pay Issuing Bank interest on any Unreimbursed Amount from the date of any payment by Issuing Bank under a Letter of Credit through and including the Reimbursement Date at the rate of interest then applicable to U.S. Revolving Loans that are Base Rate Loans. Any notice given by Issuing Bank or Administrative Agent pursuant to this Section 2.4(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(ii) Each U.S. Revolving Lender shall upon any notice pursuant to Section 2.4(c)(i) make funds available to Administrative Agent for the account of Issuing Bank at Administrative Agent’s Principal Office for Dollar-denominated payments in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. (New York City time) on the Business Day specified in such notice by Administrative Agent, whereupon, subject to the provisions of Section 2.4(c)(iii), each U.S. Revolving Lender that so makes funds available shall be deemed to have made a Base Rate Loan to Parent Borrower in such amount. Administrative Agent shall remit the funds so received to Issuing Bank.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a borrowing of U.S. Revolving Loans in the form of Base Rate Loans because the conditions set forth in Section 3.2(a) cannot be satisfied or for any other reason, from and after the date on which such Unreimbursed Amount would otherwise have been fully refinanced by U.S. Revolving Loans, Parent Borrower shall be deemed to have incurred from Issuing Bank an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the default rate for Base Rate Loans in accordance with Section 2.10. In such event, each U.S. Revolving Lender’s payment to Administrative Agent for the account of Issuing Bank pursuant to Section 2.4(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing in satisfaction of its participation obligation under this Section 2.4.

(iv) Until each U.S. Revolving Lender funds its U.S. Revolving Loan or funds its participation pursuant to this Section 2.4(c) to reimburse Issuing Bank for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Pro Rata Share of such amount shall be solely for the account of Issuing Bank.

(v) Each U.S. Revolving Lender’s obligation to make U.S. Revolving Loans or fund participations of L/C Borrowings to reimburse Issuing Bank for amounts drawn under Letters of Credit, as contemplated by this Section 2.4(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against Issuing Bank, Parent Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided , however , that each U.S. Revolving Lender’s obligation to make U.S. Revolving Loans pursuant to this Section 2.4(c) is subject to the conditions set forth in Section 3.2(a) (other than delivery by Parent Borrower of a Funding Notice). No such making of a U.S. Revolving Loan or purchase of a participation in such L/C Borrowing shall relieve or otherwise impair the obligation of Parent Borrower to reimburse Issuing Bank for the amount of any payment made by Issuing Bank under any Letter of Credit, together with interest as provided herein.

(vi) If any U.S. Revolving Lender fails to make available to Administrative Agent for the account of Issuing Bank any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.4(c) by the time specified in Section 2.4(c)(ii), Issuing Bank shall be entitled to recover from such Lender (acting through Administrative Agent), on demand, such amount with interest thereon for the period from the date

 

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such payment is required to the date on which such payment is immediately available to Issuing Bank at the Overnight Rate, plus any administrative, processing or similar fees customarily charged by Issuing Bank in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Pro Rata Share of the relevant U.S. Revolving Loan or participation in the relevant L/C Borrowing, as the case may be. A certificate of Issuing Bank submitted to any U.S. Revolving Lender (through Administrative Agent) with respect to any amounts owing under this Section 2.4(c)(vi) shall be conclusive absent manifest error.

(d) Repayment of Participations .

(i) At any time after Issuing Bank has made a payment under any Letter of Credit and has received from any U.S. Revolving Lender such Lender’s payment of such Lender’s participation in respect of such payment in accordance with Section 2.4(c), if Administrative Agent receives for the account of Issuing Bank any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from Parent Borrower or otherwise, including proceeds of Cash Collateral applied thereto by Administrative Agent), Administrative Agent will distribute to such Lender its Pro Rata Share thereof in the same funds as those received by Administrative Agent.

(ii) If any payment received by Administrative Agent for the account of Issuing Bank pursuant to Section 2.4(c)(i) is required to be returned under any of the circumstances described in Section 10.10 (including pursuant to any settlement entered into by Issuing Bank in its discretion), each U.S. Revolving Lender shall pay to Administrative Agent for the account of Issuing Bank its Pro Rata Share thereof on demand of Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Overnight Rate from time to time in effect. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e) Obligations Absolute . The obligation of Parent Borrower to reimburse Issuing Bank for each drawing under each Letter of Credit issued by it and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Credit Document;

(ii) the existence of any claim, counterclaim, setoff, defense or other right that Parent Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), Issuing Bank or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv) any payment by Issuing Bank under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by Issuing Bank under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

(v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, Parent Borrower or any of its Subsidiaries;

 

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Parent Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with Parent Borrower’s instructions or other irregularity, Parent Borrower will promptly notify Issuing Bank. Parent Borrower shall be conclusively deemed to have waived any such claim against Issuing Bank and its correspondents unless such notice is given as aforesaid.

(f) Role of Issuing Bank . Each Lender and Parent Borrower agree that, in paying any drawing under a Letter of Credit, Issuing Bank shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of Issuing Bank, Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of Issuing Bank shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the U.S. Revolving Lenders or the Requisite Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. Parent Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided , however , that this assumption is not intended to, and shall not, preclude Parent Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of Issuing Bank, Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of Issuing Bank shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.4(e); provided , however , that anything in such clauses to the contrary notwithstanding, Parent Borrower may have a claim against Issuing Bank, and Issuing Bank may be liable to Parent Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by Parent Borrower that were caused by Issuing Bank’s willful misconduct or gross negligence or Issuing Bank’s willful or grossly negligent failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and Issuing Bank shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

(g) Cash Collateral .

(i) Upon the request of Administrative Agent, (A) if Issuing Bank has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (B) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding and a backstop letter of credit that is satisfactory to Issuing Bank in its sole discretion is not in place, Parent Borrower shall, in each case, Cash Collateralize the then Outstanding Amount of all L/C Obligations.

(ii) In addition, if Administrative Agent notifies Parent Borrower at any time that the Outstanding Amount of all L/C Obligations at such time exceeds 105% of the Letter of Credit Sublimit then in effect (unless such excess arises solely in connection with the change in the Dollar Equivalent of L/C Obligations denominated in Foreign Currencies on any Revaluation Date specified in clause (b)(iv) of the definition thereof), within two Business Days after receipt of such notice, Parent Borrower shall Cash Collateralize the L/C Obligations in an amount equal to the amount by which the Outstanding Amount of all L/C Obligations exceeds the Letter of Credit Sublimit.

(iii) Administrative Agent may, at any time and from time to time after the initial deposit of such Cash Collateral, request that additional Cash Collateral be provided in order to protect against the results of exchange rate fluctuations.

(iv) Section 2.14(f) and Section 8.1 set forth certain additional requirements to deliver Cash Collateral hereunder. For purposes of this Section 2.4, Section 2.14(f) and Section 8.1, “ Cash Collateralize ” means to pledge and deposit with or deliver to Administrative Agent, for the benefit of Issuing Bank and the applicable Class(es) of Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance satisfactory to Administrative Agent and Issuing Bank (which documents are

 

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hereby consented to by the applicable Class(es) of Lenders). Derivatives of such term have corresponding meanings. Parent Borrower hereby grants to Administrative Agent, for the benefit of Issuing Bank and 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 blocked deposit accounts at Bank of America and may be invested in Cash Equivalents selected by Administrative Agent in its sole discretion. 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 Issuing Bank. 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 Parent Borrower.

(h) Applicability of ISP . Unless otherwise expressly agreed by Issuing Bank and Parent Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to each Letter of Credit.

(i) Conflict with Issuer Documents . In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

(j) Letters of Credit Issued for Subsidiaries . Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, Parent Borrower shall be obligated to reimburse Issuing Bank hereunder for any and all drawings under such Letter of Credit. Parent Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of Parent Borrower, and that Parent Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

(k) Resignation and Removal of Issuing Bank .

(i) An Issuing Bank may be replaced at any time by written agreement among Parent Borrower, Administrative Agent, the replaced Issuing Bank ( provided that no consent will be required if the replaced Issuing Bank has no Letters of Credit or reimbursement obligations with respect thereto outstanding) and the successor Issuing Bank. Administrative Agent shall notify the Lenders of any such replacement of such Issuing Bank. At the time any such replacement shall become effective, Parent Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank. From and after the effective date of any such replacement or resignation, (a) any successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (b) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto to the extent that Letters of Credit issued by it remain outstanding and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

(ii) Notwithstanding anything to the contrary contained herein, Issuing Bank may, upon sixty (60) days’ prior written notice to Parent Borrower and the Lenders, after use of commercially reasonable efforts to identify a successor Issuing Bank reasonably satisfactory to Administrative Agent and Parent Borrower, resign as an Issuing Bank. In the event of any such resignation of Issuing Bank, Parent Borrower shall be entitled to appoint from among the Lenders willing to accept such appointment a successor Issuing Bank hereunder; provided that no failure by Parent Borrower to appoint any such successor shall affect the resignation of Issuing Bank. If Issuing Bank resigns as an Issuing Bank, it shall retain all the rights and obligations of an Issuing Bank hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as an Issuing Bank and all L/C Obligation with respect thereto (including the right to require the Lenders to make Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.4(c)).

(l) U.S. Permitted Replacement Revolving Lenders . At any time that there are U.S. Permitted Replacement Commitments outstanding, each reference in this Section 2.4 to U.S. Revolving Lenders, U.S. Revolving Loans, U.S. Revolving Commitments and U.S. Revolving Exposure shall be deemed to include U.S. Permitted Replacement Revolving Lenders, U.S. Permitted Replacement Revolving Loans, U.S. Permitted Replacement Revolving Commitments and U.S. Permitted Replacement Revolving Exposure, respectively.

 

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(m) Outstanding Letters of Credit on Second Restatement Effective Date . All Letters of Credit outstanding under the Amended and Restated Credit Agreement on the Second Restatement Effective Date shall remain outstanding hereunder on the terms set forth herein. Each U.S. Revolving Lender’s risk participation in each such Letter of Credit shall be determined in accordance with such Lender’s Pro Rata Share, as provided in Section 2.4(c), as if such Letter of Credit has been issued on the Second Restatement Effective Date.

(n) [Reserved] .

(o) [Reserved] .

(p) Provisions Relating to Permitted Replacement Commitments . If the Letter of Credit Expiration Date in respect of any Classes of U.S. Revolving Commitments occurs prior to the expiry date of any Letter of Credit, then (i) if one or more other Classes of Revolving Commitments in respect of which the Letter of Credit Expiration Date shall not have so occurred are then in effect, such Letters of Credit shall automatically be deemed to have been issued (including for purposes of the obligations of the Revolving Lenders to purchase participations therein and to make Revolving Loans and payments in respect thereof pursuant to Section 2.4(c) and (d)) under (and ratably participated in by Lenders pursuant to) the Revolving Commitments in respect of such non-terminating tranches up to an aggregate amount not to exceed the aggregate principal amount of the unutilized Revolving Commitments thereunder at such time (it being understood that no partial face amount of any Letter of Credit may be so reallocated).

2.5. Pro Rata Shares; Availability of Funds.

(a) Pro Rata Shares . All Loans shall be made, and all participations purchased, by Lenders simultaneously and proportionately to their respective Pro Rata Shares, it being understood that no Lender shall be responsible for any default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby nor shall any Term Loan Commitment or any Revolving Commitment of any Lender be increased or decreased as a result of a default by any other Lender in such other Lender’s obligation to make a Loan requested hereunder or purchase a participation required hereby.

(b) Availability of Funds . Unless Administrative Agent shall have been notified by any Lender prior to the applicable Credit Date that such Lender does not intend to make available to Administrative Agent the amount of such Lender’s Loan requested on such Credit Date, Administrative Agent may assume that such Lender has made such amount available to Administrative Agent on such Credit Date, and Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to the applicable Borrower a corresponding amount on such Credit Date. If such corresponding amount is not in fact made available to Administrative Agent by such Lender, Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each day from such Credit Date until the date such amount is paid to Administrative Agent, at the Overnight Rate, plus any administrative, processing or similar fees customarily charged by Administrative Agent in connection with the foregoing. If such Lender does not pay such corresponding amount forthwith upon Administrative Agent’s demand therefor, Administrative Agent shall promptly notify the applicable Borrower and the applicable Borrower shall immediately pay such corresponding amount (excluding, for the avoidance of doubt, any interest and fees payable by such non-funding Lender) to Administrative Agent together with interest thereon, for each day from such Credit Date until the date such amount is paid to Administrative Agent, at the rate payable hereunder for Base Rate Loans for such Class of Loans. Nothing in this Section 2.5(b) shall be deemed to relieve any Lender from its obligation to fulfill its Term Loan Commitments and Revolving Commitments hereunder or to prejudice any rights that any Borrower may have against any Lender as a result of any default by such Lender hereunder.

2.6. Use of Proceeds. The proceeds of Tranche B Term Loans made on the Second Restatement Effective Date shall be applied to fund in part the making of a Restricted Junior Payment pursuant to Section 6.4(l) on or about the Second Restatement Effective Date and to pay any fees and expenses in connection therewith and with the other Second Restatement Transactions. The proceeds of Revolving Loans, Swing Line Loans, Letters of Credit, New Revolving Loans, Permitted Replacement Revolving Loans and New Term Loans made after the Second Restatement Effective Date shall be applied by Borrowers for working capital and general corporate purposes of Holdings and its Subsidiaries, subject, with respect to New Term Loans and New Revolving Loan

 

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Commitments, to Section 2.23, and with respect to Refinancing Term Loans, Section 2.24, and with respect to Permitted Replacement Revolving Loans, Section 2.25, and with respect to Extended Term Loans, Section 2.26. No portion of the proceeds of any Credit Extension shall be used in any manner that causes or would reasonably be expected to cause such Credit Extension or the application of such proceeds to violate Regulation T, Regulation U or Regulation X of the Board of Governors or any other regulation thereof or to violate the Exchange Act.

2.7. Evidence of Debt; Register; Lenders’ Books and Records; Notes.

(a) Lenders’ Evidence of Debt . Each Lender shall maintain on its internal records an account or accounts evidencing the Obligations of each Borrower to such Lender, including the amounts of the Loans made by it and each repayment and prepayment in respect thereof. Any such recordation shall be conclusive and binding on such Borrower, absent demonstrable error; provided , that the failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Revolving Commitments or such Borrower’s Obligations in respect of any applicable Loans; and provided further , in the event of any inconsistency between the Register and any Lender’s records, the recordations in the Register shall govern.

(b) Register . Administrative Agent (or its agent or sub-agent appointed by it) shall maintain at its Principal Office a register for the recordation of the names and addresses of Lenders and the Revolving Commitments and the principal amounts (and stated interest) of Loans of each Lender from time to time (the “ Register ”). The Register shall be available for inspection by any Borrower or any Lender (with respect to any entry relating to such Lender’s Loans) at any reasonable time and from time to time upon reasonable prior notice. Administrative Agent shall record, or shall cause to be recorded, in the Register the Revolving Commitments and the Loans in accordance with the provisions of Section 10.6, and each repayment or prepayment in respect of the principal amount of the Loans, and any such recordation shall be conclusive and binding on each Borrower and each Lender, absent manifest error; provided , that failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Revolving Commitments or any Borrower’s Obligations in respect of any Loan. Each Borrower hereby designates Administrative Agent to serve as such Borrower’s agent solely for purposes of maintaining the Register as provided in this Section 2.7, and each Borrower hereby agrees that, to the extent Administrative Agent serves in such capacity, Administrative Agent and its officers, directors, employees, agents, sub-agents and affiliates shall constitute “ Indemnitees .”

(c) Notes . (i) If so requested by any Additional Tranche B Term Lender by written notice to Parent Borrower (with a copy to Administrative Agent) at least two Business Days prior to the Second Restatement Effective Date, or if so requested by any Lender at any time thereafter, Parent Borrower shall execute and deliver to such Lender on the Second Restatement Effective Date (or, if such notice is delivered after the Second Restatement Effective Date, promptly after Parent Borrower’s receipt of such notice) a Note or Notes to evidence such Lender’s Loans. (ii) On and after the Second Restatement Effective Date, each Lender which holds a Revolving Loan Note shall be entitled to surrender such Revolving Loan Note to Parent Borrower against delivery of a new Note evidencing the Loans into which the Pre-Restatement Revolving Loans of such Lender were reclassified on the Second Restatement Effective Date; provided that if any such Revolving Loan Note is not so surrendered, then from and after the Second Restatement Effective Date such Note shall be deemed to evidence the Loans into which the Pre-Restatement Revolving Loans evidenced by such Note have been converted.

2.8. Interest on Loans.

(a) Except as otherwise set forth herein, each Class of Loan shall bear interest on the unpaid principal amount thereof from the date made until repayment (whether by acceleration or otherwise) thereof as follows:

(i) in the case of Revolving Loans:

(1) if a Base Rate Loan, at the Base Rate plus the Applicable Margin; or

(2) if a Eurocurrency Rate Loan, at the Eurocurrency Rate plus the Applicable Margin plus (in the case of a Eurocurrency Rate Loan of any Lender which is lent from a Lending Office in the United Kingdom or a Participating Member State) the Mandatory Cost;

 

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(ii) in the case of Swing Line Loans, at the Base Rate plus the Applicable Margin; and

(iii) (x) in the case of Tranche B Dollar Term Loans:

(1) if a Base Rate Loan, at the Base Rate plus 2.25% per annum; or

(2) if a Eurocurrency Rate Loan, at the Eurocurrency Rate plus 3.25% per annum plus (in the case of a Eurocurrency Rate Loan of any Lender which is lent from a Lending Office in the United Kingdom or a Participating Member State) the Mandatory Cost.

(y) in the case of Tranche B Euro Term Loans, at the Eurocurrency Rate plus 3.50% per annum plus (in the case of a Eurocurrency Rate Loan of any Lender which is lent from a Lending Office in the United Kingdom or a Participating Member State) the Mandatory Cost.

(b) The basis for determining the rate of interest with respect to any Loan (except a Swing Line Loan which can be made and maintained as Base Rate Loans only), and the Interest Period with respect to any Eurocurrency Rate Loan, shall be selected by the applicable Borrower and notified to Administrative Agent and Lenders pursuant to the applicable Funding Notice or Conversion/Continuation Notice, as the case may be; provided , that all Loans denominated in Foreign Currencies shall consist solely of Eurocurrency Rate Loans. If on any day a Eurocurrency Rate Loan denominated in Dollars is outstanding with respect to which a Funding Notice or Conversion/Continuation Notice has not been delivered to Administrative Agent in accordance with the terms hereof specifying the applicable basis for determining the rate of interest, then at the end of the Interest Period, such Loan shall be automatically converted to a Base Rate Loan.

(c) In connection with Eurocurrency Rate Loans there shall be no more than fifteen (15) Interest Periods outstanding at any time; provided that after the establishment of any new Class of Loans pursuant to a Refinancing Amendment, Permitted Replacement Revolving Amendment or Extension Amendment, the number of Interest Periods otherwise permitted by this Section 2.8(c) shall increase by three (3) Interest Periods for each applicable Class so established. In the event a Borrower fails to specify between a Base Rate Loan or a Eurocurrency Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, such Loan (if outstanding as a Eurocurrency Rate Loan and denominated in Dollars) will be automatically converted into a Base Rate Loan on the last day of the then current Interest Period for such Loan (or if outstanding as a Base Rate Loan will remain as, or (if not then outstanding) will be made as, a Base Rate Loan). In the event a Borrower fails to specify an Interest Period for any Eurocurrency Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, such Borrower shall be deemed to have selected an Interest Period of one month. As soon as practicable after 10:00 a.m. (New York City time) on each Interest Rate Determination Date, Administrative Agent shall determine (which determination shall, absent demonstrable error, be final, conclusive and binding upon all parties) the interest rate that shall apply to the Eurocurrency Rate Loans for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to each Borrower and each Lender.

(d) Interest payable pursuant to Section 2.8(a) shall be computed (i) in the case of Base Rate Loans, on the basis of a 365-day or 366-day year, as the case may be, and (ii) in the case of Eurocurrency Rate Loans, on the basis of a 360-day year, in each case for the actual number of days elapsed in the period during which it accrues; provided , that in the case of interest in respect of a Eurocurrency Rate Loan denominated in a Foreign Currency as to which market practice differs from the foregoing, in accordance with such market practice. 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 a Term Loan, the last Interest Payment Date with respect to such Term Loan or, with respect to a Base Rate Loan being converted from a Eurocurrency Rate Loan, the date of conversion of such Eurocurrency Rate Loan to such Base Rate 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 a Base Rate Loan being converted to a Eurocurrency Rate Loan, the date of conversion of such Base Rate Loan to such Eurocurrency Rate 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.

 

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(e) Except as otherwise set forth herein, interest on each Loan shall accrue on a daily basis and (i) shall be payable in arrears on each Interest Payment Date with respect to interest accrued on and to each such payment date; (ii) shall be payable in arrears upon any prepayment of that Loan, whether voluntary or mandatory, to the extent accrued on the amount being prepaid; and (iii) shall be payable in arrears at maturity of the Loans, including final maturity of the Loans; provided , however , that with respect to any voluntary prepayment of a Base Rate Loan, accrued interest shall instead be payable on the applicable Interest Payment Date.

(f) The parties agree that, pursuant to the provisions of the Swiss Withholding Tax Act and the current practice of the Swiss tax authorities (and based on the representations set forth in Section 5.17 and Section 9.10), notably of the Swiss Federal Tax Administration, no Swiss Withholding Tax applies to interest payments made by the Swiss Subsidiary Borrower provided that the Swiss Withholding Tax Rules are complied with. Therefore, the Swiss Subsidiary Borrower acknowledges and agrees that the interest rates which are set out in and are calculated in accordance with this Section 2.8 shall constitute a “minimum interest rate” and that, notwithstanding the foregoing, if Swiss Tax Deduction is required by law in respect of any interest payable under this Agreement by the Swiss Subsidiary Borrower and should it be unlawful for such Swiss Subsidiary Borrower to comply with Section 2.20(b) below for any reason:

(i) then the applicable interest rate in relation to that interest payment to the relevant Lender shall be (i) the interest rate which would have applied to that interest payment as provided for in this Section 2.8 divided by (ii) one (1) minus the rate at which the relevant Swiss Tax Deduction is required to be made under Swiss domestic tax law and/or applicable double taxation treaties; and

(ii) the Swiss Subsidiary Borrower shall (without duplication) (i) calculate the relevant interest with respect to the relevant Lender at the adjusted rate in accordance with paragraph (i) above, (ii) make the Swiss Tax Deduction on the interest so recalculated and (iii) all references to a rate of interest under the Agreement with respect to Loans to the Swiss Subsidiary Borrower shall be construed with respect to the relevant Lender accordingly.

(g) The parties acknowledge that the provisions of the Swiss Withholding Tax Act and the current practice of the Swiss tax authorities, notably of the Swiss Federal Tax Administration, may change in future and agree that it is in the best interest of all parties hereto that no Swiss Withholding Tax will be payable on the interest payments made with respect to the Swiss Subsidiary Borrower under this Agreement. In the event that the Swiss Withholding Tax Act and the practice of the Swiss tax authorities, notably of the Swiss Federal Tax Administration, are modified in a manner that would require the payment of such Swiss Withholding Tax, the Credit Parties and each relevant Lender agree to use commercially reasonable efforts to amend this Agreement to ensure that no Swiss Withholding Tax applies to payments in respect of such interest payments. Notwithstanding anything to the contrary in Section 10.5(a), any such amendments necessary or desirable to limit Swiss Withholding Tax (A) shall be effective with the consent of Parent Borrower, the Swiss Subsidiary Borrower and each relevant Lender and (B) shall not be construed to obligate any Credit Party to assume additional or different payment, guaranty or other economic burdens then as currently set forth herein. If, for any reason, this Agreement is not or cannot be amended to limit Swiss Withholding Tax, the parties further agree that to the extent that interest payable by the Swiss Subsidiary Borrower under the Agreement becomes subject to Swiss Withholding Tax, each relevant Lender and the Swiss Subsidiary Borrower shall promptly co-operate in completing any procedural formalities (including submitting forms and documents required by the appropriate tax authority) to the extent possible and necessary for the Swiss Subsidiary Borrower to obtain authorization (i) to make interest payments without them being subject to Swiss Withholding Tax or (ii) to being subject to Swiss Withholding Tax at a rate reduced under applicable double taxation treaties. Notwithstanding the foregoing, if Swiss Withholding Tax is required in respect of any interest payable by the Swiss Subsidiary Borrower, then the applicable interest rate shall be adjusted as set forth in Section 2.8(f), subject to the conditions set forth herein.

(h) Notwithstanding Sections 2.8(f) and 2.8(g) above, the Swiss Subsidiary Borrower shall not be required to comply with the increased interest rule such as set out under Section 2.8(f) above if it has breached the Swiss Withholding Tax Rules as a direct result of (x) any failure to satisfy the Ten Non-Bank Rule as of the Original Closing Date or (y) a Lender or participant breaching:

(i) its representation as to its status pursuant to Section 9.10 (of this Agreement or the Original Credit Agreement) on the later of the date of the relevant agreement or the date it became a party thereto (as relevant); or

 

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(ii) the requirements and limitations for assignments, transfers, participations and sub-participations (and other obligations) under Section 10.6 (of this Agreement or the Original Credit Agreement).

For the avoidance of doubt, the Swiss Subsidiary Borrower shall be required to comply with the increased interest rule such as set out under Section 2.8(f) above if it has otherwise breached the Swiss Withholding Tax Rules or if it does not comply with the covenant provided for by Section 5.17.

The principles of Section 2.20(g) shall apply with respect to refunds or credits received on account of additional interest paid under this Section 2.8.

2.9. Conversion/Continuation.

(a) Subject to Section 2.18 and, so long as no Event of Default shall have occurred and then be continuing, the applicable Borrower shall have the option:

(i) to convert at any time all or any part of any Term Loan or Revolving Loan equal to the Dollar Equivalent of $1,000,000 (or $500,000 for conversions into Base Rate Loans) and integral multiples of $100,000 in excess of that amount from one Type of Loan to another Type of Loan; provided , that (x) a Eurocurrency Rate Loan may only be converted on the expiration of the Interest Period applicable to such Eurocurrency Rate Loan unless the applicable Borrower shall pay all amounts due under Section 2.18 in connection with any such conversion and (y) no Foreign Currency Loan may be converted into a Base Rate Loan or into a Foreign Currency Loan of a different Foreign Currency; or

(ii) upon the expiration of any Interest Period applicable to any Eurocurrency Rate Loan, to continue all or any portion of such Loan equal to the Dollar Equivalent of $1,000,000 and integral multiples of $100,000 in excess of that amount as a Eurocurrency Rate Loan.

(b) The applicable Borrower shall deliver a Conversion/Continuation Notice to Administrative Agent no later than (i) 10:00 a.m. (New York City time) at least one Business Day in advance of the proposed conversion/continuation date (in the case of a conversion to a Base Rate Loan), (ii) 12:00 noon (New York City time) at least three Business Days in advance of the proposed conversion/continuation date (in the case of a conversion to, or a continuation of, a Eurocurrency Rate Loan denominated in Dollars), (iii) at least four Business Days in advance of the proposed continuation date (in the case of a continuation of, a Eurocurrency Rate Loan denominated in a Foreign Currency other than a Special Notice Currency) and (iv) at least five Business Days in advance of the proposed continuation date (in the case of a continuation of, a Eurocurrency Rate Loan denominated in a Special Notice Currency). Except as otherwise provided herein, a Conversion/Continuation Notice for conversion to, or continuation of, any Eurocurrency Rate Loans shall be irrevocable, and such Borrower shall be bound to effect a conversion or continuation in accordance therewith.

2.10. Default Interest. Upon the occurrence and during the continuance of an Event of Default, any overdue principal amount of all Loans outstanding and, to the extent permitted by applicable law, any overdue interest payments on the Loans or any overdue fees or any other overdue amounts owed hereunder, shall thereafter bear interest (including post-petition interest in any proceeding under the Bankruptcy Code or other applicable Debtor Relief Laws) payable on demand at a rate that is 2% per annum in excess of the interest rate otherwise payable hereunder with respect to the applicable Loans (or, in the case of any such fees and other amounts, at a rate which is 2% per annum in excess of the interest rate otherwise payable hereunder for Base Rate Loans that are Revolving Loans); provided , (x) in the case of Eurocurrency Rate Loans denominated in Dollars, upon the expiration of the Interest Period in effect at the time any such increase in interest rate is effective such Eurocurrency Rate Loans shall thereupon become Base Rate Loans and such overdue amounts shall thereafter bear interest payable upon demand at a rate which is 2% per annum in excess of the interest rate otherwise payable hereunder for Base Rate Loans and (y) unless otherwise agreed to by the Requisite Lenders, all Foreign Currency Loans shall be

 

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continued in one-month Interest Periods on the last day of the then current Interest Periods of such Foreign Currency Loans. Payment or acceptance of the increased rates of interest provided for in this Section 2.10 is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Administrative Agent or any Lender.

2.11. Fees.

(a) Parent Borrower agrees to pay to U.S. Revolving Lenders:

(x) commitment fees equal to (1) the daily difference between (a) the U.S. Revolving Commitments and (b) (x) the aggregate principal amount of all outstanding U.S. Revolving Loans (for the avoidance of doubt, excluding Swing Line Loans) plus (y) the L/C Obligations, times (2) the Applicable Revolving Commitment Fee Percentage; and

(y) letter of credit fees equal to (1) the Applicable Margin for Revolving Loans that are Eurocurrency Rate Loans, times (2) the Dollar Equivalent of the daily amount available to be drawn under all such Letters of Credit (regardless of whether any conditions for drawing could then be met and determined as of the close of business on any date of determination).

(i) Parent Borrower and Japanese Subsidiary Borrower jointly and severally agree to pay to Japanese Revolving Lenders commitment fees equal to (1) the daily difference between (a) the Japanese Revolving Commitments and (b) the aggregate Dollar Equivalent principal amount of all outstanding Japanese Revolving Loans times (2) the Applicable Revolving Commitment Fee Percentage; and

(ii) Parent Borrower and Swiss Subsidiary Borrower jointly and severally agree to pay to Swiss/Multicurrency Revolving Lenders commitment fees equal to (1) the daily difference between (a) the Swiss/Multicurrency Revolving Commitments and (b) the aggregate Dollar Equivalent principal amount of all outstanding Swiss/Multicurrency Revolving Loans times (2) the Applicable Revolving Commitment Fee Percentage;

provided , that any commitment fee which accrued with respect to the Revolving Commitment of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by Parent Borrower, Swiss Subsidiary Borrower or Japanese Subsidiary Borrower, as the case may be, so long as such Lender shall be a Defaulting Lender except to the extent that such commitment fee shall otherwise have been due and payable by Parent Borrower, Swiss Subsidiary Borrower or Japanese Subsidiary Borrower, as the case may be, prior to such time; and provided , further , that no such commitment fee shall accrue on the Revolving Commitment of a Defaulting Lender so long as such Lender shall be a Defaulting Lender.

All fees referred to in this Section 2.11(a) shall be paid to Administrative Agent at its Principal Office and upon receipt, Administrative Agent shall promptly distribute to each Lender its Pro Rata Share thereof.

(b) For purposes of computing the daily amount available to be drawn under any Letter of Credit under Section 2.11(a) above, the amount of such Letter of Credit shall be determined in accordance with Section 1.7.

(c) All fees referred to in Section 2.11(a) shall be calculated on the basis of a 360-day year and the actual number of days elapsed and shall be payable quarterly in arrears on the last Business Day of each March, June, September and December of each year during the Revolving Commitment Period, commencing on the first such date to occur after the First Restatement Effective Date, and on the Revolving Commitment Termination Date.

(d) [Reserved].

(e) In addition to any of the foregoing fees, Borrowers agree to pay to Agents such other fees in the amounts and at the times separately agreed upon.

 

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2.12. Scheduled Payments. From and after the Second Restatement Effective Date, the principal amounts of the (A) Tranche B Dollar Term Loans shall be repaid in consecutive quarterly installments of $4,505,000 and (B) Tranche B Euro Term Loans shall be repaid in consecutive quarterly installments of €1,926,500 (each, an “ Installment ”) on the four quarterly scheduled Interest Payment Dates applicable to Base Rate Loans commencing December 28, 2012, with the remaining principal balance of the Tranche B Term Loans payable on the Tranche B Term Loan Maturity Date.

Notwithstanding the foregoing, (x) such Installments shall be reduced in connection with any voluntary or mandatory prepayments of the Tranche B Term Loans (including any such payments prior to the First Restatement Effective Date in respect of the term loans that were refinanced by the Tranche B Term Loans and any such payment prior to the Second Restatement Effective Date) in accordance with Sections 2.13, 2.14 (other than mandatory prepayments pursuant to Section 2.14(h), which shall not reduce such Installments but shall reduce the remaining principal balance payable on the Tranche B Term Loan Maturity Date) and 2.15, as applicable and (y) the Tranche B Term Loans, together with all other amounts owed hereunder with respect thereto, shall, in any event, be paid in full no later than the Tranche B Term Loan Maturity Date.

2.13. Voluntary Prepayments/Commitment Reductions.

(a) Voluntary Prepayments.

(i) Any time and from time to time:

(1) with respect to Base Rate Loans, the applicable Borrower may prepay any such Loans on any Business Day in whole or in part, in an aggregate minimum Dollar Equivalent amount of $500,000 and integral multiples of the Dollar Equivalent amount of $100,000 in excess of that amount;

(2) with respect to Eurocurrency Rate Loans, the applicable Borrower may prepay any such Loans on any Business Day in whole or in part in an aggregate minimum Dollar Equivalent amount of $1,000,000 and integral multiples of the Dollar Equivalent amount of $100,000 in excess of that amount; and

(3) with respect to Swing Line Loans, Parent Borrower may prepay any such Loans on any Business Day in whole or in part in an aggregate minimum amount of $500,000 and in integral multiples of $100,000 in excess of that amount;

or, in each case, if less, the entire principal amount thereof then outstanding.

(ii) All such prepayments shall be made:

(1) upon prior written or telephonic notice received on the same day in the case of Base Rate Loans;

(2) upon not less than three Business Days’ prior written or telephonic notice in the case of Eurocurrency Rate Loans denominated in Dollars;

(3) upon not less than four Business Days’ prior written or telephonic notice in the case of Eurocurrency Rate Loans denominated in a Foreign Currency other than a Special Notice Currency;

(4) upon not less than five Business Days’ prior written or telephonic notice in the case of Eurocurrency Rate Loans denominated in a Special Notice Currency; and

(5) upon written or telephonic notice on the date of prepayment, in the case of Swing Line Loans;

 

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in each case given to Administrative Agent or Swing Line Lender, as the case may be, by 12:00 p.m. (New York City time) on the date required and, if given by telephone, promptly confirmed by delivery of written notice thereof to Administrative Agent (and Administrative Agent will notify each Lender for Term Loans or Revolving Loans, as the case may be, by telefacsimile or telephone) or Swing Line Lender, as the case may be. Upon the giving of any such notice, the principal amount of the Loans specified in such notice shall become due and payable on the prepayment date specified therein.

(b) Voluntary Commitment Reductions .

(i) A Borrower may, upon not less than two Business Days’ prior written or telephonic notice promptly confirmed by delivery of written notice thereof to Administrative Agent (which notice Administrative Agent will promptly notify by telefacsimile or telephone to each applicable Lender), at any time and from time to time terminate in whole or permanently reduce in part, without premium or penalty any Class of Revolving Commitments in an amount up to the amount by which such Class of Revolving Commitments exceed the Total Utilization of such Class of Revolving Commitments, in each case at the time of such proposed termination or reduction; provided , any such partial reduction of the Revolving Commitments shall be in an aggregate minimum Dollar Equivalent amount of $1,000,000 and integral multiples of the Dollar Equivalent amount of $100,000 in excess of that amount.

(ii) A Borrower’s notice to Administrative Agent shall designate the date (which shall be a Business Day) of such termination or reduction and the amount of any partial reduction, and such termination or reduction of the Revolving Commitments shall be effective on the date specified in such Borrower’s notice and shall reduce the Revolving Commitment of each Lender proportionately to its Pro Rata Share thereof.

(c) Notwithstanding anything to the contrary contained in this Agreement, but subject to the provisions of Section 2.18(c), Parent Borrower may rescind any notice of prepayment or termination under Section 2.13 if such notice of prepayment or termination was made in contemplation of a refinancing of the Term Loans and/or New Term Loans or the Revolving Commitments, Permitted Replacement Revolving Commitments and/or New Revolving Loan Commitments, as applicable, which refinancing shall not be consummated or shall otherwise be delayed.

2.14. Mandatory Prepayments.

(a) Asset Sales . No later than the fifth Business Day following the date of receipt by Holdings or any of its Subsidiaries of any Net Asset Sale Proceeds, the applicable Borrowers shall prepay the Loans as set forth in Section 2.15(b) in an aggregate amount equal to such Net Asset Sale Proceeds; provided , (x) that except as provided in clause (3) of the provisio to Section 6.8(b)(10), (i) so long as no Specified Default or Event of Default shall have occurred and be continuing, such Borrowers shall have the option, directly or through one or more of its Subsidiaries, to invest Net Asset Sale Proceeds within three hundred sixty-five days of receipt thereof in long-term productive assets of the general type useful in the business of Parent Borrower and its Subsidiaries, including in Equity Interests of a Person engaged in a Similar Business and (ii) if such Borrowers intend to invest such proceeds, but a Default (but not an Event of Default or a Specified Default) exists on the date of receipt of such Net Asset Sale Proceeds, such Borrowers may hold such proceeds (without making any such investment) until such Default is cured, but if such Default becomes an Event of Default (or a Specified Default occurs), such Borrowers shall immediately prepay the Loans with such Net Asset Sale Proceeds as set forth in Section 2.15(b) and (y) to the extent any applicable documentation governing Permitted First Priority Refinancing Debt requires Parent Borrower to prepay or make an offer to purchase such Permitted First Priority Refinancing Debt with such Net Asset Sale Proceeds, the amount of prepayment required pursuant to this Section 2.14(a) shall be deemed to be the amount equal to the product of (1) the amount of such Net Asset Sale Proceeds multiplied by (2) a fraction, the numerator of which is the outstanding principal amount of the Term Loans and the denominator of which is the sum of the outstanding principal amount of the Permitted First Priority Refinancing Debt with respect to which such a requirement to prepay or make an offer to purchase exists and the outstanding principal amount of the Term Loans; provided further that the Borrower shall not be permitted to reinvest any such Net Asset Sale Proceeds in accordance with this Section 2.14(a) to the extent the Borrower applies any such Net Asset Sale Proceeds to prepay or purchase Permitted First Priority Refinancing Debt, and to the extent Parent Borrower makes any such prepayment or purchase of Permitted First Priority Refinancing Debt, Parent Borrower shall prepay Term Loans in accordance with this paragraph within one (1) Business Day of such prepayment or purchase without giving effect to clause (x) of this proviso.

 

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(b) Insurance/Condemnation Proceeds . No later than the fifth Business Day following the date of receipt by Holdings or any of its Subsidiaries, or Administrative Agent as loss payee, of any Net Insurance/Condemnation Proceeds, the applicable Borrowers shall prepay the Loans as set forth in Section 2.15(b) in an aggregate amount equal to such Net Insurance/Condemnation Proceeds; provided , (x) (i) so long as no Specified Default or Event of Default shall have occurred and be continuing, such Borrowers shall have the option, directly or through one or more of its Subsidiaries to invest such Net Insurance/Condemnation Proceeds within three hundred sixty-five days of receipt thereof in long-term productive assets of the general type useful in the business of Parent Borrower and its Subsidiaries, which investment may include the repair, restoration or replacement of the applicable assets thereof, including in Equity Interests of a Person engaged in a Similar Business and (ii) if such Borrowers intend to invest such proceeds, but a Default (but not an Event of Default or Specified Default) exists on the date of receipt of such Net Insurance/Condemnation Proceeds, such Borrowers may hold such proceeds (without making any such investment) until such Default is cured, but if such Default becomes an Event of Default (or a Specified Default occurs), such Borrowers shall immediately prepay the Loans with such Net Insurance/Condemnation Proceeds as set forth in Section 2.15(b) and (y) to the extent any applicable documentation governing Permitted First Priority Refinancing Debt requires Parent Borrower to prepay or make an offer to purchase such Permitted First Priority Refinancing Debt with such Net Insurance/Condemnation Proceeds, the amount of prepayment required pursuant to this Section 2.14 (b) shall be deemed to be the amount equal to the product of (1) the amount of such Net Insurance/Condemnation Proceeds multiplied by (2) a fraction, the numerator of which is the outstanding principal amount of the Term Loans and the denominator of which is the sum of the outstanding principal amount of the Permitted First Priority Refinancing Debt with respect to which such a requirement to prepay or make an offer to purchase exists and the outstanding principal amount of the Term Loans; provided further that Borrowers shall not be permitted to reinvest any such Net Insurance/Condemnation Proceeds in accordance with this Section 2.14(b) to the extent the Borrower applies any such Net Insurance/Condemnation Proceeds to prepay or purchase Permitted First Priority Refinancing Debt, and to the extent Parent Borrower makes any such prepayment or purchase of Permitted First Priority Refinancing Debt, Parent Borrower shall prepay Term Loans in accordance with this paragraph within one (1) Business Day of such prepayment or purchase without giving effect to clause (x) of this proviso.

(c) Intentionally omitted .

(d) Issuance of Debt . No later than the first Business Day following the date of receipt by Holdings or any of its Subsidiaries of any Net Cash Proceeds from the incurrence of any Indebtedness of Holdings or any of its Subsidiaries (other than with respect to any Indebtedness permitted to be incurred pursuant to Section 6.1), the applicable Borrowers shall prepay the Loans as set forth in Section 2.15(b) in an aggregate amount equal to 100% of such Net Cash Proceeds.

(e) Consolidated Excess Cash Flow . In the event that there shall be Consolidated Excess Cash Flow for any Fiscal Year (commencing with the Fiscal Year ending December 31, 2010; provided that Consolidated Excess Cash Flow for the Fiscal Year ending December 31, 2010 shall be calculated for the nine-month period ending December 31, 2010), the applicable Borrowers shall, no later than the fifth Business Day following the date by which delivery of the annual financial statements with respect to such Fiscal Year is required pursuant to Section 5.1(b), prepay the Loans as set forth in Section 2.15(b) in an aggregate amount equal to (i) 50% of such Consolidated Excess Cash Flow minus (ii) voluntary repayments of the Loans (excluding repayments of Revolving Loans or Swing Line Loans except to the extent the Revolving Commitments are permanently reduced in connection with such repayments) minus (iii) voluntary prepayments, repayments or purchases (in the case of a purchase, calculated at the purchase price if less than the principal amount purchased) of Permitted First Priority Refinancing Debt on a no more than pro rata basis with the Term Loans; provided , that if, as of the last day of the most recently ended Fiscal Year, the Leverage Ratio (determined for any such period by reference to the Compliance Certificate delivered pursuant to Section 5.1(c) calculating the Leverage Ratio as of the last day of such Fiscal Year) shall be (1) 4.00:1.00 or less, such Borrowers shall only be required to make the prepayments otherwise required hereby in an amount equal to (i) 25% of such Consolidated Excess Cash Flow minus (ii) voluntary repayments of the Loans (excluding repayments of Revolving Loans or Swing Line Loans except to the extent the Revolving Commitments are permanently reduced in connection with such repayments) minus (iii) voluntary prepayments, repayments or

 

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purchases (in the case of a purchase, calculated at the purchase price if less than the principal amount purchased) of Permitted First Priority Refinancing Debt on a no more than pro rata basis with the Term Loans and (2) 3.00:1.00 or less, Borrowers shall not be required to make any prepayments otherwise required by this Section 2.14(e). Notwithstanding the foregoing, the amount of any prepayment of Loans required to be made in respect of the nine-month period ending December 31, 2010 pursuant to this Section 2.14(e) shall be reduced by an amount (but not to less than zero) (the “ 2010 Reduction Amount ”) equal to the sum of the aggregate cash consideration paid or required to be paid (to the extent funded or to be funded with Internally Generated Cash) by Parent Borrower or any Subsidiary pursuant to the SDI Acquisition Agreement (the “ SDI Amount ”); it being understood, for the avoidance of doubt, that the portion of the SDI Amount in excess of the 2010 Reduction Amount shall be available to reduce the Consolidated Excess Cash Flow in respect of the Fiscal Year ending December 31, 2011; provided that if the SDI Acquisition Agreement is terminated by Parent Borrower on or before October 31, 2011 or the SDI Acquisition is not consummated by October 31, 2011, Parent Borrower shall prepay the Term Loans in accordance with this Section 2.14(e) in an amount equal to the 2010 Reduction Amount within 30 days of the earlier of the date of such termination or October 31, 2011.

(f) Revolving Loans and Swing Loans . If at any time after the Second Restatement Effective Date, (i) the Total Utilization of any Class of U.S. Revolving Commitments shall exceed the aggregate U.S. Revolving Commitments of such Class then in effect, (ii) the Total Utilization of any Class of Japanese Revolving Commitments shall exceed 105% of the aggregate Japanese Revolving Commitments of such Class then in effect or (iii) the Total Utilization of any Class of Swiss/Multicurrency Revolving Commitments shall exceed 105% of the aggregate Swiss/Multicurrency Revolving Commitments of such Class then in effect, the applicable Borrowers promptly (and in any event within three Business Days) shall first , prepay the Swing Line Loans (if applicable), and second , prepay the applicable Revolving Loans and/or Cash Collateralize the L/C Obligations in an amount sufficient to eliminate such excess.

(g) Prepayment Certificate . Concurrently with any prepayment of the Loans of the Revolving Commitments pursuant to Sections 2.14(a) through 2.14(e), Parent Borrower shall deliver to Administrative Agent a certificate of an Authorized Officer demonstrating the calculation of the amount of the applicable net proceeds or Consolidated Excess Cash Flow, as the case may be. In the event that Parent Borrower shall subsequently determine that the actual amount received exceeded the amount set forth in such certificate, the applicable Borrower shall promptly make an additional prepayment of the Loans in an amount equal to such excess, and Parent Borrower shall concurrently therewith deliver to Administrative Agent a certificate of an Authorized Officer demonstrating the derivation of such excess.

(h) AHYDO Catch-Up Payments . In addition to the payments otherwise set forth herein, Parent Borrower shall make such additional payments as are necessary on or before the end of the applicable accrual period, and on each relevant Interest Payment Date thereafter, sufficient (but not in excess of the minimum sufficient amount) to ensure that each Loan will not be an “applicable high yield discount obligation” within the meaning of Section 163(i)(1) of the Internal Revenue Code. Each such additional payment shall be applied in full, notwithstanding any other provision herein (including Sections 2.15, 2.17 and 2.24) to prepay the relevant Loan.

(i) Credit Agreement Refinancing Indebtedness . If Parent Borrower incurs or issues any Credit Agreement Refinancing Indebtedness, Parent Borrower shall, substantially contemporaneously with such incurrence or issuance, prepay the Class or Classes of Term Loans constituting Refinanced Debt with respect to such Credit Agreement Refinancing Indebtedness in an aggregate amount equal to 100% of the Net Cash Proceeds of such issuance. Notwithstanding anything to the contrary contained in this Agreement, the Borrower may rescind or amend any notice of prepayment under this Section 2.14(i) if such prepayment would have resulted from an issuance of Credit Agreement Refinancing Indebtedness, which issuance shall not be consummated or shall otherwise be delayed.

2.15. Application of Prepayments.

(a) Application of Voluntary Prepayments by Type of Loans . Any prepayment of any Loan pursuant to Section 2.13(a) shall be applied as specified by the applicable Borrower in the applicable notice of prepayment; provided, that (i) any prepayment of Term Loans shall be made on a pro rata basis to each Class of Term Loans (based upon the then outstanding principal amounts of the respective Classes of Term Loans); provided that (x) in

 

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lieu of such application on a pro rata basis to each Class of Term Loans, at any time the applicable Borrower may, at its option, direct that such prepayment be applied (in which case it shall be applied) (I) first, to then outstanding Tranche B Term Loans on a pro rata basis among Tranche B Dollar Term Loans and Tranche B Euro Term Loans until all such Tranche B Term Loans have been repaid in full, and (II) thereafter, to the successive Class or Classes of Term Loans with the then next earliest Term Loan Maturity Date (ratably among such Classes, if multiple Classes exist with the same Maturity Date), until all such Term Loans have been repaid in full, and so on, and (y) it is understood and agreed that the preceding clause (x) may be modified as expressly provided in Section 2.24 or 2.26 in connection with a Refinancing Amendment or Extension Amendment, as the case may be and (ii) in the event any Borrower fails to specify the Loans to which any such prepayment shall be applied, such prepayment shall be applied as follows:

first , to repay outstanding Swing Line Loans and L/C Borrowings (in the case of Parent Borrower) to the full extent thereof;

second , to repay outstanding Revolving Loans to the full extent thereof; and

third , to prepay the Term Loans on a pro rata basis to each Class of Term Loans (in accordance with the respective outstanding principal amounts thereof); and further applied to reduce the scheduled remaining Installments of principal of the Term Loans as directed by Parent Borrower (but on a pro rata basis among Term Loans).

(b) Application of Mandatory Prepayments by Type of Loans . Any amount required to be paid pursuant to Sections 2.14(a) through 2.14(e) shall be applied as follows:

first , to prepay Term Loans on a pro rata basis (in accordance with the respective outstanding principal amounts thereof) and further applied first, to the next four scheduled Installments from the date of such prepayment of principal in direct order of maturity and second, on a pro rata basis among Term Loans and pro rata to the remaining scheduled Installments of principal of the Term Loans provided that in lieu of such application on a pro rata basis to each Class of Term Loans, at any time Parent Borrower may, at its option, direct that such prepayment be applied (in which case it shall be applied) (I) first, to then outstanding Tranche B Term Loans on a pro rata basis among Tranche B Dollar Term Loans and Tranche B Euro Term Loans until all such Tranche B Term Loans have been repaid in full, and (II) thereafter, to the successive Class or Classes of Term Loans with the then next earliest Term Loan Maturity Date (ratably among such Classes, if multiple Classes exist with the same Term Loan Maturity Date), until all such Term Loans have been repaid in full, and so on, and (y) it is understood and agreed that the preceding clause (x) may be modified as expressly provided in Section 2.24 or 2.26 in connection with a Refinancing Amendment or Extension Amendment, as the case may be;

second , to prepay the Swing Line Loans and L/C Borrowings to the full extent thereof (without any corresponding reduction of Revolving Commitments);

third , to prepay the Revolving Loans to the full extent thereof (without any corresponding reduction of Revolving Commitments); and

fourth , to prepay outstanding reimbursement obligations with respect to Letters of Credit (without any corresponding reduction of Revolving Commitments);

(c) Application of Prepayments of Loans to Base Rate Loans and Eurocurrency Rate Loans . Considering each Class of Loans being prepaid separately, any prepayment thereof shall be applied first to Base Rate Loans to the full extent thereof before application to Eurocurrency Rate Loans, in each case in a manner which minimizes the amount of any payments required to be made by the applicable Borrower pursuant to Section 2.18(c).

(d) Application of Net Cash Proceeds of Credit Agreement Refinancing Indebtedness . Any amount required to be paid pursuant to Section 2.14(i) shall be applied to the Class or Classes of Term Loans constituting Refinanced Debt (as designated by Parent Borrower) with respect to any such payment on pro rata basis to each such Class of Term Loans (based upon the then outstanding principal amounts of the respective Classes of Term Loans).

 

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2.16. General Provisions Regarding Payments.

(a) All payments by any Borrower of principal, interest, fees and other Obligations shall be made in the currency of such Obligations in Same Day Funds, without defense, setoff or counterclaim, free of any restriction or condition, and delivered to Administrative Agent not later than 2:00 p.m. (New York City time) (or, in the case of Obligations in a Foreign Currency, not later than the Applicable Time) on the date due at the Principal Office designated by Administrative Agent for the account of Lenders; for purposes of computing interest and fees, funds received by Administrative Agent after that time on such due date shall be deemed to have been paid by such Borrower on the next succeeding Business Day.

(b) All payments in respect of the principal amount of any Loan (other than voluntary prepayments of Base Rate Loans) shall be accompanied by payment of accrued interest on the principal amount being repaid or prepaid, and all such payments (and, in any event, any payments in respect of any Loan on a date when interest is due and payable with respect to such Loan) shall be applied to the payment of interest then due and payable before application to principal.

(c) Administrative Agent (or its agent or sub-agent appointed by it) shall promptly distribute to each Lender at such Lender’s Lending Office, such Lender’s applicable Pro Rata Share of all payments and prepayments of principal and interest due hereunder, together with all other amounts due thereto, including all fees payable with respect thereto, to the extent received by Administrative Agent.

(d) Notwithstanding the foregoing provisions hereof, if any Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any Eurocurrency Rate Loans, Administrative Agent shall give effect thereto in apportioning payments received thereafter.

(e) Subject to the provisos set forth in the definition of “Interest Period” as they may apply to Revolving Loans, whenever any payment to be made hereunder with respect to any Loan shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and, with respect to Revolving Loans only, such extension of time shall be included in the computation of the payment of interest hereunder or of the Revolving Commitment fees hereunder.

(f) [Reserved.]

(g) Administrative Agent shall deem any payment by or on behalf of any Borrower hereunder that is not made in Same Day Funds prior to 2:00 p.m. (New York City time) (or, in the case of Obligations in a Foreign Currency, prior to the Applicable Time) to be a non-conforming payment. Any such payment shall not be deemed to have been received by Administrative Agent until the later of (i) the time such funds become available funds, and (ii) the applicable next Business Day. Administrative Agent shall give prompt telephonic notice to Parent Borrower and each applicable Lender (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of Section 8.1(a) until such funds become available funds. Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding applicable Business Day) at the rate determined pursuant to Section 2.10 from the date such amount was due and payable until the date such amount is paid in full.

(h) If an Event of Default shall have occurred and not otherwise been waived, and the maturity of the Obligations shall have been accelerated pursuant to Section 8.1, all payments or proceeds received by Agents hereunder in respect of any of the Obligations shall be applied in accordance with the application arrangements described in Section 9.2 of the Pledge and Security Agreement or, with respect to Subsidiary Borrowers and Swiss Guarantors, the corresponding provision of the applicable Foreign Collateral Document.

 

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2.17. Ratable Sharing. Lenders hereby agree among themselves that, if any of them shall, whether by voluntary payment (other than a voluntary prepayment of Loans made and applied in accordance with the terms hereof), through the exercise of any right of set-off or banker’s lien, by counterclaim or cross action or by the enforcement of any right under the Credit Documents or otherwise, or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code (or other applicable Debtor Relief Laws), receive payment or reduction of a proportion of the aggregate amount of principal, interest, amounts payable in respect of Letters of Credit, fees and other amounts then due and owing to such Lender hereunder or under the other Credit Documents (collectively, the “ Aggregate Amounts Due ” to such Lender) which is greater than the proportion received by any other Lender in respect of the Aggregate Amounts Due to such other Lender, then the Lender receiving such proportionately greater payment shall (a) notify Administrative Agent and each other Lender of the receipt of such payment and (b) apply a portion of such payment to purchase participations (which it shall be deemed to have purchased from each seller of a participation simultaneously upon the receipt by such seller of its portion of such payment) in the Aggregate Amounts Due to the other Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion to the Aggregate Amounts Due to them; provided , if all or part of such proportionately greater payment received by such purchasing Lender is thereafter recovered from such Lender upon the bankruptcy or reorganization of a Borrower or otherwise, those purchases shall be rescinded and the purchase prices paid for such participations shall be returned to such purchasing Lender ratably to the extent of such recovery, but without interest. Each Borrower expressly consents to the foregoing arrangement and agrees that any holder of a participation so purchased may exercise any and all rights of banker’s lien, set-off or counterclaim with respect to any and all monies owing by such Borrower to that holder with respect thereto as fully as if that holder were owed the amount of the participation held by that holder. The provisions of this Section 2.17 shall not be construed to apply to (a) any payment made by any Borrower pursuant to and in accordance with the express terms of this Agreement or (b) any payment obtained by any Lender as consideration for the assignment or sale of a participation in any of its Loans or other Obligations owed to it.

2.18. Making or Maintaining Eurocurrency Rate Loans.

(a) Inability to Determine Applicable Interest Rate . In the event that Administrative Agent shall have determined (which determination shall be final and conclusive and binding upon all parties hereto), on any Interest Rate Determination Date with respect to any Eurocurrency Rate Loans, that by reason of circumstances affecting the London interbank market adequate and fair means do not exist for ascertaining the interest rate applicable to such Loans on the basis provided for in the definition of Eurocurrency Rate, Administrative Agent shall on such date give notice (by telefacsimile or by telephone confirmed in writing) to each Borrower and each Lender of such determination, whereupon (i) no Loans may be made as, or converted to, Eurocurrency Rate Loans until such time as Administrative Agent notifies Parent Borrower and Lenders that the circumstances giving rise to such notice no longer exist (which notice Administrative Agent agrees to give promptly upon such change in circumstances), (ii) any Foreign Currency Loans shall be converted to or continued, at the sole option of the applicable Borrower, in Dollars as Base Rate Loans and (iii) any Funding Notice or Conversion/Continuation Notice given by any Borrower with respect to the Loans in respect of which such determination was made shall be deemed to be rescinded by such Borrower (for the avoidance of doubt, without any amount being payable by such Borrower pursuant to Section 2.18(c)).

(b) Illegality or Impracticability of Eurocurrency Rate Loans . In the event that on any date any Lender shall have determined (which determination shall be final and conclusive and binding upon all parties hereto but shall be made only after consultation with Parent Borrower and Administrative Agent) that (1) the making, maintaining or continuation of its Eurocurrency Rate Loans (i) has become unlawful as a result of compliance by such Lender in good faith with any Law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty, governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful), or (ii) has become impracticable, as a result of contingencies occurring after the date hereof which materially and adversely affect the London interbank market or the position of such Lender in that market or (2) there shall have occurred any change in national or international financial, political or economic conditions (including the imposition of or any change in exchange controls) or currency exchange rates which would make it unlawful or impossible for such Lender to make Loans denominated in any Foreign Currency to the applicable Borrower, then, and in any such event, such Lender shall be an “ Affected Lender ” and it shall on that day give notice (by e-mail or by telephone confirmed in writing) to Parent Borrower and Administrative Agent of such determination (which notice Administrative Agent shall promptly transmit to each other Lender). If

 

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Administrative Agent receives a notice from (x) any Lender pursuant to clause (1)(i) or (2) of the preceding sentence or (y) a notice from Lenders constituting Requisite Lenders pursuant to clause (1)(ii) of the preceding sentence, then (1) the obligation of the Lenders (or, in the case of any notice pursuant to clause (1)(i) or (2) of the preceding sentence, such Lender) to make Loans as, or to convert Loans to, Eurocurrency Rate Loans (or, in the case of any notice pursuant to clause (2) of the preceding sentence, Foreign Currency Loans) shall be suspended until such notice shall be withdrawn by each Affected Lender (which each Affected Lender agrees to do promptly upon the circumstances in clause (1) or (2) ceasing to exist), (2) to the extent such determination by the Affected Lender relates to a Eurocurrency Rate Loan or Foreign Currency Loan then being requested by a Borrower pursuant to a Funding Notice or a Conversion/Continuation Notice, the Lenders (or in the case of any notice pursuant to clause (1)(i) or (2) of the preceding sentence, such Lender) shall make such Loan as (or continue such Loan as or convert such Loan to, as the case may be) a Base Rate Loan or a non-Foreign Currency Loan, as applicable, (3) the Lenders’ (or in the case of any notice pursuant to clause (1)(i) or (2) of the preceding sentence, such Lender’s) obligations to maintain their respective outstanding Eurocurrency Rate Loans or Foreign Currency Loans (the “ Affected Loans ”) shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or when required by Law, and (4) the Affected Loans shall automatically convert into Base Rate Loans on the date of such termination (or, in the case of any notice pursuant to clause (2) of the preceding sentence, at the sole option of the applicable Borrower, the Affected Loans shall either be repaid or converted into Dollars as Base Rate Loans on the date of such termination). Notwithstanding the foregoing, to the extent a determination by an Affected Lender as described above relates to a Eurocurrency Rate Loan or Foreign Currency Loan then being requested by a Borrower pursuant to a Funding Notice or a Conversion/Continuation Notice, such Borrower shall have the option to rescind such Funding Notice or Conversion/Continuation Notice as to all Lenders by giving written or telephonic notice (promptly confirmed by delivery of written notice thereof) to Administrative Agent of such rescission on the date on which the Affected Lender gives notice of its determination as described above (which notice of rescission Administrative Agent shall promptly transmit to each other Lender), and, for the avoidance of doubt, no amount shall be payable by such Borrower under Section 2.18(c) in connection with such rescission. If it becomes illegal for any Lender to hold or benefit from a Lien over Real Estate Assets pursuant to any applicable law, such Lender may notify Administrative Agent and disclaim any benefit of such security interest to the extent of such illegality, but such illegality shall not invalidate or render unenforceable such Lien for the benefit of each of the other Lenders.

(c) Compensation for Breakage or Non-Commencement of Interest Periods . Each Borrower shall compensate each Lender, upon written request by such Lender (which request shall set forth the basis for requesting such amounts), for all reasonable losses, expenses and liabilities (including any interest paid by such Lender to lenders of funds borrowed by it to make or carry its Eurocurrency Rate Loans and any loss, expense or liability sustained by such Lender in connection with the liquidation or re-employment of such funds but excluding loss of anticipated profits) which such Lender may sustain: (i) if for any reason (other than a default by such Lender) a borrowing of any Eurocurrency Rate Loan does not occur on a date specified therefor in a Funding Notice or a telephonic request for borrowing, or a conversion to or continuation of any Eurocurrency Rate Loan does not occur on a date specified therefor in a Conversion/Continuation Notice or a telephonic request for conversion or continuation; (ii) if any prepayment or other principal payment of, or any conversion of, any of its Eurocurrency Rate Loans occurs on a date prior to the last day of an Interest Period applicable to that Loan; or (iii) if any prepayment of any of its Eurocurrency Rate Loans is not made on any date specified in a notice of prepayment given by such Borrower.

(d) Booking of Eurocurrency Rate Loans . Any Lender may make, carry or transfer Eurocurrency Rate Loans at, to, or for the account of any of its branch offices or the office of an Affiliate of such Lender.

(e) Assumptions Concerning Funding of Eurocurrency Rate Loans . Calculation of all amounts payable to a Lender under this Section 2.18 and under Section 2.19 shall be made as though such Lender had actually funded each of its relevant Eurocurrency Rate Loans through the purchase of a Eurocurrency deposit bearing interest at the rate obtained pursuant to the definition of Eurocurrency Base Rate in an amount equal to the amount of such Eurocurrency Rate Loan and having a maturity comparable to the relevant Interest Period and through the transfer of such Eurocurrency deposit from an offshore office of such Lender to a domestic office of such Lender in the United States of America; provided , however , each Lender may fund each of its Eurocurrency Rate Loans in any manner it sees fit and the foregoing assumptions shall be utilized only for the purposes of calculating amounts payable under this Section 2.18 and under Section 2.19.

 

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2.19. Increased Costs; Capital Adequacy.

(a) Compensation for Increased Costs . In the event that any Lender (which term shall include Issuing Bank for purposes of this Section 2.19(a)) shall determine (which determination shall, absent demonstrable error, be final and conclusive and binding upon all parties hereto) that any law, treaty or governmental rule, regulation or order, or any change therein or in the interpretation, administration or application thereof (including the introduction of any new law, treaty or governmental rule, regulation or order), or any determination of a court or governmental authority, in each case that becomes effective after the Original Closing Date, or compliance by such Lender with any guideline, request or directive issued or made after the Original Closing Date by any central bank or other governmental or quasi governmental authority (whether or not having the force of law): (i) subjects such Lender (or its applicable lending office) to any additional Tax (other than Indemnified Taxes or Other Taxes covered by Section 2.20, any Excluded Taxes, any Taxes in clauses (a) or (c) or (d) of the definition of Overall Net Income Taxes and any Taxes excluded from Section 2.20 by the last sentence of Section 2.20(f) or 2.20(h)) with respect to this Agreement or any of the other Credit Documents or any of its obligations hereunder or thereunder or any payments to such Lender (or its applicable lending office) of principal, interest, fees or any other amount payable hereunder; (ii) imposes, modifies or holds applicable any reserve (including any marginal, emergency, supplemental, special or other reserve), special deposit, compulsory loan, FDIC insurance or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Lender (other than (x) any such reserve or other requirements with respect to Eurocurrency Rate Loans that are reflected in the definition of Eurocurrency Rate and (y) the requirements of the Bank of England and the Financial Services Authority or the European Central Bank reflected in the Mandatory Cost, other than as set forth in clause (iii) below); (iii) results in the failure of the Mandatory Cost, as calculated hereunder, to represent the cost to such Lender of complying with the requirements of the Bank of England and/or the Financial Services Authority or the European Central Bank in relation to its making, funding or maintaining Eurocurrency Rate Loans; or (iv) imposes any other condition (other than with respect to a Tax matter) on or affecting such Lender (or its applicable lending office) or its obligations hereunder or the London interbank market; and the result of any of the foregoing is to increase the cost to such Lender of agreeing to make, making or maintaining Loans hereunder or to reduce any amount received or receivable by such Lender (or its applicable lending office) with respect thereto; then, in any such case, Parent Borrower shall promptly pay to such Lender, upon receipt of the statement referred to in the next sentence, such additional amount or amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as may be necessary to compensate such Lender for any such increased cost or reduction in amounts received or receivable hereunder. Such Lender shall deliver to Parent Borrower (with a copy to Administrative Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to such Lender under this Section 2.19(a), which statement shall be conclusive and binding upon all parties hereto absent demonstrable error.

(b) Capital Adequacy Adjustment . In the event that any Lender (which term shall include Issuing Bank for purposes of this Section 2.19(b)) shall have determined that the adoption, effectiveness, phase-in or applicability after the Original Closing Date of any law, rule or regulation (or any provision thereof) regarding capital adequacy, or any change therein or in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its applicable lending office) with any guideline, request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of, or with reference to, such Lender’s Loans or Revolving Commitments or Letters of Credit, or participations therein or other obligations hereunder with respect to the Loans or the Letters of Credit to a level below that which such Lender or such controlling corporation could have achieved but for such adoption, effectiveness, phase-in, applicability, change or compliance (taking into consideration the policies of such Lender or such controlling corporation with regard to capital adequacy), then from time to time, within ten Business Days after receipt by Parent Borrower from such Lender of the statement referred to in the next sentence, Parent Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such controlling corporation on an after-tax basis for such reduction. Such Lender shall deliver to Parent Borrower (with a copy to Administrative Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to Lender under this Section 2.19(b), which statement shall be conclusive and binding upon all parties hereto absent manifest error.

 

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(c) Notwithstanding the foregoing, Parent Borrower shall not be required to compensate a Lender or Issuing Bank pursuant to this Section 2.19 for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or Issuing Bank, as the case may be, notifies Parent Borrower of the change giving rise to such increased costs and of such Lender’s or Issuing Bank’s intention to claim compensation therefor (except that, if the change giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

2.20. Taxes; Withholding, Etc.

(a) Payments to Be Free and Clear . All sums payable by or on behalf of any Credit Party hereunder and under the other Credit Documents shall (except to the extent required by law) be paid free and clear of, and without any deduction or withholding on account of, any Tax (other than an Overall Net Income Tax, an Excluded Tax or a Tax excluded from Section 2.20 by the last sentence of Section 2.20(f) or 2.20(h)) imposed, levied, collected, withheld or assessed by any Governmental Authority (such Taxes being referred to as “Indemnified Taxes”).

(b) Withholding of Taxes . If any Credit Party or any other Person is required by law to make any deduction or withholding on account of any Indemnified Tax from any sum paid or payable by any Credit Party to Administrative Agent or any Lender (which term shall include Issuing Bank for purposes of this Section 2.20) under any of the Credit Documents: (i) the applicable Borrower shall notify Administrative Agent of any such requirement or any change in any such requirement as soon as the applicable Borrower becomes aware of it; (ii) the applicable Borrower shall pay any such Tax before the date on which penalties attach thereto, such payment to be made (if the liability to pay is imposed on any Credit Party) for its own account or (if that liability is imposed on Administrative Agent or such Lender, as the case may be) on behalf of and in the name of Administrative Agent or such Lender; (iii) the sum payable by such Credit Party in respect of which the relevant deduction, withholding or payment is required shall be increased to the extent necessary to ensure that, after the making of that deduction, withholding or payment (including deductions, withholdings or payments on additional amounts payable under this section), Administrative Agent or such Lender, as the case may be, receives on the due date a net sum equal to what it would have received had no such deduction, withholding or payment been required or made; and (iv) within thirty days after any Credit Party has paid any sum from which it is required by law to make any deduction or withholding, and within thirty days after the due date of payment of any Indemnified Tax which any Credit Party is required by clause (ii) above to pay, Parent Borrower shall deliver to Administrative Agent evidence reasonably satisfactory to the other affected parties of such deduction, withholding or payment and of the remittance thereof to the relevant taxing or other authority; provided , (i) that the Swiss Subsidiary Borrower shall not be required to comply with the gross up obligation provided for in this Section 2.20 with respect to Swiss Withholding Taxes caused by it breaching the Swiss Withholding Tax Rules as a direct result of (x) any failure to satisfy the Ten Non-Bank Rule as of the Original Closing Date or (y) a Lender breaching its representation as to its status pursuant to Section 9.10 (of this Agreement or the Original Credit Agreement) or any failure by a Lender or participant to comply with the requirements and limitations for assignments, transfers, and sub-participations (and other obligations) under Section 10.6 (of this Agreement or the Original Credit Agreement), and (ii) with respect to Loans to Parent Borrower or the Japanese Subsidiary Borrower, no additional amount shall be required to be paid under this Section 2.20 with respect to U.S. federal withholding or other U.S. federal income taxes or Japanese withholding or other Japanese national income taxes (with respect to Loans to the Japanese Subsidiary Borrower only) to any Lender (other than a Lender that becomes a Lender pursuant to Section 2.22 of this Agreement or the Original Credit Agreement) except to the extent that any change after the Original Closing Date (in the case of each Lender listed on the signature pages to the Original Credit Agreement on the Original Closing Date) or after the effective date of the Assignment Agreement or the Amendment (as applicable) pursuant to which such Lender became a Lender (in the case of each other Lender) in any such requirement for a deduction, withholding or payment in respect of U.S. federal withholding or other U.S. federal income taxes or Japanese withholding or other Japanese national income taxes shall result in an increase in the rate of such deduction, withholding or payment from that in effect at the Original Closing Date or at the date of such Assignment Agreement or the Amendment, as the case may be, in respect of payments to such Lender; provided further that additional amounts with respect to U.S. federal withholding or other U.S. federal income taxes shall be payable to a Lender to the extent such Lender’s assignor was entitled to receive such additional amounts immediately prior to the assignment or such Lender was entitled to receive additional amounts immediately prior to a change in lending office (any U.S. federal income or withholding taxes or Japanese national income or withholding taxes excluded pursuant to the foregoing provisos being “ Excluded Taxes ”).

 

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(c) Payment of Other Taxes by the Borrowers . Without limiting the provisions of subsection (b) above, each Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Laws.

(d) Tax Indemnification . Each Borrower agrees to indemnify and hold harmless, without duplication, each Lender and Administrative Agent for the full amount of Indemnified Taxes and Other Taxes, including any such Indemnified Taxes imposed by any jurisdiction on amounts payable under this Section 2.20, payable by any Lender or Administrative Agent and any liability (including expenses) arising therefrom or with respect thereto. Payment under this indemnification shall be made within 20 days after the date such Lender or Administrative Agent makes written demand therefor. A certificate as to the amount of such payment or liability delivered to the applicable Borrower by a Lender or by Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(e) Status of Lenders ; Tax Documentation . Each Lender shall deliver to Parent Borrower (on behalf, as appropriate, of Japanese Subsidiary Borrower and Swiss Subsidiary Borrower) and to Administrative Agent, at the time or times prescribed by applicable Laws or when reasonably requested by a Borrower or Administrative Agent, such properly completed and executed documentation prescribed by applicable Laws or by the taxing authorities of any jurisdiction and such other reasonably requested information as will permit the Borrowers or Administrative Agent, as the case may be, to determine (A) whether or not payments made by the respective Borrowers hereunder or under any other Credit Document are subject to Taxes, (B) if applicable, the required rate of withholding or deduction, (C) such Lender’s entitlement to any available exemption from, or reduction of, applicable Taxes in respect of payments to be made to such Lender by the respective Borrowers pursuant to this Agreement or otherwise to establish such Lender’s status for withholding tax purposes in the applicable jurisdictions and (D) whether withholding is required under FATCA and the appropriate amount thereof. Each Lender shall also promptly notify Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption from, or reduction of, applicable Taxes. Each of the Borrowers shall promptly (i) deliver to Administrative Agent or any Lender, as Administrative Agent or such Lender shall reasonably request, such documents and forms required by any relevant taxing authorities under the Laws of any jurisdiction, duly executed and completed by such Borrower, as are required to be furnished by such Lender or Administrative Agent under such Laws in connection with any payment by Administrative Agent or any Lender of Taxes or Other Taxes, or otherwise in connection with the Credit Documents, with respect to such jurisdiction and (ii) provide Administrative Agent from time to time, upon the reasonable request of Administrative Agent, with information needed to determine whether any payments to be made pursuant to any Credit Document will be subject to any applicable withholding tax, including information needed to determine the source of any payment for applicable withholding tax purposes.

(f) Evidence of Exemption from U.S. Withholding Tax . Without limiting the generality of the foregoing, to the extent legally able to do so, each Lender (including each Lender making a Loan to the Japanese Subsidiary Borrower) that is not a United States Person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S. federal income tax purposes (a “ Non-US Lender ”) shall deliver to Administrative Agent and Parent Borrower, on or prior to the Second Restatement Effective Date (in the case of each Lender listed on the signature pages to the Amendment on the Second Restatement Effective Date to the extent that such Lender has not already delivered such forms ) or on or prior to the date of the Assignment Agreement pursuant to which it becomes a Lender (in the case of each other Lender), and at such other times as may be necessary in the determination of Parent Borrower or Administrative Agent (each in the reasonable exercise of its discretion), (i) two original copies of Internal Revenue Service Form W-8BEN, W-8ECI and/or W-8IMY (including any required attachments) (or, in each case, any successor forms), properly completed and duly executed by such Lender, and such other documentation required under the Internal Revenue Code and reasonably requested by Parent Borrower or Administrative Agent to establish that such Lender is not subject to deduction or withholding (or is subject to reduced deduction or withholding) of United States federal income tax with respect to any payments to such Lender of principal, interest, fees or other amounts payable under any of the Credit Documents, or (ii) in the case of a Lender that is not a “bank” or other Person described in Section 881(c)(3) of the Internal Revenue Code, a Certificate re Non-Bank Status together with two original copies of Internal Revenue Service Form W-8BEN or W-8IMY (including any required attachments) (or, in each case, any successor forms), properly completed and duly executed by such Lender, and such other documentation required under the Internal Revenue Code and reasonably requested by Parent Borrower or Administrative Agent to establish that such Lender is not subject to deduction or

 

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withholding (or is subject to reduced deduction or withholding) of United States federal income tax with respect to any payments to such Lender under any of the Credit Documents; provided , however , if payment to a Lender is made to an “agent” of such Lender that is a “U.S. person” and a “financial institution” (each within the meaning of Section 1.1441-1(b)(2)(ii) of the Treasury regulations), such agent may deliver two properly completed and duly executed copies of Internal Revenue Service Form W-9 (or successor form) instead of the delivery of the specified forms and certificates by the Lender to Parent Borrower and Administrative Agent (unless Administrative Agent has reason to believe that such agent will not comply with its obligations to withhold). To the extent legally able to do so and to the extent it has not already done so, each Lender that is a United States person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code) for United States federal income tax purposes (a “ U.S. Lender ”) shall deliver to Administrative Agent and Parent Borrower on or prior to the Second Restatement Effective Date (or, if later, on or prior to the date on which such Lender becomes a party to this Agreement) two original copies of Internal Revenue Service Form W-9 (or any successor form), properly completed and duly executed by such Lender, certifying that such U.S. Lender is entitled to an exemption from United States backup withholding tax. Each Lender required to deliver any forms, certificates or other evidence with respect to United States federal income tax withholding matters pursuant to this Section 2.20(f) hereby agrees, from time to time after the initial delivery by such Lender of such forms, certificates or other evidence, whenever a lapse in time or change in circumstances renders such forms, certificates or other evidence obsolete or inaccurate in any material respect, that such Lender shall promptly deliver to Administrative Agent and Parent Borrower two new original copies of Internal Revenue Service Form W-8BEN, W-8ECI and/or W-8IMY (including any required attachments) (or, in each case, any successor form), or a Certificate re Non-Bank Status and two original copies of Internal Revenue Service Form W-8BEN or W-8IMY (including any required attachments)(or, in each case, any successor forms), as the case may be, properly completed and duly executed by such Lender, and such other documentation required under the Internal Revenue Code and reasonably requested by Parent Borrower or Administrative Agent to confirm or establish that such Lender is not subject to deduction or withholding (or is subject to reduced deduction or withholding) of United States federal income tax with respect to payments to such Lender under the Credit Documents, or notify Administrative Agent and Parent Borrower of its inability to deliver any such forms, certificates or other evidence. No Borrower shall be required to pay any additional amount or make any indemnity payments to any Lender under this Section 2.20 to the extent such additional amounts or indemnity payments relate to U.S. federal withholding taxes resulting from such Lender’s failure to deliver the forms, certificates or other evidence referred to in the first sentence of this Section 2.20(f); provided , if such Lender shall have satisfied the requirements of the first sentence of this Section 2.20(f) on the Original Closing Date or on the date of the Assignment Agreement or the Amendment pursuant to which it became a Lender, as applicable, nothing in this last sentence of Section 2.20(f) (if applicable) shall relieve a Borrower of its obligation to pay any additional amounts pursuant this Section 2.20 in the event that, as a result of any change in any applicable law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, such Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing the fact that such Lender is not subject to withholding as described herein; and provided, further, that if a Lender is not legally entitled to deliver a form, certificate or other evidence referred to in the first sentence of this Section 2.20(f) at the time such Lender becomes a party to this Agreement or changes its applicable lending office, such Lender shall nevertheless be entitled to additional amounts and indemnity payments in respect of any applicable U.S. federal withholding tax to the extent such Lender’s assignor was entitled to receive additional amounts or indemnity payments immediately prior to the assignment or such Lender was entitled to receive additional amounts or indemnity payments immediately prior to the change in lending office.

(g) If any Lender or Administrative Agent determines, in its sole discretion, that it has received a refund (including a refund credited towards other tax liability) in respect of any Indemnified Taxes or Other Taxes as to which indemnification or additional amounts have been paid to it pursuant to this Section 2.20, it shall promptly remit such refund or credit to the payor, net of all out-of-pocket expenses of the Lender or Agent, as the case may be and without interest (other than any interest paid by the relevant taxing authority with respect to such refund net of any Taxes payable by Administrative Agent or Lender on such interest); provided that the recipient, upon the request of the Lender or Agent, as the case may be, agrees promptly to return such refund (plus any penalties, interest or other charges imposed by the relevant taxing authority) to such party in the event such party is required to repay such refund to the relevant taxing authority. This section shall not be construed to require Administrative Agent or any Lender to make available its tax returns (or any other information relating to Taxes that it deems confidential) to Parent Borrower or any other person and nothing contained herein shall interfere with the right of a Lender or Administrative Agent to arrange its Tax affairs in whatever manner it thinks fit, nor oblige any Lender or Administrative Agent to claim any Tax refund or do anything that would prejudice its ability to benefit from any other refunds, credits, reliefs, remissions or repayments to which it may be entitled.

 

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(h) Documentation Requirement for Exemption from Japanese Withholding Tax . Without limiting the generality of the foregoing and to the extent legally able to do so, each Lender to the Japanese Subsidiary Borrower that is a Japanese PE or Japanese Treaty Person (a “ Non-Japanese Lender ”) shall, on or prior to the Original Closing Date (in the case of each Lender listed on the signature pages to the Original Credit Agreement on the Original Closing Date) or on or prior to the date of any Assignment Agreement or the Amendment (as applicable) pursuant to which it becomes a Lender (in the case of each other Lender), and at such other times upon the request of Japanese Subsidiary Borrower or Administrative Agent as may be necessary in the reasonable determination of Japanese Subsidiary Borrower or Administrative Agent either (i) in the case of a Japanese PE, present to Administrative Agent and Japanese Subsidiary Borrower the original withholding tax exemption certificate ( gensenchoushuu no menjyo shoumeisho ) for the Japanese PE issued by the Japanese tax authority and deliver a copy thereof to Administrative Agent and Japanese Subsidiary Borrower or (ii) in the case of a Japanese Treaty Person, deliver to Administrative Agent and Japanese Subsidiary Borrower two original copies of any required applicable Application Form for Income Tax Convention ( Sozeijyouyaku ni Kansuru Todokedesho ) properly completed and duly executed by such Lender, any required residency certificate for such Lender issued by the tax authority of the jurisdiction in which such Lender is a resident, and such other documentation, all as may be required under the Laws of Japan to establish that any interest payable by Japanese Subsidiary Borrower under any of the Credit Documents may not be taxed by Japan by virtue of the provisions of an applicable Japanese Tax Treaty, and reasonably requested by Japanese Subsidiary Borrower or Administrative Agent (such withholding tax exemption certificate in (i) herein, and such applicable form, residency certificate, and such other documentation in (ii) herein, collectively, “ Withholding Exemption Document ”). For purposes of this paragraph (h), in the case of a Lender that is a Japanese Treaty Person by virtue of the provisions of a Japanese LOB Tax Treaty, two original copies of the applicable Application Form for Income Tax Convention ( Sozeijyouyaku ni Kansuru Todokedesho ) properly completed and duly executed by such Lender and residency certificate for such Lender issued by the tax authority of the jurisdiction in which such Lender is a resident are deemed to have been reasonably requested by Japanese Subsidiary Borrower prior to the Original Closing Date (in the case of each Lender listed on the signature pages to the Original Credit Agreement on the Original Closing Date) or the date of any Assignment Agreement or the Amendment (as applicable) pursuant to which it becomes a Lender (in the case of each other Lender). No Borrower shall be required to pay any additional amount or make any indemnity payments to any Lender under this Section 2.20 to the extent such additional amounts or indemnity payments relate to withholding of Japanese income tax ( gensen shotokuzei ) on interest payable by Japanese Subsidiary Borrower resulting from such Lender’s failure to comply with this Section 2.20(h); provided, however, that if such Lender shall have complied with this Section 2.20(h) on the Original Closing Date or on the date of the Assignment Agreement or the Amendment pursuant to which it became a Lender, as applicable, nothing in this last sentence of Section 2.20(h) shall relieve a Borrower of its obligation to pay any additional amounts pursuant to this Section 2.20 in the event that, as a result of any change in any applicable Law, including a treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, (i) payments to such Lender of interest payable by Japanese Subsidiary Borrower under any of the Credit Documents are no longer entitled to an exemption from withholding of Japanese income tax ( gensen shotokuzei ) upon presentation and/or delivery, as applicable, of the Withholding Exemption Documents as described in this Section 2.20(h) or (ii) such Lender is no longer properly entitled to deliver the Withholding Exemption Documents (including, for the avoidance of doubt, the documents described in the foregoing sentence).

2.21. Obligation to Mitigate. Each Lender (which term shall include Issuing Bank for purposes of this Section 2.21) agrees that, as promptly as practicable after the officer of such Lender responsible for administering its Loans or Letters of Credit, as the case may be, becomes aware of the occurrence of an event or the existence of a condition that would cause such Lender to become an Affected Lender or that would entitle such Lender to receive payments under Section 2.18, 2.19 or 2.20, it will, to the extent not inconsistent with the internal policies of such Lender and any applicable legal or regulatory restrictions, use reasonable efforts to (a) make, issue, fund or maintain its Credit Extensions, including any Affected Loans, through another office of such Lender, or (b) take such other measures as such Lender may deem reasonable, if as a result thereof the circumstances which would cause such Lender to be an Affected Lender would cease to exist or the additional amounts which would otherwise be required to be paid to such Lender pursuant to Section 2.18, 2.19 or 2.20 would be materially reduced and if, as determined by such Lender in its sole discretion, the making, issuing, funding or maintaining of such Revolving Commitments,

 

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Loans or Letters of Credit through such other office or in accordance with such other measures, as the case may be, would not otherwise adversely affect such Revolving Commitments, Loans or Letters of Credit or the interests of such Lender; provided , such Lender will not be obligated to utilize such other office pursuant to this Section 2.21 unless Parent Borrower agrees to pay all incremental expenses incurred by such Lender as a result of utilizing such other office as described above. A certificate as to the amount of any such expenses payable by Parent Borrower pursuant to this Section 2.21 (setting forth in reasonable detail the basis for requesting such amount) submitted by such Lender to Parent Borrower (with a copy to Administrative Agent) shall be conclusive absent demonstrable error.

2.22. Removal or Replacement of a Lender. Anything contained herein to the contrary notwithstanding, in the event that: (a) (i) any Lender (an “ Increased-Cost Lender ”) shall give notice to Parent Borrower that such Lender is an Affected Lender or that such Lender is entitled to receive payments under Section 2.18, 2.19 or 2.20, (ii) the circumstances which have caused such Lender to be an Affected Lender or which entitle such Lender to receive such payments shall remain in effect, and (iii) such Lender shall fail to withdraw such notice within three Business Days after Parent Borrower’s request for such withdrawal; or (b) (i) any Lender shall become a Defaulting Lender, and (ii) such Defaulting Lender shall fail to cure the default as a result of which it has become a Defaulting Lender within three Business Days thereof; or (c) in connection with any proposed amendment, modification, termination, waiver or consent with respect to any of the provisions hereof as contemplated by Section 10.5(b), the consent of Requisite Lenders shall have been obtained but the consent of one or more of such other Lenders (each a “ Non-Consenting Lender ”) whose consent is required shall not have been obtained; then, with respect to each such Increased Cost Lender, Defaulting Lender or Non-Consenting Lender (the “ Terminated Lender ”), Parent Borrower may, by giving written notice to Administrative Agent and any Terminated Lender of its election to do so, elect to cause such Terminated Lender (and such Terminated Lender hereby irrevocably agrees) to assign its outstanding Loans and its Revolving Commitments, if any, in full to one or more Eligible Assignees (each a “ Replacement Lender ”) in accordance with the provisions of Section 10.6, and Parent Borrower shall pay the fees, if any, payable thereunder in connection with any such assignment from an Increased-Cost Lender or a Non-Consenting Lender and the Defaulting Lender shall pay the fees, if any, payable thereunder in connection with any such assignment from such Defaulting Lender; provided , (1) on the date of such assignment, the Replacement Lender shall pay to Terminated Lender an amount equal to the sum of (A) an amount equal to the principal of, and all accrued interest on, all outstanding Loans of the Terminated Lender, (B) an amount equal to all unreimbursed drawings that have been funded by such Terminated Lender, together with all then unpaid interest with respect thereto at such time and (C) an amount equal to all accrued, but theretofore unpaid fees owing to such Terminated Lender pursuant to Section 2.11; (2) on the date of such assignment, Parent Borrower shall pay any amounts payable to such Terminated Lender pursuant to Section 2.18(c), 2.19 or 2.20 or otherwise as if it were a prepayment and (3) in the event such Terminated Lender is a Non-Consenting Lender, each Replacement Lender shall consent, at the time of such assignment, to each matter in respect of which such Terminated Lender was a Non-Consenting Lender; provided , that Parent Borrower may not make such election with respect to any Terminated Lender that is also an Issuing Bank unless, prior to the effectiveness of such election, Parent Borrower shall have made arrangements reasonably satisfactory to such Issuing Bank (including the furnishing of a back-up standby letter of credit in form and substance, and issued by an issuer reasonably satisfactory to such Issuing Bank or Cash Collateralizing or causing each outstanding Letter of Credit issued thereby to be cancelled). Upon the prepayment of all amounts owing to any Terminated Lender and the termination of such Terminated Lender’s Revolving Commitments, if any, such Terminated Lender shall no longer constitute a “Lender” for purposes hereof; provided , that any rights of such Terminated Lender to indemnification hereunder shall survive as to such Terminated Lender. Each Lender agrees that if Parent Borrower exercises its option hereunder to cause an assignment by such Lender as a Non-Consenting Lender or Terminated Lender, such Lender shall, promptly after receipt of written notice of such election, execute and deliver all documentation necessary to effectuate such assignment in accordance with Section 10.6. In the event that a Lender does not comply with the requirements of the immediately preceding sentence within one Business Day after receipt of such notice, each Lender hereby authorizes and directs Administrative Agent to execute and deliver such documentation as may be required to give effect to an assignment in accordance with Section 10.6 on behalf of a Non-Consenting Lender or Terminated Lender and any such documentation so executed by Administrative Agent shall be effective for purposes of documenting an assignment pursuant to Section 10.6.

 

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2.23. Incremental Facilities.

(a) At any time or from time to time after the Second Restatement Effective Date, Parent Borrower may by written notice to the Syndication Agent and Administrative Agent elect to request (A) prior to the Latest Maturity Date of any Loan hereunder, one or more increases to the existing Revolving Commitments of any Class (any such increase, the “ New Revolving Loan Commitments ”) and/or (B) prior to the Latest Maturity Date of any Loan hereunder, the establishment of one or more new term loan commitments (the “ New Term Loan Commitments ”), by an amount not in excess of the greater of (x) $300,000,000 and (y) the amount of New Term Loan Commitments and/or New Revolving Loan Commitments such that the Senior Secured Leverage Ratio shall be no greater than 3.50 to 1.00 as of the end of the Test Period most recently ended after giving pro forma effect to such New Term Loan Commitments and/or New Revolving Loan Commitments (and, in each case, with respect to any New Revolving Loan Commitment, assuming a borrowing of the maximum amount of Loans available under such New Revolving Loan Commitment and any New Revolving Loan Commitments previously made pursuant to this Section 2.23). Each New Revolving Loan Commitment or New Term Loan Commitment shall be in an aggregate principal amount that is not less than $50,000,000 individually (or such lesser amount which shall be approved by Administrative Agent or such lesser amount if such amount represents all remaining availability under the limit set forth in the preceding sentence), and integral multiples of $5,000,000 in excess of that amount. Each such notice shall specify (A) the date (each, an “ Increased Amount Date ”) on which Parent Borrower proposes that the New Revolving Loan Commitments or New Term Loan Commitments, as applicable, shall be effective and (B) the identity of each Lender or other Person that is an Eligible Assignee (each, a “ New Revolving Loan Lender ” or “ New Term Loan Lender ,” as applicable) to whom Parent Borrower proposes any portion of such New Revolving Loan Commitments or New Term Loan Commitments, as applicable, be allocated and the amounts of such allocations; provided that any Lender approached to provide all or a portion of the New Revolving Loan Commitments or New Term Loan Commitments may elect or decline, in its sole discretion, to provide a New Revolving Loan Commitment or a New Term Loan Commitment. Such New Revolving Loan Commitments or New Term Loan Commitments shall become effective, as of such Increased Amount Date; provided that (1) no Default or Event of Default shall exist on such Increased Amount Date after giving effect to such New Revolving Loan Commitments or New Term Loan Commitments, as applicable; (2) after giving effect to the making of any Series of New Term Loans or effectiveness of New Revolving Loan Commitments, each of the conditions set forth in Section 3.2(a) shall be satisfied; (3) Parent Borrower and its Subsidiaries shall be in pro forma compliance with the covenant set forth in Section 6.7(b) as of the last day of the most recently ended Fiscal Quarter for which a Compliance Certificate has been (or was required to have been) delivered to Administrative Agent pursuant to Section 5.1(c) after giving effect to such New Revolving Loan Commitments or New Term Loan Commitments (and with respect to any New Revolving Loan Commitment, assuming a borrowing of the maximum amount of New Revolving Loans available under such New Revolving Loan Commitment), as applicable; (4) the New Revolving Loan Commitments or New Term Loan Commitments shall be effected pursuant to one or more Joinder Agreements executed and delivered by Parent Borrower, the New Revolving Loan Lender or New Term Loan Lender, as applicable, and Administrative Agent, and each of which shall be recorded in the Register, and each New Revolving Loan Lender and New Term Loan Lender shall be subject to the requirements set forth in Sections 2.20(e), (f) and (h); (5) Parent Borrower shall make any payments required pursuant to Section 2.18(c) in connection with the New Revolving Loan Commitments or New Term Loan Commitments, if applicable; and (6) Parent Borrower shall deliver or cause to be delivered any legal opinions or other documents reasonably requested by Administrative Agent in connection with any such transaction. Any New Term Loans made on an Increased Amount Date shall be designated a separate series (a “ Series ”) of New Term Loans for all purposes of this Agreement.

(b) On any Increased Amount Date on which New Revolving Loan Commitments are effected, subject to the satisfaction of the foregoing terms and conditions, (a) each of the Revolving Lenders of the applicable Class shall assign to each of the New Revolving Loan Lenders, and each of the New Revolving Loan Lenders shall purchase from each of the Revolving Lenders of the applicable Class, at the principal amount thereof, such interests in the Revolving Loans of the applicable Class outstanding on such Increased Amount Date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Revolving Loans of the applicable Class will be held by existing Revolving Lenders of the applicable Class and New Revolving Loan Lenders ratably in accordance with their Revolving Loan Commitments of the applicable Class after giving effect to the addition of such New Revolving Loan Commitments to the Revolving Commitments of the applicable Class, (b) each New Revolving Loan Commitment shall be deemed for all purposes a Revolving Loan Commitment of the applicable Class and each Loan made thereunder (a “ New Revolving Loan ”) shall be deemed, for all purposes, a Revolving Loan of the applicable Class and (c) each New Revolving Loan Lender shall become a Lender with respect to the New Revolving Loan Commitment and all matters relating thereto. Administrative Agent and the Lenders hereby agree that the minimum borrowing and prepayment requirements in Section 2.2 and 2.13 of this Agreement shall not apply to the transactions effected pursuant to the immediately preceding sentence.

 

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(c) On any Increased Amount Date on which any New Term Loan Commitments of any Series are effective, subject to the satisfaction of the foregoing terms and conditions, (i) each New Term Loan Lender of any Series shall make a Loan to Parent Borrower (a “ New Term Loan ”) in an amount equal to its New Term Loan Commitment of such Series, and (ii) each New Term Loan Lender of any Series shall become a Lender hereunder with respect to the New Term Loan Commitment of such Series and the New Term Loans of such Series made pursuant thereto.

(d) Administrative Agent shall notify Lenders promptly upon receipt of Parent Borrower’s notice of each Increased Amount Date and in respect thereof (y) the New Revolving Loan Commitments and the New Revolving Loan Lenders or the Series of New Term Loan Commitments and the New Term Loan Lenders of such Series, as applicable, and (z) in the case of each notice to any Revolving Lender, the respective interests in such Revolving Lender’s Revolving Loans, in each case subject to the assignments contemplated by this Section.

(e) The terms and provisions of the New Term Loans and New Term Loan Commitments of any Series shall be as agreed between Parent Borrower and the New Term Loan Lenders providing such New Term Loans and New Term Loan Commitments, and except as otherwise set forth herein, to the extent not substantially similar to or less favorable to such New Term Loan Lenders than the Tranche B Term Loans shall be reasonably satisfactory to Administrative Agent. The terms and provisions of the New Revolving Loans shall be identical to the Revolving Loans of the applicable Class. The proceeds of any Revolving Loans borrowed on the Increased Amount Date for any New Revolving Loan Commitments shall not be used to refinance, redeem, retire, defease or otherwise make any payment on unsecured Indebtedness of Holdings or any of its Subsidiaries (other than working capital revolving credit facilities), nor shall such Revolving Loans be made in exchange for any such unsecured Indebtedness (other than working capital revolving credit facilities). In any event (i) the Weighted Average Life to Maturity of all New Term Loans of any Series shall be no shorter than the Weighted Average Life to Maturity of the Tranche B Terms Loans (except by virtue of amortization or prepayment of the Tranche B Term Loans prior to the time of such incurrence), (ii) the applicable New Term Loan Maturity Date of each Series shall be no earlier than the latest of the final maturity of (x) the Revolving Loans and (y) the Tranche B Term Loans, (iii) the yield applicable to the New Term Loans of each Series shall be determined by Parent Borrower and the applicable new Lenders and shall be set forth in each applicable Joinder Agreement; provided , however that the Effective Yield applicable to the New Term Loans shall not be greater than the Effective Yield as amended through the date of such calculation with respect to the Tranche B Term Loans plus 0.50% per annum unless the interest rate with respect to the Tranche B Term Loans is increased so as to cause the then applicable Effective Yield under this Agreement on the Tranche B Term Loans (including any upfront or similar fees or original issue discount paid and payable to the initial Lenders hereunder) to equal the Effective Yield then applicable to the New Term Loans (after giving effect to all upfront or similar fees or original issue discount payable with respect to such New Term Loans) minus 0.50% and (iv) the proceeds of the New Term Loans shall not be used to refinance, redeem, retire, defease or otherwise make any payment on unsecured Indebtedness of Holdings or any of its Subsidiaries, nor shall the New Term Loans be made in exchange for any such unsecured Indebtedness. Each Joinder Agreement may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Credit Documents as may be necessary or appropriate, in the reasonable opinion of Administrative Agent and Parent Borrower to effect the provision of this Section 2.23, and for the avoidance of doubt, this Section 2.23 shall supersede any provisions in Section 2.17 or 10.5 to the contrary.

2.24. Refinancing Amendments.

At any time after the Second Restatement Effective Date, Parent Borrower may obtain from any Lender or any Additional Refinancing Lender, Credit Agreement Refinancing Indebtedness in respect of all or any portion of the Term Loans then outstanding under this Agreement (which for this purpose will be deemed to include any then outstanding Refinancing Term Loans), in the form of Refinancing Term Loans, in each case pursuant to a Refinancing Amendment; provided that such Indebtedness (i) will rank pari passu in right of payment and of security with the other Term Loans and Term Loan Commitments hereunder, (ii) have such pricing and optional prepayment terms as may be agreed by the applicable Borrower and the Lenders thereof and (iii) except as may be agreed to by the Lenders and Additional Refinancing Lenders providing such Credit Agreement Refinancing

 

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Indebtedness in the respective Refinancing Amendment (but solely as it relates to such Lenders waiving their pro rata share of any applicable prepayment or repayment), each Class of Refinancing Term Loans shall be prepaid and repaid on a pro rata basis or less than a pro rata basis (but not greater than a pro rata basis) with all voluntary prepayments and mandatory prepayments of the other Classes of Term Loans, it being understood that the amortization schedule applicable to the Refinancing Term Loans shall be determined by the applicable Borrower and the Lenders providing the Refinancing Term Loans. 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 3.2(a) and, to the extent reasonably requested by Administrative Agent, receipt by Administrative Agent of (i) legal opinions, board resolutions and officers’ certificates consistent with those delivered on the Second Restatement Effective Date other than changes to such legal opinion resulting from a change in law, change in fact or change to counsel’s form of opinion reasonably satisfactory to Administrative Agent and (ii) reaffirmation agreements and/or such amendments to the Collateral Documents as may be reasonably requested by Administrative Agent (including Mortgage amendments) in order to ensure that the Refinancing Term Loans are provided with the benefit of the applicable Credit Documents. Each tranche of Credit Agreement Refinancing Indebtedness incurred under this Section 2.24 shall be in an aggregate principal amount that is not less than $50,000,000. Administrative Agent shall promptly notify each Lender as to the effectiveness of each Refinancing Amendment. Each of the parties hereto hereby agrees that this Agreement and the other Credit Documents may be amended pursuant to a Refinancing Amendment, without the consent of any other Lenders, to the extent (but only to the extent) necessary to (i) reflect the existence and terms of the Credit Agreement Refinancing Indebtedness incurred pursuant thereto (including any amendments necessary to treat the Term Loans and Term Loan Commitments subject thereto as Refinancing Term Loans and/or Refinancing Term Commitments), (ii) provide certain class protection to the Lenders and Additional Refinancing Lenders providing such Credit Agreement Refinancing Indebtedness with respect to voluntary prepayments and mandatory prepayments, (iii) make such other changes to this Agreement and the other Credit Documents consistent with the provisions and intent of Section 10.5(g) (without the consent of the Requisite Lenders called for therein) and (iv) effect such other amendments to this Agreement and the other Credit Documents as may be necessary or appropriate, in the reasonable opinion of Administrative Agent and Parent Borrower, to effect the provisions of this Section, and the Requisite Lenders hereby expressly authorize Administrative Agent to enter into any such Refinancing Amendment.

2.25. Extensions of Revolving Loans and Revolving Commitments .

(a) Any Borrower may at any time and from time to time request that all or a portion of any Class of Revolving Commitments (including any New Revolving Loan Commitments and any outstanding Classes of Permitted Replacement Revolving Commitments), each existing at the time of such request (each, an “ Existing Revolving Commitment ” and any related Revolving Loans thereunder, “ Existing Revolving Loans ”) be replaced with or reclassified or converted into commitments and loans that extend the termination date thereof (any such Existing Revolving Commitments which have been so extended, “ Permitted Replacement Revolving Commitments ” and any related Loans, “ Permitted Replacement Revolving Loans ”) and to provide for other terms consistent with this Section 2.25. In order to establish any Permitted Replacement Revolving Commitments, Parent Borrower shall provide a notice to Administrative Agent (who shall provide a copy of such notice to each of the Lenders of the Existing Revolving Commitments) (a “ Permitted Replacement Revolving Commitment Request ”) setting forth the proposed terms of the Permitted Replacement Revolving Commitments to be established, which terms shall be identical to those applicable to Existing Revolver Commitments; provided that (i) the Revolving Commitment Termination Date of the Permitted Replacement Revolving Commitments may be delayed to a later date than the Revolving Commitment Termination Date of the Existing Revolving Commitment; (ii) the Effective Yield with respect to extensions of credit under the Permitted Replacement Revolving Commitment (whether in the form of interest rate margin, upfront fees, original issue discount or otherwise) may be different than the Effective Yield for extensions of credit under the Existing Revolving Commitment; (iii) all borrowings under the applicable Revolving Commitments and repayments thereunder shall be made on a pro rata basis (except for (I) payments of interest and fees at different rates on Permitted Replacement Revolving Commitments (and related outstandings) and (II) repayments required upon the Revolving Commitment Termination Date of the Existing Revolving Commitments); and (iv) the Permitted Replacement Revolving Amendment may provide for other covenants and terms that apply solely to any period after the Latest Maturity Date that is in effect on the effective date of the Permitted Replacement Revolving Amendment; provided , further , that in no event shall the final maturity date of any Permitted Replacement Revolving Commitments of a given Class at the time of establishment thereof be earlier than the then Latest Maturity Date of any Existing Revolving Commitments. Any Permitted Replacement Revolving Commitments shall constitute a separate Class or Classes, as the case may be, of Revolving Commitments from the Classes constituting the Existing Revolving Commitments.

 

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(b) The applicable Borrower shall provide the applicable Permitted Replacement Revolving Commitment Request at least ten (10) Business Days prior to the date on which Lenders of the applicable Class of Revolving Loans are requested to respond (or by such later date as the Administrative Agent may agree in its reasonable discretion). Any Lender (together with any new Lender committing to provide a Permitted Replacement Revolving Commitment pursuant to Section 2.25(c) below, a “ Permitted Replacement Revolving Lender ”) wishing to have its Existing Revolving Commitments subject to such Permitted Replacement Revolving Commitment Request converted into Permitted Replacement Revolving Commitments shall notify Administrative Agent (a “ Permitted Replacement Revolving Election ”) on or prior to the date specified in such Permitted Replacement Revolving Commitment Request of its election to convert into Permitted Replacement Revolving Commitments. In the event that the aggregate amount of Existing Revolving Commitments subject to Permitted Replacement Revolving Elections exceeds the amount of Permitted Replacement Revolving Commitments requested pursuant to the Permitted Replacement Revolving Commitment Request, the Existing Revolving Commitments subject to Permitted Replacement Revolving Elections shall be converted to Permitted Replacement Revolving Commitments on a pro rata basis based on the amount of Existing Revolving Commitments included in each such Permitted Replacement Revolving Election. Notwithstanding the conversion of any Existing Revolving Commitment (to the extent constituting a U.S. Revolving Commitment or a Permitted Replacement Revolving Commitment thereof) into a Permitted Replacement Revolving Commitment, such Permitted Replacement Revolving Commitment shall be treated identically to all other U.S. Revolving Commitments for purposes of the obligations of a Lender of Revolving Loans in respect of Swing Line Loans under Section 2.3 and Letters of Credit under Section 2.4, except that the applicable Permitted Replacement Revolving Amendment may provide that the termination date of obligations to make Swing Line Loans and/or to issue Letters of Credit may be extended and the related obligations to make Swing Line Loans and issue Letters of Credit may be continued so long as Swing Line Lender and/or Issuing Bank, as applicable, have consented to such extensions (it being understood that no consent of any other Lender shall be required in connection with any such extension).

(c) In the event that a Borrower has submitted a Permitted Replacement Revolving Commitment Request in respect of all (but not less than all) of a Class of Existing Revolving Commitments and the aggregate amount of Existing Revolving Commitments subject to Permitted Replacement Revolving Elections is less than the entire aggregate amount of such Class of Existing Revolving Commitments, such Borrower, at its election, may allocate all (but not less than all) of the remaining amount of the Permitted Replacement Revolving Commitments requested and not provided by Lenders with an Existing Revolving Commitment to any other Persons that are Eligible Assignees, and the Existing Revolving Commitments not subject to Permitted Replacement Revolving Elections (“ Non-Extended Revolving Commitments ”) shall be terminated.

(d) Permitted Replacement Revolving Commitments shall be established pursuant to an amendment (a “ Permitted Replacement Revolving Amendment ”) to this Agreement (which, notwithstanding anything to the contrary set forth in Section 10.5, shall not require the consent of any Lender other than the Permitted Replacement Revolving Lenders with respect to the Permitted Replacement Revolving Commitments established thereby) executed by the Credit Parties, Administrative Agent and the Permitted Replacement Revolving Lenders. No Permitted Replacement Revolving Amendment shall provide for any tranche of Permitted Replacement Revolving Commitments in an aggregate principal amount that is less than $50,000,000. In connection with any Permitted Replacement Revolving Amendment, Administrative Agent may request that Parent Borrower deliver a customary opinion of counsel in connection with such amendment.

(e) Such Permitted Replacement Revolving Commitments shall become effective as of such date of effectiveness of such Permitted Replacement Revolving Amendment (the “ Permitted Replacement Revolving Effective Date ”); provided that (1) no Default or Event of Default shall exist on such Permitted Replacement Revolving Effective Date after giving effect to such Permitted Replacement Revolving Commitments; (2) after giving effect to the Permitted Replacement Revolving Amendment, each of the conditions set forth in Section 3.2(a) shall be satisfied; (3) the Permitted Replacement Revolving Commitments shall be effected pursuant to a Permitted Replacement Revolving Amendment, and shall be recorded in the Register, and each Permitted Replacement Revolving Lender shall be subject to the requirements set forth in Sections 2.20(e), (f) and (h); and (4) if applicable, Parent Borrower shall make any payments required pursuant to Section 2.18(c) in connection with the Permitted

 

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Replacement Revolving Commitments. The proceeds of any Revolving Loans borrowed on the Permitted Replacement Revolving Effective Date shall not be used to refinance, redeem, retire, defease or otherwise make any payment on unsecured Indebtedness of Holdings or any of its Subsidiaries (other than working capital revolving credit facilities), nor shall such Revolving Loans be made in exchange for any such unsecured Indebtedness (other than working capital revolving credit facilities).

(f) Notwithstanding anything to the contrary contained in this Agreement, including Sections 2.15 and 2.17, on any date of any Permitted Replacement Revolving Amendment, (x) any Existing Revolving Loans (and any related participations) of any Permitted Replacement Revolving Lender outstanding under the applicable Existing Revolving Commitments, shall be deemed to be allocated as Permitted Replacement Revolving Loans (and related participations) and Existing Revolving Loans (and related participations) in the same proportion as such Permitted Replacement Revolving Lender’s Existing Revolving Commitments to Permitted Replacement Revolving Commitments, and (y) all Existing Revolving Loans (and related participations) outstanding under any Non-Extended Revolving Commitment being terminated pursuant to Section 2.25(c) shall be paid with the proceeds of a Borrowing of Permitted Replacement Revolving Loans requested by Parent Borrower on such date.

2.26. Extension of Term Loans.

(a) Extension of Term Loans . Parent Borrower may at any time and from time to time request that all or a portion of the Term Loans of a given Class (each, an “ Existing Term Loan Tranche ”) be amended to extend the scheduled maturity date(s) with respect to all or a portion of any principal amount of such Term Loans (any such Term Loans which have been so amended, “ Extended Term Loans ”) and to provide for other terms consistent with this Section 2.26. In order to establish any Extended Term Loans, Parent Borrower shall provide a notice to Administrative Agent (who shall provide a copy of such notice to each of the Lenders under the applicable Existing Term Loan Tranche) (each, a “ Term Loan Extension Request ”) setting forth the proposed terms of the Extended Term Loans to be established, which shall (x) be identical as offered to each Lender under such Existing Term Loan Tranche (including as to the proposed interest rates and fees payable) and offered pro rata to each Lender under such Existing Term Loan Tranche and (y) be identical to the Term Loans under the Existing Term Loan Tranche from which such Extended Term Loans are to be amended, except that: (i) all or any of the scheduled amortization payments of principal of the Extended Term Loans may be delayed to later dates than the scheduled amortization payments of principal of the Term Loans of such Existing Term Loan Tranche, to the extent provided in the applicable Extension Amendment; (ii) the Effective Yield with respect to the Extended Term Loans (whether in the form of interest rate margin, upfront fees, original issue discount or otherwise) may be different than the Effective Yield for the Term Loans of such Existing Term Loan Tranche, in each case, to the extent provided in the applicable Extension Amendment; (iii) the Extension Amendment may provide for other covenants and terms that apply solely to any period after the Latest Maturity Date that is in effect on the effective date of the Extension Amendment (immediately prior to the establishment of such Extended Term Loans); and (iv) Extended Term Loans may have optional prepayment terms (including call protection) as may be agreed by Parent Borrower and the Lenders thereof; provided that no Extended Term Loans may be optionally prepaid prior to the date on which all Term Loans with an earlier final stated maturity (including Term Loans under the Existing Term Loan Tranche from which they were amended) are repaid in full, unless such optional prepayment is accompanied by a pro rata optional prepayment of such other Term Loans; provided, however, that (A) in no event shall the final maturity date of any Extended Term Loans of a given Term Loan Extension Series at the time of establishment thereof be earlier than the then Latest Maturity Date of any other Term Loans hereunder, (B) the Weighted Average Life to Maturity of any Extended Term Loans of a given Term Loan Extension Series at the time of establishment thereof shall be no shorter than the remaining Weighted Average Life to Maturity of any other Term Loans then outstanding (except by virtue of amortization or prepayment of such Term Loans prior to the incurrence of the Extended Term Loans of such Term Loan Extension Series), and (C) any Extended Term Loans may participate on a pro rata basis or less than a pro rata basis (but not greater than a pro rata basis) in any voluntary or mandatory repayments or prepayments hereunder, in each case as specified in the respective Term Loan Extension Request. Any Extended Term Loans amended pursuant to any Term Loan Extension Request shall be designated a series (each, a “ Term Loan Extension Series ”) of Extended Term Loans for all purposes of this Agreement; provided that any Extended Term Loans amended from an Existing Term Loan Tranche may, to the extent provided in the applicable Extension Amendment, be designated as an increase in any previously established Term Loan Extension Series with respect to such Existing Term Loan Tranche. Each Term Loan Extension Series of Extended Term Loans incurred under this Section 2.26 shall be in an aggregate principal amount that is not less than $50,000,000.

 

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(b) Extension Request . Parent Borrower shall provide the applicable Extension Request at least five (5) Business Days prior to the date on which Lenders under the Existing Term Loan Tranche, as applicable, are requested to respond (or by such later date as the Administrative Agent may agree in its reasonable discretion), and shall agree to such procedures, if any, as may be established by, or acceptable to, Administrative Agent, in each case acting reasonably to accomplish the purposes of this Section 2.26. No Lender shall have any obligation to agree to have any of its Term Loans of any Existing Term Loan Tranche amended into Extended Term Loans pursuant to any Extension Request. Any existing Term Lender wishing to have all or a portion of its Term Loans under the Existing Term Loan Tranche subject to such Extension Request amended into Extended Term Loans (each, an “Extending Term Lender ”) shall notify Administrative Agent (each, an “ Extension Election ”) on or prior to the date specified in such Extension Request of the amount of its Term Loans under the Existing Term Loan Tranche which it has elected to request be amended into Extended Term Loans (subject to any minimum denomination requirements imposed by Administrative Agent). In the event that the aggregate principal amount of Term Loans under the Existing Term Loan Tranche in respect of which applicable Term Lenders shall have accepted the relevant Extension Request exceeds the amount of Extended Term Loans requested to be extended pursuant to the Extension Request, Term Loans subject to Extension Elections shall be amended to Extended Term Loans on a pro rata basis (subject to rounding by Administrative Agent, which shall be conclusive) based on the aggregate principal amount of Term Loans included in each such Extension Election.

(c) Extension Amendment . Extended Term Loans shall be established pursuant to an amendment (each, an “ Extension Amendment ”) to this Agreement among the applicable Borrower, Administrative Agent and each Extending Term Lender providing an Extended Term Loan thereunder which shall be consistent with the provisions set forth in Section 2.26(a) above (but which shall not require the consent of any other Lender). The effectiveness of any Extension Amendment shall be subject to the satisfaction on the date thereof of each of the conditions set forth in Section 3.2 and, to the extent reasonably requested by Administrative Agent, receipt by Administrative Agent of (i) legal opinions, board resolutions and officers’ certificates consistent with those delivered on the Original Closing Date other than changes to such legal opinion resulting from a change in law, change in fact or change to counsel’s form of opinion reasonably satisfactory to Administrative Agent and (ii) reaffirmation agreements and/or such amendments to the Collateral Documents as may be reasonably requested by Administrative Agent in order to ensure that the Extended Term Loans are provided with the benefit of the applicable Credit Documents. Administrative Agent shall promptly notify each Lender as to the effectiveness of each Extension Amendment. Each of the parties hereto hereby agrees that this Agreement and the other Credit Documents may be amended pursuant to an Extension Amendment, without the consent of any other Lenders, to the extent (but only to the extent) necessary to (i) reflect the existence and terms of the Extended Term Loans incurred pursuant thereto, (ii) modify the scheduled repayments set forth in Section 2.12 with respect to any Existing Term Loan Tranche subject to an Extension Election to reflect a reduction in the principal amount of the Term Loans thereunder in an amount equal to the aggregate principal amount of the Extended Term Loans amended pursuant to the applicable Extension (with such amount to be applied ratably to reduce scheduled repayments of such Term Loans required pursuant to Section 2.12), (iii) modify the prepayments set forth in Section 2.15 to reflect the existence of the Extended Term Loans and the application of prepayments with respect thereto, (iv) make such other changes to this Agreement and the other Credit Documents consistent with the provisions and intent of Section 10.5(f) (without the consent of the Requisite Lenders called for therein) and (v) effect such other amendments to this Agreement and the other Credit Documents as may be necessary or appropriate, in the reasonable opinion of Administrative Agent and the applicable Borrower, to effect the provisions of this Section, and the Requisite Lenders hereby expressly authorize Administrative Agent to enter into any such Extension Amendment.

(d) No conversion of Loans pursuant to any Extension in accordance with this Section 2.26 shall constitute a voluntary or mandatory payment or prepayment for purposes of this Agreement.

(e) Notwithstanding anything in Sections 2.23, 2.24, 2.25 and this Section 2.26 to the contrary, the Borrowers shall not be permitted to have more than six (6) Classes of Term Loans outstanding under this Agreement at any time.

 

SECTION 3. CONDITIONS PRECEDENT

3.1. Second Restatement Effective Date. The conditions to effectiveness of this amendment and restatement of the Amended and Restated Credit Agreement in the form of this Agreement, and to the obligation of each Lender to make a Credit Extension on the Second Restatement Effective Date are set forth in Section 5 of the Amendment.

 

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3.2. Conditions to Each Credit Extension.

(a) Conditions Precedent . The obligation of each Lender to make any Loan, or Issuing Bank to issue any Letter of Credit, on any Credit Date, including the Second Restatement Effective Date, are subject to the satisfaction, or waiver in accordance with Section 10.5, of the following conditions precedent:

(i) Administrative Agent shall have received a fully executed and delivered Funding Notice or Letter of Credit Application, as the case may be;

(ii) after making the Credit Extensions requested on such Credit Date, the Total Utilization of U.S. Revolving Commitments, the Total Utilization of Japanese Revolving Commitments or the Total Utilization of Swiss/Multicurrency Revolving Commitments, as applicable, shall not exceed the U.S. Revolving Commitments, the Japanese Revolving Commitments or the Swiss/Multicurrency Revolving Commitments, as applicable, then in effect;

(iii) as of such Credit Date, the representations and warranties contained herein and in the other Credit Documents, in each case, shall be true and correct in all material respects on and as of that Credit Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date; provided that, in each case, such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof;

(iv) Except in the case of the Credit Extensions on the Original Closing Date, as of such Credit Date, no event shall have occurred and be continuing or would result from the consummation of the applicable Credit Extension that would constitute an Event of Default or a Default; and

(v) on or before the date of issuance of any Letter of Credit, Administrative Agent shall have received all other information required by the applicable Letter of Credit Application, and such other documents or information as Issuing Bank may reasonably require in connection with the issuance of such Letter of Credit.

(b) Notices . Any Notice shall be executed by an Authorized Officer in a writing delivered to Administrative Agent and, if applicable, Issuing Bank. In lieu of delivering a Notice, a Borrower may give Administrative Agent and, if applicable, Issuing Bank telephonic notice by the required time of any proposed borrowing, conversion/continuation or issuance of a Letter of Credit, as the case may be; provided each such notice shall be promptly confirmed in writing by delivery of the applicable Notice to Administrative Agent and, if applicable, Issuing Bank on or before the close of business on the date that such borrowing, continuation/conversion or issuance is requested by telephonic notice. In the event of a discrepancy between the telephone notice and the written Notice, the written Notice shall govern. In the case of any Notice that is irrevocable once given, if a Borrower provides telephonic notice in lieu thereof, such telephone notice shall also be irrevocable once given. None of Administrative Agent, Issuing Bank or any Lender shall incur any liability to a Borrower in acting upon any telephonic notice referred to above that Administrative Agent or Issuing Bank, if applicable, believes in good faith to have been given by a duly authorized officer or other person authorized on behalf of such Borrower or for otherwise acting in good faith.

 

SECTION 4. REPRESENTATIONS AND WARRANTIES

In order to induce Lenders and Issuing Bank to enter into this Agreement and to make each Credit Extension to be made thereby, each Credit Party represents and warrants to each Lender and Issuing Bank, on the Second Restatement Effective Date and on each Credit Date, that the following statements are true and correct:

4.1. Organization; Requisite Power and Authority; Qualification. Each of Holdings and its Subsidiaries (a) is duly organized, validly existing and in good standing (where applicable) under the laws of its jurisdiction of organization, and as of the Original Closing Date, the jurisdiction of organization of each such Person is as identified in Schedule 4.1 to the Original Credit Agreement, (b) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted, to enter into the Credit Documents to which it is a party and to carry out the transactions contemplated to be carried out by such Person thereby, and (c) is qualified to do business and in good standing (where applicable) in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and would not be reasonably expected to have, a Material Adverse Effect.

 

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4.2. Equity Interests and Ownership. The outstanding Equity Interests of each of Parent Borrower and its Subsidiaries are fully paid and with respect to corporate shares, non assessable. Except as set forth on Schedule 4.2 to the Original Credit Agreement, as of the Original Closing Date, there is no existing option, warrant, call, right, commitment or other agreement to which Parent Borrower or any of its Subsidiaries is a party requiring, and there is no membership interest or other Equity Interests of Parent Borrower or any of its Subsidiaries outstanding which upon conversion or exchange would require, the issuance by Parent Borrower or any of its Subsidiaries of any additional membership interests or other Equity Interests of Parent Borrower or any of its Subsidiaries or other Securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase, a membership interest or other Equity Interests of Parent or any of its Subsidiaries. Schedule 4.2 to the Original Credit Agreement correctly sets forth the ownership interest of Parent Borrower and each of its Subsidiaries in their respective Subsidiaries as of the Original Closing Date after giving effect to the Transactions.

4.3. Due Authorization. The execution, delivery and performance of each Credit Document has been duly authorized by all necessary action on the part of each Credit Party that is a party thereto.

4.4. No Conflict. The execution, delivery and performance by each Credit Party of the Credit Documents to which such Person is a party and the consummation of the transactions contemplated by the Credit Documents do not and will not (a) violate (i) any provision of any law or any governmental rule or regulation applicable to Holdings or any of its Subsidiaries in any material respect, (ii) any of the Organizational Documents of Holdings or any of its Subsidiaries, or (iii) any material order, judgment or decree of any court or other agency of government binding on Holdings or any of its Subsidiaries; (b) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of Holdings or any of its Subsidiaries except to the extent such conflict, breach or default would not reasonably be expected to have a Material Adverse Effect; (c) result in or require the creation or imposition of any Lien upon any of the properties or assets of Holdings or any of its Subsidiaries (other than any Permitted Lien); or (d) require any approval of stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of Holdings or any of its Subsidiaries, except for such approvals or consents which will be obtained on or before the Second Restatement Effective Date and except for any such approvals or consents the failure of which to obtain will not have a Material Adverse Effect.

4.5. Governmental Consents. The execution, delivery and performance by Credit Parties of the Credit Documents to which they are parties and the consummation of the Transactions do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority except (1) as otherwise set forth in the Acquisition Agreement, (2) for filings and recordings with respect to the Collateral to be made, or otherwise delivered to Collateral Agent for filing and/or recordation, as of the Second Restatement Effective Date and (3) those approvals, consents, registrations, notices or other actions, the failure of which to obtain or make would not reasonably be expected to have a Material Adverse Effect.

4.6. Binding Obligation. Each Credit Document has been duly executed and delivered by each Credit Party that is a party thereto and is the legally valid and binding obligation of such Credit Party, enforceable against such Credit Party in accordance with its respective terms, except as may be limited by Debtor Relief Laws or by equitable principles and principles of good faith and fair dealing relating to enforceability.

4.7. Historical Financial Statements . The Historical Financial Statements were prepared in conformity with GAAP and fairly present, in all material respects, the financial position, on a consolidated basis, of the Persons described in such financial statements as at the respective dates thereof and the results of operations and cash flows, on a consolidated basis, of the entities described therein for each of the periods then ended.

 

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4.8. Projections . On and as of the Second Restatement Effective Date, the projections of Holdings and its Subsidiaries for the period of Fiscal Year 2012 through and including Fiscal Year 2014 (the “ Projections ”) have been prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed to be reasonable at the time such Projections were furnished to any Commitment Party or the Lenders; provided , the Projections are not to be viewed as facts and that actual results during the period or periods covered by the Projections may differ from such Projections and that the differences may be material.

4.9. No Material Adverse Change. On each Credit Date after the Original Closing Date, since December 31, 2009, no event, circumstance or change has occurred that has caused, either in any case or in the aggregate, a Material Adverse Effect.

4.10. Adverse Proceedings, Etc. There are no Adverse Proceedings, individually or in the aggregate, that would reasonably be expected to have a Material Adverse Effect. Neither Holdings nor any of its Subsidiaries (a) is in violation of any applicable laws (including Environmental Laws) that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, or (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

4.11. Taxes. Except as otherwise permitted under Section 5.3, all federal income tax returns and all material state, local and other tax returns and reports of Holdings and its Subsidiaries required to be filed by any of them have been timely filed, and all Taxes shown on such tax returns to be due and payable and all other material Taxes, assessments, fees, and other governmental charges upon Holdings and its Subsidiaries and upon their respective properties, assets, income, businesses and franchises which are due and payable have been paid when due and payable (taking into account extensions). Holdings knows of no proposed tax assessment against Holdings or any of its Subsidiaries which is not being actively contested by Holdings or such Subsidiary in good faith and by appropriate actions and for which adequate reserves or other appropriate provisions, if any, as required in conformity with GAAP, have been made.

4.12. Properties.

(a) Title . Each of Holdings and its Subsidiaries has (i) good, sufficient and legal title to (in the case of fee interests in real property), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property) and (iii) good title to (in the case of all other personal property), all of their respective properties and assets reflected in their respective Historical Financial Statements referred to in Section 4.7 and in the most recent financial statements delivered pursuant to Section 5.1, in each case except for assets disposed of since the date of such financial statements in the ordinary course of business or as otherwise permitted under Section 6.8. Except as permitted by this Agreement (including, without limitation, the Permitted Liens), all such properties and assets are free and clear of Liens.

(b) Real Estate . As of the Original Closing Date, Schedule 4.12 to the Original Credit Agreement contains a true, accurate and complete list of all Real Estate Assets. Holdings does not have knowledge of any default that has occurred or is continuing under any lease, sublease or assignment of leases (together with all amendments, modifications, supplements, renewals of extensions of any thereof) affecting any Real Estate Asset of any Credit Party and each such agreement constitutes a legal, valid and binding obligation of each applicable Credit Party, enforceable against such Credit Party in accordance with its terms, except as in any such case as would not, individually or in the aggregate, result in a Material Adverse Effect.

4.13. Environmental Matters. Neither Holdings nor any of its Subsidiaries nor any of their respective Facilities or operations are subject to any outstanding written order, consent decree or settlement agreement with any Person relating to any Environmental Law, any Environmental Claim, or any Hazardous Materials Activity that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. Neither Holdings nor any of its Subsidiaries has received any letter or request for information under Section 104 of the

 

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Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable state law with respect to a matter or matters that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. There are and, to each of Holdings’ and its Subsidiaries’ knowledge, have been, no conditions, occurrences, or Hazardous Materials Activities which would reasonably be expected to form the basis of an Environmental Claim against Holdings or any of its Subsidiaries that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. Except as would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (i) neither Holdings nor any of its Subsidiaries nor, to any Credit Party’s knowledge, any predecessor of Holdings or any of its Subsidiaries has filed any notice under any Environmental Law indicating past or present treatment of Hazardous Materials at any Facility, and (ii) none of Holdings’ or any of its Subsidiaries’ operations involves the generation, transportation, treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent. Compliance with all current or reasonably foreseeable future requirements pursuant to or under Environmental Laws would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. No event or condition has occurred or is occurring with respect to Holdings or any of its Subsidiaries relating to any Environmental Law, any Release of Hazardous Materials, or any Hazardous Materials Activity which individually or in the aggregate has had, or would reasonably be expected to have, a Material Adverse Effect.

4.14. No Defaults. Neither Holdings nor any of its Subsidiaries is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any of its Contractual Obligations, and no condition exists which, with the giving of notice or the lapse of time or both, could constitute such a default, except where such default or defaults, if any, would not reasonably be expected to have a Material Adverse Effect.

4.15. Governmental Regulation. Neither Holdings nor any of its Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.

4.16. Margin Stock. The Borrowers are not engaged in nor will they engage, principally or as one of its important activities, in the business of purchasing or carrying Margin Stock, or extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Loans or drawings under any Letter of Credit will be used for any purpose that violates Regulation U.

4.17. Employee Matters. Neither Holdings nor any of its Subsidiaries is engaged in any unfair labor practice that would reasonably be expected to have a Material Adverse Effect. There is (a) no unfair labor practice complaint pending against Holdings or any of its Subsidiaries, or to the knowledge of Holdings and Parent Borrower, threatened in writing against any of them before the National Labor Relations Board and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement that is so pending against Holdings or any of its Subsidiaries or to the knowledge of Holdings and Parent Borrower, threatened in writing against any of them, (b) no strike or work stoppage in existence or, to the knowledge of Holdings and Parent Borrower, threatened in writing involving Holdings or any of its Subsidiaries, and (c) to the knowledge of Holdings and Parent Borrower, no union organization activity that is taking place, except, with respect to any matter specified in clause (a), (b) or (c) above, either individually or in the aggregate, such as is not reasonably likely to have a Material Adverse Effect.

4.18. Employee Benefit Plans. Holdings, each of its Subsidiaries and each of their respective ERISA Affiliates are in compliance with all applicable provisions and requirements of ERISA and the Internal Revenue Code and the regulations and published interpretations thereunder with respect to each Employee Benefit Plan, and have performed all obligations under each Employee Benefit Plan except, in each case, as would not be reasonably likely to have a Material Adverse Effect. Each Employee Benefit Plan which is intended to qualify under Section 401(a) of the Internal Revenue Code has received a favorable determination letter from the Internal Revenue Service indicating that such Employee Benefit Plan is so qualified and, to the knowledge of Holdings nothing has occurred subsequent to the issuance of such determination letter which would cause such Employee Benefit Plan to lose its qualified status, except as would not be reasonably likely to have Material Adverse Effect. No liability to the PBGC (other than required premium payments) has been or is expected to be incurred by Holdings, any of its Subsidiaries or any of their ERISA Affiliates, except as would not be reasonably likely to have a Material Adverse Effect. No ERISA Event has occurred or is expected to occur, except as would not be reasonably likely to have a Material

 

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Adverse Effect. Except to the extent required under Section 4980B of the Internal Revenue Code or similar laws, no Employee Benefit Plan provides health or welfare benefits (through the purchase of insurance or otherwise) for any retired or former employee of Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates, except as would not be reasonably likely to have a Material Adverse Effect. Except as would not be reasonably likely to have a Material Adverse Effect, the present value of the aggregate benefit liabilities under each Pension Plan sponsored, maintained or contributed to by Holdings, any of its Subsidiaries or any of their ERISA Affiliates (determined as of the end of the most recent plan year on the basis of the actuarial assumptions specified for funding purposes in the most recent actuarial valuation for such Pension Plan), did not exceed the aggregate current value of the assets of such Pension Plan. As of the most recent valuation date for each Multiemployer Plan for which the actuarial report is available, the potential liability of Holdings, its Subsidiaries and their respective ERISA Affiliates for a complete withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when aggregated with such potential liability for a complete withdrawal from all Multiemployer Plans, based on information available pursuant to Section 4221(e) of ERISA would not be reasonably likely to have a Material Adverse Effect. Except as would not be reasonably likely to have a Material Adverse Effect, Holdings, each of its Subsidiaries and each of their ERISA Affiliates have complied with the requirements of Section 515 of ERISA with respect to each Multiemployer Plan and are not in material “default” (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan.

4.19. Certain Fees. Except as set forth on Schedule 4.19 to the Original Credit Agreement, no broker’s or finder’s fee or commission will be payable with respect to the transactions contemplated by the Related Agreements, except as payable to Agents and Lenders.

4.20. Solvency. On the Second Restatement Effective Date, after giving effect to the Loans made hereunder on the Second Restatement Effective Date, Parent Borrower will be Solvent. On the first date hereunder on which any Subsidiary Borrower borrows any Loans hereunder, such Subsidiary Borrower, after giving effect to such borrowing, will be Solvent.

4.21. Creation, Perfection, Etc. Except as otherwise contemplated hereby or under any other Credit Document, including without limitation in Section 3, all filings and other actions necessary to perfect the Liens on the Collateral created under, and in the manner contemplated by, the Collateral Documents have been duly made or taken or otherwise provided for (to the extent required hereby or by the applicable Collateral Documents), and the Collateral Documents create in favor of Collateral Agent for the benefit of the Secured Parties (or the Swiss Secured Parties, as applicable), or in favor of the Secured Parties (or the Swiss Secured Parties, as applicable), a valid and, together with such filings and other actions (to the extent required hereby or by the applicable Collateral Documents), perfected First Priority Lien in the Collateral, securing the payment of the Obligations (or the Swiss Obligations, as applicable), subject to Permitted Liens.

4.22. Compliance with Statutes, Etc. Each of Holdings and its Subsidiaries is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities, in respect of the conduct of its business and the ownership of its property (including compliance with all applicable Environmental Laws with respect to any Real Estate Asset or governing its business and the requirements of any permits issued under such Environmental Laws with respect to any such Real Estate Asset or the operations of Holdings or any of its Subsidiaries), except such non-compliance that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

4.23. Disclosure. No representation or warranty of any Credit Party contained in any Credit Document (as modified or supplemented by other information so furnished) or in any other documents, certificates or written statements (as modified or supplemented by other information so furnished) furnished to any Agent or Lender by or on behalf of Holdings or any of its Subsidiaries for use in connection with the Transactions when taken as a whole contains any untrue statement of a material fact or omits to state a material fact (known to Holdings or Parent Borrower, in the case of any document not furnished by either of them) necessary in order to make the statements contained herein or therein not misleading in light of the circumstances in which the same were made; provided , that any projections and pro forma financial information contained in such materials were prepared based upon good faith estimates and assumptions believed by Holdings or Parent Borrower to be reasonable at the time of preparation, it being recognized by Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results and that such differences may be material.

 

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4.24. First Lien Senior Indebtedness. The Obligations are not subordinated in right of payment to any other Indebtedness of any Credit Party.

4.25. PATRIOT Act. To the extent applicable, each Credit Party is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ PATRIOT Act ”). No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

4.26. Related Agreements. Holdings and Parent Borrower have delivered to Administrative Agent and Syndication Agent complete and correct copies of (i) each Related Agreement as in effect on the Original Closing Date and (ii) any material amendment, restatement, supplement or other modification to or waiver of each Related Agreement entered into after the Original Closing Date.

 

SECTION 5. AFFIRMATIVE COVENANTS

Each Credit Party covenants and agrees that, so long as any Commitment is in effect and until payment in full of all Obligations that are accrued and payable (other than Obligations under any Cash Management Agreement or Hedge Agreement) and cancellation or expiration of all Letters of Credit (unless the Outstanding Amount of the L/C Obligations related thereto has been Cash Collateralized or, if satisfactory to Issuing Bank in its sole discretion, a backstop letter of credit is in place), each Credit Party shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 5.

5.1. Financial Statements and Other Reports. Each of Holdings and Parent Borrower will deliver to Administrative Agent (for distribution to the Arranger and Lenders):

(a) Quarterly Financial Statements . As soon as available, and in any event within 45 days (or in the case of the first three Fiscal Quarters ending after the Original Closing Date, 60 days) after the end of each Fiscal Quarter of each Fiscal Year (other than the fourth Fiscal Quarter of any such Fiscal Year), commencing with the Fiscal Quarter in which the Original Closing Date occurs, the consolidated balance sheet of Parent Borrower and its Subsidiaries as at the end of such Fiscal Quarter and the related consolidated statement of income of Parent Borrower and its Subsidiaries for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter and the related consolidated statements of stockholders’ equity and cash flows from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year, all in reasonable detail, together with a Financial Officer Certification and a Narrative Report with respect thereto; provided , that any financial statements delivered prior to the required delivery of the financial statements for the Fiscal Year ending December 31, 2010 shall not be required to contain all purchase accounting adjustments relating to the Transactions to the extent it is not practicable to include any such adjustments in such financial statements;

(b) Annual Financial Statements . As soon as available, and in any event within 90 days after the end of each Fiscal Year, commencing with the Fiscal Year in which the Original Closing Date occurs, (i) the consolidated balance sheet of Parent Borrower and its Subsidiaries as at the end of such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows of Parent Borrower and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year, in reasonable detail, together with a Financial Officer Certification and a Narrative Report with respect thereto; and (ii) with respect to such consolidated financial statements a report thereon of PricewaterhouseCoopers LLP or other independent certified public accountants of recognized national standing selected by Parent Borrower, and reasonably satisfactory to Administrative Agent (which report shall be unqualified as to going concern and

 

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scope of audit, and shall state that such consolidated financial statements fairly present, in all material respects, the consolidated financial position of Parent Borrower and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements) and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards);

(c) Compliance Certificate . Together with each delivery of financial statements pursuant to Sections 5.1(a) and 5.1(b), a duly executed and completed Compliance Certificate; provided, that if such Compliance Certificate demonstrates an Event of Default in respect of any covenant under Section 6.7, Parent Borrower may deliver, together with such Compliance Certificate, notice of its intent to cure such Event of Default pursuant to Section 8.2(a);

(d) Statements of Reconciliation After Change in Accounting Principles . If, as a result of any change in accounting principles and policies from those used in the preparation of the Historical Financial Statements, the consolidated financial statements delivered pursuant to Section 5.1(a) or 5.1(b) will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such subdivisions had no such change in accounting principles and policies been made, then, together with the first delivery of such financial statements after such change, one or more statements of reconciliation for all such prior financial statements in form and substance reasonably satisfactory to Administrative Agent;

(e) Notice of Default . Promptly (and in any event within 5 days) upon any Authorized Officer of Holdings or Parent Borrower obtaining actual knowledge (i) of any condition or event that constitutes a Default or an Event of Default or that notice has been given to Holdings or Parent Borrower with respect thereto; (ii) that any Person has given any notice to Holdings or any of its Subsidiaries or taken any other action with respect to any event or condition set forth in Section 8.1(b); or (iii) of the occurrence of any event or change that has caused, either in any case or in the aggregate, a Material Adverse Effect, a certificate of an Authorized Officer specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such Person and the nature of such claimed Event of Default, Default, default, event or condition, and what action Parent Borrower has taken, is taking and proposes to take with respect thereto;

(f) Notice of Litigation . Promptly upon any Authorized Officer of Holdings or Parent Borrower obtaining knowledge of (i) any Adverse Proceeding not previously disclosed in writing by Parent Borrower to Lenders, or (ii) any development in any Adverse Proceeding that, in the case of either clause (i) or (ii), would be reasonably expected to have a Material Adverse Effect, or seeks to enjoin or otherwise prevent the consummation of the Transactions or any Credit Extension, written notice thereof together with such other information as may be reasonably available to Holdings or Parent Borrower to enable Lenders and their counsel to evaluate such matters;

(g) ERISA . (i) Promptly upon any Authorized Officer of Holdings or Parent Borrower obtaining knowledge of the occurrence of or forthcoming occurrence of any ERISA Event that would be reasonably likely to have a Material Adverse Effect, a written notice specifying the nature thereof, what action Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto; and (ii) with reasonable promptness, copies of (1) each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates with the Internal Revenue Service with respect to each Pension Plan, as requested; (2) all notices received by Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies of such other documents or governmental reports or filings relating to any Employee Benefit Plan as Administrative Agent shall reasonably request;

(h) Financial Plan . As soon as practicable and in any event no later than 90 days after the beginning of each Fiscal Year, a consolidated plan and financial forecast for such Fiscal Year and each Fiscal Year (or portion thereof) through the final maturity date of the Loans (a “ Financial Plan ”), including (i) a forecasted consolidated balance sheet and forecasted consolidated statements of income and cash flows of Parent Borrower and its Subsidiaries for such Fiscal Year, and an explanation of the assumptions on which such forecasts are based and (ii) forecasted consolidated statements of income and cash flows of Parent Borrower and its Subsidiaries for each fiscal quarter of such Fiscal Year;

 

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(i) [Reserved.] ;

(j) Insurance Report . Concurrently with the delivery of the annual financial statements required to be delivered pursuant to Section 5.1(b) above, a certificate from Parent Borrower’s insurance broker(s) in form reasonably satisfactory to Administrative Agent outlining all material insurance coverage maintained as of the date of such certificate by Holdings and its Subsidiaries;

(k) Information Regarding Collateral . Parent Borrower will furnish to Collateral Agent prompt written notice of any change (i) in any Credit Party’s corporate name, (ii) in any Credit Party’s identity or corporate form or organization, (iii) in any Credit Party’s jurisdiction of organization or (iv) in any Credit Party’s Federal Taxpayer Identification Number or state organizational identification number. Parent Borrower agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral as contemplated in the Collateral Documents. Parent Borrower also agrees promptly to notify Collateral Agent if any material portion of the Collateral is damaged or destroyed;

(l) Annual Collateral Verification . Each year, at the time of delivery of annual financial statements with respect to the preceding Fiscal Year pursuant to Section 5.1(b), Parent Borrower shall deliver to Collateral Agent a certificate of its Authorized Officer either confirming that there has been no change in the information since the date of the Collateral Questionnaire delivered on the Second Restatement Effective Date or the date of the most recent certificate delivered pursuant to this Section and/or identifying such changes;

(m) Other Information . (A) Promptly upon their becoming publicly available, copies of all regular and periodic reports and all registration statements and prospectuses, if any, filed by Holdings or any of its Subsidiaries with any securities exchange or with the Securities and Exchange Commission or any governmental or private regulatory authority (other than amendments to any registration statement (to the extent such registration statement, in the form it became effective, is delivered), exhibits to any registration statement and, if applicable, any registration on Form S-8), and (B) such other information and data with respect to Holdings or any of its Subsidiaries as from time to time may be reasonably requested by Administrative Agent, Collateral Agent or Syndication Agent; and

(n) Certification of Public Information . Holdings, Parent Borrower and each Lender acknowledge that certain of the Lenders may be Public Lenders and, if documents or notices required to be delivered pursuant to this Section 5.1 or otherwise are being distributed through IntraLinks/IntraAgency, SyndTrak or another relevant website or other information platform (the “ Platform ”), any document or notice that Holdings or Parent Borrower has indicated contains Non-Public Information shall not be posted on that portion of the Platform designated for such Public Lenders. Each of Holdings and Parent Borrower agrees to clearly designate all information provided to Administrative Agent by or on behalf of Holdings or Parent Borrower which is suitable to make available to Public Lenders. If Holdings or Parent Borrower has not indicated whether a document or notice delivered pursuant to this Section 5.1 contains Non-Public Information, 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 non-public information with respect to Holdings, its Subsidiaries and their securities.

Notwithstanding the foregoing, the obligations in paragraphs (a) and (b) of this Section 5.1 may be satisfied with respect to financial information of Holdings and its Subsidiaries by furnishing (A) the applicable financial statements of Holdings (or any direct or indirect parent thereof) or (B) Parent Borrower’s or Holdings’ (or any direct or indirect parent thereof), as applicable, Form 10-K or 10-Q, as applicable, filed with the SEC; provided that, the other applicable requirements of such paragraphs (a) and (b) are complied with and with respect to clauses (A) and (B), to the extent such information relates to Holdings or a direct or indirect parent, such information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to Holdings or such parent, on the one hand, and the information relating to Parent Borrower and its Subsidiaries on a standalone basis, on the other hand.

 

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5.2. Existence. Except as otherwise permitted under Section 6.8, each Credit Party will, and will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect its existence and all rights and franchises, licenses and permits material to its business; provided , that no Credit Party (other than each Borrower with respect to existence and other than as permitted under Section 6.8) or any of its Subsidiaries (other than as permitted under Section 6.8) shall be required to preserve any such existence, right or franchise, licenses and permits (a) if such Person’s board of directors (or similar governing body) or management shall determine that the loss thereof is not disadvantageous in any material respect to such Person or to Lenders or (b) except to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect.

5.3. Payment of Taxes and Claims. Each Credit Party will, and will cause each of its Subsidiaries to, pay all material Taxes imposed upon it or any of its properties or assets or in respect of any of its income, businesses or franchises before any penalty or fine accrues thereon, and all claims (including claims for labor, services, materials and supplies) for sums that have become due and payable or that by law have or may become a Lien upon any of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided , no such Tax or claim need be paid if it is being contested in good faith by appropriate actions promptly taken and diligently conducted, so long as (a) adequate reserve or other appropriate provision, as shall be required in conformity with GAAP shall have been made therefor, and (b) in the case of a Tax or claim which has or may become a Lien against any of the Collateral, such contest proceedings operate to stay the sale of, or such Lien shall not have been enforced with respect to, any material portion of the Collateral to satisfy such Tax or claim. No Credit Party will, nor will it permit any of its Subsidiaries to, file or consent to the filing of any consolidated income tax return with any Person (other than Holdings, any direct or indirect parent thereof or any of its Subsidiaries).

5.4. Maintenance of Properties. Except if the failure to do so would not reasonably be expected to have a Material Adverse Effect, each Credit Party will, and will cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all properties used or useful in the business of Holdings and its Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof.

5.5. Insurance. Holdings will maintain or cause to be maintained, with financially sound and reputable insurers, such public liability insurance, third party property damage insurance, business interruption insurance and casualty insurance with respect to liabilities, losses or damage in respect of the assets, properties and businesses of Holdings and its Subsidiaries as may customarily be carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses, in each case in such amounts (giving effect to self-insurance), with such deductibles, covering such risks and otherwise on such terms and conditions as shall be customary for such Persons. Without limiting the generality of the foregoing, Holdings will maintain or cause to be maintained (a) flood insurance with respect to each Flood Hazard Property that is located in a community that participates in the National Flood Insurance Program, in each case in compliance with any applicable regulations of the Board of Governors of the Federal Reserve System, and (b) replacement value casualty insurance on the Collateral under such policies of insurance, with such insurance companies, in such amounts, with such deductibles, and covering such risks as are at all times carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses. Each such policy of insurance shall (i) in the case of each general liability insurance policy, name Collateral Agent, on behalf of the Secured Parties, as an additional insured thereunder as its interests may appear, (ii) in the case of each casualty insurance policy, contain a customary loss payable clause or endorsement that names Collateral Agent, on behalf of the Secured Parties, as the loss payee thereunder and provide that the insurer affording coverage (with respect to casualty and liability insurance) will provide at least thirty days’ prior written notice to Collateral Agent of any modification or cancellation of such policy.

5.6. Books and Records; Inspections. Each Credit Party will, and will cause each of its Subsidiaries to, keep proper books of record and accounts in which entries in conformity in all material respects with GAAP shall be made of all material dealings and transactions in relation to its business and activities. To the extent permitted by Law, each Credit Party will, and will cause each of its Subsidiaries to, permit any authorized representatives designated by any Lender to visit and inspect any of the properties of any Credit Party and any of its respective Subsidiaries, to inspect, copy and take extracts from its and their financial and accounting records, and to discuss its and their affairs, finances and accounts with its and their officers and independent public accountants, subject to the customary policies and procedures of such independent public accountants, all upon reasonable notice and at such

 

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reasonable times during normal business hours and as often as may reasonably be requested; provided , that, excluding any such visits and inspections during the continuation of any Event of Default, (i) only Administrative Agent, Collateral Agent or Syndication Agent on behalf of the Lenders may exercise the rights of the Lenders under this Section 5.6 and such Agents may (either individually, or at the request of the Requisite Lenders) make no more than two (2) such visits or inspections during any calendar year, and (ii) Borrower shall be required to reimburse such Agent for the costs of such visit or inspection only one (1) such time during any calendar year; provided further, that during the continuation of any Event of Default, Administrative Agent, Collateral Agent or Syndication Agent (or any of their representatives) may do any of the foregoing (but not more than once during the period such Event Default is outstanding) at the expense of Parent Borrower upon reasonable notice and during normal business hours Administrative Agent and the Lenders shall give Parent Borrower the opportunity to participate in any discussions with Parent Borrower’s or any of its Subsidiaries’ independent public accountants.

5.7. Lenders Meetings. Holdings and Parent Borrower will, upon the request of Administrative Agent or Requisite Lenders, participate in a meeting of Administrative Agent and Lenders once during each Fiscal Year to be held at Parent Borrower’s corporate offices (or at such other location as may be agreed to by Parent Borrower and Administrative Agent) at such time as may be agreed to by Parent Borrower and Administrative Agent.

5.8. Compliance with Laws. Each Credit Party will comply, and shall cause each of its Subsidiaries and all other Persons, if any, on or occupying any Facilities to comply, with the requirements of all applicable Laws of any Governmental Authority (including all Environmental Laws), noncompliance with which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.9. Environmental.

(a) Environmental Disclosure . Holdings will deliver to Administrative Agent and Lenders:

(i) as soon as practicable following receipt thereof, copies of all environmental audits, investigations, analyses and reports of any kind or character, whether prepared by personnel of Holdings or any of its Subsidiaries or by independent consultants, governmental authorities or any other Persons, with respect to significant environmental matters at any Facility or with respect to any Environmental Claims in either case that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect;

(ii) promptly following the occurrence thereof, written notice describing in reasonable detail (1) any Release at, on, under or from any Facility required to be reported to any federal, state or local governmental or regulatory agency under any applicable Environmental Laws (except for Releases which could not reasonably be expected to result in a Material Adverse Effect), (2) any remedial action taken by Holdings or any other Person in response to (A) any Hazardous Materials Activities the existence of which has a reasonable possibility of resulting in one or more Environmental Claims having, individually or in the aggregate, a Material Adverse Effect, or (B) any Environmental Claims that, individually or in the aggregate, have a reasonable possibility of resulting in a Material Adverse Effect, and (3) Holdings or Parent Borrower’s discovery of any occurrence or condition on any real property adjoining or in the vicinity of any Facility that would reasonably be expected to cause such Facility or any part thereof to be subject to any material restrictions on the ownership, occupancy, transferability or use thereof under any Environmental Laws;

(iii) as soon as practicable following the sending or receipt thereof by Holdings or any of its Subsidiaries, a copy of any and all material written communications with respect to (1) any Environmental Claims that, individually or in the aggregate, have a reasonable possibility of giving rise to a Material Adverse Effect, (2) any Release at, on, under or from any Facility required to be reported to any federal, state or local governmental or regulatory agency and requiring notice to Administrative Agent and Lenders pursuant to sub-section (a)(ii)(1) of this Section 5.9, and (3) any request for information from any governmental agency that suggests such agency is investigating whether Holdings or any of its Subsidiaries may be potentially responsible for any Hazardous Materials Activity and that relates to a matter that would reasonably be expected to result in a Material Adverse Effect;

(iv) prompt written notice describing in reasonable detail (1) any proposed acquisition of stock, assets, or property by Holdings or any of its Subsidiaries that would reasonably be expected to (A) expose

 

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Holdings or any of its Subsidiaries to, or result in, Environmental Claims that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or (B) affect the ability of Holdings or any of its Subsidiaries to maintain in full force and effect all material Governmental Authorizations required under any Environmental Laws for their respective operations and (2) any proposed action to be taken by Holdings or any of its Subsidiaries to modify current operations in a manner that would reasonably be expected to subject Holdings or any of its Subsidiaries to any additional material obligations or requirements under any Environmental Laws; and

(v) with reasonable promptness, such other documents and information as from time to time may be reasonably requested by Administrative Agent in relation to any matters disclosed pursuant to this Section 5.9(a).

(b) Hazardous Materials Activities, Etc. Each Credit Party shall promptly take, and shall cause each of its Subsidiaries promptly to take, any and all actions necessary to (i) cure any violation of applicable Environmental Laws by such Credit Party or its Subsidiaries that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (ii) make an appropriate response to any Environmental Claim against such Credit Party or any of its Subsidiaries and discharge any obligations it may have to any Person thereunder where failure to do so would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5.10. Subsidiaries. In the event that any Person becomes a Wholly-Owned Domestic Subsidiary of Parent Borrower (other than a Disregarded Domestic Subsidiary), Parent Borrower shall promptly (and in any event within 45 days (or 90 days in the case of any Required Real Estate Documents) thereof or by such later date as designated by Administrative Agent in its sole discretion) (a) cause such Domestic Subsidiary to become a Guarantor hereunder and a Grantor under the Pledge and Security Agreement by executing and delivering to Administrative Agent and Collateral Agent a Counterpart Agreement, and (b) take all such actions and execute and deliver, or cause to be executed and delivered, all such documents, instruments, agreements, and certificates as are similar to those described in Sections 3.1(b) and 3.1(i), in each case of the Original Credit Agreement and, in the case of any Material Real Estate Assets, all Required Real Estate Documents. In the event that any Person becomes a Foreign Subsidiary or Disregarded Domestic Subsidiary of Parent Borrower, and the voting Equity Interests of such Foreign Subsidiary or Disregarded Domestic Subsidiary are owned by Parent Borrower or by any Wholly-Owned Domestic Subsidiary (other than a Disregarded Domestic Subsidiary) thereof, Parent Borrower shall take, or shall cause such Domestic Subsidiary to take, all of the actions referred to in Section 3.1(i)(i) of the Original Credit Agreement and (as applicable in the case of a Material First-Tier Foreign Subsidiary (as defined in the Pledge and Security Agreement)) the actions required by Section 4.4 of the Pledge and Security Agreement, necessary to grant and to perfect a First Priority Lien in favor of Collateral Agent, for the benefit of Secured Parties, or in favor of the Secured Parties, pursuant to the Pledge and Security Agreement, in 66% of such voting Equity Interests (but no other Equity Interests). In the event that any Person that is organized under the laws of Switzerland becomes a Wholly-Owned Subsidiary of a Swiss Subsidiary Borrower, Swiss Subsidiary Borrower shall promptly (and in any event within 45 days thereof or by such later date as designated by Administrative Agent in its sole discretion) (a) cause such Subsidiary to become a Swiss Guarantor under the Swiss Guaranty and a grantor under such agreements as are analogous to the Foreign Collateral Documents, and (b) take all such actions and execute and deliver, or cause to be executed and delivered, all such documents, instruments, agreements, and certificates as are analogous to those described in Sections 3.1(b) and 3.1(i), in each case of the Original Credit Agreement. With respect to each such Subsidiary, Parent Borrower shall promptly (and in any event with 45 days of the date on which such Person became a Subsidiary) send to Administrative Agent written notice setting forth with respect to such Person (i) the date on which such Person became a Subsidiary of Parent Borrower, and (ii) all of the data required to be set forth in Schedules 4.1 and 4.2 with respect to all Subsidiaries of Parent Borrower; and such written notice shall be deemed to supplement Schedule 4.1 and 4.2 for all purposes hereof.

5.11. Additional Material Real Estate Assets. In the event that any Credit Party (other than any Swiss Credit Party) acquires a Material Real Estate Asset or a Real Estate Asset owned or leased on the Original Closing Date becomes a Material Real Estate Asset and such interest has not otherwise been made subject to the Lien of the Collateral Documents in favor of Collateral Agent, for the benefit of the Secured Parties, or in favor of the Japanese Secured Parties, as applicable, then such Credit Party shall promptly (and in any event no later than 90 days after acquiring such Material Real Estate Asset or by such later time as designated by Collateral Agent in its sole discretion) take all such actions and execute and deliver, or cause to be executed and delivered, all Required Real

 

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Estate Documents with respect to each such Material Real Estate Asset that Collateral Agent shall reasonably request to create in favor of Collateral Agent, for the benefit of the Secured Parties, or in favor of the Japanese Secured Parties, as applicable, a valid and, subject to any filing and/or recording referred to herein, perfected First Priority security interest in such Material Real Estate Assets. In addition to the foregoing, Parent Borrower shall, at the request of Collateral Agent, deliver, from time to time, to Collateral Agent such appraisals as are required by law or regulation of Real Estate Assets with respect to which Collateral Agent has been granted a Lien. This Section 5.11 shall not apply to any Real Estate Asset owned by the Swiss Credit Parties, which shall not be pledged or otherwise become Collateral hereunder.

5.12. Interest Rate Protection. No later than ninety (90) days following the Original Closing Date, Parent Borrower shall obtain, and at all times thereafter until the third anniversary of the Original Closing Date, cause to be maintained protection against fluctuations in interest rates pursuant to one or more Interest Rate Agreements with counterparties reasonably satisfactory to Syndication Agent, in order to ensure that no less than 50% of the aggregate principal amount of the total Indebtedness (other than Revolving Loans) for borrowed money of Holdings and its Subsidiaries then outstanding is either (i) subject to such Interest Rate Agreements or (ii) Indebtedness that bears interest at a fixed rate.

5.13. Further Assurances. At any time or from time to time upon the request of Administrative Agent, each Credit Party will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as Administrative Agent or Collateral Agent may reasonably request in order to ensure that (x) the Obligations are guarantied by the Guarantors and are secured by substantially all of the assets of Holdings and its Subsidiaries and all of the outstanding Equity Interests of Parent Borrower and its Subsidiaries (subject to limitations and exceptions contained in the Credit Documents, including with respect to Foreign Subsidiaries), (y) the Swiss Obligations are guaranteed by the Swiss Guarantors and are secured by the assets of the Swiss Credit Parties to the extent required by the applicable Foreign Collateral Documents and (z) the Japanese Obligations are secured by the assets of Japanese Subsidiary Borrower to the extent required by the applicable Foreign Collateral Documents.

5.14. Miscellaneous Covenants. Unless otherwise consented to by Agents or Requisite Lenders:

(a) Maintenance of Ratings . At all times, Parent Borrower shall use commercially reasonable efforts to maintain (x) a corporate family rating issued by Moody’s and a corporate credit rating issued by S&P, and (y) public ratings issued by Moody’s and S&P with respect to its senior secured debt.

(b) Cash Management Systems . Holdings and its Subsidiaries shall establish and maintain cash management systems that are consistent with the past practice of Parent Borrower and its Subsidiaries or otherwise customary and appropriate for businesses similar to Parent Borrower as determined in good faith by its management.

5.15. Designation of Restricted and Unrestricted Subsidiaries.

(a) Parent Borrower’s Board of Directors may designate any of its Subsidiaries, including any newly formed Subsidiary or any Person that will become a Subsidiary of Parent Borrower by way of acquisition, to be an “ Unrestricted Subsidiary ,” upon which designation such Unrestricted Subsidiary shall cease to be deemed a “Subsidiary” within the meaning of this Agreement. Such designation subject to the following conditions:

(i) such Subsidiary has no Indebtedness other than Indebtedness that is non-recourse to the property and assets of Holdings, Parent Borrower or any other Subsidiary;

(ii) such Subsidiary has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Parent Borrower or any of its other Subsidiaries;

(iii) the designation of such Subsidiary as an Unrestricted Subsidiary would not cause a Default or Event of Default;

 

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(iv) Parent Borrower and its Subsidiaries shall be in pro forma compliance with the covenant set forth in Section 6.7 (b) as of the last day of the most recently ended Fiscal Quarter for which a Compliance Certificate has been (or was required to have been) delivered to Administrative Agent pursuant to Section 5.1(c) after giving effect to such designation; and

(v) after giving effect to such designation, the Consolidated Total Assets of all Unrestricted Subsidiaries and their respective Subsidiaries shall be no greater than 4.00% of the Consolidated Total Assets of Parent Borrower and its subsidiaries (including Unrestricted Subsidiaries).

(b) Upon any such designation of a Subsidiary of Parent Borrower as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by Parent Borrower and its Subsidiaries in the newly designated Unrestricted Subsidiary will be deemed to be an Investment made as of the time of that designation and will reduce the amount available for Investments under Section 6.6.

(c) Parent Borrower’s Board of Directors may redesignate any Unrestricted Subsidiary to be a Subsidiary of Parent Borrower subject to the following conditions:

(1) such Subsidiary executes and delivers to Administrative Agent a Counterpart Agreement providing for a Guarantee; and

(2) the redesignation of such Unrestricted Subsidiary as a Subsidiary would not cause a Default or Event of Default; it being understood that any Indebtedness, Liens, agreements or transactions of such Unrestricted Subsidiary outstanding at the time of such redesignation shall be deemed to be incurred or entered into at such time.

5.16. Intentionally Omitted .

5.17. Swiss Withholding Tax Rules. Swiss Subsidiary Borrower shall ensure that while it is a Borrower it shall comply with the Swiss Withholding Tax Rules, subject to the Lenders complying with their obligations under Section 10.6 and their representations and undertakings otherwise set forth herein. Swiss Subsidiary Borrower shall assume, for the purposes of determining the total number of creditors which are Non-Eligible Swiss Banks with respect to the Twenty Non-Bank Rule, that at all times, with respect to the Obligations of the Swiss Subsidiary Borrower hereunder, there are 10 Non-Eligible Swiss Banks.

 

SECTION 6. NEGATIVE COVENANTS

Each Credit Party covenants and agrees that, so long as any Commitment is in effect and until payment in full of all Obligations that are accrued and payable (other than Obligations under any Cash Management Agreement or Hedge Agreement) and cancellation or expiration of all Letters of Credit (unless the Outstanding Amount of the L/C Obligations related thereto has been Cash Collateralized or, if satisfactory to Issuing Bank in its sole discretion, a backstop letter of credit is in place), such Credit Party shall perform, and shall cause each of its Subsidiaries to perform, all covenants in this Section 6.

6.1. Indebtedness. No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except:

(a) the Obligations;

(b) (i) Senior Notes not to exceed $1,000,000,000 in the aggregate (less the aggregate principal amount of the Senior Exchange Notes), (ii) Senior Exchange Notes not to exceed $1,000,000,000 in the aggregate (less the aggregate principal amount of the Senior Notes) and (iii) New Senior Notes not to exceed $500,000,000 in the aggregate;

 

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(c) Indebtedness existing on the Second Restatement Effective Date, described in Schedule 6.1 (other than Indebtedness described in clauses (a) and (b) of this Section 6.1);

(d) (x) Attributable Debt in connection with any Designated Sale and Lease-Back Transaction so long as the total Attributable Debt permitted under this clause (d)(x) does not exceed $75,000,000 outstanding at any time, and (y) Indebtedness (including obligations under Capital Leases) incurred by Parent Borrower or any of its Subsidiaries within 270 days of the related purchase, lease or improvement, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful 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 (together with any Refinancing Indebtedness in respect thereof) not to exceed, together with all other Indebtedness issued and outstanding under this clause (d)(y), $75,000,000 at any time outstanding;

(e) Indebtedness incurred by Parent Borrower or any of its Subsidiaries (i) in the ordinary course of business constituting reimbursement obligations with respect to letters of credit (other than any Letter of Credit hereunder), including letters of credit issued in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; 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 or incurrence and (ii) any reimbursement obligations with respect to letters of credit issued in favor of Issuing Bank or Swing Line Lender to support any Defaulting Lender’s participation in Letters of Credit or Swing Line Loans, respectively, as contemplated by Section 2.4(a)(iii)(E) or 2.3(b), respectively;

(f) Indebtedness arising from agreements of Parent Borrower or its Subsidiaries providing for indemnification, adjustment of purchase price, earn-outs or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a subsidiary for the purpose of financing such acquisition; provided , however , that

(i) such Indebtedness is not reflected on the balance sheet of Parent Borrower or any of its Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (f)(i)); and

(ii) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by Parent Borrower and its Subsidiaries in connection with such disposition;

(g) Indebtedness of Parent Borrower to a Wholly-Owned Subsidiary (including any Subsidiary Borrower) or a Guarantor Subsidiary; provided that (i) any such Indebtedness to a Wholly-Owned Subsidiary that is not a Guarantor Subsidiary is expressly subordinated in right of payment to the Obligations, (ii) all such Indebtedness shall be evidenced by an Intercompany Note, and, if owed to a Credit Party, shall be subject to a First Priority Lien pursuant to the Pledge and Security Agreement or the applicable Foreign Collateral Documents and (iii) any subsequent issuance or transfer of any Capital Stock or any other event which results in any Subsidiary ceasing to be a Wholly-Owned Subsidiary or a Guarantor Subsidiary or any other subsequent transfer of any such Indebtedness (except to Parent Borrower or another Wholly-Owned Subsidiary or a Guarantor Subsidiary, or any collateral agent under this Agreement or the Collateral Documents) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (g);

(h) Indebtedness of a Wholly-Owned Subsidiary (including any Subsidiary Borrower) or a Guarantor Subsidiary to Parent Borrower or another Wholly-Owned Subsidiary (including any Subsidiary Borrower) or a Guarantor Subsidiary; provided that (i) if a Guarantor Subsidiary incurs such Indebtedness to a Subsidiary that is not a Guarantor Subsidiary, such Indebtedness is expressly subordinated in right of payment to the Guaranty of the Obligations of such Guarantor Subsidiary, (ii) all such Indebtedness shall be evidenced by the Intercompany Note, and, if owed to a Credit Party, shall be subject to a First Priority Lien pursuant to the Pledge and Security Agreement or the applicable Foreign Collateral Documents, (iii) any subsequent transfer of any such Indebtedness (except to

 

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Parent Borrower or another Wholly-Owned Subsidiary or a Guarantor Subsidiary, or any collateral agent under this Agreement or the Collateral Documents) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (h) and (iv) the aggregate principal amount of all Indebtedness of Subsidiaries that are not Guarantor Subsidiaries owed to Parent Borrower or Guarantor Subsidiaries at any one time outstanding shall not exceed the aggregate amount to be permitted to be made as an Investment pursuant to Section 6.6;

(i) Indebtedness in respect of (x) Hedge Agreements (and guarantees thereof) other than those entered into for speculative purposes and (y) Cash Management Agreements (and guarantees thereof);

(j) obligations incurred in the ordinary course of business in respect of self-insurance and performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by Parent Borrower or any of its Subsidiaries;

(k) the incurrence or issuance by Parent Borrower or any Subsidiary of Parent Borrower of Indebtedness which serves to extend, replace, refund, renew, defease or refinance any Indebtedness incurred as permitted under clause (b), (c), (d), (k), (q), (r), (v) and (w) of this Section 6.1 or any Indebtedness issued to so extend, replace, refund, renew, defease or refinance such Indebtedness (the “ Refinanced Indebtedness ”), or any Indebtedness, including additional Indebtedness, incurred to pay accrued and unpaid interest on such Refinanced Indebtedness, premiums (including tender premiums), defeasance costs and fees and expenses (including upfront fees and original issue discount) in connection therewith (the “ Refinancing Indebtedness ”); provided , however , that such Refinancing Indebtedness:

(i) has a final maturity date later than the final maturity date of, and 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 Refinanced Indebtedness (except by virtue of amortization or prepayment of such Refinanced Indebtedness prior to the time of incurrence of such Refinancing Indebtedness); provided , solely to the extent such Refinancing Indebtedness is incurred in connect with a Permitted Acquisition or other Investment permitted by Section 6.6, that Refinancing Indebtedness may be incurred in the form of a bridge or other interim credit facility intended to be refinanced or replaced with long-term indebtedness, in which case, on or prior to the first anniversary of the incurrence of such “bridge” or other credit facility, this clause (i) shall not prohibit the inclusion of customary terms for “bridge” facilities, including customary mandatory prepayment, repurchase or redemption provisions;

(ii) to the extent such Refinancing Indebtedness extends, replaces, refunds, renews, defeases or refinances (x) Indebtedness subordinated or pari passu to the Obligations, such Refinancing Indebtedness is subordinated or pari passu to the Obligations at least to the same extent as the Indebtedness being extended, replaced, renewed, defeased, refinanced or refunded or (y) Disqualified Stock, such Refinancing Indebtedness must be Disqualified Stock,

(iii) shall not include:

(A) Indebtedness of a Subsidiary of Parent Borrower that is not a Guarantor that refinances Indebtedness of Parent Borrower or a Guarantor Subsidiary; or

(B) Indebtedness of Parent Borrower or a Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary, and

(iv) shall not be secured by any assets which did not secure the Indebtedness being extended, replaced, renewed, defeased, refunded or refinanced;

(l) the incurrence or issuance by any Foreign Subsidiary of Parent Borrower of Indebtedness for working capital purposes in an aggregate principal amount for all Foreign Subsidiaries under this clause (l) not to exceed $75,000,000 at any time outstanding;

 

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(m) Indebtedness arising in the ordinary course of business from 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 such Indebtedness (x) is extinguished within two Business Days of its incurrence or (y) arises in respect of one or more accounts of any Subsidiary that is a Foreign Subsidiary with any bank or other financial institution subject to a pooling or similar arrangement with one or more accounts of any other Subsidiaries that are Foreign Subsidiaries with such bank or other financial institution to the extent the net aggregate amount of funds in all such accounts subject to such pooling or similar arrangement with such bank or other financial institution is positive;

(n) (i) any guarantee by Holdings, Parent Borrower or a Subsidiary of Indebtedness or other obligations of any Subsidiary so long as the incurrence of such Indebtedness incurred by such Subsidiary is permitted under the terms of this Agreement, or (ii) any guarantee by a Subsidiary of Indebtedness of Parent Borrower or Holdings; provided , that such Subsidiary simultaneously becomes a Guarantor of the Obligations and complies with Sections 5.10, 5.11 and 5.13, as applicable; provided , that the aggregate principal amount of all such Indebtedness of Subsidiaries that are not Guarantor Subsidiaries guaranteed by Holdings, Parent Borrower or any Guarantor Subsidiary at any one time outstanding shall not exceed the amount permitted to be made as an Investment pursuant to Section 6.6;

(o) Indebtedness of Parent Borrower or any of its Subsidiaries incurred in the ordinary course of business consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements;

(p) Indebtedness of Parent Borrower or any of its Subsidiaries to future, current or former officers, consultants, directors and employees thereof, and their respective Controlled Investment Affiliates or Immediate Family Members, in each case to finance the purchase or redemption of Equity Interests of Parent Borrower or any direct or indirect parent company of Parent Borrower to the extent described in Section 6.4(e) hereof;

(q) unsecured Indebtedness incurred by Parent Borrower or any Guarantor Subsidiary to finance all or a portion of a Permitted Acquisition; provided , that (x) both immediately prior and after giving effect to such incurrence, (1) no Default or Event of Default shall exist or result therefrom and (2) Parent Borrower and its Subsidiaries will be in pro forma compliance with the covenant set forth in Section 6.7 (b) and (y) such Indebtedness matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the Tranche B Term Loan Maturity Date; provided , further , that any such Indebtedness may be incurred in the form of a bridge or other interim credit facility intended to be refinanced or replaced with long-term indebtedness, in which case, on or prior to the first anniversary of the incurrence of such “bridge” or other credit facility, the preceding clause (y) shall not prohibit the inclusion of customary terms for “bridge” facilities, including customary mandatory prepayment, repurchase or redemption provisions;

(r) Indebtedness of a Person or Indebtedness attaching to assets of a Person that, in either case, becomes a Subsidiary or Indebtedness attaching to assets that are acquired by Parent Borrower or any Subsidiary; provided that: (x) both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom and (2) Parent Borrower and its Subsidiaries will be in pro forma compliance with the covenant set forth in Section 6.7(b), (y) such Indebtedness existed at the time such Person became a Subsidiary or at the time such assets were acquired and, in each case, was not created in anticipation thereof and (z) such Indebtedness is not guaranteed in any respect by Holdings or any Subsidiary (other than by any such Person that so becomes a Subsidiary);

(s) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;

(t) incurrence by Parent Borrower or any Guarantor Subsidiary of additional Indebtedness in an aggregate principal amount not to exceed $200,000,000 at any time outstanding;

(u) Indebtedness incurred by Parent Borrower or any Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business;

 

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(v) Permitted Unsecured Refinancing Debt;

(w) Permitted First Priority Refinancing Debt and Permitted Second Priority Refinancing Debt; and

(x) Indebtedness of Parent Borrower in respect of one or more series of senior unsecured notes, senior secured first lien or junior lien notes or subordinated notes, in each case issued in a public offering, Rule 144A or other private placement in lieu of the foregoing or secured or unsecured mezzanine Indebtedness that will be secured by the Collateral on a pari passu or junior basis with the Obligations, that are issued or made in lieu of New Revolving Loan Commitments and/or New Term Loan Commitments pursuant to an indenture or a note purchase agreement or otherwise (the “ Incremental Equivalent Debt ”); provided that (i) the aggregate principal amount of all Incremental Equivalent Debt issued pursuant to this Section 6.1(x) shall not, together with any New Revolving Loan Commitments and/or New Term Loan Commitments established pursuant to Section 2.23, exceed the greater of (x) $300,000,000 and (y) the amount of Incremental Equivalent Debt such that the Senior Secured Leverage Ratio shall be no greater than 3.50 to 1.00 as of the end of the Test Period most recently ended after giving pro forma effect to such Incremental Equivalent Debt and any New Term Loan Commitments and/or New Revolving Loan Commitments established pursuant to Section 2.23, (ii) such Incremental Equivalent Debt shall not be subject to any Guarantee by any Person other than a Credit Party, (iii) in the case of Incremental Equivalent Debt that is secured, the obligations in respect thereof shall not be secured by any Lien on any asset of Holdings, Parent Borrower or any Restricted Subsidiary other than any asset constituting Collateral, (iv) no Default or Event of Default shall have occurred and be continuing or would exist immediately after giving effect to such incurrence, (v) if such Incremental Equivalent Debt is secured, the security agreements relating to such Incremental Equivalent Debt shall be substantially the same as the Collateral Documents (with such differences as are reasonably satisfactory to the Administrative Agent), (vi) if such Incremental Equivalent Debt is (a) secured on a pari passu basis with the Obligations, then such Incremental Equivalent Debt shall be subject to a First Lien Intercreditor Agreement or (b) secured on a junior basis to the Obligations, then such Incremental Equivalent Debt shall be subject to a Second Lien Intercreditor Agreement, and (vii) the documentation with respect to any Incremental Equivalent Debt shall contain no mandatory prepayment, repurchase or redemption provisions except with respect to change of control, asset sale and casualty event mandatory offers to purchase and customary acceleration rights after an event of default that are customary for financings of such type, and (viii)  provided that, solely for the purposes of clause (i)(y) of this Section 6.1(x), any Incremental Equivalent Debt which is to be unsecured shall be considered secured.

Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount, and the payment of interest or dividends in the form of additional Indebtedness shall in each case not be deemed to be an incurrence of Indebtedness for purposes of this Section 6.1.

With respect to any U.S. dollar-denominated restriction on the incurrence of Indebtedness or related baskets in this Section 6.1:

(1) the U.S. 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, in the case of revolving credit debt; provided , however , that the U.S. dollar-equivalent principal amount of all Term Loans and Revolving Loans denominated in a foreign currency, including for the avoidance of doubt, any such Term Loans incurred prior to the Second Restatement Effective Date and any Revolving Loans incurred under Revolving Commitments provided prior to the Second Restatement Effective Date, shall be calculated based on the relevant currency exchange rate in effect on the Second Restatement Effective Date;

(2) if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, 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; and

(3) the principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

 

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6.2. Liens. No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods or accounts receivable) of Holdings or any of its Subsidiaries, whether now owned or hereafter acquired or licensed, or any income, profits or royalties therefrom, except:

(a) (i) Liens in favor of Collateral Agent for the benefit of the Secured Parties, or in favor of the Secured Parties (or the Swiss Secured Parties), granted pursuant to any Credit Document and (ii) Liens on cash or deposits granted in favor of Swing Line Lender or Issuing Bank to Cash Collateralize any Defaulting Lender’s participation in Swing Line Loans or Letters of Credit, respectively, as contemplated by Section 2.3(b) and 2.4(a)(iii)(E), respectively;

(b) pledges, deposits or security by such Person under workers’ compensation laws, unemployment insurance, employers’ health tax and other social security laws or similar legislation (including in respect of deductibles, self-insured retention amounts and premium and adjustments thereto), or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal 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;

(c) Liens imposed by applicable law, such as landlord’s, carriers’, warehousemen’s, materialmen’s, repairmen’s and mechanics’ Liens, in each case for sums not yet overdue for a period of more than 30 days or being contested in good faith by appropriate actions 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 maintained on the books of such Person in accordance with GAAP;

(d) Liens for taxes, assessments or other governmental charges not yet overdue for a period of more than 30 days or subject to penalties for nonpayment or which are being contested in good faith by appropriate actions diligently pursued, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

(e) 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, issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

(f) survey exceptions, encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights-of-way, servitudes, sewers, electric lines, drains, telegraph and telephone and cable television lines, gas and oil pipelines and other similar purposes, or other restrictions (including minor defects and 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 do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(g) zoning, building codes or similar laws or rights reserved to or vested in any governmental office or agency to control or regulate the use of any real property;

(h) Liens securing obligations relating to any Indebtedness permitted to be incurred pursuant to clauses (d) and (k) of Section 6.1; provided such Liens do not at any time encumber any property except for additions and accessions to such property other than the property financed by such Indebtedness and the proceeds and products thereof and customary security deposits;

(i) Liens existing on the Second Restatement Effective Date and described in Schedule 6.2;

 

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(j) Liens on property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided , however , that (i) such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming a Subsidiary; (ii) such Liens may not extend to any other property owned by Parent Borrower or any of its Subsidiaries; and (iii) the Indebtedness secured by such Lien shall be permitted under Section 6.1(d) or 6.1(r) or any Refinancing Indebtedness thereof permitted under Section 6.1(k); provided , that in the case of Liens securing Indebtedness under Section 6.1(r), such Liens shall be purchase money liens or Capital Leases and not “blanket” liens;

(k) Liens existing on property or other assets at the time Parent Borrower or a Subsidiary acquired the property or such other assets, including any acquisition by means of an amalgamation, merger or consolidation with or into Parent Borrower or any of its Subsidiaries; provided , however , that (i) such Liens are not created or incurred in connection with, or in contemplation of, such acquisition, amalgamation, merger or consolidation, (ii) such Liens may not extend to any other property owned by Parent Borrower or any of its Subsidiaries and (iii) the Indebtedness secured by such Lien shall be permitted under Section 6.1(d) or 6.1(r) or any Refinancing Indebtedness thereof permitted under Section 6.1(k); provided, that in the case of Liens securing Indebtedness under Section 6.1(r), such Liens shall be purchase money liens or Capital Leases and not “blanket” liens;

(l) Liens securing obligations relating to any Indebtedness or other obligations of a Subsidiary owing to Parent Borrower or a Guarantor Subsidiary permitted to be incurred in accordance with Section 6.1 hereof; provided that any such Lien on Collateral shall be expressly junior in priority to the Liens on such Collateral granted to the Collateral Agent for the benefit of the Secured Parties, or in favor of the Secured Parties, under the Credit Documents and all documentation with respect thereto shall be in the form and substance reasonably satisfactory to the Collateral Agent;

(m) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances or commercial 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;

(n) leases, subleases, licenses or sublicenses, covenants not to sue, releases, consents and other forms of license granted to others in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of Parent Borrower or any of its Subsidiaries and do not secure any Indebtedness;

(o) Liens arising from Uniform Commercial Code (or equivalent statutes) financing statement filings regarding operating leases, consignments or accounts entered into by Parent Borrower and its Subsidiaries in the ordinary course of business;

(p) 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 the foregoing clauses (h), (i), (j) and (k); provided , however , that (a) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property), and (b) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (h), (i), (j) and (k) at the time the original Lien was permitted to be created pursuant to this Section 6.2 under this Agreement, and (ii) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

(q) deposits made or other security provided in the ordinary course of business to secure liability to insurance carriers;

(r) other Liens on assets other than the Collateral securing obligations (including Indebtedness) that do not exceed $75,000,000 in the aggregate at any one time outstanding;

(s) Liens securing judgments for the payment of money not constituting an Event of Default under clause (h) under Section 8.1 hereof so long as such Liens are adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

 

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(t) Liens 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;

(u) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code or any comparable or successor provision on items in the course of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business, and (iii) in favor of banking institutions arising in the ordinary course of business 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;

(v) 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;

(w) 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 Parent Borrower or any of its Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of Parent Borrower and its Subsidiaries or (iii) relating to purchase orders and other agreements entered into with customers of Parent Borrower or any of its Subsidiaries, in each case under this clause (w), arising in the ordinary course of business;

(x) Liens arising in the ordinary course of business to secure accounts payable or similar trade obligations not constituting Indebtedness;

(y) Liens deemed to exist in connection with Investments in repurchase obligations constituting Cash Equivalents contemplated by clause (5) of the definition of “Cash Equivalents” permitted under this Agreement; provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;

(z) Liens deemed to exist by reason of the rights reserved or vested in any Person by the terms of any lease, license, franchise, grant or permit held by Parent Borrower or any Subsidiary thereof or by a statutory provision, to terminate any such lease, license, franchise, grant or permit, or to require annual or periodic payments as a condition to the continuance thereof;

(aa) Liens deemed to exist by reason of (x) any encumbrance or restriction (including put and call arrangements) with respect to capital stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement or (y) any encumbrance or restriction imposed under any contract for the sale by Parent Borrower or any of its Subsidiaries of the Capital Stock of any Subsidiary, or any business unit or division of Parent Borrower or any Subsidiary permitted under this Agreement;

(bb) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into by Parent Borrower or any Subsidiary in the ordinary course of business;

(cc) Liens solely on any cash earnest money deposits made by Parent Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement in connection with a proposed acquisition of another Person, or any asset, business unit or division of another Person;

(dd) Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

(ee) Liens on Capital Stock of an Unrestricted Subsidiary that secure Indebtedness or other obligations of such Unrestricted Subsidiary;

 

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(ff) security given to a public utility or any municipality or governmental authority when required by such utility or authority in connection with the operations of that Person in the ordinary course of business;

(gg) Liens described on a Title Policy delivered pursuant to Section 3.1(h) of the Original Credit Agreement;

(hh) any interest or title or a lessor or sublessor under any lease of real estate permitted hereunder and any restriction or encumbrance to which the interest or title of such lessor or sublessor may be subject;

(ii) zoning, building codes or similar laws or rights reserved to or vested in any governmental office or agency to control or regulate the use of any real property;

(jj) any proxy agreement relating to IMS Government Solutions, Inc. and its Equity Interests entered into with the Defense Security Service; and

(kk) Liens on Collateral securing obligations relating to any Indebtedness permitted to be incurred pursuant to Section 6.1(w); provided that such Liens are subject to the applicable Intercreditor Agreement.

6.3. No Further Negative Pledges. No Credit Party shall enter into any agreement prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired, to secure the Obligations, except with respect to:

(a) contractual encumbrances, licenses or restrictions in effect on the Second Restatement Effective Date, including pursuant to this Agreement and the related documentation and Hedge Agreements and related documentation;

(b) contractual restrictions contained in the Senior Notes Indenture, the Senior Notes, the Senior Exchange Notes Indenture, the Senior Exchange Notes, the New Senior Notes Indenture, the New Senior Notes and related guarantees and related documentation;

(c) purchase money obligations for property acquired in the ordinary course of business and Capital Leases that impose restrictions on the property so acquired;

(d) applicable Law or any applicable rule, regulation or order;

(e) any agreement, license or other instrument of a Person acquired by or merged, consolidated or amalgamated with or into Parent Borrower or any of its Subsidiaries in existence at the time of such acquisition, merger, consolidation or amalgamation (but in any such case not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its subsidiaries, or the property or assets of the Person and its subsidiaries, so acquired;

(f) secured Indebtedness (to the extent such Indebtedness is permitted to be incurred pursuant to Section 6.1 hereof and the related Liens are permitted to be incurred pursuant to Section 6.2(h), (j), (k), (p), (r) or (ee) hereof) that limits the right of the debtor to dispose of the assets (other than any Collateral) securing such Indebtedness;

(g) customary provisions in any joint venture agreement or similar agreement to the extent prohibiting the pledge of the Equity Interests of such joint venture;

(h) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which Parent Borrower or any of its 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 Parent Borrower or such Subsidiary that are subject to such agreement, the payment rights arising thereunder or the proceeds thereof and not any other asset or property of Parent Borrower or such Subsidiary or the assets or property of any other Subsidiary;

 

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(i) any encumbrances or restrictions of the type referred to above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (a) through (e) of this Section 6.3; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of Parent Borrower, no more restrictive with respect to such encumbrances and other restrictions taken as a whole than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

6.4. Restricted Junior Payments. No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, declare, pay or make, any sum for any Restricted Junior Payment except for:

(a) the declaration and payment of dividends or the making of other distributions by any Subsidiary of Parent Borrower ratably to its direct equity holders;

(b) the making of regularly scheduled payments of interest in respect of any Subordinated Indebtedness in accordance with the terms of, and only to the extent required by, and subject to the subordination provisions contained in, the indenture or other agreement pursuant to which such Subordinated Indebtedness was issued;

(c) the redemption, repurchase, retirement or other acquisition of any Equity Interests, including any accrued and unpaid dividends thereon (“ Treasury Capital Stock ”), or Subordinated Indebtedness of Parent Borrower or any Equity Interests of any direct or indirect parent company of Parent Borrower, in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Subsidiary) of, Equity Interests of Parent Borrower or any direct or indirect parent company of Parent Borrower to the extent contributed to Parent Borrower (in each case, other than any Disqualified Stock) (“ Refunding Capital Stock ”);

(d) the redemption, repurchase, exchange, defeasance or other acquisition or retirement of (x) Subordinated Indebtedness of Parent Borrower or a Guarantor Subsidiary made in exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of Parent Borrower or a Guarantor Subsidiary or (y) Disqualified Stock of Parent Borrower made by exchange for, or out of the proceeds of the substantially concurrent sale of, Disqualified Stock of Parent Borrower, which, in each case, is incurred in compliance with Section 6.1(k) or 6.1(t) hereof;

(e) any Restricted Junior Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests (other than Disqualified Stock) of Parent Borrower or any of its direct or indirect parent companies held by any future, present or former employee, director, officer or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of Parent Borrower or any of its Subsidiaries or any direct or indirect parent companies pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement (including, for the avoidance of doubt, any principal and interest payable on any notes issued by Parent Borrower or any direct or indirect parent company of Parent Borrower in connection with any such repurchase, retirement or other acquisition), or any stock subscription or shareholder agreement, including any Equity Interest rolled over by management of Parent Borrower or any direct or indirect parent company of Parent Borrower in connection with the Transactions; provided , however , that the aggregate amount of Restricted Junior Payments made under this clause (e) shall not exceed in any calendar year $20,000,000 (which shall increase to $40,000,000 subsequent to the consummation of a Qualified Public Offering (with unused amounts for any year being carried over to the next succeeding year, but not to any subsequent year, and the permitted amount for each year shall be used prior to any amount carried over from the previous year)); provided further that such amount in any calendar year may be increased by an amount not to exceed:

(1) the cash proceeds from the sale of Equity Interests (other than Disqualified Stock) of Parent Borrower and, to the extent contributed to Parent Borrower, the cash proceeds from the sale of Equity Interests of any of Parent Borrower’s direct or indirect parent companies, in each case to any future, present or former employees, directors, officers or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of Parent Borrower or any of its Subsidiaries that occurs after the Original Closing Date and not in connection with the consummation of the Transactions; plus

 

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(2) the cash proceeds of key man life insurance policies received by Parent Borrower or its Subsidiaries (or any direct or indirect parent company to the extent contributed to common equity of Parent Borrower) after the Original Closing Date; less

(3) the amount of any Restricted Junior Payments previously made with the cash proceeds described in clauses (1) and (2) of this clause (e);

provided further that cancellation of Indebtedness representing the consideration for the purchase of the Equity Interests of Parent Borrower or any of its direct or indirect parent companies owing to Parent Borrower or any of its Subsidiaries from any future, present or former employees, directors, officers or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) of Parent Borrower, any direct or indirect parent company, or any of Parent Borrower’s Subsidiaries in connection with a repurchase of Equity Interests of Parent Borrower or any of its direct or indirect parent companies will not be deemed to constitute a Restricted Junior Payment for purposes of this Section 6.4 or any other provision of this Agreement;

(f) cashless 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;

(g) other Restricted Junior Payments in an aggregate amount taken together with all other Restricted Junior Payments made pursuant to this clause (g) not to exceed (i) $150,000,000 in the aggregate since the Original Closing Date plus (ii) at any time on or after the third anniversary of the Original Closing Date, an additional $150,000,000 in the aggregate since the Original Closing Date; provided that, in the case of this clause (ii), the Leverage Ratio of Parent Borrower and its Subsidiaries, based on the most recent Compliance Certificate received by Administrative Agent pursuant to Section 5.1(c), would be less than 3.50:1.00 on a pro forma basis after giving effect to any Restricted Junior Payments made pursuant to this clause (g);

(h) any Restricted Junior Payment used to fund (or otherwise made in connection with) the Transactions to the extent permitted by Section 6.11(d) hereof;

(i) cash payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Equity Interests of Parent Borrower or any direct or indirect parent company of Parent Borrower;

(j) the declaration and payment of dividends or distributions by Parent Borrower to, or the making of loans to, Holdings (or any direct or indirect parent entities the sole direct or indirect assets of which consist of the Capital Stock of Holdings and cash) in amounts required for Holdings or any such direct or indirect parent companies to pay, in each case without duplication,

(1) franchise and excise taxes and other fees, taxes and expenses required to maintain their legal existence;

(2) foreign, federal, state and/or local income, franchise or similar tax liability attributable to the income of Parent Borrower and its Subsidiaries (and, to the extent of the amount actually received from its Unrestricted Subsidiaries, its Unrestricted Subsidiaries) in respect of consolidated, combined, unitary or affiliated tax returns filed by a direct or indirect parent of Parent Borrower; provided that in each case the amount of such payments in any Fiscal Year does not exceed (i) the amount of such taxes actually paid by Holdings or such direct or indirect parent companies on account of such taxes, and (ii) the amount that Parent Borrower and its Subsidiaries would be required to pay in respect of foreign, federal, state and local income and similar taxes for such Fiscal Year were Parent Borrower, its Subsidiaries and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes as a group separate from any such parent entity, reduced by any such taxes actually paid or to be paid directly by Parent Borrower, its Subsidiaries or its Unrestricted Subsidiaries;

(3) customary salary, bonus and other benefits payable to officers and employees of Holdings or any such direct or indirect parent company of Parent Borrower to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of Parent Borrower and its Subsidiaries;

 

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(4) general operating and overhead costs and expenses of Holdings or any such direct or indirect parent company to the extent such costs and expenses are attributable to the ownership, operations or business of Parent Borrower and its Subsidiaries; and

(5) reasonable fees and expenses owed by Holdings or any such direct or indirect parent company to the extent related to any unsuccessful equity or debt offering of Holdings or such parent entity;

(k) payments made pursuant to the Management Agreement as in effect on the Original Closing Date to the extent permitted by clauses (g) or (j) of Section 6.11;

(l) the declaration and payment of dividends by Parent Borrower to Holdings (and by Holdings to its direct or indirect parent entities) on or around the Second Restatement Effective Date in an aggregate amount not to exceed $1,250,000,000; and

(m) Restricted Junior Payments not to exceed the Cumulative Consolidated Net Income Amount, unless, at the time of and immediately after giving effect to such Restricted Junior Payment, on a pro forma basis, the Fixed Charge Coverage Ratio of the Parent Borrower for the most recently ended Test Period for which internal financial statements are available immediately preceding the date on which such Restricted Junior Payment is made, would not have been at least 2.00 to 1.00;

provided , however , that, at the time of and after giving effect to any Restricted Junior Payment permitted under clauses (e), (g) and (m) of this Section 6.4, no Specified Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof.

6.5. Restrictions on Subsidiary Distributions. Except as provided herein, Parent Borrower shall not, and shall not permit any of its Subsidiaries that are not Credit Parties to, create or otherwise cause to exist or become effective any consensual encumbrance or consensual restriction of any kind on the ability of any such Subsidiary of Parent Borrower to (1) pay dividends or make any other distributions on any of such Subsidiary’s Equity Interests owned by Parent Borrower or any other Credit Party, (2) repay or prepay any Indebtedness owed by such Subsidiary to Parent Borrower or any other Credit Party, (3) make loans or advances to Parent Borrower or any other Credit Party, or (4) sell, lease or transfer any of its property or assets to Parent Borrower or any other Credit Party other than by reason of:

(a) contractual encumbrances, licenses or restrictions in effect on the Second Restatement Effective Date, including pursuant to this Agreement and the related documentation and Hedge Agreements and related documentation;

(b) contractual restrictions contained in the Senior Notes Indenture, the Senior Notes, the Senior Exchange Notes Indenture, the Senior Exchange Notes, the New Senior Notes Indenture, the New Senior Notes and related guarantees and related documentation;

(c) purchase money obligations for property acquired in the ordinary course of business and Capital Leases that impose restrictions of the nature discussed in clause (4) of the introductory paragraph to this Section 6.5 on the property so acquired;

(d) applicable Law or any applicable rule, regulation or order;

(e) any agreement, license or other instrument of a Person acquired by or merged, consolidated or amalgamated with or into Parent Borrower or any of its Subsidiaries in existence at the time of such acquisition, merger, consolidation or amalgamation (but in any such case not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its subsidiaries, or the property or assets of the Person and its subsidiaries, so acquired;

 

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(f) contracts for the sale of assets, including customary restrictions with respect to a Subsidiary of Parent Borrower, pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such subsidiary;

(g) secured Indebtedness (to the extent such Indebtedness is permitted to be incurred pursuant to Section 6.1 hereof and the related Liens are permitted to be incurred pursuant to Section 6.2 hereof) that limits the right of the debtor to dispose of the assets securing such Indebtedness;

(h) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

(i) customary provisions in any joint venture agreement or similar agreement;

(j) any transfer, lease, sublease, covenant not to sue, release, consent, license or sublicense of Intellectual Property and other assets, in each case, entered into in the ordinary course of business;

(k) restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase, sale or other agreement to which Parent Borrower or any of its 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 Parent Borrower or such Subsidiary that are subject to such agreement, the payment rights arising thereunder or the proceeds thereof and not any other asset or property of Parent Borrower or such Subsidiary or the assets or property of any other Subsidiary;

(l) Indebtedness of Foreign Subsidiaries that are not Credit Parties incurred subsequent to the Original Closing Date in compliance with Section 6.1 hereof; provided that Parent Borrower has determined in its good faith judgment that the incurrence of such Indebtedness and the terms thereof are on commercially reasonable terms and reasonably necessary to the business of such Foreign Subsidiary and will not materially impair Parent Borrower’s ability to make payments under the Obligations when due; and

(m) any encumbrances or restrictions of the type referred to above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (a) through (l) of this Section 6.5; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of Parent Borrower, no more restrictive with respect to such encumbrances and other restrictions taken as a whole than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

6.6. Investments. No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, make any Investment in any Person, including any Joint Venture, except:

(a) any Investment in Parent Borrower, any of its Wholly-Owned Subsidiaries or any of the Guarantor Subsidiaries; provided that the aggregate amount of Investments by Parent Borrower or any Guarantor Subsidiary in any Wholly-Owned Subsidiary that is not a Guarantor Subsidiary (other than any Investment constituting a Permitted Foreign Subsidiary Restructuring), when aggregated with the Acquisition Consideration for all Investments made pursuant to Section 6.6(c)(iii), shall not exceed $200,000,000 at any one time outstanding;

(b) any Investment in Cash Equivalents;

(c) (i) Permitted Acquisitions of Persons that become Guarantor Subsidiaries, (ii) Permitted Acquisitions by Wholly-Owned Foreign Subsidiaries of Persons that do not become Guarantor Subsidiaries, so long as (x) any such Permitted Acquisition shall not be financed, directly or indirectly, with the proceeds of the Revolving Loans or any Investment made by a Credit Party (unless such Investment was made by a Credit Party under another provision of this Section 6.6) and (y) the Leverage Ratio of Parent Borrower and its Subsidiaries, based on the most recent Compliance Certificate received by Administrative Agent pursuant to Section 5.1(c), would be less than 5.0:1.0, on a pro forma basis after giving effect to such Permitted Acquisition, and (iii) Permitted

 

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Acquisitions of Persons that do not become Guarantor Subsidiaries, the Acquisition Consideration for which, together with all other Permitted Acquisitions of Persons that do not become Guarantor Subsidiaries pursuant to this clause (iii), and when aggregated with all outstanding Investments made pursuant to Section 6.6(a) which are subject to the limitation in the proviso therein, shall not exceed $200,000,000;

(d) the SDI Acquisition;

(e) any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to Section 6.8(b)(10) hereof or any other disposition of assets not constituting an Asset Sale;

(f) any Investment existing on the Second Restatement Effective Date or made pursuant to a binding commitment in effect on the Second Restatement Effective Date, in each case as reflected on Schedule 6.6, or an Investment consisting of any extension, modification, replacement or renewal of any such Investment or binding commitment existing on the Second Restatement Effective Date; provided that the amount of the original Investment is not increased by such extension, modification, replacement or renewal (other than as a result of any change in the Dollar Equivalent of any Investment denominated in a foreign currency);

(g) any Investment acquired by Parent Borrower or any of its Subsidiaries:

(1) in exchange for any other Investment or accounts receivable held by Parent Borrower or any such 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 (including any trade creditor or customer); or

(2) in satisfaction of judgments against other Persons; or

(3) as a result of a foreclosure by Parent Borrower or any of its Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(h) Investments with respect to Hedge Agreements (and guarantees thereof) permitted under Section 6.1(i) hereof;

(i) any guarantee of Indebtedness (including any Guarantee) permitted under Section 6.1 hereof and any performance guarantees and Contingent Obligations in the ordinary course of business and any Liens on the assets of Parent Borrower or any Subsidiary incurred in compliance with Section 6.2 hereof;

(j) any Investment consisting of a purchase or other acquisition of inventory, supplies, material, equipment, or Intellectual Property, or the licensing or contribution of Intellectual Property to another Person pursuant to any distribution, service, joint marketing, co-branding, co-distribution, or other similar arrangements with other Persons, however denominated;

(k) additional Investments in an aggregate amount, taken together with all other Investments made pursuant to this clause (k) that are at that time outstanding, not to exceed $150,000,000;

(l) loans and advances to officers, directors and employees of any direct or indirect parent of Parent Borrower, Parent Borrower or any of its Subsidiaries (A) to finance the purchase of Capital Stock of any direct or indirect parent of Parent Borrower (provided that the amount of such loans and advances used to acquire such Capital Stock shall be contributed to Parent Borrower in cash as common equity), (B) for reasonable and customary business-related travel expenses, moving expenses and similar expenses, in each case incurred in the ordinary course of business, and (C) for additional purposes not contemplated by subclause (A) or (B) above, in an aggregate principal amount at any time outstanding with respect to this subclause (C) not exceeding $10,000,000;

(m) any Investment the payment for which consists of Equity Interests (exclusive of Disqualified Stock) of Parent Borrower or any of its direct or indirect parent companies;

 

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(n) any Investments in prepaid expenses, checks or other similar negotiable instruments held for collection and lease, utility and workers’ compensation, performance and similar deposits entered into as a result of the operations of the business, in each of the foregoing cases of this clause (n), in the ordinary course of business; and

(o) so long as immediately after giving effect to any such Investment, no Default has occurred and is continuing, and Parent Borrower and its Subsidiaries will be in pro forma compliance with the covenant set forth in Sections 6.7 (b), other Investments in an amount not to exceed the Cumulative Growth Amount immediately prior to the time of the making of any Investment.

Notwithstanding the foregoing, in no event shall any Credit Party make any Investment which also constitutes a Restricted Junior Payment not otherwise permitted under the terms of Section 6.4.

6.7. Financial Covenants.

(a) Intentionally omitted .

(b) Leverage Ratio . Parent Borrower shall not permit the Leverage Ratio as of the last day of any Test Period, beginning with the Test Period ending June 30, 2010 to exceed the correlative ratio indicated:

 

Fiscal

Quarter

  

Leverage

Ratio

June 30, 2010

   6.00:1.00

September 30, 2010

   6.00:1.00

December 31, 2010

   6.00:1.00

March 31, 2011

   6.00:1.00

June 30, 2011

   6.00:1.00

September 30, 2011

   6.00:1.00

December 31, 2011

   6.00:1.00

March 31, 2012

   5.75:1.00

June 30, 2012

   5.75:1.00

September 30, 2012

   6.75:1.00

December 31, 2012

   6.75:1.00

March 31, 2013

   6.75:1.00

June 30, 2013

   6.75:1.00

September 30, 2013

   6.75:1.00

December 31, 2013

   6.50:1.00

March 31, 2014

   6.50:1.00

June 30, 2014

   6.50:1.00

September 30, 2014

   6.25:1.00

 

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Fiscal

Quarter

  

Leverage

Ratio

 

December 31, 2014

     6.25:1.00   

March 31, 2015

     6.00:1.00   

June 30, 2015

     6.00:1.00   

September 30, 2015

     5.75:1.00   

December 31, 2015

     5.75:1.00   

March 31, 2016

     5.50:1.00   

June 30, 2016

     5.50:1.00   

September 30, 2016

     5.50:1.00   

December 31, 2016

     5.50:1.00   

March 31, 2017

     5.25:1.00   

June 30, 2017

     5.00:1.00   

(c) Maximum Consolidated Capital Expenditures . Holdings shall not, and shall not permit its Subsidiaries to, make or incur Consolidated Capital Expenditures, in any Fiscal Year, in an aggregate amount for Holdings and its Subsidiaries in excess of $125,000,000; provided , such amount for any Fiscal Year shall be increased by an amount equal to the excess, if any (but in no event more than $62,500,000), of such amount for the immediately preceding Fiscal Year (with the above scheduled amount for any Fiscal Year being used prior to any amount carried over from the preceding Fiscal Year) over the actual amount of Consolidated Capital Expenditures for such previous Fiscal Year; provided , further , so long as no Default shall have occurred and being continuing or would result therefrom, Holdings and its Subsidiaries may also make Consolidated Capital Expenditures in an amount not to exceed the Cumulative Growth Amount immediately prior to the making of such Consolidated Capital Expenditures (but the amount of Consolidated Capital Expenditures made from the Cumulative Growth Amount in any Fiscal Year shall not exceed 50% of the above scheduled amount of Consolidated Capital Expenditures that would have otherwise been permitted to made in such Fiscal Year pursuant to this Section 6.7(c)); and provided , further that for each Permitted Acquisition consummated in any Fiscal Year and, if consummated, the SDI Acquisition in the Fiscal Year ending December 31, 2011, the maximum amounts set forth above for such Fiscal Year and for every Fiscal Year thereafter shall be increased by an amount equal to 110% of the quotient obtained by dividing (A) the amount of Consolidated Capital Expenditures made by the acquired Person or business for the thirty-six month period immediately preceding the consummation of such Permitted Acquisition or SDI Acquisition as determined by the financial statements for such acquired Person or business by (B) three (3).

6.8. Fundamental Changes; Dispositions.

(a) No Credit Party shall, nor shall it permit any of its Subsidiaries to, merge, consolidate, or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution) or sell, lease, transfer or otherwise dispose (in one transaction or a series of transactions) all or substantially all of the assets of Parent Borrower and its Subsidiaries taken as a whole, except that:

(1) any Subsidiary of Parent Borrower (other than a Subsidiary Borrower) may be merged with or into Parent Borrower or any Guarantor Subsidiary, or be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to Parent Borrower or any Guarantor Subsidiary; provided , in the case of such a merger, Parent Borrower or such Guarantor Subsidiary, as applicable shall be the continuing or surviving Person;

 

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(2) (i) any Subsidiary of Parent Borrower that is not a Guarantor (other than a Subsidiary Borrower or a Swiss Guarantor) may merge or consolidate with or into any other Subsidiary of Parent Borrower that is not a Guarantor (other than a Subsidiary Borrower), (ii) any Subsidiary (other than a Subsidiary Borrower or a Swiss Guarantor) may liquidate or dissolve or change its legal form if Parent Borrower determines in good faith that such action is in the best interests of Parent Borrower and its Subsidiaries and if not materially disadvantageous to the Lenders and (iii) any Swiss Guarantor may merge or consolidate with or into any other Swiss Credit Party;

(3) any Subsidiary may dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to a Subsidiary of Parent Borrower that is not a Guarantor; provided , that such Investment in such Subsidiary is permitted by Section 6.6;

(4) so long as (x) no Default exists or would result therefrom, (y) Parent Borrower and its Subsidiaries shall be in compliance with the financial covenant set forth in Section 6.7 (b) on a pro forma basis after giving effect thereto as of the last day of the Test Period most recently ended (as determined in accordance with Section 1.10) and (z) if in connection with an Investment under Section 6.6, the requirements thereof shall be complied with, any Borrower may merge with any other Person; provided that (i) in the case of a merger involving Parent Borrower, Parent Borrower shall be the continuing or surviving corporation or (ii) in the case of a merger involving a Subsidiary Borrower, if the Person formed by or surviving any such merger or consolidation is not such Subsidiary Borrower (any such Person, the “ Successor Borrower ”), (A) the Successor Borrower shall be an entity organized or existing under the laws of: (x) in the case of the Japanese Subsidiary Borrower, Japan and (y) in the case of the Swiss Subsidiary Borrower, Switzerland, (B) the Successor Borrower shall expressly assume all the obligations of such Borrower under this Agreement and the other Credit Documents to which such Borrower is a party pursuant to a supplement hereto or thereto in form reasonably satisfactory to Administrative Agent, (C) in the case of any such transaction involving Swiss Subsidiary Borrower, each Swiss Guarantor, unless it is the other party to such merger or consolidation, shall have by a supplement to the Swiss Guaranty confirmed that its guarantee of the Swiss Obligations shall apply to the Successor Borrower’s obligations under this Agreement, and (D) such Borrower shall have delivered to Administrative Agent an officer’s certificate and an opinion of counsel, each stating that such merger or consolidation and such supplement to this Agreement or any Collateral Document comply with this Agreement; provided , further , that if the foregoing are satisfied, the Successor Borrower will succeed to, and be substituted for, such Borrower under this Agreement;

(5) so long as no Default exists or would result therefrom, any Subsidiary (other than a Subsidiary Borrower) may merge or consolidate with any other Person in order to effect an Investment permitted pursuant to Section 6.6;

(6) the Acquisition may be consummated; and

(7) so long as no Default exists or would result therefrom, a merger, dissolution, liquidation, consolidation or Asset Sale, the purpose of which is to effect an Asset Sale permitted pursuant to Section 6.8(b).

Notwithstanding the foregoing, Parent Borrower and its Subsidiaries shall not merge or consolidate with Holdings or any direct or indirect parent of Holdings.

(b) No Credit Party shall, nor shall it permit any of its Subsidiaries to, make or consummate an Asset Sale, other than:

(1) any disposition of Cash Equivalents or obsolete or worn out equipment, vehicles or other similar assets in the ordinary course of business or any disposition of inventory or goods (or other assets) held for sale or no longer used in the ordinary course of business (excluding any dispositions by operations or divisions discontinued or to be discontinued);

 

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(2) the disposition of all or substantially all of the assets of a Credit Party in a manner permitted pursuant to Section 6.8(a);

(3) the making of any Restricted Junior Payment that is permitted to be made, and is made, under Section 6.4 hereof or the making of any Investment permitted under Section 6.6 hereof;

(4) (A) any (i) disposition of property or assets by Parent Borrower or a Guarantor Subsidiary or (ii) issuance of securities by a Guarantor Subsidiary, in each case, to Parent Borrower or any Guarantor Subsidiary; and (B) any (i) disposition of property or assets by a Subsidiary that is not a Guarantor Subsidiary or (ii) issuance of Securities by a Subsidiary that is not a Guarantor Subsidiary, in each case, to Parent Borrower, any of its Wholly-Owned Subsidiaries or any Guarantor Subsidiary;

(5) to the extent allowable under Section 1031 of the Internal Revenue Code, any exchange of like property (excluding any boot thereon) for use in a Similar Business between Parent Borrower or any of its Subsidiaries and another Person with a Fair Market Value in an aggregate amount for all such exchanges from the Second Restatement Effective Date not to exceed $25,000,000;

(6) any leases, subleases, assignments, transfers, licenses or sublicenses of any real or personal property, including any Intellectual Property, in the ordinary course of business;

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

(8) the granting of Liens not prohibited by this Agreement or foreclosures, expropriations, condemnations or similar actions with respect to assets;

(9) any financing transaction with respect to property built or acquired by Parent Borrower or any Subsidiary, including sale and lease-back transactions, in each case, permitted by this Agreement;

(10) other Asset Sales; provided , that (1) the consideration received for such assets shall be in an amount at least equal to the Fair Market Value thereof, (2) with respect to any Asset Sale (or series of related Asset Sales) for a purchase price exceeding $50,000,000, no less than 75% thereof shall be paid in Cash or Cash Equivalents (which shall be deemed to include the following for purposes of this proviso: (A) any liabilities (as shown on Parent Borrower’s or such Subsidiary’s most recent balance sheet or in the footnotes thereto) of Parent Borrower or such Subsidiary, other than liabilities that are by their terms subordinated to the Loans, that are assumed by the transferee of any such assets and for which Parent Borrower and all of its Subsidiaries have been validly released by all creditors in writing, and (B) any securities, notes or other obligations or assets received by Parent Borrower or such Subsidiary from such transferee that are converted by Parent Borrower or such Subsidiary into Cash Equivalents (to the extent of the Cash Equivalents received) within 180 days following the closing of such Asset Sale), and (3) the Net Asset Sale Proceeds thereof shall be applied as required by Section 2.14(a) and to the extent that the Net Asset Sale Proceeds in any Fiscal Year exceed $150,000,000, all Net Asset Sale Proceeds in excess of such amount shall be applied to prepay the Terms Loans in accordance with Section 2.14(a) and may not be reinvested in the business of Parent Borrower and its Subsidiaries;

(11) any surrender or waiver of contract rights or the settlement, release or surrender of contract rights or other litigation claims in the ordinary course of business;

(12) a Designated Sale and Leaseback Transaction;

(13) the voluntary unwinding of any Hedge Agreements; and

(14) dispositions of accounts receivable in connection with the collection or compromise thereof in the ordinary course of business.

 

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6.9. Disposal of Subsidiary Interests. Except for (i) any sale of all of its interests in the Equity Interests of any of its Subsidiaries in compliance with the provisions of Section 6.6 or Section 6.8, (ii) any sale of its interests in the Equity Interests of a Guarantor Subsidiary (or a Subsidiary which was required to become a Guarantor hereunder) to the extent such Guarantor Subsidiary remains (or becomes, as applicable) a Guarantor following such sale or (iii) a Permitted Foreign Subsidiary Restructuring, no Credit Party shall, nor shall it permit any of its Subsidiaries to, (a) directly or indirectly issue, sell, assign, pledge or otherwise encumber or dispose of any Equity Interests of any of its Subsidiaries, except to qualify directors and shares issued to foreign nationals if required by applicable Law; or (b) permit any of its Subsidiaries directly or indirectly to issue, sell, assign, pledge or otherwise encumber or dispose of any Equity Interests of any of its Subsidiaries, except to another Credit Party (subject to the restrictions on such disposition otherwise imposed hereunder), or to qualify directors if required by applicable law. Under no circumstances shall any Foreign Subsidiary or any Disregarded Domestic Subsidiary issue, sell or otherwise dispose of any non-voting Equity Interests of such Subsidiary.

6.10. Sales and Lease-Backs. No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, become or remain liable as lessee or as a guarantor or other surety with respect to any lease of any property (whether real, personal or mixed), whether now owned or hereafter acquired, which such Credit Party (a) has sold or transferred or is to sell or to transfer to any other Person (other than Holdings or any of its Subsidiaries), or (b) intends to use for substantially the same purpose as any other property which has been or is to be sold or transferred by such Credit Party to any Person (other than Holdings or any of its Subsidiaries) in connection with such lease, other than a Designated Sale and Leaseback Transaction.

6.11. Transactions with Affiliates. No Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of Holdings on terms that are materially less favorable to Holdings or that Subsidiary, as the case may be, than those that would be obtained at the time from a Person who is not such a holder or Affiliate; provided , the foregoing restriction shall not apply to:

(a) transactions between or among Parent Borrower and any of its Subsidiaries;

(b) Restricted Junior Payments permitted by Section 6.4 hereof and Investments permitted under Section 6.6 hereof;

(c) the payment of reasonable and customary fees, compensation and benefits paid to, and indemnities and reimbursements provided on behalf of, or for the benefit of, current or former officers, directors, employees or consultants of Parent Borrower, any of its direct or indirect parent companies or any of its Subsidiaries;

(d) (i) the Transactions and the payment of all reasonable fees and expenses related to the Transactions, including Transaction Costs, (ii) the First Restatement Transactions and the payment of all reasonable fees and expenses related to the First Restatement Transactions, including First Restatement Transaction Costs and (iii) the Second Restatement Transactions and the payment of all reasonable fees and expenses related to the Second Restatement Transactions, including Second Restatement Transaction Costs;

(e) transactions with customers, clients, suppliers, contractors, joint venture partners 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 Parent Borrower and its Subsidiaries, in the reasonable determination of the board of directors of Parent Borrower or the senior management thereof, or are on terms at least as favorable as would reasonably have been obtained at such time from an unaffiliated party;

(f) the issuance of Equity Interests (other than Disqualified Stock) of Parent Borrower to any direct or indirect parent company of Parent Borrower or to any Sponsor or to any director, officer, employee or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of Parent Borrower, any of its direct or indirect parent companies or any of its Subsidiaries;

 

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(g) payments by Parent Borrower or any of its Subsidiaries to the Sponsors or any of their Affiliates 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 approved by a majority of the disinterested members of the board of directors of Parent Borrower in good faith;

(h) payments by or Indebtedness (and cancellation thereof) and Preferred Stock of Parent Borrower and its Subsidiaries in the ordinary course of business to any future, current or former employee, director, officer or consultant (or their respective Controlled Investment Affiliates or Immediate Family Members) of Parent Borrower, any of its subsidiaries or any of its direct or indirect parent companies 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 distributor equity plan or agreement; and any employment agreements, stock option plans and other compensatory arrangements (and any successor plans thereto) and any supplemental executive retirement benefit plans or arrangements with any such employees, directors, officers, distributors or consultants (or their respective Controlled Investment Affiliates or Immediate Family Members) that are, in each case, approved by the board of directors of Parent Borrower in good faith;

(i) investments by any Sponsor in securities of Parent Borrower or any of its Subsidiaries (and payment of reasonable out of pocket expenses incurred by such Persons in connection therewith) so long as the investment is being offered generally to other investors on the same or more favorable terms;

(j) (1) so long as no Specified Default or Event of Default shall have occurred or is continuing or shall result therefrom, the payment of management, consulting, monitoring and advisory fees pursuant to the Management Agreement as in effect on the Original Closing Date, (2) so long as no Event of Default shall have occurred or is continuing or shall result therefrom, payment of all customary termination and transaction fees up to the amounts set forth in such Management Agreement as in effect on the Original Closing Date and (3) payment of all indemnities and reimbursement of expenses under such Management Agreement as in effect on the Original Closing Date;

(k) the existence of, or the performance by Parent Borrower or any of its Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Second Restatement Effective Date; provided that the existence of, or the performance by Parent Borrower or any of its Subsidiaries of obligations under any future amendment to, any such existing agreement or under any similar agreement entered into after the Second Restatement Effective Date shall only be permitted by this clause (k) to the extent that the terms of any such amendment or new agreement are not otherwise disadvantageous in any material respect in the good faith judgment of the board of directors of Parent Borrower to the Lenders when taken as a whole as compared to the original agreement in effect on the Second Restatement Effective Date;

(l) payments on (x) the Senior Notes in accordance with the terms of the Senior Notes Indenture and (y) the Loans in accordance with the terms of this Agreement;

(m) transactions in which Parent Borrower or any of its Subsidiaries, as the case may be, delivers to Administrative Agent a letter from an Independent Financial Advisor stating that such transaction is fair to Parent Borrower or such Subsidiary from a financial point of view or stating that the terms are not materially less favorable to Parent Borrower or its relevant Subsidiary than those that would have been obtained in a comparable transaction by Parent Borrower or such Subsidiary with an unrelated Person on an arm’s-length basis;

(n) any agreement as in effect as of the Second Restatement Effective Date and set forth on Schedule 6.11 hereof or any amendment thereto (so long as any such amendment is not disadvantageous in any material respect in the good faith judgment of the board of directors of Parent Borrower to the Lenders when taken as a whole as compared to the applicable agreement as in effect on the Second Restatement Effective Date); and

(o) payments by Parent Borrower (and any direct or indirect parent company thereof) and its Subsidiaries pursuant to tax sharing agreements among Parent Borrower (and any such parent company) and its Subsidiaries; provided that in each case the amount of such payments in any Fiscal Year does not exceed the amount that Parent Borrower, its Subsidiaries and its Unrestricted Subsidiaries (to the extent of amounts received from

 

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Unrestricted Subsidiaries) would be required to pay in respect of foreign, federal, state and local taxes for such Fiscal Year were Parent Borrower, its Subsidiaries and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any such parent entity, reduced by any such taxes actually paid or to be paid directly by Parent Borrower, its Subsidiaries or its Unrestricted Subsidiaries.

6.12. Conduct of Business. No Credit Party shall, nor shall it permit any of its Subsidiaries, to engage in any business other than a Similar Business.

6.13. Permitted Activities of Holdings. Holdings shall not (a) incur, directly or indirectly, any Indebtedness other than the Indebtedness and obligations under this Agreement, the other Credit Documents and the Related Agreements; (b) create or suffer to exist any Lien upon any property or assets now owned or hereafter acquired, leased or licensed by it other than the Liens created under the Collateral Documents to which it is a party or Permitted Liens; (c) engage in any business or own any assets other than (i) holding 100% of the Equity Interests of Parent Borrower (excluding any interests held by a general partner, managing member or equivalent entity which is itself a direct Wholly-Owned Subsidiary of Holdings), (ii) performing its obligations and activities incidental thereto under the Credit Documents, and to the extent not inconsistent therewith, the Related Agreements; and (iii) making Restricted Junior Payments and Investments to the extent permitted by this Agreement; (d) consolidate with or merge with or into, or convey, transfer, lease or license all or substantially all its assets to, any Person; (e) sell or otherwise dispose of any Equity Interests of any of its direct Subsidiaries; (f) create or acquire any Subsidiary or make or own any Investment in any Person other than Parent Borrower or any Investment to be contributed to Parent Borrower or any Subsidiary thereof; or (g) fail to hold itself out to the public as a legal entity separate and distinct from all other Persons.

6.14. Amendments or Waivers of Organizational Documents and Certain Related Agreements. Except as set forth in Section 6.15, no Credit Party shall nor shall it permit any of its Subsidiaries to, agree to any material amendment, restatement, supplement or other modification to, or waiver of, any of its Organizational Documents after the Second Restatement Effective Date or any of its material rights under any Related Agreement after the Original Closing Date if the effect thereof would be materially adverse to the Lenders in the good faith judgment of the board of directors or management of Parent Borrower without in each case obtaining the prior written consent of Requisite Lenders to such amendment, restatement, supplement or other modification or waiver; provided, that each Person that becomes a Subsidiary of a Credit Party after the Second Restatement Effective Date may amend, restate, supplement, or otherwise modify, any of its Organizational Documents in a manner consistent with the Organizational Documents of the Credit Parties. For purposes of this Section 6.14, any amendment, restatement, supplement or other modification to, or any waiver of, any fees or other economic terms in the Management Agreement shall be deemed material and subject in all respect to this Section 6.14. Notwithstanding the foregoing, for the avoidance of doubt, no consent of Lenders shall be required under this Section 6.14 with respect to any amendments or modifications to the Senior Notes Indenture to become effective on the Second Restatement Effective Date as described in the Consent Solicitation and Exchange Offer.

6.15. Amendments or Waivers with respect to Certain Indebtedness. No Credit Party shall, nor shall it permit any of its Subsidiaries to, amend or otherwise change the terms of any Subordinated Indebtedness, if the effect of such amendment or change is to increase the current cash interest costs with respect to such Subordinated Indebtedness (after giving effect to any concurrent reduction of the principal amount of such Subordinated Indebtedness as a result of such amendment), change (to earlier dates) any dates upon which payments of principal or interest are due thereon, change the redemption, prepayment or defeasance provisions thereof, change the subordination provisions of any Subordinated Indebtedness (or of any guaranty thereof), or if such amendment or change, together with all other amendments or changes made, would be materially adverse to the Lenders without in each case obtaining the prior written consent of Administrative Agent to such amendment or change.

6.16. Fiscal Year. No Credit Party shall, nor shall it permit any of its Subsidiaries to change its Fiscal Year-end from December 31 without the consent of Administrative Agent not to be unreasonably withheld or delayed.

 

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SECTION 7. GUARANTY

7.1. Guaranty of the Obligations.

(a) Subject to the provisions of Section 7.2, U.S. Guarantors jointly and severally hereby irrevocably and unconditionally guaranty to Administrative Agent for the ratable benefit of the Beneficiaries the due and punctual payment in full of all Obligations when the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code (or comparable provisions under other applicable Debtor Relief Laws)) (collectively, the “ U.S. Guaranteed Obligations ”).

(b) Parent Borrower hereby irrevocably and unconditionally guaranties to Administrative Agent for the ratable benefit of the Beneficiaries the due and punctual payment in full of all Foreign Obligations when the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code (or comparable provisions under other applicable Debtor Relief Laws)) (collectively, the “ Foreign Guaranteed Obligations ” and, together with the U.S. Guaranteed Obligations, the “ Guaranteed Obligations ”).

7.2. Contribution by Guarantors. All Guarantor Subsidiaries desire to allocate among themselves (collectively, the “ Contributing Guarantors ”), in a fair and equitable manner, their obligations arising under this Guaranty. Accordingly, in the event any payment or distribution is made on any date by a Guarantor Subsidiary (a “ Funding Guarantor ”) under this Guaranty such that its Aggregate Payments exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled to a contribution from each of the other Contributing Guarantors in an amount sufficient to cause each Contributing Guarantor’s Aggregate Payments to equal its Fair Share as of such date. “ Fair Share ” means, with respect to a Contributing Guarantor as of any date of determination, an amount equal to (a) the ratio of (i) the Fair Share Contribution Amount with respect to such Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution Amounts with respect to all Contributing Guarantors multiplied by (b) the aggregate amount paid or distributed on or before such date by all Funding Guarantors under this Guaranty in respect of the Guaranteed Obligations. “ Fair Share Contribution Amount ” means, with respect to a Contributing Guarantor as of any date of determination, the maximum aggregate amount of the obligations of such Contributing Guarantor under this Guaranty that would not render its obligations hereunder or thereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any comparable applicable provisions of law; provided , solely for purposes of calculating the “Fair Share Contribution Amount” with respect to any Contributing Guarantor for purposes of this Section 7.2, any assets or liabilities of such Contributing Guarantor arising by virtue of any rights to subrogation, reimbursement or indemnification or any rights to or obligations of contribution hereunder shall not be considered as assets or liabilities of such Contributing Guarantor. “ Aggregate Payments ” means, with respect to a Contributing Guarantor as of any date of determination, an amount equal to (1) the aggregate amount of all payments and distributions made on or before such date by such Contributing Guarantor in respect of this Guaranty (including in respect of this Section 7.2), minus (2) the aggregate amount of all payments received on or before such date by such Contributing Guarantor from the other Contributing Guarantors as contributions under this Section 7.2. The amounts payable as contributions hereunder shall be determined as of the date on which the related payment or distribution is made by the applicable Funding Guarantor. The allocation among Contributing Guarantors of their obligations as set forth in this Section 7.2 shall not be construed in any way to limit the liability of any Contributing Guarantor hereunder. Each Guarantor Subsidiary is a third party beneficiary to the contribution agreement set forth in this Section 7.2.

7.3. Payment by Guarantors.

(a) Subject to Section 7.2, U.S. Guarantors hereby jointly and severally agree, in furtherance of the foregoing and not in limitation of any other right which any Beneficiary may have at law or in equity against any Guarantor by virtue hereof, that upon the failure of any Borrower to pay any of the U.S Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code (or comparable provisions under other applicable Debtor Relief Laws)), U.S. Guarantors will upon demand pay, or cause to be paid, in Cash, to Administrative Agent for the ratable benefit of Beneficiaries, an amount equal to the sum of the unpaid principal amount of all U.S Guaranteed Obligations then due as aforesaid, accrued and unpaid interest on such U.S. Guaranteed Obligations (including interest which, but for such Borrower’s becoming the subject of a case under the Bankruptcy Code or other applicable Debtor Relief Law, would have accrued on such U.S. Guaranteed Obligations, whether or not a claim is allowed against such Borrower for such interest in the related bankruptcy case) and all other U.S. Guaranteed Obligations then owed to Beneficiaries as aforesaid.

 

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(b) Parent Borrower hereby agrees, in furtherance of the foregoing and not in limitation of any other right which any Beneficiary may have at law or in equity against Parent Borrower by virtue hereof, that upon the failure of any Subsidiary Borrower to pay any of the Foreign Guaranteed Obligations when and as the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code (or comparable provisions under other applicable Debtor Relief Laws)), Parent Borrower will upon demand pay, or cause to be paid, in Cash, to Administrative Agent for the ratable benefit of Beneficiaries, an amount equal to the sum of the unpaid principal amount of all Foreign Guaranteed Obligations then due as aforesaid, accrued and unpaid interest on such Foreign Guaranteed Obligations (including interest which, but for such Borrower’s becoming the subject of a case under the Bankruptcy Code or other applicable Debtor Relief Law, would have accrued on such Foreign Guaranteed Obligations, whether or not a claim is allowed against such Borrower for such interest in the related bankruptcy case) and all other Foreign Guaranteed Obligations then owed to Beneficiaries as aforesaid.

7.4. Liability of Guarantors Absolute. To the extent permitted by applicable Law, each Guarantor agrees that its Obligations hereunder are irrevocable, absolute, independent and unconditional and shall not be affected by any circumstance which constitutes a legal or equitable discharge of a guarantor or surety other than payment in full of the U.S. Guaranteed Obligations (other than (x) obligations under Hedge Agreements and Cash Management Agreements not yet due and payable, and (y) contingent indemnification obligations not yet accrued and payable) or Foreign Guarantee Obligations, as applicable. In furtherance of the foregoing and without limiting the generality thereof, to the extent permitted by applicable Law, each Guarantor agrees as follows:

(a) this Guaranty is a guaranty of payment when due and not of collectability. This Guaranty is a primary obligation of each Guarantor and not merely a contract of surety;

(b) [reserved];

(c) payment by any Guarantor of a portion, but not all, of the Guaranteed Obligations shall in no way limit, affect, modify or abridge any Guarantor’s liability for any portion of the Guaranteed Obligations which has not been paid. Without limiting the generality of the foregoing, if Administrative Agent is awarded a judgment in any suit brought to enforce any Guarantor’s covenant to pay a portion of the Guaranteed Obligations, such judgment shall not be deemed to release such Guarantor from its covenant to pay the portion of the Guaranteed Obligations that is not the subject of such suit, and such judgment shall not, except to the extent satisfied by such Guarantor, limit, affect, modify or abridge any other Guarantor’s liability hereunder in respect of the Guaranteed Obligations;

(d) any Beneficiary, upon such terms as it deems appropriate, without notice or demand and without affecting the validity or enforceability hereof or giving rise to any reduction, limitation, impairment, discharge or termination of any Guarantor’s liability hereunder, from time to time may, subject to compliance with the provisions of Section 10.5 and similar provisions governing amendments and waivers in any other Credit Document, (i) renew, extend, accelerate, increase the rate of interest on, or otherwise change the time, place, manner or terms of payment of the Guaranteed Obligations; (ii) settle, compromise, release or discharge, or accept or refuse any offer of performance with respect to, or substitutions for, the Guaranteed Obligations or any agreement relating thereto and/or subordinate the payment of the same to the payment of any other obligations; (iii) request and accept other guaranties of the Guaranteed Obligations and take and hold security for the payment hereof or the Guaranteed Obligations; (iv) release, surrender, exchange, substitute, compromise, settle, rescind, waive, alter, subordinate or modify, with or without consideration, any security for payment of the Guaranteed Obligations, any other guaranties of the Guaranteed Obligations, or any other obligation of any Person (including any other Guarantor) with respect to the Guaranteed Obligations; (v) enforce and apply any security now or hereafter held by or for the benefit of such Beneficiary in respect hereof or the Guaranteed Obligations and direct the order or manner of sale thereof, or exercise any other right or remedy that such Beneficiary may have against any such security, in each case as such Beneficiary in its discretion may determine consistent herewith or the applicable Hedge Agreement or Cash Management Agreement and any applicable security agreement, including foreclosure on any such security pursuant to one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable,

 

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and even though such action operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Guarantor against any Borrower or any security for the Guaranteed Obligations; and (vi) exercise any other rights available to it under the Credit Documents or any Hedge Agreements or Cash Management Agreements; and

(e) this Guaranty and the obligations of Guarantors hereunder shall be valid and enforceable and shall not be subject to any reduction, limitation, impairment, discharge or termination for any reason (other than payment in full of the Guaranteed Obligations (other than (x) obligations under Hedge Agreements and Cash Management Agreements not yet due and payable, and (y) contingent indemnification obligations not yet accrued and payable)), including the occurrence of any of the following, whether or not any Guarantor shall have had notice or knowledge of any of them: (i) any failure or omission to assert or enforce or agreement or election not to assert or enforce, or the stay or enjoining, by order of court, by operation of law or otherwise, of the exercise or enforcement of, any claim or demand or any right, power or remedy (whether arising under the Credit Documents or any Hedge Agreements or Cash Management Agreements, at law, in equity or otherwise) with respect to the Guaranteed Obligations or any agreement relating thereto, or with respect to any other guaranty of or security for the payment of the Guaranteed Obligations; (ii) any rescission, waiver, amendment or modification of, or any consent to departure from, any of the terms or provisions (including provisions relating to events of default) hereof, any of the other Credit Documents, any of the Hedge Agreements or Cash Management Agreements or any agreement or instrument executed pursuant thereto, or of any other guaranty or security for the Guaranteed Obligations, in each case whether or not in accordance with the terms hereof or such Credit Document, such Hedge Agreement or Cash Management Agreement or any agreement relating to such other guaranty or security ( provided , that except as expressly provided therein, no Credit Document to which any Guarantor is a party may be amended or otherwise modified without the consent of such Guarantor); (iii) the Guaranteed Obligations, or any agreement relating thereto, at any time being found to be illegal, invalid or unenforceable in any respect; (iv) the application of payments received from any source (other than payments received pursuant to the other Credit Documents or any of the Hedge Agreements or Cash Management Agreements or from the proceeds of any security for the Guaranteed Obligations, except to the extent such security also serves as collateral for indebtedness other than the Guaranteed Obligations) to the payment of indebtedness other than the Guaranteed Obligations, even though any Beneficiary might have elected to apply such payment to any part or all of the Guaranteed Obligations; (v) any Beneficiary’s consent to the change, reorganization or termination of the corporate structure or existence of Holdings or any of its Subsidiaries and to any corresponding restructuring of the Guaranteed Obligations; (vi) any failure to perfect or continue perfection of a security interest in any collateral which secures any of the Guaranteed Obligations; (vii) any defenses, set-offs or counterclaims which any Borrower may allege or assert against any Beneficiary in respect of the Guaranteed Obligations, including failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury; and (viii) 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 as an obligor in respect of the Guaranteed Obligations.

7.5. Waivers by Guarantors. To the extent permitted by applicable Law, each Guarantor hereby waives, for the benefit of Beneficiaries: (a) any right to require any Beneficiary, as a condition of payment or performance by such Guarantor, to (i) proceed against the applicable Borrower, any other guarantor (including any other Guarantor) of the Guaranteed Obligations or any other Person, (ii) proceed against or exhaust any security held from the applicable Borrower, any such other guarantor or any other Person, (iii) proceed against or have resort to any balance of any Deposit Account or credit on the books of any Beneficiary in favor of the applicable Borrower or any other Person, or (iv) pursue any other remedy in the power of any Beneficiary whatsoever; (b) any defense arising by reason of the incapacity, lack of authority or any disability or other defense of the applicable Borrower or any other Guarantor including any defense based on or arising out of the lack of validity or the unenforceability of the Guaranteed Obligations or any agreement or instrument relating thereto or by reason of the cessation of the liability of the applicable Borrower or any other Guarantor from any cause other than payment in full of the Guaranteed Obligations (other than (x) obligations under Hedge Agreements and Cash Management Agreements not yet due and payable, and (y) contingent indemnification obligations not yet accrued and payable); (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (d) any defense based upon any Beneficiary’s errors or omissions in the administration of the Guaranteed Obligations, except behavior which amounts to bad faith; (e) (i) any principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms hereof and any legal or equitable discharge of such Guarantor’s obligations hereunder, (ii) the benefit of any statute

 

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of limitations affecting such Guarantor’s liability hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv) promptness, diligence and any requirement that any Beneficiary protect, secure, perfect or insure any security interest or lien or any property subject thereto; (f) notices, demands, presentments, protests, notices of protest, notices of dishonor and notices of any action or inaction, including acceptance hereof, notices of default hereunder, the Hedge Agreements, the Cash Management Agreements or any agreement or instrument related thereto, notices of any renewal, extension or modification of the Guaranteed Obligations or any agreement related thereto, notices of any extension of credit to any Borrower and notices of any of the matters referred to in Section 7.4 and any right to consent to any thereof; and (g) any defenses or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms hereof.

7.6. Guarantors’ Rights of Subrogation, Contribution, Etc. To the extent permitted by applicable Law, until the Guaranteed Obligations shall have been paid in full (other than (x) obligations under Hedge Agreements and Cash Management Agreements not yet due and payable, and (y) contingent indemnification obligations not yet accrued and payable) and the Revolving Commitments shall have terminated and all Letters of Credit shall have expired or been cancelled (or back-up standby letters of credit in form and substance reasonably satisfactory to Issuing Bank or deposits of Cash Collateral in respect of all Letters of Credit shall have been furnished to Issuing Bank), each Guarantor hereby waives any claim, right or remedy, direct or indirect, that such Guarantor now has or may hereafter have against any Borrower or any other Guarantor or any of its assets in connection with this Guaranty or the performance by such Guarantor of its obligations hereunder, in each case whether such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise and including (a) any right of subrogation, reimbursement or indemnification that such Guarantor now has or may hereafter have against any Borrower with respect to the Guaranteed Obligations, (b) any right to enforce, or to participate in, any claim, right or remedy that any Beneficiary now has or may hereafter have against any Borrower, and (c) any benefit of, and any right to participate in, any collateral or security now or hereafter held by any Beneficiary. In addition, until the Guaranteed Obligations shall have been paid in full (other than (x) obligations under Hedge Agreements and Cash Management Agreements not yet due and payable, and (y) contingent indemnification obligations not yet accrued and payable) and the Revolving Commitments shall have terminated and all Letters of Credit shall have expired or been cancelled (or back-up standby letters of credit in form and substance reasonably satisfactory to Issuing Bank or deposits of Cash Collateral in respect of all Letters of Credit shall have been furnished to Issuing Bank), each Guarantor shall withhold exercise of any right of contribution such Guarantor may have against any other guarantor (including any other Guarantor) of the Guaranteed Obligations, including any such right of contribution as contemplated by Section 7.2. Each Guarantor further agrees that, to the extent the waiver or agreement to withhold the exercise of its rights of subrogation, reimbursement, indemnification and contribution as set forth herein is found by a court of competent jurisdiction to be void or voidable for any reason, any rights of subrogation, reimbursement or indemnification such Guarantor may have against any Borrower or against any collateral or security, and any rights of contribution such Guarantor may have against any such other guarantor, shall be junior and subordinate to any rights any Beneficiary may have against such Borrower, to all right, title and interest any Beneficiary may have in any such collateral or security, and to any right any Beneficiary may have against such other guarantor. If any amount shall be paid to any Guarantor on account of any such subrogation, reimbursement, indemnification or contribution rights at any time when all Guaranteed Obligations shall not have been finally paid in full (other than (x) obligations under Hedge Agreements and Cash Management Agreements not yet due and payable, and (y) contingent indemnification obligations not yet accrued and payable), such amount shall be held in trust for Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over to Administrative Agent for the benefit of Beneficiaries to be credited and applied against the applicable Guaranteed Obligations, whether matured or unmatured, in accordance with the terms hereof.

7.7. Subordination of Other Obligations. Any Indebtedness of any Borrower or any Guarantor now or hereafter held by any Guarantor (the “ Obligee Guarantor ”) is hereby subordinated in right of payment to the U.S. Guaranteed Obligations or Foreign Guaranteed Obligations, as applicable.

7.8. Continuing Guaranty. This Guaranty is a continuing guaranty and shall remain in effect until all of the Guaranteed Obligations shall have been paid in full (other than (x) obligations under Hedge Agreements and Cash Management Agreements not yet due and payable, and (y) contingent indemnification obligations not yet accrued and payable) and the Revolving Commitments shall have terminated and all Letters of Credit shall have expired or been cancelled (or back-up standby letters of credit in form and substance reasonably satisfactory to

 

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Issuing Bank or deposits of Cash Collateral in respect of all Letters of Credit shall have been furnished to Issuing Bank). To the extent permitted by applicable law, each Guarantor hereby irrevocably waives any right to revoke this Guaranty as to future transactions giving rise to any Guaranteed Obligations.

7.9. Authority of Guarantors or Borrowers. It is not necessary for any Beneficiary to inquire into the capacity or powers of any Guarantor or any Borrower or the officers, directors or any agents acting or purporting to act on behalf of any of them.

7.10. Financial Condition of Parent Borrower. Any Credit Extension may be made to any Borrower or continued from time to time, and any Hedge Agreements or Cash Management Agreements may be entered into from time to time, in each case without notice to or authorization from any Guarantor regardless of the financial or other condition of such Borrower at the time of any such grant or continuation or at the time such Hedge Agreement or Cash Management Agreement is entered into, as the case may be. No Beneficiary shall have any obligation to disclose or discuss with any Guarantor its assessment, or any Guarantor’s assessment, of the financial condition of any Borrower. Each Guarantor has adequate means to obtain information from each Borrower on a continuing basis concerning the financial condition of each Borrower and its ability to perform its obligations under the Credit Documents, the Hedge Agreements and the Cash Management Agreements, and each Guarantor assumes the responsibility for being and keeping informed of the financial condition of each Borrower and of all circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations. To the extent permitted by law, each Guarantor hereby waives and relinquishes any duty on the part of any Beneficiary to disclose any matter, fact or thing relating to the business, operations or conditions of any Borrower now known or hereafter known by any Beneficiary.

7.11. Bankruptcy, Etc.

(a) So long as any Guaranteed Obligations remain outstanding (other than (x) obligations under Hedge Agreements and Cash Management Agreements not yet due and payable, and (y) contingent indemnification obligations not yet accrued and payable), no Guarantor shall, without the prior written consent of Administrative Agent acting pursuant to the instructions of Requisite Lenders, commence or join with any other Person in commencing any bankruptcy, reorganization or insolvency case or proceeding of or against any Borrower or any other Guarantor. The obligations of Guarantors hereunder shall not be reduced, limited, impaired, discharged, deferred, suspended or terminated by any case or proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of any Borrower or any other Guarantor or by any defense which any Borrower or any other Guarantor may have by reason of the order, decree or decision of any court or administrative body resulting from any such proceeding.

(b) To the extent permitted by applicable Law, each Guarantor acknowledges and agrees that any interest on any portion of the Guaranteed Obligations which accrues after the commencement of any case or proceeding referred to in clause (a) above (or, if interest on any portion of the Guaranteed Obligations ceases to accrue by operation of law by reason of the commencement of such case or proceeding, such interest as would have accrued on such portion of the Guaranteed Obligations if such case or proceeding had not been commenced) shall be included in the Guaranteed Obligations because it is the intention of Guarantors and Beneficiaries that the Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto should be determined without regard to any rule of law or order which may relieve any Borrower of any portion of such Guaranteed Obligations, and Guarantors will permit any trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit of creditors or similar Person to pay Administrative Agent, or allow the claim of Administrative Agent in respect of, any such interest accruing after the date on which such case or proceeding is commenced.

(c) In the event that all or any portion of the Guaranteed Obligations are paid by any Borrower, the obligations of Guarantors hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) are rescinded or recovered directly or indirectly from any Beneficiary as a preference, fraudulent transfer or otherwise, and any such payments which are so rescinded or recovered shall constitute Guaranteed Obligations for all purposes hereunder.

7.12. Discharge of Guaranty upon Sale or Designation of Guarantor Subsidiary. If (i) all of the Equity Interests of any Guarantor Subsidiary or any of its successors in interest hereunder shall be sold or otherwise disposed of (including by merger or consolidation) in accordance with the terms and conditions hereof or (ii) a

 

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Guarantor Subsidiary shall be designated as an Unrestricted Subsidiary in accordance with the provisions of Section 5.15, the Guaranty of such Guarantor Subsidiary or such successor in interest, as the case may be, hereunder shall automatically be discharged and released without any further action by any Beneficiary or any other Person effective as of the time of such Asset Sale, and upon any such discharge and release, Administrative Agent and Collateral Agent agree to take any actions and execute and/or file any documents promptly upon the reasonable request of Parent Borrower, at the sole expense of Parent Borrower and the applicable Guarantor Subsidiary.

 

SECTION 8. EVENTS OF DEFAULT

8.1. Events of Default. If any one or more of the following conditions or events shall occur:

(a) Failure to Make Payments When Due . Failure by any Borrower to pay (i) when due any installment of principal of any Loan, whether at stated maturity, by acceleration, by notice of voluntary prepayment, by mandatory prepayment or otherwise; (ii) when due (including with proceeds from a Revolving Loan deemed to be requested by Parent Borrower as contemplated by Section 2.4(c)) any amount payable to Issuing Bank in reimbursement of any drawing under a Letter of Credit; or (iii) any interest on any Loan or any fee or any other amount due hereunder within five days after the date due; or

(b) Default in Other Agreements . (i) Failure of any Credit Party or any of their respective Subsidiaries to pay when due any principal of or interest on or any other amount, including any payment in settlement, payable in respect of one or more items of Indebtedness (other than Indebtedness referred to in Section 8.1(a)) in an individual principal amount or aggregate principal amount (or Termination Value) of $25,000,000 or more, in each case beyond the grace period, if any, provided therefor; or (ii) breach or default by any Credit Party with respect to any other material term of (1) one or more items of Indebtedness in the individual or aggregate principal amounts referred to in clause (i) above or (2) any loan agreement, mortgage, indenture or other agreement relating to such item(s) of Indebtedness, in each case beyond the grace period, if any, provided therefor, if the effect of such breach or default is to cause, or to permit the holder or holders of that Indebtedness (or a trustee on behalf of such holder or holders) to cause, that Indebtedness to become or be declared due and payable (or redeemable) prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be; or

(c) Breach of Certain Covenants . Failure of any Credit Party to perform or comply with any term or condition contained in Section 2.6, Sections 5.1(e), Section 5.2 (solely as to the existence of any Borrower) or Section 6; or

(d) Breach of Representations, Etc. Any representation, warranty, certification or other statement of fact made or deemed made by any Credit Party in any Credit Document or in any statement or certificate at any time required to be delivered in connection herewith or therewith shall be false in any material respect as of the date made or deemed made; or

(e) Other Defaults Under Credit Documents. Any Credit Party shall default in the performance of or compliance with any term contained herein or any of the other Credit Documents, other than any such term referred to in any other Section of this Section 8.1, and such default shall not have been remedied or waived within thirty days after receipt by Parent Borrower of notice from Administrative Agent or any Lender of such default; or

(f) Involuntary Bankruptcy ; Appointment of Receiver, Etc. (i) A court of competent jurisdiction shall enter a decree or order for relief in respect of Holdings, any Borrower or any Significant Subsidiary or any group of Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of Parent Borrower), would constitute a Significant Subsidiary in an involuntary case under the Bankruptcy Code or under any other applicable Debtor Relief Law now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted at the request of Holdings, any Borrower or any Significant Subsidiary or any group of Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of Parent Borrower), would constitute a Significant Subsidiary under any applicable federal or state law; or (ii) an involuntary case shall be commenced against Holdings, any Borrower or any Significant Subsidiary or any group of Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of Parent Borrower), would constitute a Significant Subsidiary, under the Bankruptcy Code or under any other applicable Debtor Relief Law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a

 

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receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over Holdings, any Borrower or any Significant Subsidiary or any group of Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of Parent Borrower), would constitute a Significant Subsidiary, or over all or a substantial part of its property, shall have been entered; or there shall have occurred the involuntary appointment of an interim receiver, trustee or other custodian of Holdings, any Borrower or any Significant Subsidiary or any group of Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of Parent Borrower), would constitute a Significant Subsidiary, for all or a substantial part of its property; or a warrant of attachment, execution or similar process shall have been issued against any substantial part of the property of Holdings, any Borrower or any Significant Subsidiary or any group of Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of Parent Borrower), would constitute a Significant Subsidiary, and any such event described in this clause (ii) shall continue for sixty days without having been dismissed, bonded or discharged; or

(g) Voluntary Bankruptcy ; Appointment of Receiver, Etc. (i) Holdings, any Borrower or any Significant Subsidiary or any group of Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of Parent Borrower), would constitute a Significant Subsidiary, shall have an order for relief entered with respect to it or shall commence a voluntary case under the Bankruptcy Code or under any other applicable Debtor Relief Law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such Law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property; or Holdings, any Borrower or any Significant Subsidiary or any group of Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of Parent Borrower), would constitute a Significant Subsidiary, shall make any assignment for the benefit of creditors; or (ii) Holdings, any Borrower or any Significant Subsidiary or any group of Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of Parent Borrower), would constitute a Significant Subsidiary, shall be unable, or shall fail generally, or shall admit in writing its inability, to pay its debts as such debts become due; or the board of directors (or similar governing body) of Holdings, any Borrower or any Significant Subsidiary or any group of Subsidiaries that, taken together (as of the most recent unaudited consolidated financial statements of Parent Borrower), would constitute a Significant Subsidiary (or any committee thereof), shall adopt any resolution or otherwise authorize any action to approve any of the actions referred to herein or in Section 8.1(f); or

(h) Judgments and Attachments . Any money judgment, writ or warrant of attachment or similar process requiring payment by Holdings or any of its Subsidiaries of an amount in excess of $25,000,000 individually or in the aggregate at any time (in either case to the extent not adequately covered by insurance as to which a solvent and unaffiliated insurance company has acknowledged coverage) shall be entered or filed against Holdings or any of its Subsidiaries or any of their respective assets and shall remain undischarged, unvacated, unbonded or unstayed for a period of sixty days; or

(i) [Reserved.]

(j) Employee Benefit Plans . There shall occur one or more ERISA Events which individually or in the aggregate results in or would reasonably be expected to result in a Material Adverse Effect;

(k) Change of Control . A Change of Control shall occur; or

(l) Guaranties, Collateral Documents and Other Credit Documents . At any time after the execution and delivery thereof, (i) the Guaranty for any reason, other than the satisfaction in full of all Obligations (other than (x) obligations under Hedge Agreements and Cash Management Agreements not yet due and payable, and (y) contingent indemnification obligations not yet accrued and payable), shall cease to be in full force and effect (other than in accordance with its terms) or shall be declared to be null and void by a court of competent jurisdiction or any Guarantor shall repudiate its obligations thereunder, (ii) this Agreement or any Collateral Document ceases to be in full force and effect (other than by reason of a release of Collateral in accordance with the terms hereof or thereof or the satisfaction in full of the Obligations (other than (x) obligations under Hedge Agreements and Cash Management Agreements not yet due and payable, and (y) contingent indemnification obligations not yet accrued and payable) in accordance with the terms hereof) or shall be declared null and void by a court of competent jurisdiction, or Collateral Agent shall not have or shall cease to have (other than by reason of a release of Collateral in accordance

 

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with the terms hereof or thereof or the satisfaction in full of the Obligations (other than (x) obligations under Hedge Agreements and Cash Management Agreements not yet due and payable, and (y) contingent indemnification obligations not yet accrued and payable)) a valid and perfected Lien in any material portion of Collateral purported to be covered by the Collateral Documents with the priority required by the relevant Collateral Document, in each case for any reason other than the failure of Collateral Agent or any Secured Party to take any action within its control, the failure of Administrative Agent or Collateral Agent to maintain possession of certificates actually delivered to it representing the securities pledged under the Collateral Documents or to file UCC continuation statements and except as to any immaterial portion of Collateral consisting of real property to the extent that such losses are covered by a lender’s title policy and such insurer has not denied coverage or (iii) any Credit Party shall contest the validity or enforceability of any Credit Document in writing or deny in writing that it has any further liability, including with respect to future advances by Lenders, under any Credit Document to which it is a party or shall contest the validity or perfection of any Lien in any Collateral purported to be covered by the Collateral Documents;

THEN , (1) upon the occurrence of any Event of Default described in Section 8.1(f) or 8.1(g), automatically, and (2) upon the occurrence and during the continuance of any other Event of Default, at the request of (or with the consent of) Requisite Lenders, upon notice to Parent Borrower by Administrative Agent, (A) the Revolving Commitments, if any, of each Lender having such Revolving Commitments and the obligation of Issuing Bank to issue any Letter of Credit shall immediately terminate; (B) each of the following shall immediately become due and payable, in each case without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by each Credit Party to the extent permitted by applicable Law: (I) the unpaid principal amount of and accrued interest on the Loans, (II) an amount equal to the maximum amount that may at any time be drawn under all Letters of Credit then outstanding (regardless of whether any beneficiary under any such Letter of Credit shall have presented, or shall be entitled at such time to present, the drafts or other documents or certificates required to draw under such Letters of Credit), and (III) all other Obligations; provided , the foregoing shall not affect in any way the obligations of Lenders under Section 2.4(b)(v) or Section 2.4(c); (C) Administrative Agent may cause Collateral Agent to enforce any and all Liens and security interests created pursuant to Collateral Documents; and (D) Administrative Agent shall direct Parent Borrower to Cash Collateralize (and Parent Borrower hereby agrees upon receipt of such notice, or upon the occurrence of any Event of Default specified in Sections 8.1(f) and (g) to Cash Collateralize) the L/C Obligations (in an amount equal to the then Outstanding Amount thereof).

8.2. Parent Borrower’s Right to Cure. Notwithstanding anything to the contrary contained in Section 8.1, for purposes of determining whether an Event of Default has occurred under the financial covenant set forth in Section 6.7(b), any equity contribution (in the form of common equity) made to Parent Borrower after the last day of any Fiscal Quarter and on or prior to the day that is 10 days after the day on which financial statements are required to be delivered for that Fiscal Quarter will, at the request of Parent Borrower, be included in the calculation of Consolidated Adjusted EBITDA solely for the purposes of determining compliance with the financial covenant at the end of such Fiscal Quarter and any subsequent period that includes such Fiscal Quarter (any such equity contribution, a “ Specified Equity Contribution ”); provided that (a) Parent Borrower shall not be permitted to so request that a Specified Equity Contribution be included in the calculation of Consolidated Adjusted EBITDA with respect to any Fiscal Quarter unless, after giving effect to such requested Specified Equity Contribution, there will be a period of at least two Fiscal Quarters in the Relevant Four Fiscal Quarter Period in which no Specified Equity Contribution has been made, (b) no more than three Specified Equity Contributions will be made in the aggregate, (c) the amount of any Specified Equity Contribution and the use of proceeds therefrom will be no greater than the amount required to cause Parent Borrower to be in compliance with the financial covenant, (d) all Specified Equity Contributions and the use of proceeds therefrom will be disregarded for all other purposes under the Credit Documents (including calculating Consolidated Adjusted EBITDA for purposes of determining basket levels, Applicable Margin, Applicable Revolving Commitment Fee Percentage, and other items governed by reference to Consolidated Adjusted EBITDA, and for purposes of the Restricted Junior Payments covenant in Section 6.4), and (e) the proceeds of all Specified Equity Contributions will be applied to prepay the Term Loans. To the extent that the proceeds of the Specified Equity Contribution are used to repay Indebtedness, such Indebtedness shall not be deemed to have been repaid for purposes of calculating the financial covenant set forth in Section 6.7(b) for the Relevant Four Fiscal Quarter Period. For purposes of this paragraph, the term “ Relevant Four Fiscal Quarter Period ” shall mean, with respect to any requested Specified Equity Contribution, the four Fiscal Quarter period ending on (and including) the Fiscal Quarter in which Consolidated Adjusted EBITDA will be increased as a result of such Specified Equity Contribution.

 

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SECTION 9. AGENTS

9.1. Appointment and Authority. GSLP is hereby appointed Syndication Agent hereunder, and each Lender and Issuing Bank hereby authorizes GSLP to act as Syndication Agent in accordance with the terms hereof and the other Credit Documents. Bank of America is hereby appointed Administrative Agent and Collateral Agent hereunder and under the other Credit Documents and each Lender and Issuing Bank hereby authorizes Bank of America to act as Administrative Agent and Collateral Agent on its behalf, including executing Credit Documents on its behalf, and to exercise such powers as are delegated to Administrative Agent and the Collateral Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto. Each of Barclays Capital, DB, HSBC Securities, JPM and Wells is hereby appointed Co-Documentation Agent hereunder, and each Lender and Issuing Bank hereby authorizes each of Barclays Capital, DB, HSBC Securities, JPM and Wells to act as Co-Documentation Agent in accordance with the terms hereof and the other Credit Documents. Each Agent hereby agrees to act in its capacity as such upon the express conditions contained herein and the other Credit Documents, as applicable. Except as set forth in Section 9.6, Section 9.9 and Section 9.10, the provisions of this Section 9 are solely for the benefit of Agents and Lenders and no Credit Party shall have any rights as a third party beneficiary of any of the provisions thereof. In performing its functions and duties hereunder, each Agent shall act solely as an agent of the Lenders and does not assume and shall not be deemed to assume any relationship of agency or trust with or for Holdings or any of its Subsidiaries. Each of the Syndication Agent and each Co-Documentation Agent, without consent of or notice to any party hereto, may assign any and all of its rights or obligations hereunder to any of its Affiliates. As of the Second Restatement Effective Date, neither GSLP, in its capacity as Syndication Agent, nor Barclays Capital, DB, HSBC Securities, JPM and Wells, in their capacities as Co-Documentation Agent, nor the senior managing agents, shall have any obligations but shall be entitled to all benefits of this Section 9. Each of the Syndication Agent and each Co-Documentation Agent may resign from such role at any time, with immediate effect, by giving prior written notice thereof to Administrative Agent and Parent Borrower.

9.2. Rights as a Lender. Each Person serving as 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 an Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as Agent hereunder in such Person’s individual capacity. Each such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with Holdings, Parent Borrower or any Subsidiary or other Affiliate thereof as if such Person were not Agent hereunder and without any duty to account therefor to the Lenders.

9.3. Exculpatory Provisions. No Agent nor any of its officers, partners, directors, employees or agents shall (i) be liable to any Lender for any action taken or omitted by any Agent under or in connection with any of the Credit Documents or (ii) have any duties or obligations except those expressly set forth herein and in the other Credit Documents. Without limiting the generality of the foregoing, the Agents, in such capacity:

(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 Credit Documents that such Agent is required to exercise as directed in writing by the Requisite Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Credit Documents); provided , that no Agent shall be required to take any action requested by such Lenders that, in its opinion or the opinion of its counsel, may expose such Agent to liability or that is contrary to any Credit Document or applicable Law; and

(c) shall not, except as expressly set forth herein and in the other Credit Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any of Holdings, Parent Borrower or any of their respective Affiliates that is communicated to or obtained by the Person serving as Agent or any of its Affiliates in any capacity.

No Agent shall be liable for any action taken or not taken by it (i) with the consent or at the request of the Requisite Lenders (or such other number or percentage of the Lenders as shall be necessary, or as Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.5 and 8.1) or (ii) in the

 

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absence of its own gross negligence or willful misconduct. No Agent shall be deemed to have knowledge of any Default unless and until notice in writing describing such Default is given to such Agent by Parent Borrower, a Lender or Issuing Bank.

No Agent shall 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 Credit 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 Credit Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Section 3 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to Administrative Agent.

Administrative Agent hereby agrees that it shall (i) furnish to GSLP, in its capacity as Arranger, upon GSLP’s request, a copy of the Register, (ii) cooperate with GSLP in granting access to any Lenders (or potential lenders) who GSLP identifies to the Platform and (iii) maintain GSLP’s access to the Platform.

9.4. Reliance by Administrative Agent. Each 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. Each 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 Issuing Bank, such Agent may presume that such condition is satisfactory to such Lender or Issuing Bank unless such Agent shall have received notice to the contrary from such Lender or Issuing Bank prior to the making of such Loan or the issuance of such Letter of Credit. Each Agent may consult with legal counsel (who may be counsel for Parent Borrower), 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.

9.5. Delegation of Duties. Each Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Credit Document by or through any one or more sub-agents appointed by such Agent. Each 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 9 shall apply to any such sub-agent and to the Related Parties of such 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 such Agent.

9.6. Resignation of Administrative Agent. Administrative Agent and Collateral Agent may at any time give notice of their respective resignations to the Lenders, Issuing Bank and Parent Borrower. Upon receipt of any such notice of resignation, the Requisite Lenders shall have the right, in consultation with Parent Borrower, 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 Requisite Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent or Collateral Agent, as applicable, gives notice of its resignation, then the retiring Administrative Agent or Collateral Agent, as applicable, may on behalf of the Lenders and Issuing Bank, appoint a successor Agent or Collateral Agent, as the case may be, meeting the qualifications set forth above; provided that if Administrative Agent or Collateral Agent, as the case may be, shall notify Parent Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Credit Documents (except that in the case of any collateral security held by Collateral Agent on behalf of the Lenders or Issuing Bank under any of the Credit Documents, the retiring Collateral Agent shall continue to hold such collateral security until such time as a successor Collateral Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through Administrative Agent or Collateral Agent shall instead be made by or to each Lender and Issuing Bank directly, until such time as the Requisite Lenders appoint a successor Administrative Agent or Collateral Agent, as applicable, as provided for above in this Section 9.6. Upon the acceptance of a successor’s

 

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appointment as Administrative Agent or Collateral Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent or Collateral Agent, as the case may be, and the retiring Administrative Agent or Collateral Agent shall be discharged from all of its duties and obligations hereunder or under the other Credit Documents (if not already discharged therefrom as provided above in this Section 9.6) other than its confidentiality obligations under Section 10.17. The fees payable by Parent Borrower to a successor Administrative Agent or Collateral Agent, as applicable, shall be the same as those payable to its predecessor unless otherwise agreed between Parent Borrower and such successor. After the retiring Administrative Agent’s or Collateral Agent’s resignation hereunder and under the other Credit Documents, the provisions of this Section 9 and Section 10.3 shall continue in effect for the benefit of such retiring Administrative Agent or Collateral Agent, their respective 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 Administrative Agent was acting as Administrative Agent or while the retiring Collateral Agent was acting as Collateral Agent, and such retiring Administrative Agent or Collateral Agent, their respective sub-agents and their respective Related Parties shall continue to be bound by Section 10.17.

9.7. Non-Reliance on Agents and Other Lenders. Each Lender and Issuing Bank acknowledges that it has, independently and without reliance upon any Agent 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 Issuing Bank also acknowledges that it will, independently and without reliance upon any 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 Credit Document or any related agreement or any document furnished hereunder or thereunder. No Agent shall have any duty or responsibility, either initially or on a continuing basis, to make any such analysis on behalf of Lenders or to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter, and no Agent shall have any responsibility with respect to the accuracy of or the completeness of any information provided to Lenders.

9.8. No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of Arranger, Syndication Agent or any Co-Documentation Agent listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Credit Documents, except in its capacity, as applicable, as Agent, a Lender or Issuing Bank hereunder.

9.9. Collateral and Guaranty Matters. The Lenders and Issuing Bank irrevocably authorize Administrative Agent or Collateral Agent, as applicable, at its option and in its discretion:

(a) to release any Lien on any property granted to or held by Collateral Agent under any Credit Document (i) upon termination of the Commitments and payment in full of all Obligations (other than (x) obligations under Hedge Agreements and Cash Management Agreements not yet due and payable, and (y) contingent indemnification obligations) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which backstop standby letters of credit in form and substance reasonably satisfactory to Issuing Bank or deposits of Cash Collateral shall have been furnished to Issuing Bank), (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Credit Document, or (iii) subject to Section 10.5, if approved, authorized or ratified in writing by the Requisite Lenders;

(b) to subordinate any Lien on any property granted to or held by Collateral Agent under any Credit Document to the holder of any Lien on such property that is permitted by Section 6.2; and

(c) to release any Guarantor Subsidiary from its obligations under the Guaranty or any Swiss Guarantor from its obligations under the Swiss Guaranty, in each case, if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder.

Upon request by Administrative Agent or Collateral Agent, as applicable, at any time, the Requisite Lenders will confirm in writing Administrative Agent’s authority to take any action pursuant to this Section 9.9, including, without limitation, to release any Guarantor Subsidiary from its obligations under the Guaranty or any Swiss Guarantor from its obligations under the Swiss Guaranty, in each case, pursuant to this Section 9.9.

 

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9.10. Lenders’ Representations, Warranties and Acknowledgment.

(a) (i) Each Lender, by delivering its signature page to the Original Credit Agreement, an Assignment Agreement or a Joinder Agreement and funding its Tranche B Term Loan (as defined in the Original Credit Agreement) and/or Revolving Loans on the Original Closing Date, shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit Document and each other document required to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the Original Closing Date.

(ii) Each Lender, by delivering its signature page to the First Amendment, an Assignment Agreement or a Joinder Agreement and funding its Tranche B Term Loan (as defined in the Amended and Restated Credit Agreement) and/or Revolving Loans on the First Restatement Effective Date, as the case may be, shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit Document and each other document required to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the First Restatement Effective Date.

(iii) Each Lender, by delivering its signature page to the Amendment, an Assignment Agreement or a Joinder Agreement and funding its Tranche B Term Loan and/or Revolving Loans on the Second Restatement Effective Date or by the funding of any New Term Loans, New Revolving Loans, Permitted Replacement Revolving Loans or Loans of any Extension Series, as the case may be, shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit Document and each other document required to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the Second Restatement Effective Date or as of the date of funding of such New Revolving Loans, Permitted Replacement Revolving Loans, New Term Loans or Loans of any Extension Series.

(b) Each Lender acknowledges that Affiliated Lenders are Eligible Assignees hereunder and may purchase Loans and/or Commitments hereunder from Lenders from time to time, subject to the restrictions set forth in the definition of Eligible Assignee and Section 10.6(i).

(c) Each Lender participating in any Loan to the Swiss Subsidiary Borrower represents and warrants at the Original Closing Date, Second Restatement Effective Date and on each Credit Date of such Loan as to its status as either (i) an Eligible Swiss Bank, or (ii) not an Eligible Swiss Bank, and each Lender becoming a Lender of the Swiss Subsidiary Borrower by assignment pursuant to Section 10.6(c) shall represent and warrant as of the effective date of such assignment as to its status as either (i) an Eligible Swiss Bank or (ii) not an Eligible Swiss Bank.

9.11. Right to Indemnity. Each Lender, in proportion to its Pro Rata Share, severally agrees to indemnify each Agent, to the extent that such Agent shall not have been reimbursed by any Credit Party, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including counsel fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against such Agent in exercising its powers, rights and remedies or performing its duties hereunder or under the other Credit Documents or otherwise in its capacity as such Agent in any way relating to or arising out of this Agreement or the other Credit Documents; provided , that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent’s gross negligence or willful misconduct, as determined by a final, non-appealable judgment of a court of competent jurisdiction. If any indemnity furnished to any Agent for any purpose shall, in the opinion of such Agent, be insufficient or become impaired, such Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished; provided , that in no event shall this sentence require any Lender to indemnify any Agent against any liability, obligation, loss, damage, penalty, action, judgment, suit, cost, expense or disbursement in excess of such Lender’s Pro Rata Share thereof; and provided further , that this sentence shall not be deemed to require any Lender to indemnify any Agent against any liability, obligation, loss, damage, penalty, action, judgment, suit, cost, expense or disbursement described in the proviso in the immediately preceding sentence.

9.12. Withholding Taxes. To the extent required by any applicable Law, Administrative Agent may withhold from any payment to any Lender (which term shall include any Issuing Bank for purposes of this Section 9.12) an amount equivalent to any applicable withholding tax. If the Internal Revenue Service or any other

 

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Governmental Authority asserts a claim that Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender because the appropriate form was not delivered or was not properly executed or because such Lender failed to notify Administrative Agent of a change in circumstance which rendered the exemption from, or reduction of, withholding tax ineffective or for any other reason, such Lender shall indemnify Administrative Agent fully for all amounts paid, directly or indirectly, by Administrative Agent as tax or otherwise, including any penalties or interest and together with all expenses (including legal expenses, allocated internal costs and out-of-pocket expenses) incurred. A certificate as to the amount of such payment or liability delivered to any Lender by Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to setoff any amounts owing to such Lender under any Credit Document agreement any amount that such Lender owes the Administrative Agent under this Section 9.12).

9.13. Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Credit Party, 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 Administrative Agent shall have made any demand on any Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(a) 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, Issuing Bank and Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, Issuing Bank and Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, Issuing Bank and Administrative Agent under Sections 2.11, 10.2 and 10.3) allowed in such judicial proceeding; and

(b) 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 Issuing Bank to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to the Lenders and Issuing Bank, to pay to Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due Administrative Agent under Sections 2.11, 10.2 and 10.3.

Nothing contained herein shall be deemed to authorize Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or Issuing Bank to authorize Administrative Agent to vote in respect of the claim of any Lender or Issuing Bank in any such proceeding.

 

SECTION 10. MISCELLANEOUS

10.1. Notices.

(a) Notices Generally . Any notice or other communication herein required or permitted to be given to a Credit Party, Syndication Agent, Collateral Agent, Administrative Agent, Swing Line Lender, Issuing Bank or Co-Documentation Agent, shall be sent to such Person’s address as set forth on Appendix B or in the other relevant Credit Document, and in the case of any Lender, the address as indicated on Appendix B or otherwise indicated to Administrative Agent in writing. Except as otherwise set forth in Section 3.2(b) or paragraph (b) below, each notice hereunder shall be in writing and may be personally served or sent by telefacsimile or United States mail or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile, or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed; provided, that no notice to any Agent shall be effective until received by such Agent; provided further, that any such notice or other communication shall at the request of Administrative Agent be provided to any sub-agent appointed pursuant to Section 9.5 hereto as designated by Administrative Agent from time to time.

 

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(b) Electronic Communications .

(i) Notices and other communications to Lenders and Issuing Bank hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites, including the Platform) pursuant to procedures approved by Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or Issuing Bank pursuant to Section 2 if such Lender or Issuing Bank, as applicable, has notified Administrative Agent that it is incapable of receiving notices under such Section by electronic communication. Administrative Agent or Parent Borrower may, in its 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 Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), 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 (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

(ii) Each Credit Party understands that the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution and assumes the risks associated with such electronic distribution, except to the extent caused by the willful misconduct or gross negligence of Administrative Agent, as determined by a final, non-appealable judgment of a court of competent jurisdiction.

(iii) The Platform and any Approved Electronic Communications are provided “as is” and “as available.” In no event shall any of Agent or Arranger or any of their respective partners, officers, directors, employees, agents, trustees, advisors or representatives (collectively, the “ Agent Affiliates ”) have any liability to any Borrower, any Lender, Issuing Bank or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Borrower’s or Administrative Agent’s transmission of Borrower materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Affiliate; provided , however , that in no event shall any Agent Affiliate have any liability to any Borrower, any Lender, Issuing Bank or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages). No warranty of any kind, express, implied or statutory, including any warranty of viruses or other code defects is made by the Agent Affiliates in connection with the Platform or the Approved Electronic Communication.

(iv) Each Credit Party, each Lender, each Issuing Bank and each Agent agrees that 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.

(c) Private Side Information Contacts . 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 information that is not made available through the “Public Side Information” portion of the Platform and that may contain Non-Public Information with respect to Holdings, its Subsidiaries or their securities for purposes of United States federal or state securities laws.

10.2. Expenses. Whether or not the transactions contemplated hereby shall be consummated, Parent Borrower agrees to pay promptly (a) all the actual and reasonable out of pocket costs and expenses incurred in connection with the negotiation, preparation and execution of the Credit Documents and any consents, amendments, waivers or other modifications thereto; (b) all the costs of furnishing all opinions by counsel for Parent Borrower and the other Credit Parties; (c) the reasonable fees, expenses and disbursements of counsel to Administrative Agent, Syndication Agent, Collateral Agent, Issuing Bank and their Affiliates in connection with the negotiation,

 

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preparation, execution and administration of the Credit Documents and any consents, amendments, waivers or other modifications thereto and any other documents or matters requested by Parent Borrower; provided , that so long as a Default or Event of Default shall not have occurred and be continuing, in connection with any one action or proceeding or separate but substantially similar actions or proceedings arising out of the same general allegations, reasonable attorney’s fees shall be limited to one primary external counsel and, if reasonably required, local or specialist counsel, for all indemnified persons; provided , further , that such limitation shall not apply in the case of Administrative Agent, Syndication Agent or Collateral Agent and each of Administrative Agent, Syndication Agent and Collateral Agent shall each be entitled to its own separate representation in all instances; and provided , further , that no such limitation shall apply if counsel for Syndication Agent or Administrative Agent determines in good faith that there is a conflict of interest that requires separate representation for Administrative Agent, Syndication Agent, Collateral Agent or Issuing Bank; (d) all the actual costs and reasonable expenses of creating, perfecting, recording, maintaining and preserving Liens in favor of Collateral Agent, for the benefit of the Secured Parties (or the Swiss Secured Parties, as applicable), to the extent such actions are required or permitted by any applicable Credit Document, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums and reasonable fees, expenses and disbursements of counsel to Administrative Agent, Syndication Agent, Collateral Agent or Issuing Bank and of counsel providing any opinions that Administrative Agent, Syndication Agent or Collateral Agent, Issuing Bank or Requisite Lenders may request in respect of the Collateral or the Liens created pursuant to the Collateral Documents; (e) all the actual and reasonable out of pocket costs and reasonable fees, expenses and disbursements of any auditors, accountants, consultants or appraisers; (f) all the actual and reasonable out of pocket costs and reasonable expenses (including the reasonable fees, expenses and disbursements of any appraisers, consultants, advisors and agents employed or retained by Collateral Agent and its counsel) in connection with the custody or preservation of any of the Collateral; (g) all other actual and reasonable costs and expenses incurred by Administrative Agent, Syndication Agent or Collateral Agent in connection with the syndication of the Loans and Commitments and the transactions contemplated by the Credit Documents and any consents, amendments, waivers or other modifications thereto and (h) after the occurrence of a Default or an Event of Default, all costs and expenses, including reasonable attorneys’ fees and costs of settlement, incurred by any Administrative Agent, Syndication Agent, Collateral Agent and Lenders in enforcing any Obligations of or in collecting any payments due from any Credit Party hereunder or under the other Credit Documents by reason of such Default or Event of Default (including in connection with the sale, lease or license of, collection from, or other realization upon any of the Collateral or the enforcement of the Guaranty) or in connection with any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a “work-out” or pursuant to any insolvency or bankruptcy cases or proceedings.

10.3. Indemnity.

(a) In addition to the payment of expenses pursuant to Section 10.2, whether or not the transactions contemplated hereby shall be consummated, each Credit Party agrees to indemnify, pay and hold harmless, each Agent, Issuing Bank and Lender and the officers, partners, members, directors, trustees, advisors, employees, agents, sub-agents and Affiliates of each Agent, Issuing Bank and each Lender (each, an “ Indemnitee ”), from and against any and all Indemnified Liabilities; provided , that no Credit Party shall have any obligation to any Indemnitee hereunder with respect to any Indemnified Liabilities to the extent such Indemnified Liabilities arise from the gross negligence or willful misconduct of any such Indemnitee, in each case, as determined by a final, non-appealable judgment of a court of competent jurisdiction. To the extent that the undertakings to indemnify, pay and hold harmless set forth in this Section 10.3 may be unenforceable in whole or in part because they are violative of any Law or public policy, the applicable Credit Party shall contribute the maximum portion that it is permitted to pay and satisfy under applicable Law to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them. This paragraph shall not apply with respect to Taxes that are the subject of, or excluded from, Section 2.20.

(b) To the extent permitted by applicable law, no Credit Party shall assert, and each Credit Party hereby waives, any claim against each Lender, each Agent, Issuing Bank, Arranger and their respective Affiliates, directors, employees, attorneys, agents or sub-agents, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty imposed by any applicable legal requirement) arising out of, in connection with, as a result of, or in any way related to, this Agreement or any Credit Document or any agreement or instrument contemplated hereby or thereby or referred to herein or therein, the transactions contemplated hereby or thereby, any Loan or the

 

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use of the proceeds thereof or any act or omission or event occurring in connection therewith, and each Credit Party hereby waives, releases and agrees not to sue upon any such claim or any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

10.4. Set-Off. In addition to any rights now or hereafter granted under applicable Law and not by way of limitation of any such rights, upon the occurrence and during the continuance of any Event of Default, each Lender is hereby authorized by each Credit Party at any time or from time to time subject to the consent of Administrative Agent (such consent not to be unreasonably withheld or delayed), without notice to any Credit Party or to any other Person (other than Administrative Agent), any such notice being hereby expressly waived, to set-off and to appropriate and to apply any and all deposits (general or special, including Indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust, payroll, 401(k) and other employee benefit accounts) and any other Indebtedness at any time held or owing by such Lender to or for the credit or the account of any Credit Party against and on account of the then accrued and payable obligations and liabilities of any Credit Party to such Lender hereunder, the Letters of Credit and participations therein and under the other Credit Documents, including all claims of any nature or description arising out of or connected hereto, the Letters of Credit and participations therein or with any other Credit Document, irrespective of whether or not (a) such Lender shall have made any demand hereunder or (b) the principal of or the interest on the Loans or any amounts in respect of the Letters of Credit or any other amounts due hereunder shall have become due and payable pursuant to Section 2 and although such obligations and liabilities, or any of them, may be contingent or unmatured. Notwithstanding anything to the contrary in this Section 10.4, no Lender may set-off or appropriate and apply any such deposits or any other Indebtedness held or owing by such Lender to or for the credit or the account of any Swiss Credit Party against any Obligations of Parent Borrower or Japanese Subsidiary Borrower, or any Obligations of any U.S. Guarantor in respect of its Guaranty of the Obligations of either Parent Borrower or Japanese Subsidiary Borrower hereunder.

10.5. Amendments and Waivers.

(a) Requisite Lenders’ Consent . Except as provided in Sections 10.5(b) for amendments, modifications, terminations, waivers and consents described therein, and subject to the limitations set forth in Section 10.5(c), no amendment, modification, termination or waiver of any provision of the Credit Documents, or consent to any departure by any Credit Party therefrom, shall in any event be effective without the written concurrence of Requisite Lenders; provided , that Administrative Agent may, with the consent of Parent Borrower only, amend, modify or supplement this Agreement to cure any ambiguity, omission, defect, mistake or inconsistency, so long as such amendment, modification or supplement does not adversely affect the rights of any Lender or Issuing Bank.

(b) Affected Lenders’ Consent . Without the written consent of each Lender (other than a Defaulting Lender with respect to clauses (ii), (v) and (vii) through (xiii) below) that would be directly affected thereby, no amendment, modification, termination, or consent shall be effective if the effect thereof would:

(i) extend the scheduled final maturity of any Loan or Note;

(ii) waive, reduce or postpone any scheduled repayment (but not prepayment) of principal;

(iii) extend the stated expiration date of any Letter of Credit beyond the Revolving Commitment Termination Date;

(iv) reduce the rate of interest on any Loan (other than any waiver of any increase in the interest rate applicable to any Loan pursuant to Section 2.10) or any fee or any premium payable hereunder, it being understood that any change to the definition of Leverage Ratio or in the component definitions thereof shall not constitute a reduction in the rate of interest; and further provided that only the consent of Requisite Lenders shall be necessary to amend the default rate in Section 2.10 or to waive any obligation of any Borrower to pay interest at the default rate;

(v) extend the time for payment of any such interest, fees or premium (if any);

 

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(vi) reduce the principal amount of any Loan or any reimbursement obligation in respect of any Letter of Credit;

(vii) amend, modify, terminate or waive any provision of Section 2.13(b)(ii), this Section 10.5(b), Section 10.5(c) or any other provision of this Agreement that expressly provides that the consent of all Lenders is required;

(viii) amend the definition of “Requisite Lenders” or “Pro Rata Share”; provided , that with the consent of Requisite Lenders, additional extensions of credit pursuant hereto may be included in the determination of “Requisite Lenders” or “Pro Rata Share” on substantially the same basis as the Term Loan Commitments, the Term Loans, the Revolving Commitments and the Revolving Loans are included on the Original Closing Date;

(ix) release all or substantially all of the Collateral or all or substantially all of the Guarantors from the Guaranty except as expressly provided in the Credit Documents;

(x) except to the extent permitted by the Credit Documents, consent to the assignment or transfer by any Credit Party of any of its rights and obligations under any Credit Document;

(xi) amend Section 1.6 (except to shorten or waive any time periods provided for therein) or the definition of “Foreign Currency”;

(xii) make any Loan, interest, fee or other amount payable in any currency other than as expressly provided herein; or

(xiii) change the jurisdiction of organization, incorporation or formation of any Borrower (provided that the jurisdiction of incorporation of Parent Borrower may be changed so long as the new jurisdiction of incorporation is the United States, any state thereof or the District of Columbia or any territory thereof);

provided that, for the avoidance of doubt, all Lenders shall be deemed directly affected thereby with respect to any amendment described in clauses (vii), (viii), (ix) and (x).

(c) Other Consents . No amendment, modification, termination or waiver of any provision of the Credit Documents, or consent to any departure by any Credit Party therefrom, shall:

(i) increase any Revolving Commitment of any Lender over the amount thereof then in effect without the consent of such Lender; provided , no amendment, modification or waiver of any condition precedent, covenant, Default or Event of Default shall constitute an increase in any Revolving Commitment of any Lender;

(ii) amend, modify, terminate or waive any provision hereof relating to the Swing Line Sublimit or the Swing Line Loans without the consent of Swing Line Lender;

(iii) alter the required application of any repayments or prepayments as between Classes pursuant to Section 2.15 without the consent of Lenders holding more than 50% of the aggregate Tranche B Term Loan Exposure of all Lenders, Revolving Exposure of all Lenders, New Term Loan Exposure of all Lenders or Permitted Replacement Revolving Exposure of all Lenders, as applicable, of each Class which is being allocated a lesser repayment or prepayment as a result thereof; provided , Requisite Lenders may waive, in whole or in part, any prepayment so long as the application, as between Classes, of any portion of such prepayment which is still required to be made is not altered;

(iv) amend, modify, terminate or waive any obligation of Lenders relating to the purchase of participations in Letters of Credit as provided in Section 2.4(c), amend or modify any provision affecting the rights and duties of Issuing Bank under this Agreement or any instrument or agreement relating to any Letter of Credit or amend Section 1.6 (except to shorten or waive any time periods provided for therein) or the definition of “Foreign Currency” without the written consent of Administrative Agent and of Issuing Bank;

 

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(v) amend, modify or waive this Agreement or the Pledge and Security Agreement so as to alter the ratable treatment of Obligations arising under the Credit Documents and Obligations arising under Hedge Agreements or Cash Management Agreements or the definition of “Lender Counterparty,” “Hedge Agreement,” “Cash Management Agreement,” “Obligations,” or “Secured Obligations” (as defined in any applicable Collateral Document) in each case in a manner adverse to any Lender Counterparty with Obligations then outstanding without the written consent of any such Lender Counterparty; or

(vi) amend, modify, terminate or waive any provision of Section 9 as the same applies to any Agent, or any other provision hereof as the same applies to the rights or obligations of any Agent, in each case without the consent of such Agent.

(d) Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except as expressly set forth in Section 10.5(b) above.

(e) Execution of Amendments, Etc. Administrative Agent may, but shall have no obligation to, with the concurrence of any Lender, execute amendments, modifications, waivers or consents on behalf of such Lender. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances. Any amendment, modification, termination, waiver or consent effected in accordance with this Section 10.5 shall be binding upon each Lender at the time outstanding, each future Lender and, if signed by a Credit Party, on such Credit Party. Administrative Agent shall be apprised of any such amendment, modifications, waivers or consents with reasonable advance notice and shall receive reasonable advance notice of any amendment, modification, waiver or consent prior to such amendment, modification, waiver or consent becoming effective in order for it to perform its duties and obligations.

(f) [Reserved.]

(g) Notwithstanding anything else to the contrary in this Section 10.5, (i) the adoption of a Permitted Replacement Revolving Amendment, Refinancing Amendment or Extension Amendment shall require only the consent of the Lender relating thereto and (ii) the adoption of amendments to this Agreement and the other Credit Documents pursuant to Joinder Agreements, Refinancing Amendments, Permitted Replacement Revolving Amendments or Extension Amendments entered into pursuant to Section 2.23, Section 2.24, Section 2.25 or Section 2.26 shall require only the consents set forth in Section 2.23, Section 2.24, Section 2.25 or Section 2.26, as applicable.

10.6. Successors and Assigns; Participations.

(a) Generally . This Agreement shall be binding upon the parties hereto and their respective successors and permitted assigns and shall inure to the benefit of the parties hereto and the successors and permitted assigns of Lenders. No Credit Party’s rights or obligations hereunder nor any interest therein may be assigned or delegated by any Credit Party without the prior written consent of all Lenders and any purported assignment or delegation without such consent shall be null and void. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, Affiliates of each of the Agents and Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Register . Borrowers, Administrative Agent and Lenders shall deem and treat the Persons listed as Lenders in the Register as the holders and owners of the corresponding Commitments and Loans listed therein for all purposes hereof, and no assignment or transfer of any such Commitment or Loan shall be effective, in each case, unless and until recorded in the Register following receipt of a fully executed Assignment Agreement effecting the assignment or transfer thereof, together with the required forms and certificates regarding tax matters and any fees payable in connection with such assignment, in each case, as provided in Section 10.6(d). Each assignment shall be recorded in the Register promptly following receipt by Administrative Agent of the fully executed Assignment Agreement and all other necessary documents and approvals, prompt notice thereof shall be provided to Parent Borrower and a copy of such Assignment Agreement shall be maintained, as applicable. The date of such

 

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recordation of a transfer shall be referred to herein as the “ Assignment Effective Date .” Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Commitments or Loans.

(c) Right to Assign . Each Lender shall have the right at any time to sell, assign or transfer all or a portion of its rights and obligations under this Agreement, including all or a portion of its Commitment or Loans owing to it or other Obligations ( provided , however , that pro rata assignments shall not be required and each assignment shall be of a uniform, and not varying, percentage of all rights and obligations under and in respect of any applicable Loan and any related Commitments; provided , further , that notwithstanding any assignment of any Commitment or Loan, neither Swing Line Lender nor Issuing Bank shall be permitted to assign its obligations in such capacity hereunder pursuant to this Section 10.6(c)); and provided, further, that no assignment of a Revolving Loan or a Permitted Replacement Revolving Loan in the form of a Foreign Currency Loan shall be effective unless the assignee of such Foreign Currency Loan shall have represented in the Assignment Agreement that such assignee is able to make Revolving Loans or a Permitted Replacement Revolving Loan to the applicable Borrower in all applicable Foreign Currencies:

(i) to any Person meeting the criteria of clause (i)(x) of the definition of the term of “Eligible Assignee” (with respect to Assignments of Term Loans) or clause (i)(y) of such definition (with respect to assignments of Revolving Loans, Revolving Commitments, Permitted Replacement Revolving Loans, Permitted Replacement Revolving Commitments, New Revolving Loans and New Revolving Loan Commitments) upon the giving of notice to Parent Borrower and Administrative Agent; and

(ii) to any Person meeting the criteria of clause (ii) of the definition of the term of “Eligible Assignee” upon giving of notice to Parent Borrower and Administrative Agent and, in the case of assignments of Revolving Loans or Revolving Commitments to any such Person (except in the case of assignments made by or to GSLP), consented to by each of Parent Borrower and Administrative Agent (such consent not to be (x) unreasonably withheld or delayed or, (y) in the case of Parent Borrower, required at any time an Event of Default shall have occurred and then be continuing); provided, further each such assignment pursuant to this Section 10.6(c)(ii) shall be in an aggregate amount of not less than (A) the Dollar Equivalent of $2,500,000 (or such lesser amount as may be agreed to by Parent Borrower and Administrative Agent or as shall constitute the aggregate amount of the applicable Class of the Revolving Commitments and Revolving Loans of the assigning Lender) with respect to the assignment of the Revolving Commitments and Revolving Loans and (B) the Dollar Equivalent of $1,000,000 (or such lesser amount as may be agreed to by Parent Borrower and Administrative Agent or as shall constitute the aggregate amount of the Tranche B Term Loan or New Term Loans of a Series of the assigning Lender) with respect to the assignment of Term Loans.

Notwithstanding the foregoing, no assignment shall be made without the consent of Parent Borrower (such consent not to be (x) unreasonably withheld or delayed or (y) required at any time an Event of Default shall have occurred and then be continuing (except in the case of clause (ii) below)) in the case of (i) an assignment of Japanese Revolving Loans or Japanese Revolving Commitments to a Person who is not an Eligible Japanese Investor or (ii) an assignment of Swiss/Multicurrency Revolving Loans or Swiss/Multicurrency Revolving Commitments to a Non-Eligible Swiss Bank, unless such Non-Eligible Swiss Bank is a Lender which is a Permitted Non-Eligible Swiss Bank. The consent of Parent Borrower shall be deemed to be reasonably withheld if such assignment would result in a breach of the Ten Non-Bank Rule.

Each Lender participating in any Loan to the Swiss Subsidiary Borrower that is an Eligible Swiss Bank undertakes to:

(i) promptly notify Administrative Agent and Parent Borrower if it has ceased or will or is likely to cease to be an Eligible Swiss Bank; and

(ii) upon request of Parent Borrower provide an assignee which is an Eligible Swiss Bank and transfer all its rights and obligations under this Agreement to such assignee.

 

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(d) Mechanics . Assignments and assumptions of Loans and Commitments by Lenders shall be effected by manual execution and delivery to Administrative Agent of an Assignment Agreement. Assignments made pursuant to the foregoing provision shall be effective as of the Assignment Effective Date (which shall be determined by Administrative Agent pursuant to its customary procedures). In connection with all assignments there shall be delivered to Administrative Agent such forms, certificates or other evidence, if any, with respect to United States federal income tax withholding matters, Japanese income tax withholding matters and withholding tax matters of any other jurisdiction as the assignee under such Assignment Agreement may be required to deliver pursuant to Sections 2.20(e), (f) and (h), together with payment to Administrative Agent of a registration and processing fee of $3,500 (except that Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee; provided that neither Arranger nor any of its affiliates shall be required to pay a registration and processing fee in connection with any assignment by or to Arranger or any of its affiliates). Prior to date of, and as a condition to, the Assignment Effective Date, each assignee that is not a Lender shall deliver to Administrative Agent an Administrative Questionnaire.

(e) Representations and Warranties of Assignee . Each Lender, upon execution and delivery hereof or upon succeeding to an interest in the Commitments and Loans, as the case may be, represents and warrants as of the Second Restatement Effective Date or as of the Assignment Effective Date that (i) it is an Eligible Assignee; (ii) it has experience and expertise in the making of or investing in commitments or loans such as the applicable Commitments or Loans, as the case may be; and (iii) it will make or invest in, as the case may be, its Commitments or Loans for its own account in the ordinary course and without a view to distribution of such Commitments or Loans within the meaning of the Securities Act or the Exchange Act or other federal securities laws (it being understood that, subject to the provisions of this Section 10.6, the disposition of such Commitments or Loans or any interests therein shall at all times remain within its exclusive control).

(f) Effect of Assignment . Subject to the terms and conditions of this Section 10.6, as of the “Assignment Effective Date” (i) the assignee thereunder shall have the rights and obligations of a “Lender” hereunder to the extent of its interest in the Loans and Commitments as reflected in the Register and shall thereafter be a party hereto and a “Lender” for all purposes hereof; (ii) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned to the assignee, relinquish its rights (other than any rights which survive the termination hereof under Section 10.8) and be released from its obligations hereunder other than its confidentiality obligations under Section 10.17 (and, in the case of an assignment covering all or the remaining portion of an assigning Lender’s rights and obligations hereunder, such Lender shall cease to be a party hereto on the Assignment Effective Date; provided , anything contained in any of the Credit Documents to the contrary notwithstanding, such assigning Lender shall continue to be entitled to the benefit of all indemnities hereunder as specified herein with respect to matters arising out of the prior involvement of such assigning Lender as a Lender hereunder); (iii) the Commitments shall be modified to reflect any Commitment of such assignee and any Revolving Commitment of such assigning Lender, if any; and (iv) if any such assignment occurs after the issuance of any Note hereunder, the assigning Lender shall, upon the effectiveness of such assignment or as promptly thereafter as practicable, surrender its applicable Notes to Administrative Agent for cancellation, and thereupon the applicable Borrower shall issue and deliver new Notes (at such Borrower’s expense), if so requested by the assignee and/or assigning Lender, to such assignee and/or to such assigning Lender, with appropriate insertions, to reflect the Revolving Commitments and/or the New Revolving Loan Commitments and/or outstanding Loans of the assignee and/or the assigning Lender.

(g) Participations .

(i) Each Lender shall have the right at any time to sell one or more participations to any Person (other than Holdings, any of its Subsidiaries or any of its Affiliates) in all or any part of its Commitments, Loans or in any other Obligation. Notwithstanding the foregoing, no participation shall be sold, and no sub-participations shall be sold in such participation, without the consent of Parent Borrower (such consent not to be (x) unreasonably withheld or delayed or (y) required at any time an Event of Default shall have occurred and then be continuing (except in the case of clause (ii) below)) in the case of (i) a sale of a participation in any Japanese Revolving Loans or Japanese Revolving Commitments to a Person who is not an Eligible Japanese Investor or (ii) a sale of a participation in any Swiss/Multicurrency Revolving Loans or Swiss/Multicurrency Revolving Commitments to a Non-Eligible Swiss Bank, and any purported sale of a participation or a sub-participation without the receipt of required consent shall be null and void. The consent of Parent Borrower shall be deemed to be

 

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reasonably withheld if such participation or sub-participation would result in a breach of the Ten Non-Bank Rule. Each Lender that sells a participation shall acting solely for this purpose as an agent of the Borrowers maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each participant’s interest in the Loans or other obligations under this Agreement (the “ Participant Register ”). The entries in the Participant Register shall be conclusive absent manifest error.

(ii) The holder of any such participation, other than an Affiliate of the Lender granting such participation, shall not be entitled to require such Lender to take or omit to take any action hereunder except with respect to any amendment, modification or waiver that would (A) extend the final scheduled maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is not extended beyond the Revolving Commitment Termination Date) in which such participant is participating, or reduce the rate or extend the time of payment of interest or fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates, it being understood that any change to the definition of Leverage Ratio or in the component definitions thereof shall not constitute a reduction in the rate of interest) or reduce the principal amount thereof, or increase the amount of the participant’s participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Commitment shall not constitute a change in the terms of such participation, and that an increase in any Commitment or Loan shall be permitted without the consent of any participant if the participant’s participation is not increased as a result thereof), (B) consent to the assignment or transfer by any Credit Party of any of its rights and obligations under this Agreement or (C) release all or substantially all of the Collateral under the Collateral Documents (except as expressly provided in the Credit Documents) supporting the Loans hereunder in which such participant is participating.

(iii) Parent Borrower agrees that each participant shall be entitled to the benefits of Sections 2.18(c), 2.19 and 2.20 (with respect to participants that have elected to receive the benefits thereof, solely to the extent such participants are also subject to the requirements of Section 2.20) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (c) of this Section; provided , that a participant shall not be entitled to receive any greater payment under Section 2.19 or 2.20 than the applicable Lender would have been entitled to receive with respect to the participation sold to such participant, unless the sale of the participation to such participant is made with Parent Borrower’s prior written consent (not to be unreasonably withheld); provided further that, except as specifically set forth in the first proviso of this sentence, nothing herein shall require any notice to Parent Borrower or any other Person in connection with the sale of any participation. To the extent permitted by law, each participant also shall be entitled to the benefits of Section 10.4 as though it were a Lender, provided such participant agrees to be subject to Section 2.17 as though it were a Lender. Notwithstanding anything in the foregoing to the contrary, the Borrowers shall continue to deal solely with the Lender granting the participation.

(h) Certain Other Assignments and Participations . In addition to any other assignment or participation permitted pursuant to this Section 10.6 any Lender may assign and/or pledge all or any portion of its Loans, the other Obligations owed by or to such Lender, and its Notes, if any, to secure obligations of such Lender including any Federal Reserve Bank as collateral security pursuant to Regulation A of the Board of Governors and any operating circular issued by such Federal Reserve Bank; provided, that no Lender, as between Borrowers and such Lender, shall be relieved of any of its obligations hereunder as a result of any such assignment and pledge, and provided further that in no event shall the applicable Federal Reserve Bank, pledgee or trustee, be considered to be a “Lender” or be entitled to require the assigning Lender to take or omit to take any action hereunder. For the avoidance of doubt, and with respect to any Swiss Subsidiary Borrower, nothing in Subsection (g) above restricts any Lender, participant or subparticipant, from entering into any agreement with another person under which payments are made by reference to this Agreement or to any hereto related participation or subparticipation agreement, provided such agreement does not result in application of the Swiss Withholding Tax Rules.

(i) Affiliate Lender Assignments . (A) Notwithstanding the definition of “Eligible Assignee” or anything else to the contrary contained in this Agreement, any Lender may assign all or a portion of its Term Loans to any Person who, after giving effect to such assignment, would be an Affiliated Lender (with the consent of Administrative Agent (not to be unreasonably withheld or delayed)); provided that:

(i) the assigning Lender and the Affiliated Lender purchasing such Lender’s Term Loans shall execute and deliver to Administrative Agent an assignment agreement substantially in the form of Exhibit D to the Amended and Restated Credit Agreement (an “ Affiliated Lender Assignment Agreement ”);

 

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(ii) for the avoidance of doubt, Lenders shall not be permitted to assign Revolving Commitments or Revolving Loans to an Affiliated Lender and any purported assignment of Revolving Commitments or Revolving Loans to an Affiliated Lender shall be null and void; and

(iii) at the time of such assignment on a pro forma basis after giving affect to such assignment, the aggregate principal amount of all Term Loans held by Affiliated Lenders shall not exceed 10% of the aggregate principal amount of all Term Loans outstanding under this Agreement.

(B) Notwithstanding anything to the contrary in this Agreement, no Affiliated Lender shall have any right to (i) attend (including by telephone) any meeting or discussions (or portion thereof) among Administrative Agent or any Lender to which representatives of the Credit Parties are not invited, (ii) receive any information or material prepared by Administrative Agent or any Lender or any communication by or among Administrative Agent and/or one or more Lenders, except to the extent such information or materials have been made available to any Credit Party or its representatives, or (iii) make or bring (or participate in, other than as a passive participant in or recipient of its pro rata benefits of) any claim, in its capacity as a Lender, against any Agent or any other Lender with respect to any duties or obligations or alleged duties or obligations of such Agent or any other such Lender under the Credit Documents.

(C) Each Affiliated Lender, solely in its capacity as a Term Lender, hereby agrees, and each Affiliated Lender Assignment Agreement shall provide a confirmation that, if any Credit Party shall be subject to any voluntary or involuntary proceeding commenced under any Debtor Relief Laws (“ Bankruptcy Proceedings ”), (i) such Affiliated Lender shall not take any step or action in such Bankruptcy Proceeding to object to, impede, or delay the exercise of any right or the taking of any action by Administrative Agent (or the taking of any action by a third party that is supported by Administrative Agent) in relation to such Affiliated Lender’s claim with respect to its Loans (a “ Claim ”) (including, without limitation, objecting to any debtor in possession financing, use of cash collateral, grant of adequate protection, sale or disposition, compromise, or plan of reorganization) so long as such Affiliated Lender is treated in connection with such exercise or action on the same or better terms as the other Term Lenders and (ii) with respect to any matter requiring the vote of Term Lenders during the pendency of a Bankruptcy Proceeding (including, without limitation, voting on any plan of reorganization), the Loans held by such Affiliated Lender (and any Claim with respect thereto) shall be deemed to be voted in the same proportion as the allocation of voting with respect to such matter by Lenders who are not Affiliated Lenders so long as such Affiliated Lender is treated in connection with the exercise of such right or taking of such action on the same or better terms as the other Term Lenders. For the avoidance of doubt, the Lenders and each Affiliated Lender agree and acknowledge that the provisions set forth in clauses (i) and (ii) of this Section 10.6(i)(C), and the related provisions set forth in each Affiliated Lender Assignment Agreement, shall be enforceable as if such provisions constituted a “subordination agreement” as such term is contemplated by, and utilized in, Section 510(a) of the United States Bankruptcy Code (or the comparable provision of any other Debtor Relief Law), and, as such, would be enforceable for all purposes in any case where a Credit Party has filed for protection under any Debtor Relief Law applicable to such Credit Party.

10.7. Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.

10.8. Survival of Representations, Warranties and Agreements. All representations, warranties and agreements made herein shall survive the execution and delivery hereof and the making of any Credit Extension. Notwithstanding anything herein or implied by law to the contrary, the agreements of each Credit Party set forth in Sections 2.18(c), 2.19, 2.20, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.17, 9.3 and 9.11 shall survive the payment of the Loans, the cancellation or expiration of the Letters of Credit and the reimbursement of any amounts drawn thereunder, and the termination hereof.

 

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10.9. No Waiver; Remedies Cumulative. No failure or delay on the part of any Agent or any Lender in the exercise of any power, right or privilege hereunder or under any other Credit Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege. The rights, powers and remedies given to each Agent and each Lender hereby are cumulative and shall be in addition to and independent of all rights, powers and remedies existing by virtue of any statute or rule of law or in any of the other Credit Documents or any of the Hedge Agreements or Cash Management Agreements. Any forbearance or failure to exercise, and any delay in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy.

10.10. Marshalling; Payments Set Aside. Neither any Agent, Issuing Bank nor any Lender shall be under any obligation to marshal any assets in favor of any Credit Party or any other Person or against or in payment of any or all of the Obligations. To the extent that any Credit Party makes a payment or payments to Administrative Agent, Issuing Bank or Lenders (or to Administrative Agent or Issuing Bank, on behalf of Lenders), or any Agent, Issuing Bank or any Lenders enforce any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, any other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred.

10.11. Severability. In case any provision in or obligation hereunder or under any other Credit Document shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

10.12. Obligations Several; Independent Nature of Lenders’ Rights. The obligations of Lenders hereunder are several and no Lender shall be responsible for the obligations or Commitment of any other Lender hereunder. Nothing contained herein or in any other Credit Document, and no action taken by Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a partnership, an association, a joint venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and each Lender shall be entitled to protect and enforce its rights arising out hereof and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for such purpose.

10.13. Headings. Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.

10.14. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

10.15. CONSENT TO JURISDICTION.

(a) SUBJECT TO CLAUSE (E) OF THE FOLLOWING SENTENCE, ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENTS, OR ANY OF THE OBLIGATIONS, SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY HERETO, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE EXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS (OTHER THAN WITH RESPECT TO ACTIONS BY ANY AGENT IN RESPECT OF RIGHTS UNDER ANY SECURITY AGREEMENT GOVERNED BY A LAWS OTHER THAN THE LAWS OF THE STATE OF NEW YORK OR WITH RESPECT TO ANY COLLATERAL SUBJECT THERETO); (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN

 

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ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1; (D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES THAT AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS UNDER ANY SECURITY DOCUMENT OR THE ENFORCEMENT OF ANY JUDGMENT.

(B) EACH CREDIT PARTY THAT IS ORGANIZED UNDER THE LAWS OF A JURISDICTION OUTSIDE THE UNITED STATES HEREBY APPOINTS PARENT BORROWER AS ITS AGENT FOR SERVICE OF PROCESS IN ANY MATTER RELATED TO THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS AND SHALL PROVIDE WRITTEN EVIDENCE OF ACCEPTANCE OF SUCH APPOINTMENT BY SUCH AGENT ON OR BEFORE THE ORIGINAL CLOSING DATE.

10.16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

10.17. Confidentiality. Each Agent (which term shall for the purposes of this Section 10.17 include the Arranger) and each Lender (which term shall for the purposes of this Section 10.17 include Issuing Bank) shall hold all non public information regarding Parent Borrower and its Subsidiaries and their businesses obtained by such Agent or such Lender pursuant to the requirements hereof in accordance with such Agent’s and such Lender’s customary procedures for handling confidential information of such nature, it being understood and agreed by Parent Borrower that, in any event, Administrative Agent may disclose such information to the Lenders and each Agent and each Lender may make (i) disclosures of such information to Affiliates of such Lender or Agent and to their respective agents, advisors and investors (and to other Persons authorized by a Lender or Agent to organize, present or disseminate such information in connection with disclosures otherwise made in accordance with this Section 10.17) (it being understood that the Persons to whom such disclosure is made shall be informed of the confidential nature of such information and instructed to keep such Information confidential), (ii) disclosures of such information reasonably required by any bona fide or potential assignee, transferee or participant in connection with the contemplated assignment, transfer or participation of any Loans or any participations therein or by any direct or indirect contractual counterparties (or the professional advisors thereto) to any swap or derivative transaction relating to Parent Borrower and its obligations ( provided , such assignees, transferees, participants, counterparties and advisors are advised of and agree to be bound by either the provisions of this Section 10.17 or other provisions

 

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at least as restrictive as this Section 10.17), (iii) disclosure to any rating agency when required by it, provided that, prior to any disclosure, such rating agency shall undertake in writing to preserve the confidentiality of any confidential information relating to Credit Parties received by it from any Agent or any Lender, (iv) disclosures in connection with the exercise of any remedies hereunder or under any other Credit Document and (v) disclosures required or requested by applicable law, any governmental agency or representative thereof or by the NAIC or pursuant to legal or judicial process; provided , unless specifically prohibited by applicable law or court order, each Lender and each Agent shall make reasonable efforts to notify Parent Borrower of any request by any governmental agency or representative thereof (other than any such request in connection with any examination of the financial condition or other routine examination of such Lender by such governmental agency) for disclosure of any such non public information prior to disclosure of such information. In addition, each Agent and each Lender may disclose the existence of this Agreement and the information about this Agreement to market data collectors, similar services providers to the lending industry, and service providers to the Agents and the Lenders in connection with the administration and management of this Agreement and the other Credit Documents.

10.18. Usury Savings Clause. Notwithstanding any other provision herein, the aggregate interest rate charged with respect to any of the Obligations, including all charges or fees in connection therewith deemed in the nature of interest under applicable law shall not exceed the Highest Lawful Rate. If the rate of interest (determined without regard to the preceding sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the outstanding amount of the Loans made hereunder shall bear interest at the Highest Lawful Rate until the total amount of interest due hereunder equals the amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect. In addition, if when the Loans made hereunder are repaid in full the total interest due hereunder (taking into account the increase provided for above) is less than the total amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect, then to the extent permitted by law, Parent Borrower shall pay to Administrative Agent an amount equal to the difference between the amount of interest paid and the amount of interest which would have been paid if the Highest Lawful Rate had at all times been in effect. Notwithstanding the foregoing, it is the intention of Lenders and Borrowers to conform strictly to any applicable usury laws. Accordingly, if any Lender contracts for, charges, or receives any consideration which constitutes interest in excess of the Highest Lawful Rate, then any such excess shall be cancelled automatically and, if previously paid, shall at such Lender’s option be applied to the outstanding amount of the Loans made hereunder or be refunded to the applicable Borrower.

10.19. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.

10.20. Effectiveness; Entire Agreement. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by Parent Borrower and Administrative Agent of written notification of such execution and authorization of delivery thereof. With the exception of those terms contained in Sections 3, 4, 5 (including Annex A), 7 and 9 of the Amended and Restated Commitment Letter, dated November 26, 2009, among GSLP, and certain affiliates of GSLP, Bank of America, Banc of America Securities LLC, Barclays Bank PLC, HSBC Securities, HSBC Bank USA, National Association and Royal Bank of Canada (collectively, the “ Commitment Parties ”) and Healthcare Technology Holdings, Inc. (the “ Commitment Letter ”), which by the terms of the Commitment Letter remain in full force and effect (such terms the “ Surviving Terms ”), all of the Commitment Parties’ obligations under the Commitment Letter shall terminate and be superseded by the Credit Documents and the Commitment Parties shall be released from all liability in connection therewith, including any claim for injury or damages, whether consequential, special, direct, indirect, punitive or otherwise. Parent Borrower hereby assumes all obligations of Healthcare Technology Holdings, Inc. under the Commitment Letter with respect to the Surviving Terms.

10.21. PATRIOT Act. Each Lender subject to the PATRIOT Act and Administrative Agent (for itself and not on behalf of any Lender) hereby notifies each Credit Party that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies each Credit Party, which information includes the name and address of each Credit Party and other information that will allow such Lender or Administrative Agent, as applicable, to identify such Credit Party in accordance with the PATRIOT Act.

 

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10.22. Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment Agreement 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.

10.23. No Fiduciary Duty. Each Agent, each Lender and their Affiliates (collectively, solely for purposes of this paragraph, the “ Lenders ”), may have economic interests that conflict with those of Parent Borrower, its stockholders and/or its affiliates. Parent Borrower agrees that nothing in the Credit 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 Parent Borrower, its stockholders or its affiliates, on the other. The Credit Parties acknowledge and agree that (i) the transactions contemplated by the Credit 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 Parent Borrower, 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 Parent Borrower, 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 Parent Borrower, its stockholders or its Affiliates on other matters) or any other obligation to Parent Borrower except the obligations expressly set forth in the Credit Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of Parent Borrower, its management, stockholders, creditors or any other Person. Parent Borrower acknowledges and agrees that Parent Borrower 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. Parent Borrower 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 Parent Borrower, in connection with such transaction or the process leading thereto.

10.24. Judgment Currency. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Credit Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures Administrative Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of any Borrower in respect of any such sum due from it to Administrative Agent or Lenders hereunder or under the other Credit Documents shall, notwithstanding any judgment in a currency (the “ Judgment Currency ”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “ Agreement Currency ”), be discharged only to the extent that on the Business Day following receipt by Administrative Agent of any sum adjudged to be so due in the Judgment Currency, Administrative Agent may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to Administrative Agent from the applicable Borrower in the Agreement Currency, such Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify Administrative Agent or the Person to whom such obligation was owing against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to Administrative Agent in such currency, Administrative Agent agrees to return the amount of any excess to such Borrower (or to any other Person who may be entitled thereto under applicable Law).

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

 

IMS HEALTH INCORPORATED, as Parent Borrower
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Vice President and Treasurer
HEALTHCARE TECHNOLOGY INTERMEDIATE HOLDINGS, INC., as Holdings
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Vice President and Treasurer

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


IMS JAPAN K.K., as Japanese Subsidiary Borrower
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Attorney-in-fact

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


IMS AG, as Swiss Subsidiary Borrower
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Attorney-in-fact
By:  

/s/ Margaret F. Cupp

  Name:   Margaret F. Cupp
  Title:   Attorney-in-fact

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


ARSENAL HOLDING COMPANY
ARSENAL HOLDING (II) COMPANY
DATA NICHE ASSOCIATES, INC.
IMS HEALTH INDIA HOLDING CORPORATION
IMS HEALTH TRADING CORPORATION
RX INDIA CORPORATION
VALUEMEDICS RESEARCH, LLC
IMS HEALTH HOLDING CORPORATION
IMS HEALTH INVESTING CORPORATION
IMS HEALTH INVESTMENTS, INC.
IMS HEALTH PURCHASING, INC., as Guarantors
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   President

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


IMS CONTRACTING & COMPLIANCE, INC.
IMS GOVERNMENT SOLUTIONS, INC.
IMS HEALTH TRANSPORTATION SERVICES CORPORATION
HEALTH BENCHMARKS, INC.
HEALTH VANGUARD, INC.
IMS SOFTWARE SERVICES LTD.
PHARMETRICS, INC., as Guarantors
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Treasurer

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


IMS HEALTH LICENSING ASSOCIATES, L.L.C., as Guarantor
By:  

/s/ Maryanne Piorek

  Name:   Maryanne Piorek
  Title:   Responsible Officer

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


IMS TRADING MANAGEMENT, INC., as Guarantor
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   President

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


THE TAR HEEL TRADING COMPANY, LLC, as Guarantor
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Vice President & Treasurer

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


IMS HEALTH FINANCE, INC., as Guarantor
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   President

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


MARKET RESEARCH MANAGEMENT, INC., as Guarantor
By:  

/s/ Margaret F. Cupp

  Name:   Margaret F. Cupp
  Title:   President

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


COORDINATED MANAGEMENT HOLDINGS, L.L.C., as Guarantor
By:  

/s/ Margaret F. Cupp

  Name:   Margaret F. Cupp
  Title:   President

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


COORDINATED MANAGEMENT SYSTEMS, INC., as Guarantor
By:  

/s/ Margaret F. Cupp

  Name:   Margaret F. Cupp
  Title:   President

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


SPARTAN LEASING CORPORATION, as Guarantor
By:  

/s/ Margaret F. Cupp

  Name:   Margaret F. Cupp
  Title:   President

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


IMS CHINAMETRIK INCORPORATED, as Guarantor
By:  

/s/ Margaret F. Cupp

  Name:   Margaret F. Cupp
  Title:   Vice President

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


INTERCONTINENTAL MEDICAL STATISTICS INTERNATIONAL, LTD., as Guarantor
By:  

/s/ Harvey A. Ashman

  Name:   Harvey A. Ashman
  Title:   President

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


ENTERPRISE ASSOCIATES L.L.C., as Guarantor
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Vice President

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


IMS HOLDING INC., Guarantor
By:  

/s/ Margaret F. Cupp

  Name:   Margaret F. Cupp
  Title:   Vice President

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


IMS SERVICES, LLC, as Guarantor
By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   President

 

Amended and Restated Credit and Guaranty Agreement Signature Pages


BANK OF AMERICA, N.A., as Administrative Agent and Collateral Agent
By:  

/s/ Kevin L. Ahart

  Name:   Kevin L. Ahart
  Title:   Vice President

 

BANK OF AMERICA, N.A., as Issuing Bank, Swing Line Lender and a Lender

By:   /s/ Frank Byrne
  Name:  

Frank Byrne

  Title:  

Vice President

 

Amended and Restated Credit and Guaranty Agreement Signature Pages

Exhibit 10.5

AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED

CREDIT AND GUARANTY AGREEMENT

AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT, dated as of February 6, 2013 (this “ Amendment ”), among IMS HEALTH INCORPORATED, a Delaware corporation (“ Parent Borrower ”), IMS AG, a Swiss corporation and a subsidiary of Parent Borrower (“ Swiss Subsidiary Borrower ”), IMS JAPAN K.K., a Japanese stock corporation ( kabushiki kaisha ) and a subsidiary of Parent Borrower (“ Japanese Subsidiary Borrower ”; and together with Parent Borrower and Swiss Subsidiary Borrower, each a “ Borrower ” and collectively, “ Borrowers ”), BANK OF AMERICA, N.A., as Administrative Agent (in such capacity, the “ Administrative Agent ”), each Tranche B-1 Dollar Term Lender (as defined below) and each Tranche B-1 Euro Term Lender (as defined below). Terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement (as defined below) unless otherwise defined herein.

W I T N E S S E T H :

WHEREAS, each Borrower, the Administrative Agent, the Guarantors from time to time party thereto and the Lenders from time to time party thereto have entered into a Second Amended and Restated Credit and Guaranty Agreement, dated as of October 24, 2012 (as amended, amended and restated, supplemented or otherwise modified prior to the date hereof, the “ Credit Agreement ”);

WHEREAS, pursuant to Section 10.5(g) of the Credit Agreement, Parent Borrower desires to create new classes of Tranche B-1 Dollar Term Loans and Tranche B-1 Euro Term Loans as Refinancing Term Loans pursuant to Section 2.24 of the Credit Agreement having identical terms with, having the same rights and obligations under the Credit Documents as and in the aggregate principal amounts as the Tranche B Dollar Term Loans and Tranche B Euro Term Loans, respectively, as set forth in the Credit Agreement and Credit Documents, except as set forth in this Amendment;

WHEREAS, each Term Lender that executes and delivers a consent to this Amendment substantially in the form of Exhibit A hereto (a “ Consent ”) shall be deemed, upon the Amendment No. 1 Dollar Term Loan Effective Date or Amendment No. 1 Euro Term Loan Effective Date, as applicable, to have exchanged the principal amount set forth on the signature page to such Lender’s Consent (or such lesser amount allocated to it by the Amendment No. 1 Arrangers) of its Tranche B Dollar Term Loans and Tranche B Euro Term Loans, as applicable, for Tranche B-1 Dollar Term Loans and Tranche B-1 Euro Term Loans, as applicable, and such Lender shall thereafter become a Tranche B-1 Dollar Term Lender and Tranche B-1 Euro Term Lender, as applicable; and

WHEREAS, each Person that executes and delivers a joinder to this Amendment substantially in the form of Exhibit B hereto (a “ Joinder ”) as an Additional Tranche B-1 Dollar Term Lender or Additional Tranche B-1 Euro Term Lender will make Tranche B-1 Dollar Term Loans or Tranche B-1 Euro Term Loans, as applicable, to Parent Borrower in the amount set forth on the signature page of such Person’s Joinder on the Amendment No. 1 Dollar Term Loan Effective Date and Amendment No. 1 Euro Term Loan Effective Date, respectively, the proceeds of which will be used by Parent Borrower to repay in full the aggregate outstanding principal amounts of Non-Exchanged Tranche B Dollar Term Loans and Non-Exchanged Tranche B Euro Term Loans;


NOW, THEREFORE, the parties hereto hereby agree as follows:

ARTICLE I

Amendments

Section 1.1. Amendments Relating to Tranche B-1 Dollar Term . Subject to the occurrence of the Amendment No. 1 Dollar Term Loan Effective Date:

(a) Section 1.1 of the Credit Agreement is hereby amended by inserting in appropriate alphabetical order the following new definitions:

Additional Tranche B-1 Dollar Term Lender ” means a Person with an Additional Tranche B-1 Dollar Term Loan Commitment to make Additional Tranche B-1 Dollar Term Loans to Parent Borrower on the Amendment No. 1 Dollar Term Loan Effective Date, which for the avoidance of doubt may be an existing Term Lender.

Additional Tranche B-1 Dollar Term Loan ” means a Loan that is made pursuant to Section 2.1(c)(i).

Additional Tranche B-1 Dollar Term Loan Commitment ” means, with respect to an Additional Tranche B-1 Dollar Term Lender, the commitment of such Additional Tranche B-1 Dollar Term Lender to make an Additional Tranche B-1 Dollar Term Loan on the Amendment No. 1 Dollar Term Loan Effective Date, in the amount set forth on the joinder agreement of such Additional Tranche B-1 Dollar Term Lender to Amendment No. 1.

Additional Tranche B-1 Term Lender ” means an Additional Tranche B-1 Dollar Term Lender or Additional Tranche B-1 Euro Term Lender, and which shall each constitute “Term Lenders” and “Lenders” under this Agreement as of the Amendment No. 1 Dollar Term Loan Effective Date and Amendment No.1 Euro Term Loan Effective Date, respectively.

Amendment No. 1 ” means Amendment No. 1 to this Agreement, dated as of February 6, 2013, among the Borrowers, the Administrative Agent, each Tranche B-1 Dollar Term Lender and each Tranche B-1 Euro Term Lender.

Amendment No. 1 Arrangers ” means Bank of America, N.A. and Goldman Sachs Lending Partners LLC, as joint lead arrangers and joint lead bookrunners in connection with Amendment No. 1.

Amendment No. 1 Dollar Term Loan Effective Date ” means February 6, 2013.

Exchanged Tranche B Dollar Term Loans ” means each Tranche B Dollar Term Loan (or portion thereof) as to which the Lender thereof has consented to exchange into a Tranche B-1 Dollar Term Loan and the Amendment No. 1 Arrangers have allocated into a Tranche B-1 Dollar Term Loan.

Non-Exchanged Tranche B Dollar Term Loan ” means each Tranche B Dollar Term Loan (or portion thereof) other than an Exchanged Tranche B Dollar Term Loan.

Repricing Transaction ” means the prepayment, refinancing, substitution or replacement of all or a portion of the Tranche B-1 Term Loans with the incurrence of Indebtedness in the form of loans (including any new or additional term loans under this Agreement (including Refinancing Term Loans), but excluding, for the avoidance of doubt, any notes, including notes

 

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permitted to be issued hereunder constituting Credit Agreement Refinancing Indebtedness) by Parent Borrower or any Subsidiary that is broadly marketed or syndicated to banks and other institutional investors in financings similar to the facilities provided for in this Agreement and is incurred for the primary purpose of prepaying or replacing the Tranche B-1 Term Loans with loans having an effective yield (with the comparative determinations to be made by Administrative Agent consistent with generally accepted financial practices, after giving effect to, among other factors, margin, interest rate floors, upfront or similar fees or original issue discount (with any such upfront fees or original issue discount being equated to interest rate assuming a 4-year life to maturity) shared with all providers of such financing, but excluding the effect of any arrangement, structuring, syndication or other fees payable in connection therewith that are not shared with all providers of such financing, and without taking into account any fluctuations in the Eurocurrency Rate (or comparable rate)) that is less than the effective yield (as determined by Administrative Agent on the same basis) of the Tranche B-1 Term Loans, including without limitation, as may be effected through any amendment to the terms of the Tranche B-1 Term Loans under this Agreement reducing the interest rate or effective yield of the Tranche B-1 Term Loans. Any determination by Administrative Agent as contemplated by the preceding sentence shall be conclusive and binding on all Lenders holding Tranche B-1 Term Loans.

Tranche B-1 Dollar Term Loan Commitment ” means, with respect to a Lender having Tranche B Dollar Term Loan Exposure, the agreement of such Lender to exchange the principal amount of its Tranche B Dollar Term Loans set forth on the signature page to such Lender’s Consent (or such lesser amount allocated to it by the Amendment No. 1 Arrangers) for an equal principal amount of Tranche B-1 Dollar Term Loans on the Amendment No. 1 Dollar Term Loan Effective Date.

Tranche B-1 Dollar Term Lender ” means an Additional Tranche B-1 Dollar Term Lender or a Lender with a Tranche B-1 Dollar Term Loan.

Tranche B-1 Dollar Term Loan ” means an Additional Tranche B-1 Dollar Term Loan or a Loan that is deemed made pursuant to Section 2.1(c)(i).

Tranche B-1 Term Loan Maturity Date ” means the earlier of (i) September 1, 2017, and (ii) the date on which all Tranche B-1 Term Loans shall become due and payable in full hereunder, whether by acceleration or otherwise.

(b) The definition of “Base Rate” in Section 1.1 of the Credit Agreement is hereby amended by deleting the last sentence thereof in its entirety and replacing it with the following:

“Notwithstanding the foregoing, in no event shall the Base Rate with respect to any Tranche B-1 Dollar Term Loan at any time be less than 2.00%.”

(c) The definition of “Eurocurrency Base Rate” in Section 1.1 of the Credit Agreement is hereby amended by deleting clause (ii) of the proviso in clause (a) thereof in its entirety and replacing it with the following:

“in no event shall the Eurocurrency Base Rate with respect to any Tranche B-1 Dollar Term Loan at any time be less than 1.00%”.

(d) All references to “Tranche B Dollar Term Loan,” “Tranche B Dollar Term Loan Commitment,” “Tranche B Dollar Term Loan Exposure” and “Tranche B Dollar Term Loan Note” in the Credit Documents shall be deemed to be replaced with “Tranche B-1 Dollar Term Loan,” “Tranche B-1

 

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Dollar Term Loan Commitment,” “Tranche B-1 Dollar Term Loan Exposure” and “Tranche B Dollar Term Loan Note,” respectively (unless the context otherwise requires, including, without limitation, with respect to the definitions of “Tranche B Dollar Term Loan,” “Tranche B Dollar Term Loan Commitment,” “Tranche B Dollar Term Loan Note,” Section 2.1 of the Credit Agreement and the Preliminary Statements to the Credit Agreement).

(e) All references to “Tranche B Term Loan Exposure,” “Tranche B Term Loan Maturity Date” and “Tranche B Term Loans” in the Credit Documents shall be deemed to be replaced with “Tranche B-1 Term Loan Exposure or Tranche B Term Loan Exposure, as applicable,” “Tranche B-1 Term Loan Maturity Date or Tranche B Term Loan Maturity Date, as applicable” and “Tranche B-1 Term Loans or Tranche B Term Loans, as applicable,” respectively (unless the context otherwise requires, including, without limitation, with respect to the definitions of “Tranche B Term Loan Exposure,” “Tranche B Term Loan Maturity Date” and “Tranche B Term Loans” and Section 2.6 of the Credit Agreement). From the Amendment No. 1 Dollar Term Loan Effective Date until immediately prior to the Amendment No. 1 Euro Term Loan Effective Date, the following definitions shall apply:

Tranche B-1 Term Loan Exposure ” means, with respect to any Lender, as of any date of determination, such Lender’s Tranche B-1 Dollar Term Loan Exposure.

Tranche B-1 Term Loans ” means the Tranche B-1 Dollar Term Loans.

(f) Section 2.1 of the Credit Agreement is hereby amended by adding the following paragraph (c) to such Section:

“(c) Tranche B-1 Dollar Term Loans .

(i) Subject to the terms and conditions hereof and of Amendment No. 1, each Lender having a Tranche B Dollar Term Loan Exposure severally agrees to exchange its Exchanged Tranche B Dollar Term Loans for a like principal amount of Tranche B-1 Dollar Term Loans on the Amendment No. 1 Dollar Term Loan Effective Date. All Tranche B-1 Dollar Term Loans made on the Amendment No. 1 Dollar Term Loan Effective Date by Lenders of Exchanged Tranche B Dollar Term Loans will have the Type of Loan and Interest Periods specified in the Funding Notice delivered in connection therewith. All accrued and unpaid interest on the Exchanged Tranche B Dollar Term Loans to, but not including, the Amendment No. 1 Dollar Term Loan Effective Date, shall be payable on the Amendment No. 1 Dollar Term Loan Effective Date, but no amounts under Section 2.18(c) shall be payable in connection with such exchange.

(ii) Subject to the terms and conditions hereof and of Amendment No. 1, each Additional Tranche B-1 Dollar Term Lender severally agrees to make an Additional Tranche B-1 Dollar Term Loan to Parent Borrower on the Amendment No. 1 Dollar Term Loan Effective Date in the principal amount equal to its Additional Tranche B-1 Dollar Term Loan Commitment on the Amendment No. 1 Dollar Term Loan Effective Date. All Additional Tranche B-1 Dollar Term Loans will have the Type of Loan and Interest Periods specified in the Funding Notice delivered in connection therewith.

(iii) The Tranche B-1 Dollar Term Loans shall have the same terms as the Tranche B Dollar Term Loans, as set forth in this Agreement and the

 

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Credit Documents before giving effect to Amendment No. 1, except as modified by Amendment No. 1; it being understood that the Tranche B-1 Dollar Term Loans (and all principal, interest and other amounts in respect thereof) will constitute “Obligations” under this Agreement and the other Credit Documents and shall have the same rights and obligations under this Agreement and the other Credit Documents as the Tranche B Dollar Term Loans prior to the Amendment No. 1 Dollar Term Loan Effective Date, except as modified by Amendment No. 1.”

(g) Section 2.6 of the Credit Agreement is hereby amended by adding the following at the end thereof:

“The proceeds of the Tranche B-1 Dollar Term Loans shall be used to refinance the Tranche B Dollar Term Loans pursuant to Section 2.14(i).”

(h) Section 2.8(a)(iii)(x) of the Credit Agreement is hereby amended and restated in its entirety as follows:

“(iii) (x) in the case of Tranche B-1 Dollar Term Loans:

 

  (1) if a Base Rate Loan, at the Base Rate plus 1.75% per annum; or

 

  (2) if a Eurocurrency Rate Loan, at the Eurocurrency Rate plus 2.75% per annum plus (in the case of a Eurocurrency Rate Loan of any Lender which is lent from a Lending Office in the United Kingdom or a Participating Member State) the Mandatory Cost.”

(i) Section 2.12 of the Credit Agreement is hereby amended and restated in its entirety as follows:

Scheduled Payments. (A) From and after the Amendment No. 1 Dollar Term Loan Effective Date, the principal amounts of the Tranche B-1 Dollar Term Loans shall be repaid in consecutive quarterly installments of $4,505,000 and (B) from and after the Amendment No. 1 Euro Term Loan Effective Date, the principal amounts of the Tranche B-1 Euro Term Loans shall be repaid in consecutive quarterly installments of €1,926,500 (each such quarterly installment described in clause (A) and this clause (B), an “ Installment ”), in each case, on the four quarterly scheduled Interest Payment Dates applicable to Base Rate Loans commencing March 29, 2013, with the remaining principal balance of the Tranche B-1 Term Loans payable on the Tranche B-1 Term Loan Maturity Date.

Notwithstanding the foregoing, (x) such Installments shall be reduced in connection with any voluntary or mandatory prepayments of the Tranche B-1 Term Loans (including any such payments (other than, for the avoidance of doubt, the First Restatement Transactions) prior to the Amendment No. 1 Dollar Term Loan Effective Date or Amendment No. 1 Euro Term Loan Effective Date, as applicable, in respect of the term loans that were refinanced by the Tranche B Term Loans or the Tranche B-1 Term Loans) in accordance with Sections 2.13, 2.14 (other than mandatory prepayments pursuant to Section 2.14(h), which shall not reduce such Installments but shall reduce the remaining principal balance payable on the Tranche B-1 Term Loan Maturity Date) and 2.15, as applicable and (y) the Tranche B-1 Term Loans, together with all other amounts owed hereunder with respect thereto, shall, in any event, be paid in full no later than the Tranche B-1 Term Loan Maturity Date.”

 

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(j) Section 2.13 of the Credit Agreement is hereby amended by adding the following new clause (d) after clause (c) thereof:

“(d) In the event that, on or prior to the six month anniversary of the Amendment No. 1 Dollar Term Loan Effective Date, Parent Borrower (x) makes a prepayment (whether voluntary or mandatory) of any Tranche B-1 Term Loans constituting a Repricing Transaction, or (y) effects any amendment to the terms of the Tranche B-1 Term Loans under this Agreement that constitutes a Repricing Transaction, Parent Borrower shall pay to Administrative Agent, for the ratable account of each of the applicable Lenders, (I) in the case of clause (x), a prepayment premium of 1.00% of the aggregate principal amount of the Tranche B-1 Term Loans so prepaid and (II) in the case of clause (y), a fee equal to 1.00% of the aggregate principal amount of the Tranche B-1 Term Loans outstanding immediately prior to such amendment that are subject to a Repricing Transaction. Such amounts shall be due and payable on the date of effectiveness of such Repricing Transaction.”

(k) Section 9.10(a) of the Credit Agreement is hereby amended by adding the following new clause (iv) after clause (iii) thereof:

“(iii) Each Lender, by delivering its signature page to Amendment No. 1, whether in the form of a Consent or a Joinder (each as defined in Amendment No. 1) and funding its Tranche B-1 Term Loan on the Amendment No. 1 Dollar Term Loan Effective Date or Amendment No. 1 Euro Term Loan Effective Date, as applicable, or by the funding of any New Term Loans, New Revolving Loans, Permitted Replacement Revolving Loans or Loans of any Extension Series, as the case may be, shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit Document and each other document required to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the Amendment No. 1 Dollar Term Loan Effective Date or Amendment No. 1 Euro Term Loan Effective Date, as applicable, or as of the date of funding of such New Revolving Loans, Permitted Replacement Revolving Loans, New Term Loans or Loans of any Extension Series.”

Section 1.2. Amendments Relating to Tranche B-1 Euro Term Loans . Subject to the occurrence of the Amendment No. 1 Euro Term Loan Effective Date:

(a) Section 1.1 of the Credit Agreement is hereby amended by inserting in appropriate alphabetical order the following new definitions:

Additional Tranche B-1 Euro Term Lender ” means a Person with an Additional Tranche B-1 Euro Term Loan Commitment to make Additional Tranche B-1 Euro Term Loans to Parent Borrower on the Amendment No. 1 Euro Term Loan Effective Date, which for the avoidance of doubt may be an existing Term Lender.

Additional Tranche B-1 Euro Term Loan ” means a Loan that is made pursuant to Section 2.1(d)(ii).

Additional Tranche B-1 Euro Term Loan Commitment ” means, with respect to an Additional Tranche B-1 Euro Term Lender, the commitment of such Additional Tranche B-1 Euro Term Lender to make an Additional Tranche B-1 Euro Term Loan on the Amendment No. 1 Euro Term Loan Effective Date, in the amount set forth on the joinder agreement of such Additional Tranche B-1 Euro Term Lender to Amendment No. 1.

 

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Amendment No. 1 Euro Term Loan Effective Date ” means February 8, 2013

Exchanged Tranche B Euro Term Loans ” means each Tranche B Euro Term Loan (or portion thereof) as to which the Lender thereof has consented to exchange into a Tranche B-1 Euro Term Loan and the Amendment No. 1 Arrangers have allocated into a Tranche B-1 Euro Term Loan.

Non-Exchanged Tranche B Euro Term Loan ” means each Tranche B Euro Term Loan (or portion thereof) other than an Exchanged Tranche B Euro Term Loan.

Tranche B-1 Euro Term Loan Commitment ” means, with respect to a Lender having Tranche B Euro Term Loan Exposure, the agreement of such Lender to exchange the principal amount of its Tranche B Euro Term Loans set forth on the signature page to such Lender’s Consent (or such lesser amount allocated to it by the Amendment No. 1 Arrangers) for an equal principal amount of Tranche B-1 Euro Term Loans on the Amendment No. 1 Euro Term Loan Effective Date.

Tranche B-1 Euro Term Lender ” means an Additional Tranche B-1 Euro Term Lender or a Lender with a Tranche B-1 Euro Term Loan.

Tranche B-1 Euro Term Loan ” means an Additional Tranche B-1 Euro Term Loan or a Loan that is deemed made pursuant to Section 2.1(d)(i).

(b) The definition of “Eurocurrency Base Rate” in Section 1.1 of the Credit Agreement is hereby amended by deleting clause (i) of the proviso in clause (a) thereof in its entirety and replacing it with the following:

“in no event shall the Eurocurrency Base Rate with respect to any Tranche B-1 Euro Term Loan at any time be less than 1.25%”.

(c) All references to “Tranche B Euro Term Loan,” “Tranche B Euro Term Loan Commitment,” “Tranche B Euro Term Loan Exposure” and “Tranche B Euro Term Loan Note” in the Credit Documents shall be deemed to be replaced with “Tranche B-1 Euro Term Loan,” “Tranche B-1 Euro Term Loan Commitment,” “Tranche B-1 Euro Term Loan Exposure” and “Tranche B Euro Term Loan Note,” respectively (unless the context otherwise requires, including, without limitation, with respect to the definitions of “Tranche B Euro Term Loan,” “Tranche B Euro Term Loan Commitment,” “Tranche B Euro Term Loan Note,” Section 2.1 of the Credit Agreement and the Preliminary Statements to the Credit Agreement).

(d) All references to “Tranche B-1 Term Loan Exposure or Tranche B Term Loan Exposure, as applicable,” “Tranche B-1 Term Loan Maturity Date or Tranche B Term Loan Maturity Date, as applicable” and “Tranche B-1 Term Loans or Tranche B Term Loans, as applicable,” respectively in the Credit Documents shall be deemed to be replaced with “Tranche B-1 Term Loan Exposure,” “Tranche B-1 Term Loan Maturity Date” and “Tranche B-1 Term Loans”.

(e) Section 2.1 of the Credit Agreement is hereby amended by adding the following paragraph (d) to such Section:

“(d) Tranche B-1 Euro Term Loans .

 

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(i) Subject to the terms and conditions hereof and of Amendment No. 1, each Lender having a Tranche B Euro Term Loan Exposure severally agrees to exchange its Exchanged Tranche B Euro Term Loans for a like principal amount of Tranche B-1 Euro Term Loans on the Amendment No. 1 Euro Term Loan Effective Date. All Tranche B-1 Euro Term Loans made on the Amendment No. 1 Euro Term Loan Effective Date by Lenders of Exchanged Tranche B Euro Term Loans will have the Type of Loan and Interest Periods specified in the Funding Notice delivered in connection therewith. All accrued and unpaid interest on the Exchanged Tranche B Euro Term Loans to, but not including, the Amendment No. 1 Euro Term Loan Effective Date, shall be payable on the Amendment No.1 Euro Term Loan Effective Date, but no amounts under Section 2.18(c) shall be payable in connection with such exchange.

(ii) Subject to the terms and conditions hereof and of Amendment No. 1, each Additional Tranche B-1 Euro Term Lender severally agrees to make an Additional Tranche B-1 Euro Term Loan to Parent Borrower on the Amendment No. 1 Euro Term Loan Effective Date in the principal amount equal to its Additional Tranche B-1 Euro Term Loan Commitment on the Amendment No. 1 Euro Term Loan Effective Date. All Additional Tranche B-1 Euro Term Loans will have the Type of Loan and Interest Periods specified in the Funding Notice delivered in connection therewith.

(iii) The Tranche B-1 Euro Term Loans shall have the same terms as the Tranche B Euro Term Loans as set forth in this Agreement and the Credit Documents before giving effect to Amendment No. 1, except as modified by Amendment No. 1; it being understood that the Tranche B-1 Euro Term Loans (and all principal, interest and other amounts in respect thereof) will constitute “Obligations” under this Agreement and the other Credit Documents and shall have the same rights and obligations under this Agreement and the other Credit Documents as the Tranche B Euro Term Loans prior to the Amendment No. 1 Euro Term Loan Effective Date, except as modified by Amendment No. 1.”

(f) Section 2.6 of the Credit Agreement is hereby amended by adding the following at the end thereof:

“The proceeds of the Tranche B-1 Euro Term Loans shall be used to refinance the Tranche B Euro Term Loans pursuant to Section 2.14(i).”

(g) Section 2.8(a)(iii)(y) of the Credit Agreement is hereby amended and restated in its entirety as follows:

“(y) in the case of Tranche B-1 Euro Term Loans, at the Eurocurrency Rate plus 3.00% per annum plus (in the case of a Eurocurrency Rate Loan of any Lender which is lent from a Lending Office in the United Kingdom or a Participating Member State) the Mandatory Cost.”

 

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ARTICLE II

Conditions to Effectiveness

Section 2.1. Tranche B-1 Dollar Term Loan Effectiveness . This Amendment (other than the amendments set forth in Section 1.2) shall become effective on the date (the “ Amendment No. 1 Dollar Term Loan Effective Date ”) on which:

(a) The Administrative Agent (or its counsel) shall have received from (i) each Tranche B-1 Dollar Term Lender with a Tranche B-1 Dollar Term Loan Commitment, (ii) each Tranche B-1 Euro Term Lender with a Tranche B-1 Euro Term Loan Commitment, (iii) the Administrative Agent and (iv) each Borrower, (x) a counterpart of this Amendment signed on behalf of such party, (y) a Consent or (z) written evidence satisfactory to the Administrative Agent (which may include telecopy or other electronic transmission of a signed signature page of this Amendment or a Consent) that such party has signed a counterpart of this Amendment or a Consent. The Administrative Agent shall have received from each Additional Tranche B-1 Dollar Term Lender and each Additional Tranche B-1 Euro Term Lender an executed counterpart to a Joinder. The Administrative Agent shall have received a Guarantor Consent and Reaffirmation in the form of Annex A hereto duly executed and delivered by each U.S. Guarantor.

(b) The Administrative Agent shall have received, on behalf of itself, the Collateral Agent, the Tranche B-1 Dollar Term Lenders and the Tranche B-1 Euro Term Lenders, an opinion of (i) Ropes & Gray LLP, counsel for the Credit Parties, dated as of the Amendment No. 1 Dollar Term Loan Effective Date, (ii) DLA Piper LLP, Illinois counsel for the Credit Parties, dated as of the Amendment No. 1 Dollar Term Loan Effective Date, (iii) Pepper Hamilton LLP, Pennsylvania counsel to the Credit Parties, dated as of the Amendment No. 1 Dollar Term Loan Effective Date, and (iv) opinions of counsel to the Credit Parties, dated as of the Amendment No. 1 Dollar Term Loan Effective Date, in such other jurisdictions as the Administrative Agent shall reasonably request prior to the Amendment No. 1 Dollar Term Loan Effective Date, in each case in form and substance reasonably satisfactory to the Administrative Agent.

(c) The Administrative Agent shall have received (i) copies of each Organizational Document executed and delivered by each Credit Party that is a party to this Amendment or a Guarantor Consent and Reaffirmation, as applicable, and, to the extent applicable, certified as of a recent date by the appropriate governmental official, each dated the Amendment No. 1 Dollar Term Loan Effective Date or a recent date prior thereto; (ii) signature and incumbency certificates of the officers of such Person executing this Amendment or a Guarantor Consent and Reaffirmation to which it is a party; (iii) resolutions of the Board of Directors or similar governing body of each Credit Party that is a party to this Amendment or a Guarantor Consent and Reaffirmation approving and authorizing the execution, delivery and performance of this Amendment and the other Credit Documents to which it is a party, and other than with respect to Swiss Subsidiary Borrower, certified as of the Amendment No. 1 Dollar Term Loan Effective Date by its secretary or an assistant secretary or, with respect to a Credit Party in Japan, the representative director as being in full force and effect without modification or amendment; (iv) resolutions of the General Meeting of Shareholders of the Swiss Subsidiary Borrower approving and authorizing the execution, delivery and performance of this Amendment and the other Credit Documents to which it is a party and (v) if available, a good standing certificate from the applicable Governmental Authority of Parent Borrower’s and each U.S. Guarantor’s jurisdiction of incorporation, organization or formation, each dated a recent date prior to the Amendment No. 1 Dollar Term Loan Effective Date.

 

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(d) The Amendment No. 1 Arrangers shall have been paid all fees payable to them pursuant to that certain engagement letter, dated as of January 28, 2013, among Parent Borrower and the Amendment No. 1 Arrangers and Parent Borrower shall have paid, to the extent invoiced at least two Business Days prior to the Amendment No. 1 Dollar Term Loan Effective Date, all out-of-pocket expenses required to be paid by Parent Borrower under the Credit Agreement in connection with this Amendment, including the reasonable fees and expenses of Cahill Gordon & Reindel LLP.

(e) The Administrative Agent shall have received, prior to the effectiveness of this Amendment, all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) that has been requested in writing at least 3 Business Days prior to the Amendment No. 1 Dollar Term Loan Effective Date.

(f) The aggregate principal amount of the Exchanged Tranche B Dollar Term Loans plus the aggregate principal amount of the Additional Tranche B-1 Dollar Term Loan Commitments shall equal the aggregate principal amount of the outstanding Tranche B Dollar Term Loans immediately prior to the Amendment No. 1 Dollar Term Loan Effective Date.

(g) The Administrative Agent shall have received a certificate from an Authorized Officer of Parent Borrower stating that on the Amendment No. 1 Dollar Term Loan Effective Date, the conditions set forth in Section 3.2(a) of the Credit Agreement have been satisfied.

The Administrative Agent shall promptly notify Parent Borrower and the Lenders of the Amendment No. 1 Dollar Term Loan Effective Date.

Section 2.2. Tranche B-1 Euro Term Loan Effectiveness . The amendments set forth in Section 1.2 shall become effective on the date (the “ Amendment No. 1 Euro Term Loan Effective Date ”) on which the aggregate principal amount of the Exchanged Tranche B Euro Term Loans plus the aggregate principal amount of the Additional Tranche B-1 Euro Term Loan Commitments shall equal the aggregate principal amount of the outstanding Tranche B Euro Term Loans immediately prior to the effectiveness of this Amendment, which shall be the second Business Day after the Amendment No. 1 Dollar Term Loan Effective Date.

The Administrative Agent shall promptly notify Parent Borrower and the Lenders of the Amendment No. 1 Euro Term Loan Effective Date.

ARTICLE III

Representation and Warranties .

Each Borrower represents and warrants as follows as of the date hereof:

(a) The execution, delivery and performance of the Amendment have been duly authorized by all necessary action on the part of each Borrower. The execution, delivery and performance by each Borrower of this Amendment does not and will not (a) violate (i) any provision of any law or any

 

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governmental rule or regulation applicable to Holdings or any of its Subsidiaries in any material respect, (ii) any of the Organizational Documents of Holdings or any of its Subsidiaries, or (iii) any material order, judgment or decree of any court or other agency of government binding on Holdings or any of its Subsidiaries; (b) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of Holdings or any of its Subsidiaries except to the extent such conflict, breach or default would not reasonably be expected to have a Material Adverse Effect; (c) result in or require the creation or imposition of any Lien upon any of the properties or assets of Holdings or any of its Subsidiaries (other than any Permitted Lien); or (d) require any approval of stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of Holdings or any of its Subsidiaries, except for such approvals or consents which will be obtained on or before the Amendment No. 1 Dollar Term Loan Effective Date and except for any such approvals or consents the failure of which to obtain will not have a Material Adverse Effect.

(b) This Amendment has been duly executed and delivered by each Borrower and constitutes a legally valid and binding obligation of such Borrower, enforceable against such Borrower in accordance with its terms, except as may be limited by Debtor Relief Laws or by equitable principles and principles of good faith and fair dealing relating to enforceability.

(c) Upon the effectiveness of this Amendment and both before and immediately after giving effect to this Amendment and the making of the Term Loans as contemplated herein, no Default or Event of Default exists.

(d) Each of the representations and warranties of each Borrower and each other Credit Party contained in Section 4 of the Credit Agreement and in the other Credit Documents, in each case, is true and correct in all material respects on and as of the date hereof, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date; provided that, in each case, such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof.

ARTICLE IV

Miscellaneous

Section 4.1. Reference to and Effect on the Credit Agreement and the Credit Documents .

(a) On and after the Amendment No. 1 Dollar Term Loan Effective Date and the Amendment No.1 Euro Term Loan Effective Date, as applicable, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement, as amended by the then effective provisions of this Amendment.

(b) The Credit Agreement and each of the other Credit Documents, as specifically amended by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. Without limiting the generality of the foregoing, the Collateral Documents and all of the Collateral described therein do and shall continue to secure the payment of all Obligations of the Credit Parties under the Credit Documents, in each case, as amended by this Amendment.

 

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(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Credit Documents, nor constitute a waiver of any provision of any of the Credit Documents. On and after the effectiveness of this Amendment, this Amendment shall for all purposes constitute a Credit Document.

Section 4.2. Liens Unimpaired . After giving effect to this Amendment, neither the modification of the Credit Agreement effected pursuant to this Amendment nor the execution, delivery, performance or effectiveness of this Amendment:

(a) impairs the validity, effectiveness or priority of the Liens granted pursuant to any Credit Document, and such Liens continue unimpaired to secure repayment of all Obligations, whether heretofore or hereafter incurred (except with respect to the pledge of the Equity Interests of IMS Japan K.K., with respect to which the documents set forth on Schedule I hereto shall be executed following the Amendment No. 1 Dollar Term Loan Effective Date); or

(b) except as shall have been made or taken on or prior to the Amendment No. 1 Dollar Term Loan Effective Date and except with respect to the execution of the documents set forth on Schedule I hereto and the actions set forth therein, requires that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens.

Section 4.3. Execution in Counterparts . This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute one and the same instrument. Delivery by facsimile or electronic transmission of an executed counterpart of a signature page to this Amendment shall be effective as delivery of an original executed counterpart of this Amendment.

Section 4.4. Severability . In case any provision in or obligation of this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

Section 4.5. Waiver . Each Lender delivering a Consent to this Amendment hereby irrevocably waives its right to receive any payments under Section 2.18(c) of the Credit Agreement as a result of its Tranche B Dollar Term Loans and Tranche B Euro Term Loans, as applicable, being repaid on the Amendment No. 1 Dollar Term Loan Effective Date and Amendment No. 1 Euro Term Loan Effective Date, respectively, and not on the last day of the Interest Period applicable thereto.

Section 4.6. Successors . The terms of this Amendment shall be binding upon, and shall inure for the benefit of, the parties hereto and their respective successors and assigns.

Section 4.7. Governing Law; Jurisdiction . This Amendment shall be governed by, and construed and enforced in accordance with, the laws of the State of New York. For the avoidance of doubt, Section 10.15 of the Credit Agreement shall apply to this Amendment.

Section 4.8. Lender Signatures . Each Lender that signs a signature page to this Amendment (including, for the avoidance of doubt, by executing a Consent or Joinder) shall be deemed to have approved this Amendment No. 1. Each Lender signatory to this Amendment No. 1 agrees that such Lender shall not be entitled to receive a copy of any other Lender’s signature page to this Amendment No. 1, but agrees that a copy of such signature page may be delivered to the Borrowers and the Administrative Agent.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their respective duly authorized officers as of the date first above written.

 

IMS HEALTH INCORPORATED,

as Parent Borrower

By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Vice President and Treasurer
IMS JAPAN K.K.,

as Japanese Subsidiary Borrower

By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Attorney-in-fact
IMS AG,

as Swiss Subsidiary Borrower

By:  

/s/ Jeffrey J. Ford

  Name:   Jeffrey J. Ford
  Title:   Attorney-in-fact
By:  

/s/ Margaret F. Cupp

  Name:   Margaret F. Cupp
  Title:   Attorney-in-fact

[Signature Page to Amendment No. 1 to Credit Agreement]


BANK OF AMERICA, N.A.,

as Administrative Agent

By:  

/s/ Kevin L. Ahart

  Name:   Kevin L. Ahart
  Title:   Vice President

[Signature Page to Amendment No. 1 to Credit Agreement]

 


Schedule I

to Amendment

1. Share Pledge Agreement, among IMS Health Incorporated, the Secured Parties and Bank of America, N.A., covering the pledge of 100% of the voting Equity Interests of IMS Japan K.K. and delivery to Bank of America, N.A. of the share certificates evidencing the Equity Interests of IMS Japan K.K.

 

 

 

 

 

 

Schedule I-1


EXHIBIT A

CONSENT TO AMENDMENT NO. 1

CONSENT (this “ Consent ”) to Amendment No. 1, dated as of February 6, 2013 (the “ Amendment ”) by and among IMS HEALTH INCORPORATED, a Delaware corporation (“ Parent Borrower ”), IMS AG, a Swiss corporation and a subsidiary of Parent Borrower (“ Swiss Subsidiary Borrower ”), IMS JAPAN K.K., a Japanese stock corporation ( kabushiki kaisha ) and a subsidiary of Parent Borrower (“ Japanese Subsidiary Borrower ”; and together with Parent Borrower and Swiss Subsidiary Borrower, each a “ Borrower ” and collectively, “ Borrowers ”), BANK OF AMERICA, N.A., as Administrative Agent (in such capacity, the “ Administrative Agent ”), each Tranche B-1 Dollar Term Lender (as defined therein) and each Tranche B-1 Euro Term Lender (as defined therein) to the Second Amended and Restated Credit and Guaranty Agreement, dated as of October 24, 2012, among the Borrowers, the Guarantors (as defined therein) from time to time party thereto, the Administrative Agent and each other lender from time to time party thereto (the “ Credit Agreement ”). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Amendment.

Lender with Tranche B Dollar Term Loan Exposure

The undersigned Lender with Tranche B Dollar Term Loan Exposure hereby irrevocably and unconditionally approves the Amendment and consents as follows:

Cashless Settlement Option :

 

  ¨ to exchange 100% of the outstanding principal amount of the Tranche B Dollar Term Loan held by such Lender (or such lesser amount allocated to such Lender by the Amendment No. 1 Arrangers) for a Tranche B-1 Dollar Term Loan in a like principal amount.

Lender with Tranche B Euro Term Loan Exposure

The undersigned Lender with Tranche B Euro Term Loan Exposure hereby irrevocably and unconditionally approves the Amendment and consents as follows:

Cashless Settlement Option :

 

  ¨ to exchange 100% of the outstanding principal amount of the Tranche B Euro Term Loan held by such Lender (or such lesser amount allocated to such Lender by the Amendment No. 1 Arrangers) for a Tranche B-1 Euro Term Loan in a like principal amount.

 

Date: January     , 2013

 

  ,
as a Lender (type name of the legal entity)  
By:  

 

  Name:  
  Title:  

 

SIGNATURE PAGES TO CONSENT TO AMENDMENT NO. 1

TO CREDIT AGREEMENT OMITTED DUE TO VOLUMINOUS NATURE


If a second signature is necessary:
By:  

 

  Name:
  Title:

 

SIGNATURE PAGES TO CONSENT TO AMENDMENT NO. 1

TO CREDIT AGREEMENT OMITTED DUE TO VOLUMINOUS NATURE


EXHIBIT B

JOINDER AGREEMENT

JOINDER AGREEMENT, dated as of February 6, 2013 (this “ Agreement ”), by and among [ADDITIONAL TERM LENDER] (each, an “ Additional Tranche B-1 Dollar Term Lender , or Additional Tranche B-1 Euro Term Lender ,” as applicable, and, collectively, the “ Additional Term Lenders ”), IMS HEALTH INCORPORATED, a Delaware corporation (“ Parent Borrower ”), BANK OF AMERICA, N.A., as Administrative Agent (in such capacity, the “ Administrative Agent ”).

RECITALS:

WHEREAS, reference is hereby made to the Second Amended and Restated Credit and Guaranty Agreement, dated as of October 24, 2012 (as further amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “ Credit Agreement ”), among IMS HEALTH INCORPORATED, a Delaware corporation, IMS AG, a Swiss corporation and a subsidiary of Parent Borrower, IMS JAPAN K.K., a Japanese stock corporation ( kabushiki kaisha ) and a subsidiary of Parent Borrower, the Guarantors (as defined therein) from time to time party thereto, BANK OF AMERICA, N.A., as Administrative Agent, and each lender from time to time party thereto (capitalized terms used but not defined herein having the meaning provided in the Credit Agreement);

WHEREAS, subject to the terms and conditions of the Credit Agreement, Parent Borrower may establish Additional Tranche B-1 Dollar Term Loan Commitments and Additional Tranche B-1 Euro Term Loan Commitments with Additional Tranche B-1 Dollar Term Lenders and Additional Tranche B-1 Euro Term Lenders, respectively; and

WHEREAS, subject to the terms and conditions of the Credit Agreement, Additional Tranche B-1 Dollar Term Lenders and Additional Tranche B-1 Euro Term Lenders shall become Lenders pursuant to one or more Joinder Agreements;

NOW, THEREFORE, in consideration of the premises and agreements, provisions and covenants herein contained, the parties hereto agree as follows:

Each Additional Tranche B-1 Dollar Term Lender and Additional Tranche B-1 Euro Term Lender hereby irrevocably and unconditionally approves Amendment No. 1 to the Credit Agreement and agrees to provide the respective Additional Tranche B-1 Dollar Term Loan Commitment and Additional Tranche B-1 Euro Term Loan Commitment set forth on its signature page hereto pursuant to and in accordance with Section 2.1(c)(ii) of the Credit Agreement and Section 2.1(d)(ii) of the Credit Agreement, respectively. The Additional Tranche B-1 Dollar Term Loan Commitments and Additional Tranche B-1 Euro Term Loan Commitments provided pursuant to this Agreement shall be subject to all of the terms in the Credit Agreement and to the conditions set forth in the Credit Agreement, and shall be entitled to all the benefits afforded by the Credit Agreement and the other Credit Documents, and shall, without limiting the foregoing, benefit equally and ratably from the Guarantees and security interests created by the Collateral Documents.

Each Additional Tranche B-1 Dollar Term Lender and Additional Tranche B-1 Euro Term Lender and the Administrative Agent acknowledge and agree that the Additional Tranche B-1 Dollar Term Loan Commitments and Additional Tranche B-1 Euro Term Loan Commitments provided pursuant to this Agreement shall constitute Additional Tranche B-1 Dollar Term Loan Commitments and Additional Tranche B-1 Euro Term Loan Commitments, respectively, for all purposes of the Credit Agreement and the other applicable Credit Documents. Each Additional Tranche B-1 Dollar Term Lender and Additional Tranche B-1 Euro Term Lender hereby agrees to make Additional Tranche B-1


Dollar Term Loans and Additional Tranche B-1 Euro Term Loans, respectively, to Parent Borrower in an amount equal to its respective Additional Tranche B-1 Dollar Term Loan Commitment and Additional Tranche B-1 Euro Term Loan Commitment on the Amendment No. 1 Dollar Term Loan Effective Date and Amendment No.1 Euro Term Loan Effective Date, respectively, in accordance with Section 2.1(c)(ii) or Section 2.1(d)(ii), respectively, of the Credit Agreement.

Each Additional Term Lender (i) confirms that it has received a copy of the Credit Agreement and the other Credit Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement; (ii) agrees that it will, independently and without reliance upon the Administrative Agent, the Amendment No. 1 Arrangers or any other Additional Term Lender or any other Lender or Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iii) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement and the other Credit Documents as are delegated to the Administrative Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; and (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.

Upon (i) the execution of a counterpart of this Agreement by each Additional Tranche B-1 Dollar Term Lender and Additional Tranche B-1 Euro Term Lender, the Administrative Agent and Parent Borrower and (ii) the delivery to the Administrative Agent of a fully executed counterpart (including by way of telecopy or other electronic transmission) hereof, each of the undersigned Additional Tranche B-1 Dollar Term Lender and Additional Tranche B-1 Euro Term Lender shall become Lenders under the Credit Agreement and shall have the respective Additional Tranche B-1 Dollar Term Loan Commitments and Additional Tranche B-1 Euro Term Loan Commitments set forth on its signature page hereto, effective as of the Amendment No. 1 Dollar Term Loan Effective Date and Amendment No.1 Euro Term Loan Effective Date, respectively.

For each Additional Term Lender, delivered herewith to the Administrative Agent are such forms, certificates or other evidence with respect to United States federal income tax withholding matters as such Additional Term Lender may be required to deliver to the Administrative Agent pursuant to Section 10.6 of the Credit Agreement.

This Agreement may not be amended, modified or waived except by an instrument or instruments in writing signed and delivered on behalf of each of the parties hereto.

This Agreement, the Credit Agreement and the other Credit Documents constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and verbal, among the parties or any of them with respect to the subject matter hereof.

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as would be enforceable.

 

-2-


This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.

 

-3-


IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Joinder Agreement as of February     , 2013.

 

[NAME OF ADDITIONAL TRANCHE B-1 DOLLAR TERM LENDER]
By:  

 

  Name:
  Title:
If a second signature is necessary:
By:  

 

  Name:
  Title:
Additional Tranche B-1 Dollar Term Loan Commitments:
$                                                                                                       
[NAME OF ADDITIONAL TRANCHE B-1 EURO TERM LENDER]
By:  

 

  Name:
  Title:
If a second signature is necessary:
By:  

 

  Name:
  Title:
Additional Tranche B-1 Euro Term Loan Commitments:
$                                                                                                       

[Signature Page to Joinder Agreement]


IMS HEALTH INCORPORATED,
as Parent Borrower
By:  

 

  Name:   Jeffrey J. Ford
  Title:   Vice President and Treasurer


Accepted:

BANK OF AMERICA, N.A.

as Administrative Agent

By:  

 

  Name:
  Title:


ANNEX A

GUARANTOR CONSENT AND REAFFIRMATION

February 6, 2013

Reference is made to (a) the Second Amended and Restated Credit and Guaranty Agreement dated as of October 24, 2012 (as amended, supplemented or otherwise modified prior to the date hereof, the “ Credit Agreement ”), among IMS Health Incorporated, a Delaware corporation (“ Parent Borrower ”), IMS AG, a Swiss corporation and a subsidiary of Parent Borrower (“ Swiss Subsidiary Borrower ”), IMS Japan K.K., a Japanese stock corporation ( kabushiki kaisha ) and a subsidiary of Parent Borrower (“ Japanese Subsidiary Borrower ”; and together with Parent Borrower and Swiss Subsidiary Borrower, each a “ Borrower ” and collectively, “ Borrowers ”), certain subsidiaries of Parent Borrower, as Guarantors, the Lenders party thereto from time to time, Goldman Sachs Lending Partners LLC, as Syndication Agent, Bank of America, N.A., as Administrative Agent (in such capacity, the “ Administrative Agent ”) and as Collateral Agent (in such capacity, the “ Collateral Agent ”), and each of Barclays Capital, the investment banking division of Barclays Bank PLC, HSBC Securities (USA) Inc. and RBC Capital Markets, as Co-Documentation Agents, and (b) Amendment No. 1 to Second Amended and Restated Credit and Guaranty Agreement, dated as of February 6, 2013 (the “ Amendment ”), attached as Exhibit A hereto. Capitalized terms used but not otherwise defined in this Guarantor Consent and Reaffirmation (this “ Consent ”) are used with the meanings attributed thereto in the Amendment.

Each U.S. Guarantor hereby consents to the execution, delivery and performance of the Amendment, including the effectiveness of the Amendment and the making of the loans thereunder, and agrees that each reference to the Credit Agreement in the Credit Documents shall, on and after the Amendment No. 1 Dollar Term Loan Effective Date and the Amendment No.1 Euro Term Loan Effective Date, as applicable, be deemed to be a reference to the Credit Agreement after giving effect to the then effective provisions of this Amendment.

Each U.S. Guarantor hereby acknowledges and agrees that, after giving effect to the Amendment, all of its respective obligations and liabilities under the Credit Documents to which it is a party, as such obligations and liabilities have been amended by the Amendment, are reaffirmed, and remain in full force and effect.

After giving effect to the Amendment, each U.S. Guarantor reaffirms each Lien granted by it to the Collateral Agent for the benefit of the Secured Parties under each of the Credit Documents to which it is a party, which Liens shall continue in full force and effect during the term of the Credit Agreement as amended by the Amendment, and shall continue to secure the Obligations (after giving effect to the Amendment), in each case, on and subject to the terms and conditions set forth in the Credit Agreement and the other Credit Documents after giving effect to the Amendment.

Nothing in this Consent shall create or otherwise give rise to any right to consent on the part of the Guarantors to the extent not required by the express terms of the Credit Documents.


This Consent is a Credit Document and shall be governed by, and construed and enforced in accordance with, the laws of the State of New York.


IN WITNESS WHEREOF, the parties hereto have duly executed this Consent as of the date first set forth above.

 

IMS HEALTH INCORPORATED,
as Parent Borrower
By:  

 

  Name:   Jeffrey J. Ford
  Title:   Vice President and Treasurer
HEALTHCARE TECHNOLOGY INTERMEDIATE HOLDINGS, INC., as Holdings
By:  

 

  Name:   Jeffrey J. Ford
  Title:   Vice President and Treasurer

 

[Signature Page to Guarantor Consent and Reaffirmation]


ARSENAL HOLDING COMPANY
ARSENAL HOLDING (II) COMPANY
DATA NICHE ASSOCIATES, INC.
IMS HEALTH FINANCE, INC.
IMS HEALTH HOLDING CORPORATION
IMS HEALTH INDIA HOLDING CORPORATION
IMS HEALTH INVESTING CORPORATION
IMS HEALTH INVESTMENTS, INC.
IMS HEALTH PURCHASING, INC.
IMS HEALTH TRADING CORPORATION
IMS HOLDING INC.
IMS SERVICES, LLC
IMS TRADING MANAGEMENT, INC.
RX INDIA CORPORATION
TTC ACQUISITION CORPORATION
VALUEMEDICS RESEARCH, LLC, as Guarantors
By:  

 

  Name:   Jeffrey J. Ford
  Title:   President

 

[Signature Page to Guarantor Consent and Reaffirmation]


IMS CONTRACTING & COMPLIANCE, INC.

IMS GOVERNMENT SOLUTIONS, INC.

IMS HEALTH TRANSPORTATION SERVICES CORPORATION

IMS SOFTWARE SERVICES LTD.

MED-VANTAGE, INC.

PHARMETRICS, INC., as Guarantors

By:  

 

  Name:   Jeffrey J. Ford
  Title:   Treasurer

 

[Signature Page to Guarantor Consent and Reaffirmation]


IMS HEALTH LICENSING ASSOCIATES, L.L.C., as Guarantor
By:  

 

  Name:   Maryanne Piorek
  Title:   Responsible Officer

 

[Signature Page to Guarantor Consent and Reaffirmation]


COORDINATED MANAGEMENT HOLDINGS, L.L.C.

COORDINATED MANAGEMENT SYSTEMS, INC.

MARKET RESEARCH MANAGEMENT, INC.

SPARTAN LEASING CORPORATION, as Guarantors

By:  

 

  Name:   Margaret F. Cupp
  Title:   President

 

[Signature Page to Guarantor Consent and Reaffirmation]


IMS CHINAMETRIK INCORPORATED, as Guarantor
By:  

 

  Name:   Margaret F. Cupp
  Title:   Vice President

 

[Signature Page to Guarantor Consent and Reaffirmation]


INTERCONTINENTAL MEDICAL STATISTICS INTERNATIONAL, LTD., as Guarantor
By:  

 

  Name:   Jeffrey J. Ford
  Title:   Secretary

 

[Signature Page to Guarantor Consent and Reaffirmation]


ENTERPRISE ASSOCIATES L.L.C., as Guarantor
By:  

 

  Name:   Jeffrey J. Ford
  Title:   Vice President

 

[Signature Page to Guarantor Consent and Reaffirmation]


THE TAR HEEL TRADING COMPANY, LLC, as Guarantor
By:  

 

  Name:   Jeffrey J. Ford
  Title:   Vice President and Treasurer

 

[Signature Page to Guarantor Consent and Reaffirmation]


Exhibit A to

Guarantor Consent and Reaffirmation

Amendment

[See attached.]

Exhibit 10.6

2013 IMS H EALTH - A NNUAL I NCENTIVE C OMPENSATION P LAN

The 2013 IMS Health Annual Incentive Plan (the Plan) is directly linked to the company’s growth and profitability objectives, and supports a culture where performance drives compensation.

 

I. Plan Eligibility

Most IMS employees are eligible to participate in the Plan, with the exception of employees who are on another IMS incentive plan including, but not limited to, Sales Incentive Plans. Contractors and student interns also are excluded from the Plan, unless eligibility is required under local regulation.

 

II. Plan Structure

A participant’s annual incentive payout is influenced by the following components:

 

    IMS Financial Performance

 

    Assessment of IMS Performance by the Chairman & CEO and IMS Board

 

    Assessment of Business Unit performance by the Chairman & CEO

 

    Business Unit President Discretion

 

    Base Salary & Incentive Target Percent

 

    Individual Performance

For purposes of this plan, “Business Unit” will be used to describe the geographic Business Units, IMS Global Consulting Group, Healthcare Value Solutions, Strategy & Global Pharma Solutions, Global Technology Services & Operations, Supply Management and Global Staff Functions, unless otherwise noted.

 

A. IMS Financial Performance

The amount of funding that is available to distribute to the Business Units, and subsequently to employees, is based on IMS’s financial performance. The Plan may be funded for a given Plan Year (January 1 through December 31) at 100 percent if two conditions are met:

 

  1. IMS achieves 10 percent “Earnings Before Interest, Taxes, Depreciation and Amortization” (EBITDA) growth year over year; and

 

  2. IMS Free Cash Flow (FCF) factor is equivalent to 85 percent of EBITDA.

 

    EBITDA only considers expenses that impact cash flow. Depreciation and amortization and non-cash compensation expense do not affect cash and are, therefore, excluded from EBITDA.

 

    FCF is a measure of how well IMS manages cash. This includes such items as capital spending, deferred software and changes to our balance sheet - mainly in accounts receivable and accounts payable.

 

    Funding for the Plan is capped at 150 percent of target (before the FCF factor is applied), which would mean IMS achieved EBITDA growth of 25 percent.

 

IMS Health Confidential   Page 1  


2013 IMS H EALTH - A NNUAL I NCENTIVE C OMPENSATION P LAN

 

    If year over year EBITDA growth is less than 5 percent, there is no incentive funding.

 

    The funded incentive pool may be modified up or down based on the ratio of FCF to EBITDA.

 

B. Assessment of IMS Performance by the Chairman & CEO and IMS Board

The actual amount of funding available may be adjusted up or down by the Chairman & CEO and IMS Board, in their sole discretion, based on their assessment of the overall performance of IMS.

 

C. Assessment of Business Unit Performance by the Chairman & CEO

Each Business Unit is allocated a portion of the overall IMS funding based on how it performs against its own EBITDA growth target and contribution to IMS FCF, and the Chairman & CEO’s discretion

 

    Geographic Business Unit EBITDA growth targets are established based on market dynamics unique to their respective geographies.

 

    Business Support and Staff Functions are aligned to the company’s overall financials.

 

D. Business Unit President Discretion

The Business Unit Presidents determine how incentive funding is allocated within their respective Business Units.

 

E. Base Salary & Incentive Target Percent

Target Incentive Opportunity (the amount of incentive an eligible employee is eligible to receive) is based on the base salary earned during the plan year and his/her incentive target percent. Target Incentive Opportunity is calculated as follows:

 

    Target Incentive Opportunity = Incentive eligible annual base salary × target incentive %

 

    Funded Incentive Opportunity = employee incentive opportunity after Business Unit President discretion is applied

 

    For more information on incentive eligible annual base salary, refer to “General Conditions, Section III, B. ” of the Plan.

 

IMS Health Confidential   Page 2  


2013 IMS H EALTH - A NNUAL I NCENTIVE C OMPENSATION P LAN

 

F. Individual Performance

 

    The amount of incentive that employees receive depends on their personal performance, meaning high-performing employees earn higher rewards.

 

    Performance is assessed by the employee’s manager based on achievement of assigned performance goals and objectives.

 

    Based on this performance assessment, the manager will determine an applicable payout % that, in conjunction with an employee’s funded incentive opportunity, will be used to determine the incentive payout amount.

Guidelines for Determining Incentive Awards

 

Results

   Incentive Payout
Range *
 

Exceeded all or most goals and objectives

     Up to 200

Met goals and objectives

     Up to 110

Did not meet some or all goals and objectives

     Up to 80

 

* expressed as a percentage of an eligible employee’s Target Incentive Opportunity

 

IMS Health Confidential   Page 3  


2013 IMS H EALTH - A NNUAL I NCENTIVE C OMPENSATION P LAN

 

III. Changes to Eligibility Status

 

A. New Hire - Employees who begin their employment with IMS prior to October 1 of the Plan Year are eligible to receive a prorated incentive award based on actual hire date and number of days the employee was covered under this Plan. Employees who begin work with IMS on or after October 1 of the Plan Year are not eligible to participate in the Plan for that Plan Year.

 

B. Promotions, Demotions and Base Salary/Incentive Target Changes - If an eligible employee has a base salary and or incentive target percent change during the Plan Year, the Target Incentive Opportunity for the Plan Year in which the change occurred will be prorated based on the effective date of the change(s). Base salary generally excludes allowances and may be defined differently in certain jurisdictions, if so such definition will be communicated locally.

 

C. Change in Status - If an eligible employee has a change in work hours, such as going from full-time to part-time status, or vice versa, the actual incentive award for the Plan Year in which the change of status occurred will be prorated based on the effective date of the change.

 

D. Other Leave of Absence - Subject to applicable local policy and applicable law, eligible employees who are absent from work due to an approved absence or leave will have any incentive award calculated according to the actual gross base salary paid (or, for hourly employees, scheduled hours during weeks worked) during the year.

 

E. Transfer - If an eligible employee transfers out of the Plan during the Plan Year into another incentive plan (e.g., a Sales Plan), the Target Incentive Opportunity may be prorated based on the number of days the employee was participating in the Plan.

 

    If an eligible employee transfers to another Business Unit during the Plan Year and remains incentive eligible under the Plan, his/her Target Incentive Opportunity for the Plan Year will be subject to the incentive funding for the Business Unit he/she is assigned to at the end of the year.

 

F. Voluntary Termination - An employee who meets one or more of the following is not eligible to receive any incentive award under the Plan, unless applicable local law or contract requires that all or a portion of the award be paid to such employee under the following circumstances:

 

    An employee who has resigned at any time prior to the payment date of any applicable incentive award

 

    An employee who has resigned and is still “working their notice” at the time of any applicable payment date

 

G. Retirement - If a participating employee “retires” from IMS and the affected employee’s last day worked is on or before June 30 of the Plan Year, they will not be eligible to receive an incentive award for the Plan Year in which they retired. If the retirement date is after June 30 of the Plan Year, the incentive award will be prorated to the day based on the effective date of retirement.

 

IMS Health Confidential   Page 4  


2013 IMS H EALTH - A NNUAL I NCENTIVE C OMPENSATION P LAN

 

H. Layoff - If a participating employee is laid off or involuntarily terminated from IMS for any reason and the affected employee’s last day worked is on or before June 30 of the Plan Year, they will not be eligible to receive an incentive award for the Plan Year in which they were laid off. If eligible participating employee is laid off from IMS after working more than six (6) full months of the Plan Year, the employee’s Target Incentive Opportunity will be prorated based on the number of days worked during the year before any funding or performance factors are considered for final payout. As used in this paragraph, an employee is not considered to have been laid off if, without limitation, the employee has been terminated by IMS for cause or for poor performance.

 

I. Death - In the event that employment ends due to death, IMS has the authority, in its sole discretion, to determine the extent and conditions under which an award shall be earned and made payable to the estate.

 

J. Involuntary Termination - Employees participating in the Plan forfeit eligibility in the event of involuntary termination and will not receive an incentive payout. Exceptions to this may include, but are not limited to, “Section III, Retirement and Layoff ” of the Plan as detailed above, statutory regulations or other employment contracts agreed locally and/or local IMS policy and procedures. Questions about eligibility under this provision may be directed to the local Human Resources organization.

 

K. Form and Timing of Payment - Incentive awards will be paid in a single lump sum by the 15 th day of March in the United States and Canada, and typically no later than the end of March in other countries, with respect to performance to the immediately preceding Plan Year.

 

IV. General Conditions

 

A. As used in this Plan document, “Company” refers to IMS Health Incorporated (“IMS”) and Affiliates of IMS which employ any employees covered under this Plan. As used herein, “Affiliate” shall mean any entity controlled by, or under the common control of, such IMS. For these purposes, “control” shall refer to: (i) the possession, directly or indirectly, of the power to direct the management or policies of an entity, whether through the ownership of voting securities, by contract or otherwise, or (ii) the ownership, directly or indirectly, of more than 50% of the voting securities or other ownership interest of an entity

 

B. Company reserves the right to revise or terminate any of the provisions of this Plan or to terminate the Plan itself at any time without prior notice. The Director of Compensation will publish all such revisions to the Plan.

 

IMS Health Confidential   Page 5  


2013 IMS H EALTH - A NNUAL I NCENTIVE C OMPENSATION P LAN

 

C. The issuance of these guidelines for any year does not, in any way, commit the Company to pay a similar kind of compensation in any subsequent year. Furthermore, the payment of an incentive award in any year shall not be considered a precedent for any later year and the payment shall not limit the Company’s absolute discretion in future years to pay or not pay any incentive award.

 

D. Eligibility for participation and receipt of compensation under this Plan requires strict compliance with IMS standards for ethical conduct and company policies. Non-compliance, as determined by IMS in its sole discretion, will constitute grounds for cancellation of incentive compensation eligibility.

 

E. Participation in this Plan by any employee of the Company is conditioned on the express agreement by the participant that he/she will not, directly or indirectly during or after his/her employment with the Company, transfer, or allow to be transferred, any Company confidential information to any person, firm, or organization not authorized by IMS to receive it.

 

F. Participation in this Plan is conditioned on the express agreement by the participant that he/she executes any documents deemed necessary by the Company to administer the Plan.

 

G. Any participant’s complaint regarding this Plan, or with respect to any incentives received pursuant to this Plan, must be received in writing by the Company from the participant within six (6) months after the end of the Plan Year. Failure to formally register a complaint or claim for compensation will constitute a waiver of complaint on the participant’s behalf.

 

H. Anything in this Plan to the contrary notwithstanding, the terms of this Plan shall be interpreted and applied in a manner consistent with the requirements of Section 409A of the United States Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations thereunder so as not to subject an employee to the payment of any tax penalty or interest which may be imposed by Section 409A of the Code and the Company shall have no right to accelerate or make any payment under this Plan except to the extent such action would not subject an employee to the payment of any tax penalty or interest under Section 409A of the Code. It is intended that payments made under this Plan shall be exempt from compliance with Section 409A of the Code pursuant to the exemption for short-term deferrals set forth in Section 1.409A-1(b)(4) of the Treasury Regulations. If all or a portion of the payments provided under this Plan constitute taxable income to an employee for any taxable year that is prior to the taxable year in which such payments are to be paid to such employee as a result of the Plan’s failure to comply with the requirements of Section 409A of the Code and the Treasury Regulations, the applicable payment shall be paid immediately to the employee to the extent such payment is required to be included in the employee’s income.

 

IMS Health Confidential   Page 6  


2013 IMS H EALTH - A NNUAL I NCENTIVE C OMPENSATION P LAN

 

V. Plan Review & Approvals

This Plan document supersedes any and all prior incentive plans, policies and arrangements of IMS. Senior management also reserves the right to adjust an individual payment if the payout does not appropriately reflect effort, or extraordinary/unusual events.

All components of this Plan, including accompanying forms, and any updates, revisions, clarifications, and/or other modifications made by IMS are proprietary and may not be altered or modified in any way unless authorized in writing by the Director of Compensation and the Senior Vice President of Human Resources and Administration. The Senior Vice President of Human Resources and Administration has the authority to interpret the Plan and to make all discretionary decisions relating to, exceptions to, and interpretations of the Plan and the administration and implementation thereof.

Every effort has been made to ensure the accuracy of the contents of this Plan. However, in the unlikely event of a discrepancy between the Plan described in this document and the provisions of the actual Plan, the language and provisions of the actual Plan will prevail.

The Company maintains sole discretion to make any and all financial calculations necessary for the administration of this Plan, or the calculation of any incentive compensation hereunder, based on applicable IMS policies and procedures.

 

IMS Health Confidential   Page 7  

Exhibit 10.7

IMS Health Incorporated

Employee Protection Plan and Summary Plan Description

As Amended and Restated Effective September 1, 2009

I. Administrative Information

Plan Administration

The Employee Benefits Committee (the “Committee”), a committee of management employees of IMS Health Incorporated (the “Corporation”), is named as the Plan Administrator under the IMS Health Incorporated Employee Protection Plan (the “Plan”). As such, it has the exclusive right, power and authority to interpret the provisions of the Plan and to conclusively decide any questions arising in connection with the administration of, and any claim for severance benefits under, the Plan. All such determinations by the Plan Administrator shall be final and binding on all parties. Without limiting the generality of the foregoing, such authority shall include the discretionary power:

 

  To make and enforce such rules and regulations as the Plan Administrator deems necessary or proper for the efficient administration of the Plan;

 

  To interpret the Plan, the Plan Administrator’s interpretation of the Plan to be final and conclusive on all persons claiming benefits under the Plan;

 

  To decide all questions, including questions of fact, concerning the Plan and the eligibility of any person to participate in, and receive benefits under, the Plan;

 

  To appoint such agents, counsel, accountants, consultants and other persons as may be required to assist in administering the Plan; and

 

  To establish procedures, forms and time frames with respect to elections and other matters under the Plan.

Right to Amend and Terminate

The Corporation currently intends to continue the Plan indefinitely, but reserves the right to amend, modify, or terminate any and all provisions of the Plan and any benefits payable under the Plan at any time without further obligation; provided, however, that during a Change in Control Period, the Corporation may not terminate the Plan, nor may the Corporation modify or amend the Plan in a manner that reduces the compensation or benefits otherwise payable under the Plan, nor may the Corporation modify or amend the Plan in a manner that materially adversely affects the rights of a person who has started to receive compensation or benefits under the Plan. Any amendment, modification or termination of the Plan may be made by action of the Corporation’s Board of Directors, the Committee or their delegatees.

Not an Employment Contract

Participation in the Plan does not confer any rights to continued employment with the Corporation or any of its subsidiaries or affiliates.


Non-Assignment of Benefit

Benefits under the Plan may not be assigned, pledged or otherwise transferred. If, for example, an employee owes money to someone, he or she may not give that person the right to collect from the Plan any benefit which may be payable.

Prior Policies

Except for any restrictive covenant, confidentiality and/or arbitration or dispute resolution agreements entered into by an employee and the Corporation (which agreements shall remain in full force and effect), this Plan supersedes any and all prior severance plans, policies, arrangements, or practices of the Corporation (whether written or unwritten, express or implied) relating to any subject matter covered by the Plan. Notwithstanding the preceding sentence, the Plan does not affect the severance provisions of (a) any written individual employment agreement between an employee and the Corporation which results in such employee not being an Eligible Employee hereunder; (b) any change-in-control agreement; and (c) any other agreement entered into between an employee and the Corporation which expressly supersedes the provisions of this Plan (i.e., by naming this Plan) and which remains in effect at the date of such employee’s termination of employment.

Offsets and Termination of Severance Benefits

Benefits payable under the Plan will be offset by any severance or termination payment required to be made by the Corporation pursuant to applicable law or the requirements of any works council or labor organization.

The “Salary Continuation Period” described below will end and salary and benefits payable under this Plan will cease upon the earlier of: (a) the end of the Salary Continuation Period; (b) your reemployment by the Corporation or any subsidiary or affiliate of the Corporation; or (c) your earning compensation under any employment or compensatory arrangement for services provided to any party other than the Corporation (including as an employee, consultant, sole proprietor, security holder, or otherwise in an arrangement in which anything of value is earned or accrued based on your services).

If you are reemployed by the Corporation after having received Salary Continuation under the Plan or any previous severance plan of the Corporation or its predecessor companies, any Years of Service taken into account for purposes of determining such Salary Continuation will be disregarded in determining any future Salary Continuation or Benefits Continuation to which you may become entitled upon a subsequent Eligible Termination.

Claims Procedures

Your local Human Resources department reviews and authorizes the payment of benefits under this Plan for those employees who qualify under the provisions of the Plan. No claim forms need be submitted. Questions regarding the payment of Plan benefits should be directed to your local Human Resources department. If you feel that you are not receiving benefits that are due, you must notify the Plan Administrator in writing. If the claim for benefits is denied (in whole or in part), you will be notified electronically or in writing within 90 days (180 days if the Plan

 

-2-


Administrator notifies you within the 90-day period of a need for an extension) of receiving the claim. The notice of denial will state the reason for the denial, the pertinent Plan provisions upon which the denial is based, any additional information which may be needed and the reason such additional information (if any) is needed. In addition, you will be given an explanation of the Plan’s claims review procedures and the time limits applicable to such procedures, including a statement that you have a right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) following an adverse benefit determination on review.

If you wish to have a denied claim further reviewed, you must send a written request for review to the Plan Administrator at 901 Main Avenue, Suite 612, Norwalk, Connecticut 06851, within 60 days after your initial claim is denied. You may submit written comments, documents, records and other information relating to the claim to the Plan Administrator. Your claim for review will be given a full and fair review that takes into account all comments, documents, records and other information submitted that relates to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

The Plan Administrator will render a decision on the claim no later than 60 days after its receipt of your request for review. However, if the Plan Administrator finds it necessary, due to special circumstances, to extend this period and notifies you electronically or in writing, the decision will be rendered as soon as practicable, but in no event later than 120 days after your request for review. The Plan Administrator’s decision will be provided electronically or in writing. Such decision will be written in a manner calculated to be understood by you and will include specific reasons for the decision, specific references to the pertinent Plan provisions on which the decision is based, a statement that you have a right to bring a civil action under Section 502(a) of ERISA and that you are entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant to your claim for benefits. A document is relevant to your claim for benefits if it was relied upon in making the determination, was submitted, considered or generated in the course of making the determination or demonstrates that benefit determinations are made in accordance with the Plan and that Plan provisions have been applied consistently with respect to similarly situated claimants.

You may not institute any action or proceeding in any state or federal court of law or equity, or before any administrative tribunal or arbitrator, for a claim for benefits under the Plan until you have first exhausted the procedures set forth above. No action or proceeding at all may be brought in state or federal court or before any administrative tribunal or arbitrator for benefits under this Plan after one year from the date of the Plan Administrator’s final decision on your claim as described above.

Statement of ERISA Rights

As a participant in the Plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan participants shall be entitled to:

Examine, without charge, at the Plan Administrator’s office, all Plan documents, including copies of all documents filed by the Plan with the U.S. Department of Labor, such as detailed annual reports and Plan descriptions.

 

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Obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator. The Plan Administrator may request a reasonable charge for the copies.

In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of employee benefit plans. The people who operate your Plan, called “fiduciaries,” have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including your employer or any other person, may discriminate against you in any way for the purpose of preventing you from obtaining a benefit or exercising your rights under ERISA. If your claim for benefits is denied in whole or in part you must receive a written explanation of the reasons for the denial. You have the right to have the Plan Administrator review and reconsider your claim.

Under ERISA, there are steps you can take to enforce your rights. For instance, if you request materials from the Plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court but any such suit must be filed within one year from the date of the Plan Administrator’s final decision on your claim. If it should happen that you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court.

The court will decide who should pay court costs and legal fees. If you are successful the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

If you have any questions about your Plan, you should contact your local Human Resources department. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

Right to Withhold Taxes

The Corporation may cause such amounts to be withheld from any payment made under the Plan as it determines necessary to fulfill any federal, state or local wage or compensation withholding requirements.

Unfunded Plan

The Corporation will make all payments under the Plan, and pay all expenses of the Plan, from its general assets. Nothing contained in the Plan will give any employee any interest in any property of the Corporation or any of its subsidiaries or affiliates.

 

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Governing Law

The provisions of the Plan will be construed, administered and enforced according to applicable federal law and the laws of the State of Connecticut, without regard to its conflict of law rules and with regard to its statutes of limitations.

Compliance with Section 409A

Interpretation Consistent with Section 409A

Anything in this Plan to the contrary notwithstanding, the terms of this Plan shall be interpreted and applied in a manner consistent with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury regulations thereunder (the “Regulations”) and the Corporation shall have no right to accelerate or make any payment under this Plan except to the extent permitted under Section 409A of the Code. The Corporation shall have no obligation, however, to reimburse any employee for any tax penalty or interest payable or provide a gross-up payment in connection with any tax liability of such employee under Section 409A of the Code except that this provision shall not apply in the event of the Corporation’s negligence or willful disregard in its interpretation of the application of Section 409A of the Code and the Regulations to the Plan, which negligence or willful disregard causes a Plan participant to become subject to a tax penalty or interest payable under Section 409A of the Code, in which case the Corporation will reimburse the participant on an after-tax basis for any such tax penalty or interest not later than the last day of the participant’s taxable year next following the participant’s taxable year in which the participant remits the applicable taxes and interest.

Exemptions from Section 409A

A Plan participant’s right to salary continuation payments under this Plan shall be treated at all times as a right to a series of separate payments under Section 1.409A-2(b)(2)(iii) of the Regulations. It is intended that: (a) all payments made under this Plan on or before the 15th day of the third month following the end of the participant’s taxable year in which the participant terminates employment shall be exempt from compliance with Section 409A of the Code pursuant to the exception for short-term deferrals set forth in Section 1.409A-1(b)(4) of the Treasury Regulations (the “Exempt Short-Term Deferral Payments”); and (b) payments under this Plan, in excess of the Exempt Short-Term Deferral Payments, that are made on or before the last day of the second taxable year of the participant following the participant’s taxable year in which the participant terminates employment in an aggregate amount not exceeding two times the lesser of: (i) the sum of the participant’s annualized compensation based on the participant’s annual rate of pay for the participant’s taxable year preceding the taxable year in which the participant terminates employment (adjusted for any increase during that year that was expected to continue indefinitely if the participant had not terminated employment); or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the participant terminates employment shall be exempt from compliance with Section 409A of the Code pursuant to the exception for payments under a separation pay plan as set forth in Section 1.409A-1(b)(9)(iii) of the Regulations.

 

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Specific Plan Information

Plan Name

The IMS Health Incorporated Employee Protection Plan

Plan Type

Welfare/Severance Plan

Type of Administration

Self Administered

Plan Year

January 1 to December 31

Name and Address of Plan Sponsor

IMS Health Incorporated

901 Main Avenue

Suite 612

Norwalk, CT 06851

Name, Address and Telephone Number of Plan Administrator

The Employee Benefits Committee

Attention: General Counsel

IMS Health Incorporated

901 Main Avenue

Suite 612

Norwalk, CT 06851

(203) 319-4700

Agent for Service of Legal Process

IMS Health Incorporated

Service of legal process may also be

made upon the Plan Administrator

(see address above)

Source of Financing of Benefits

The general assets of the Corporation

Effective Date of this Amendment and Restatement of the Plan

January 1, 2008

Employer Identification Number

06-1506026

Plan Number

506

 

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II. Plan Terms

 

Introduction

The Plan provides severance benefits to eligible employees of the Corporation.

Plan Coverage

The Plan covers all full-time salaried employees and regular part-time salaried employees of the Corporation and any affiliated company that the Committee has designated to participate in the Plan (collectively referred to as the “Corporation”) who incur an “Eligible Termination” (as defined below). These employees are referred to in this summary as “Eligible Employees.” Notwithstanding the foregoing, (a) an employee who has entered into an agreement with the Corporation which expressly excludes such employee from participation in this Plan (e.g., by naming this Plan or excluding participation in Company-sponsored severance plans generally) and which remains in effect at the date of such employee’s termination of employment shall not be an Eligible Employee; and (b) an employee who otherwise would qualify but who is not on the United States payroll shall be an Eligible Employee only if so determined by the Plan Administrator, and such Eligible Employee, and any employee of an affiliated company who qualifies as an Eligible Employee shall be subject to such additional terms and limitations as the Plan Administrator may consider necessary or advisable; and (c) a worker who has signed an agreement with the Corporation stating that he or she is not eligible to participate in the Plan and any worker that the Corporation treats as an independent contractor, during the period that the worker is so treated, regardless of whether such worker may be determined to be an employee by administrative, judicial or other decision, shall not be an Eligible Employee. Each Eligible Employee shall be designated as within one of the groups specified as “Selected Executives,” “Level A,” “Level B,” or “Level C” as described in Section III below.

Eligible Termination

Severance benefits are only payable under this Plan if an Eligible Employee incurs an “Eligible Termination.” An Eligible Termination means an involuntary termination of an Eligible Employee’s employment by the Corporation for any reason except that an involuntary termination for “Cause”, as defined below, will not constitute an Eligible Termination and in the case of any Eligible Employee designated as within Level A, B or C as described in Section III below, an involuntary termination due to unsatisfactory performance will not constitute an Eligible Termination unless otherwise determined by the Plan Administrator in its sole discretion.

The foregoing notwithstanding, an Eligible Termination shall not include (a) a unilateral resignation; or (b) any termination where an offer of employment is made to the Eligible

 

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Employee of a comparable position at the Corporation. Solely for the purpose of determining whether an Eligible Employee has received an offer of a comparable position in connection with a Business Unit Acquisition (as defined below), an Eligible Employee shall be considered to have received such an offer if the offer is for employment with the entity that engaged in such Business Unit Acquisition, the compensation payable pursuant to such offer is not less than 100% of such Eligible Employee’s base Salary with the Company immediately prior to the Business Unit Acquisition and the principle place of employment under such offer is not more than 30 miles away from such Eligible Employee’s principle place of employment with the Corporation immediately prior to the Business Unit Acquisition. The determination of whether an Eligible Employee has received an offer of a comparable position under any other circumstances shall be determined by the Plan Administrator, in its sole discretion.

“Business Unit Acquisition” for purposes of this Plan means the acquisition by an entity unrelated to the Corporation of substantially all of the assets of a business unit of the Corporation.

“Cause” for purposes of this Plan means:

(a) Willful malfeasance or willful misconduct by the Eligible Employee in connection with his or her employment;

(b) Continuing failure to perform such duties as are requested by any employee to whom the Eligible Employee reports, directly or indirectly or by the Board of Directors of the Corporation;

(c) Failure by the Eligible Employee to observe material policies of the Corporation; or

(d) The commission by the Eligible Employee of (i) any felony or (ii) any misdemeanor involving moral turpitude.

Severance Benefits

If an Eligible Employee incurs an Eligible Termination not within a Change in Control Period, he or she will be entitled to the Salary Continuation and benefits described in Section III below for the period specified in Section III. If the Eligible Termination occurs within a Change in Control Period, the Eligible Employee shall be entitled to receive Salary Continuation in an amount equal to 130% of the amount determined in accordance with Section III for the period specified in Section III and benefits for the period specified in Section III, except as otherwise provided below; provided, however, that if the Corporation and the Eligible Employee have entered into a change in control agreement or other agreement specifically providing for severance payments and benefits upon specified terminations following a change in control of the Corporation which is in effect at the date of the Eligible Termination (whether or not severance payments and benefits are actually payable under such other agreement), no Salary Continuation or benefits will be payable to the Eligible Employee under this Plan. Under certain limited circumstances, however, the Chief Executive Officer of the Corporation (or other officers to whom authority is delegated) may alter the provisions of the Plan (by, for example, increasing or reducing benefits otherwise payable under the Plan), but not the time or form of payment of those benefits, in a manner that complies with Section 409A of the Code. Severance benefits under the Plan may not, in any event, exceed the limitations imposed by ERISA on severance payable under welfare benefit plans.

 

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The “Salary Continuation Period” described below will end and salary and benefits payable under this Plan will cease upon the earlier of: (a) the end of the Salary Continuation Period; (b) an Eligible Employee’s reemployment by the Corporation or any subsidiary or affiliate of the Corporation; or (c) an Eligible Employee’s earning compensation under any employment or compensatory arrangement for services provided to any party other than the Corporation (including as an employee, consultant, sole proprietor, security holder, or otherwise in an arrangement in which anything of value is earned or accrued based on the Eligible Employee’s services). The Eligible Employee must inform the Plan Administrator of any such employment or other arrangement under which such services will be provided, prior to or upon commencement of such employment or arrangement, including the date as of which such employment or services commenced. The Corporation shall be entitled to recover from the Eligible Employee any payments and the fair market value of benefits previously made or provided to the Eligible Employee under the Plan which would not have been paid if the Plan Administrator had adequate prior notice of the matters described in the preceding sentence.

Unless otherwise determined by the Plan Administrator, the amount of Salary payable during the period specified in Section III below shall be reduced by each of the following amounts applicable to the Eligible Employee (but not reduced to an amount less than zero):

 

    the amount of any sign-on bonus or any other amount(s) paid by the Corporation to the Eligible Employee (other than the payment of base Salary, performance-related bonuses, or reimbursement of business-related expenses incurred by the Eligible Employee) in connection with the Eligible Employee’s commencement of employment, if such payment(s) occurred within twelve months of the date of the Eligible Termination, or

 

    the amount of any severance payments, termination payments or any other amounts paid or payable to the Eligible Employee arising from or relating to the termination of employment of the Eligible Employee by the Corporation arising from the laws of any governmental entity or the requirements of any works council or labor organization.

If reduced in accordance with this paragraph, the aggregate amount of Salary payable during the period specified in Section III shall be payable proportionately over the period during which Salary Continuation is to be paid, as specified in Section III.

The payment of severance benefits in excess of two weeks of Salary and benefits, as provided in Section III, is conditioned upon the signing of a release and agreement and such other documents that the Plan Administrator may require in a form approved by the Plan Administrator. The release and agreement will require an Eligible Employee’s waiver of all claims, legal and contractual, against the Corporation, its subsidiaries and affiliates. In addition, it may require, among other things, that for the greater of a period of one year following termination or through the end of the Salary Continuation Period described below, the Eligible Employee (a) be reasonably available to consult and cooperate with the Corporation on various matters and (b) not compete with the Corporation, its subsidiaries and affiliates, or recruit or solicit their customers or employees. The release and agreement will be provided to the Eligible Employee as

 

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soon as administratively practicable following the Eligible Termination and must be executed and returned to the Corporation eight days before the date of commencement of payment of severance and benefits in excess of two weeks of Salary and benefits. (In order to satisfy the exemption from Section 409A of the Code described above, the date of commencement of payment of severance and benefits in excess of two weeks of Salary and benefits shall be on or before the earlier of: (i) the 90 th day following the Eligible Termination, determined in the sole discretion of the Plan Administrator; or (ii) March 15 th of the calendar year following the year in which the Eligible Termination occurred.)

IMPORTANT: If an Eligible Employee does not sign the release and agreement, he or she will not be entitled to any benefits under the Plan in excess of two weeks of Salary and benefits and will have NO RIGHT to any other severance benefits under the Plan. If the release and agreement is signed, the payment of severance benefits may be delayed until the end of any period during which an employee is permitted by law to revoke a signed release. An Eligible Employee’s obligation under the agreement continues for the greater of one year following termination or through the Salary Continuation Period, even if Salary Continuation ends prior to expiration of this period.

Anything in this Plan to the contrary notwithstanding, payment of Salary Continuation that is not exempt from compliance with Section 409A of the Code to any Specified Employee upon separation from service shall not be made before the date that is six months after the date of separation from service (or, if earlier, the date of death of such Specified Employee). Any Salary Continuation payment which is subject to the six-month delay in payment described in this paragraph will be adjusted to reflect the deferred payment date by multiplying the delayed payment by the product of the six-month CMT Treasury Bill annualized yield rate as published by the U.S. Treasury for the date on which such payment would have been made but for the delay multiplied by a fraction, the numerator of which is the number of days by which such payment was delayed and the denominator of which is 365. The adjusted payment shall be made at the beginning of the seventh month following the Specified Employee’s separation from service.

Certain terms are used in the description of Plan benefits contained in this summary. These terms, and their meanings, are as follows:

“Annual Incentive” means a bonus the amount of which is based on performance determined over a one-year period.

“Annual Incentive Plan” means any annual incentive plan in which the Eligible Employee participated immediately prior to termination of employment.

“Benefits Continuation” means the continuation of medical, dental and life benefits that are paid over the Salary Continuation Period, as described in Section III.

“Change in Control” means the occurrence of one of the following events:

(a) any “Person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the Corporation, any trustee or other fiduciary holding securities under an employee benefit plan of the

 

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Corporation, or any corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of stock in the Corporation) becomes the “Beneficial Owners” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 20% or more of the combined voting power of the Corporation’s then-outstanding securities;

(b) during any period of 24 months (not including any period prior to the Effective Date), individuals who at the beginning of such period constitute the board of directors of the Corporation (the “Board”), and any new director (other than (i) a director nominated by a Person who has entered into an agreement with the Corporation to effect a transaction described in paragraphs (a), (c), or (d) of this definition, (ii) a director nominated by any Person (including the Corporation) who publicly announces an intention to take or to consider taking actions (including, but not limited to, an actual or threatened proxy contest) which if consummated would constitute a Change in Control, or (iii) a director nominated by any Person who is the Beneficial Owner, directly or indirectly, of securities of the Corporation representing 10% or more of the combined voting power of the Corporation’s securities) whose election by the Board or nomination for election by the Corporation’s stockholders was approved in advance by a vote of at least two thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;

(c) any transaction (or series of transactions) is consummated under which the Corporation is merged or consolidated with any other company, other than a merger or consolidation (i) which would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 66 2/3% of the combined voting power of the voting securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation and (ii) after which no Person holds 20% or more of the combined voting power of the then-outstanding securities of the Corporation or such surviving entity;

(d) a sale or disposition by the Corporation of all or substantially all of the Corporation’s assets is consummated or the stockholders of the Corporation approve a plan of complete liquidation of the Corporation; or

(e) the Board adopts a resolution to the effect that, for purposes of this Plan, a Change in Control has occurred.

“Change in Control Period” means the period beginning upon a Change in Control and ending at the end of the 12th month following the Change in Control.

“Salary” means an Eligible Employee’s annual base Salary in effect at the time of an Eligible Termination except, for purposes of determining the amount payable during the Salary Continuation Period, the Plan Administrator may, in its sole discretion, include an additional cash amount as part of the amount of Salary, in order to reflect any periodic payment being received as compensation by the Eligible Employee in addition to Salary immediately prior to termination and to ensure comparability of benefits among Eligible Employees receiving benefits under the Plan.

 

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“Salary Continuation” means the Salary that is paid over the Salary Continuation Period.

“Salary Continuation Period” means the total number of weeks over which Salary Continuation is payable. The Salary Continuation Period will begin immediately following the Eligible Termination, subject to the Eligible Employee’s execution and return of the release and agreement described above for Salary Continuation in excess of two weeks.

“Specified Employee” means an employee who satisfies the requirements for being designated a “key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code at any time during a calendar year, in which case such employee shall be considered a Specified Employee for the twelve-month period beginning on the first day of the fourth month immediately following the end of such calendar year.

“Year of Service” means each full and partial year of employment with the Corporation. Service will also include periods of employment prior to the reorganization of Dun & Bradstreet or Cognizant Corporation to the extent they were taken into account under the Dun & Bradstreet and Cognizant Career Transition Plans prior to such reorganization. All partial years of employment will be aggregated to determine an Eligible Employee’s total Years of Service under the Plan. Prior periods of employment with companies that are acquired or become affiliated with the Corporation will not be taken into account unless expressly approved by the Plan Administrator. For purposes of determining Salary Continuation and Benefits Continuation payable to an Eligible Employee who is re-employed by the Corporation, Years of Service taken into account for purposes of determining any Salary Continuation previously paid to such re-employed Eligible Employee under the Plan or any previous severance plan of the Corporation or its predecessor companies shall be disregarded in determining such Eligible Employee’s Salary Continuation and Benefits Continuation upon an Eligible Termination following such re-employment.

 

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III. Salary and Benefits Continuation Information

 

Salary Continuation

An Eligible Employee who has an Eligible Termination will be assigned to a Designated Group as follows:

 

Designated Group

  

Participation Criteria

  

Salary Range

Selected Executives    Persons who have entered into Change in Control Agreements    N/A
A    Persons who have not entered into Change in Control Agreements    Salary greater than or equal to $150,000
B    Persons who have not entered into Change in Control Agreements    Salary between $75,000 and $149,000
C    All other Eligible Employees    Salary less than $75,000

An Eligible Employee’s Designated Group assignment will determine the period of Salary and Benefits Continuation upon an Eligible Termination in accordance with the following table:

 

    

Selected Executives

  

Group A

  

Group B

  

Group C

Less than 1 Year of Service    26 weeks of Salary and Benefits Continuation    16 weeks of Salary and Benefits Continuation    8 weeks of Salary and Benefits Continuation    4 weeks of Salary and Benefits Continuation
One or more Years of Service   

1.5 weeks of Salary and Benefits Continuation per $10,000 of Salary plus

3 weeks of

Salary and Benefits Continuation for each Year of Service, subject to minimum and maximum

  

1.5 weeks of Salary and Benefits Continuation per $10,000 of Salary plus

 

2 weeks of

Salary and Benefits Continuation for each Year of Service, subject to minimum and maximum

  

1 week of

Salary and Benefits Continuation per $10,000 of Salary plus

 

2 weeks of

Salary and Benefits Continuation for each Year of Service, subject to minimum and maximum

  

1 week of Salary and Benefits Continuation per $10,000 of Salary plus

 

1.5 weeks of Salary and Benefits Continuation for each Year of Service, subject to minimum and maximum

Minimum    26 weeks    16 weeks    8 weeks    4 weeks
Maximum    104 weeks    78 weeks    52 weeks    52 weeks

 

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Salary will be payable semi-monthly throughout the Salary Continuation Period. The amount of the semi-monthly payments will be at your annualized Salary rate.

Sample Calculation

If an employee has 16 Years of Service with the Corporation and is earning a Salary equal to $110,000 at the time of an Eligible Termination, the employee will receive semi-monthly payments at the annualized rate of $110,000 as below:

1.0 x ($110,000/$10,000) = 11 weeks

plus

2.0 x 16 = 32.0 weeks

Resulting in a total of 43 weeks of Salary

Benefits Continuation

Medical, dental and life insurance benefits will continue throughout the Salary Continuation Period at the levels in effect for the Eligible Employee immediately prior to the Eligible Termination but in no event greater than the levels in effect for active employees generally during the Salary Continuation Period, provided that the Eligible Employee shall pay the employee portion of any required premium or contribution and that continuation of any medical flexible spending accounts will be on an after-tax basis only. Any period during which an Eligible Employee and his or her dependents may be entitled to continued medical coverage following an Eligible Termination pursuant to federal or state laws will commence as of the Eligible Termination and not the end of the Salary Continuation Period.

Eligible Employees do not accrue or earn vacation or time-off benefits during the Salary Continuation Period.

Termination of Salary and Benefits Continuation

The Salary Continuation Period described above will end and salary and benefits payable under this Plan will cease upon the earlier of: (a) the end of the Salary Continuation Period; (b) the Eligible Employee’s reemployment by the Corporation or any subsidiary or affiliate of the Corporation; or (c) the Eligible Employee’s earning compensation under any employment or compensatory arrangement for services provided to any party other than the Corporation

 

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(including as an employee, consultant, sole proprietor, security holder, or otherwise in an arrangement in which anything of value is earned or accrued based on your services). The Eligible Employee must inform the Plan Administrator of any such employment or other arrangement under which such services will be provided, prior to or upon commencement of such employment or arrangement, including the date as of which such employment or services commenced. The Corporation shall be entitled to recover from the Eligible Employee any payments and the fair market value of benefits previously made or provided to the Eligible Employee under the Plan which would not have been paid if the Plan Administrator had adequate prior notice of the matters described in the preceding sentence.

Annual Incentive

The following applies to Eligible Employees who were participants in any Annual Incentive Plan immediately prior to an Eligible Termination:

If an Eligible Employee was employed for at least 6 full calendar months in the Annual Incentive Plan performance period during which the Eligible Termination occurs, he or she will receive, in cash, a portion of the Annual Incentive which would have been payable for that year under the Annual Incentive Plan if employment did not terminate. The portion of the incentive payable is determined by multiplying the amount of the Annual Incentive that would have been payable by the number of full months of the Eligible Employee’s employment during the Annual Incentive Plan performance period and dividing that result by 12.

The amount payable under this Plan will be paid at the time the Annual Incentive would have been paid if an Eligible Termination had not occurred. In addition, no incentive will be paid in respect of a program that is designed to be based on a performance period of less than one year (e.g., quarterly bonuses).

Annual Incentive Example:

An Eligible Employee incurs an Eligible Termination on July 1st, six months into an Annual Incentive performance period (for this illustration the performance period is assumed to be the calendar year). Annual Incentives are normally payable in March of the following year and at that time it is determined that the Eligible Employee would have received a $10,000 Annual Incentive for the prior year. The amount payable to the Eligible Employee is determined as follows:

$10,000 x 6/12 = $5,000

If the Eligible Employee incurred an Eligible Termination at any time prior to July 1st, no Annual Incentive would be payable because the Eligible Employee must be employed at least six full months during an Annual Incentive performance period to be entitled to an Annual Incentive under this Plan.

Stock Options

Upon termination of employment, any and all exercisable (vested) stock options held by an Eligible Employee either shall terminate and be forfeited, or may be exercisable for a limited

 

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period of time as set forth in the applicable stock option plan prospectus distributed to employees. Unvested options shall terminate and be forfeited upon termination of employment. The prospectus also describes the treatment of any “purchased options.”

Outplacement Services

An Eligible Employee will be entitled to such reasonable outplacement services as may be provided by the Corporation. The Corporation will inform all Eligible Employees of the availability of outplacement services. Any such outplacement services provided to an Eligible Employee will not extend beyond the last day of the second calendar year following the calendar year in which the Eligible Employee’s Eligible Termination occurred, provided that any reimbursement for outplacement expenses may be paid by the last day of the third calendar year following the calendar year in which the Eligible Employee’s Eligible Termination occurred.

Death During Salary Continuation Period

In the event of an Eligible Employee’s death during the Salary Continuation Period, the Salary Continuation and Annual Incentive amounts will continue to be paid to the Eligible Employee’s estate at the time or times otherwise provided for in this Plan. The payment of all other benefits under the Plan will cease.

No Further Grants

Following an Eligible Employee’s termination of employment and in accordance with the applicable plans and programs, no new grants, awards or contributions will be made to, by or on behalf of him or her under any plan or program of the Corporation including, but not limited to, the Annual Incentive Plan and any stock option, retirement or savings plan. In addition, participation in all Corporation benefit plans (other than the medical, dental and life insurance coverage which may be continued under this Plan) will cease upon termination of employment.

 

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Exhibit 10.8

FIRST AMENDMENT TO THE

IMS HEALTH INCORPORATED EMPLOYEE PROTECTION PLAN

(as amended and restated effective September 1, 2009)

Effective January 1, 2011, the IMS Health Incorporated Employee Protection Plan, as amended and restated effective September 1, 2009 (the “Plan”), is amended as follows:

1. The first paragraph under the subtitle “ Offsets and Termination of Severance Benefits” is amended to read in its entirety as follows:

Benefits payable under the Plan are not intended to duplicate such benefits as pay-in-lieu-of-notice, severance pay, or similar benefits under other benefit plans, severance programs, employment contracts, the requirements of any works council or labor organization or applicable laws, such as the WARN Act. Should such other benefits be payable, your benefits under this Plan will be reduced accordingly or, alternatively, benefits previously paid under this Plan will be treated as having been paid to satisfy such other benefit obligations. In either case, the Plan Administrator, in its sole discretion, will determine how to apply this provision and may override other provisions in this Plan in doing so.

2. The second bulleted paragraph under the subtitle “ Severance Benefits” is amended to read in its entirety as follows:

 

    the amount of any severance payments, termination payments or any other amounts paid or payable to the Eligible Employee arising from or relating to the termination of employment of the Eligible Employee by the Corporation on account of pay-in-lieu-of-notice, severance pay, or similar benefits under other benefit plans, severance programs, employment contracts, the requirements of any works council or labor organization or applicable laws, such as the WARN Act.

In all other respects the Plan remains in full force and effect.

The authorized officers of IMS Health Incorporated have caused this instrument of amendment to be executed this      day of             , 2011.

 

IMS Health Incorporated
By  

 

Its  

 

Exhibit 10.9

SECOND AMENDMENT TO THE

IMS HEALTH INCORPORATED EMPLOYEE PROTECTION PLAN

(as amended and restated effective September 1, 2009)

Effective January 1, 2012, the IMS Health Incorporated Employee Protection Plan, as amended and restated effective September 1, 2009 and as amended by a First Amendment thereto effective January 1, 2011 (the “Plan”), is further amended as follows:

The paragraph under the subtitle “ Plan Coverage” is amended to read in its entirety as follows:

The Plan covers all full-time salaried employees and regular part-time salaried employees of the Corporation and any affiliated company that the Committee has designated to participate in the Plan (collectively referred to as the “Corporation”) who incur an “Eligible Termination” (as defined below). These employees are referred to in this summary as “Eligible Employees.” Notwithstanding the foregoing, (a) an employee who has entered into an agreement with the Corporation which expressly excludes such employee from participation in this Plan (e.g., by naming this Plan or excluding participation in Company-sponsored severance plans generally) and which remains in effect at the date of such employee’s termination of employment shall not be an Eligible Employee; and (b) an employee who otherwise would qualify but who is not on the United States payroll shall be an Eligible Employee only if so determined by the Plan Administrator, and such Eligible Employee, and any employee of an affiliated company who qualifies as an Eligible Employee shall be subject to such additional terms and limitations as the Plan Administrator may consider necessary or advisable; and (c) a worker who has signed an agreement with the Corporation stating that he or she is not eligible to participate in the Plan and any worker that the Corporation treats as an independent contractor, during the period that the worker is so treated, regardless of whether such worker may be determined to be an employee by administrative, judicial or other decision, shall not be an Eligible Employee; and (d) effective January 1, 2012, an employee of SDI Health LLC on December 31, 2011 shall not be an Eligible Employee until November 1, 2012. Each Eligible Employee shall be designated as within one of the groups specified as “Selected Executives,” “Level A,” “Level B,” or “Level C” as described in Section III below.

In all other respects the Plan remains in full force and effect.

The authorized officers of IMS Health Incorporated have caused this instrument of amendment to be executed this      day of             , 2011.

 

IMS Health Incorporated
By  

 

Its  

 

Exhibit 10.10

IMS HEALTH INCORPORATED

DEFINED CONTRIBUTION EXECUTIVE RETIREMENT PLAN

As Amended and Restated


TABLE OF CONTENTS

 

         Page  
INTRODUCTION      1   
SECTION 1 - DEFINITIONS      1   
1.1.  

Affiliated Employer

     1   
1.2.  

Basic Disability Plan

     1   
1.3.  

Basic Plan

     1   
1.4.  

Basic Rate

     2   
1.5.  

Benefit Payment Date

     2   
1.6.  

Board

     2   
1.7.  

Cause

     2   
1.8.  

CEO

     3   
1.9.  

Change in Control

     3   
1.10.  

Change in Control Agreement

     6   
1.11.  

Code

     6   
1.12.  

Committee

     6   
1.13.  

Common Stock

     6   
1.14.  

Company

     6   
1.15.  

Compensation

     6   
1.16.  

Designated Account

     7   
1.17.  

Designated Beneficiary

     7   
1.18.  

Disability or Disabled

     7   
1.19.  

Effective Date

     7   
1.20.  

Entry Age

     7   
1.21.  

ERISA

     7   
1.22.  

Fair Market Value

     7   
1.23.  

Former Member

     8   
1.24.  

Good Reason

     8   
1.25.  

Holdings

     10   
1.26.  

Investment Credits

     10   
1.27.  

Initial Public Offering

     11   
1.28.  

Management Stockholders Agreement

     11   
1.29.  

Member

     11   
1.30.  

Merger

     11   
1.31.  

Past Service

     11   
1.32.  

Past Service Contributions Rate

     12   
1.33.  

Plan

     12   
1.34.  

Plan Administrator

     12   
1.35.  

Potential Change in Control

     12   
1.36.  

Public Offering

     13   
1.37.  

Regulations

     13   

 

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TABLE OF CONTENTS

(continued)

 

1.38.  

Retirement

     13   
1.39.  

Retirement Account

     14   
1.40.  

Retirement Benefit

     14   
1.41.  

Retirement Credits

     14   
1.42.  

Separation from Service

     14   
1.43.  

Service

     14   
1.44.  

Specified Employee

     15   
1.45.  

Stock Account

     15   
1.46.  

Stock Account Effective Date

     16   
1.47.  

Stock Account Member

     16   
1.48.  

Stock Unit

     16   
1.49.  

Vested Former Member

     16   
SECTION 2 - PARTICIPATION      16   
2.1.  

Commencement of Participation

     16   
2.2.  

Termination of Participation

     16   
SECTION 3 - AMOUNT AND FORM OF BENEFITS      17   
3.1.  

Retirement Benefit

     17   
3.2.  

Time and Form of Payment

     23   
3.3.  

Nonpayment of Benefits

     28   
3.4.  

Notification of Nonpayment of Benefits

     29   
3.5.  

Repayment of Benefits

     30   
3.6.  

Change in Control

     30   
SECTION 4 - DEATH BENEFITS      33   
4.1.  

Death Prior to Benefit Payment Date

     33   
4.2.  

Death On or After Benefit Payment Date

     34   
SECTION 5 - PLAN ADMINISTRATOR      34   
5.1.  

Duties and Authority

     34   
5.2.  

Presentation of Claims

     34   
5.3.  

Claims Denial Notification

     35   
5.4.  

Claims Review Procedure

     35   
5.5.  

Timing

     36   
5.6.  

Final Decision

     36   
5.7.  

Delayed Payments

     37   
SECTION 6 - MISCELLANEOUS      37   
6.1.  

Amendment; Suspension

     37   
6.2.  

Termination

     40   

 

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TABLE OF CONTENTS

(continued)

 

6.3.  

No Employment Rights

     44   
6.4.  

Unfunded Status

     44   
6.5.  

Arbitration

     44   
6.6.  

No Alienation

     46   
6.7.  

Withholding

     46   
6.8.  

Governing Law

     46   
6.9.  

Successors

     47   
6.10.  

Integration

     48   
Appendix A      49   
Appendix B      50   

 

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IMS HEALTH INCORPORATED

DEFINED CONTRIBUTION EXECUTIVE RETIREMENT PLAN

As Amended and Restated Effective as of February 26, 2010

INTRODUCTION

Effective as of January 1, 2007, the IMS Health Incorporated Defined Contribution Executive Retirement Plan (the “Plan”) was established to provide a means of ensuring the payment of a competitive level of retirement and survivor benefits, and thereby attract, retain and motivate a select group of executives of IMS Health Incorporated and its affiliated employers. This document represents a complete restatement of the Plan effective as of February 26, 2010.

Effective as of June 30, 2012, participation in the Plan is frozen and the allocation of Retirement Credits is discontinued with respect to periods beginning on or after such date.

SECTION 1 - DEFINITIONS

 

  1.1. Affiliated Employer ” shall mean an entity affiliated with the Company.

 

  1.2. Basic Disability Plan ” shall mean as to any Member the long-term disability plan of the Company or an Affiliated Employer pursuant to which long-term disability benefits are payable to such Member.

 

  1.3.

Basic Plan ” shall mean as to any Member or Vested Former Member the defined benefit pension plan of the Company or an Affiliated Employer intended to meet the requirements of Code Section 401(a) pursuant to

 

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  which retirement benefits are payable to such Member or Vested Former Member or to the Designated Beneficiary of a deceased Member or Vested Former Member.

 

  1.4. Basic Rate ” shall mean, with respect to any Member, the percentage specified in Appendix A to this Plan which is applicable to a Member whose Entry Age is the same as such Member’s Entry Age.

 

  1.5. Benefit Payment Date ” shall mean the date on which a Member’s or Vested Former Member’s Retirement Benefit is paid to such Member or Vested Former Member in accordance with Section 3.2 or to such Member’s or Vested Former Member’s Designated Beneficiary in accordance with Section 4.1.

 

  1.6. Board ” shall mean the Board of Directors of IMS Health Incorporated, except that any action authorized to be taken by the Board hereunder may also be taken by a duly authorized committee of the Board or its duly authorized delegees.

 

  1.7. Cause ” A Member shall not be deemed to have been terminated for “Cause” under this Plan unless such Member shall have been terminated for “Cause” under the terms of such Member’s employment agreement or Change in Control Agreement with the Company, if any. If no such employment agreement or Change in Control Agreement containing a definition of “Cause” shall be in effect, for purposes of this Plan “Cause” shall mean a Member’s:

 

-2-


  (a) willful and continued failure to substantially perform his or her duties (other than any such failure resulting from incapacity due to physical or mental illness or Disability or any failure after the issuance of a notice of termination by the Member for Good Reason) which failure is demonstrably and materially damaging to the financial condition or reputation of the Company and/or its Affiliated Employers, and which failure continues more than 48 hours after a written demand for substantial performance is delivered to the Member by the Company, which demand specifically identifies the manner in which the Company believes that the Member has not substantially performed his or her duties; or

 

  (b) the willful engaging by the Member in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise.

No act, or failure to act, on the part of the Member shall be deemed “willful” unless done, or omitted to be done, by the Member not in good faith and without reasonable belief that his or her action or omission was in the best interest of the Company.

 

  1.8. CEO ” shall mean the Chief Executive Officer of the Company.

 

  1.9.

Change in Control ” If a “Change in Control” shall have occurred or shall be deemed to have occurred under the terms of a Member’s or Vested Former Member’s Change in Control Agreement or employment agreement with the Company, if any, then a “Change in Control” shall be

 

-3-


  deemed to have occurred under this Plan. Otherwise a “Change in Control” shall be deemed to have occurred if:

 

  (a) any “Person” as such term is used for purposes of Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), becomes the “Beneficial Owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities;

 

  (b)

during any period of 24 months (not including any period prior to the Effective Date), individuals who at the beginning of such period constitute the Board, and any new director (other than (i) a director nominated by a Person who has entered into an agreement with the Company to effect a transaction described in Sections 1.9(a), (c), or (d) hereof, (ii) a director nominated by any Person (including the Company) who publicly announces an intention to take or to consider taking actions (including, but not limited to, an actual or threatened proxy contest) which if consummated would constitute a Change in Control, or (iii) a director nominated by any Person who is the Beneficial Owner, directly or indirectly, of securities of the Company representing 10% or more of the

 

-4-


  combined voting power of the Company’s securities) whose election by the Board or nomination for election by the Company’s stockholders was approved in advance by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;

 

  (c) any transaction (or series of transactions) is consummated under which the Company is merged or consolidated with any other company, other than a merger or consolidation (i) which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 66 2/3% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, and (ii) after which no Person holds 20% or more of the combined voting power of the then outstanding securities of the Company or such surviving entity;

 

  (d) a sale or disposition by the Company of all or substantially all of the Company’s assets is consummated or the stockholders of the Company approve a plan of complete liquidation of the Company; or

 

  (e) the Board adopts a resolution to the effect that, for purposes of this Plan, a Change in Control has occurred.

 

-5-


  1.10. Change in Control Agreement ” shall mean any written agreement in effect between any Member or Former Member or Vested Former Member and the Company or an Affiliated Employer pursuant to which benefits may be payable to such Member or Former Member or Vested Former Member in connection with a Change in Control.

 

  1.11. Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

  1.12. Committee ” shall mean the Human Resources Committee of the Board.

 

  1.13. Common Stock ” shall mean the common stock, $0.001 par value, of Holdings.

 

  1.14. Company ” shall mean IMS Health Incorporated.

 

  1.15.

Compensation ” shall mean base salary, annual bonuses, commissions, overtime and shift pay, in each case prior to reductions for elective contributions under Sections 401(k), 125 and 132(f)(4) of the Code and deferred compensation under any nonqualified deferred compensation plan. Notwithstanding the foregoing, Compensation shall exclude severance pay (including, without limitation, severance pay under the Company’s Employee Protection Plan), stay-on bonuses, long-term bonuses, retirement income, change-in-control payments, contingent payments, amounts paid under this Plan or any other retirement plan or deferred compensation plan, income derived from stock options, stock

 

-6-


  appreciation rights and other equity-based compensation and other forms of special remuneration.

 

  1.16. Designated Account ” shall mean the portion of a Member’s Retirement Account (if any) that is not the Stock Account.

 

  1.17. Designated Beneficiary ” shall mean one or more persons, estates or other entities, designated in accordance with such procedures as may be specified by the Plan Administrator, that are entitled to receive benefits under the Plan upon the death of a Member or Vested Former Member and, in the absence of any such designation, the Member’s or Vested Former Member’s estate.

 

  1.18. Disability ” or “ Disabled ” shall mean disability or disabled for purposes of the Basic Disability Plan.

 

  1.19. Effective Date ” shall mean January 1, 2007. The effective date of this amendment and restatement shall mean February 26, 2010.

 

  1.20. Entry Age ” shall mean a Member’s age on the date that such Member commences participation in the Plan in accordance with Section 2.1.

 

  1.21. ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended.

 

  1.22.

Fair Market Value ” shall mean, with respect to a share of Common Stock, “Fair Market Value” as defined in the Management Stockholders

 

-7-


  Agreement among Holdings, its subsidiaries and investors dated as of February 26, 2010. As of the Stock Account Effective Date, the Fair Market Value of each share of Common Stock shall be $1.00. Following an Initial Public Offering, “Fair Market Value” shall mean, with respect to a share of Common Stock, the closing price of a share of Common Stock on the stock exchange on which the shares of Common Stock are then listed or any established over-the-counter trading system on which dealings take place, or if no trades were made on any such day, the immediately preceding day on which trades were made.

 

  1.23. Former Member ” shall mean (a) a Member whose employment with the Company or an Affiliated Employer terminates before he or she has completed five or more years of Service, or (b) a Member who was removed from participation in the Plan, in accordance with Section 2.2 hereof, before he or she has completed five or more years of Service.

 

  1.24. Good Reason ” If a Member shall have terminated employment for “Good Reason” under the terms of such Member’s Change in Control Agreement or employment agreement with the Company, if any, then such Member shall be deemed to have terminated employment for “Good Reason” under this Plan. Otherwise “Good Reason” shall mean, without the Member’s express written consent, the occurrence of any of the following circumstances unless, such circumstances are fully corrected prior to the date of termination specified in the notice of termination given in respect thereof:

 

-8-


  (a) the assignment to the Member of any duties inconsistent with the Member’s position in the Company, or an adverse alteration in the nature or status of the Member’s responsibilities or the conditions of the Member’s employment;

 

  (b) a reduction by the Company in the Member’s annual base salary, target bonus or perquisites except for across-the-board perquisite reductions similarly affecting all senior executives of the Company and all senior executives of any Person, as such term is used for purposes of Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, in control of the Company;

 

  (c) the relocation of the principal place of the Member’s employment to a location more than 50 miles from the location of such place of employment; for this purpose, required travel on the Company’s business will not constitute a relocation so long as the extent of such travel is substantially consistent with the Member’s customary business travel obligations;

 

  (d) the failure by the Company to pay to the Member any portion of the Member’s compensation or to pay to the Member any portion of an installment of deferred compensation under any deferred compensation program of the Company within seven days of the date such compensation is due;

 

-9-


  (e) the failure by the Company to continue in effect any material compensation or benefit plan in which the Member participated unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Member’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amounts of benefits provided and the level of the Member’s participation relative to other participants;

 

  (f) the failure of the Company to obtain a satisfactory agreement from any successor to the Company to fully assume the Company’s obligations and to perform under this Plan, as contemplated in Section 6.9 hereof;

 

  (g) with respect to any Member who is a party to an employment agreement or a Change in Control Agreement, any purported termination of such Member’s employment that is not effected pursuant to the notice provisions, if any, in such Member’s employment agreement or Change in Control Agreement.

 

  1.25. Holdings ” shall mean Healthcare Technology Holdings, Inc., a Delaware corporation, which will indirectly hold 100% of the common stock of the Company following the Merger.

 

  1.26. Investment Credits ” shall mean notional additions to the Retirement Account determined in accordance with Section 3.1(d).

 

-10-


  1.27. Initial Public Offering ” shall mean an initial Public Offering registered on Form S-1 (or any successor form under the Securities Act of 1933, as in effect from time to time) following which the equity securities of the Holdings are being actively traded on a national securities exchange or interdealer quotation system.

 

  1.28. Management Stockholders Agreement ” shall mean the Management Stockholders Agreement, dated as of February 26, 2010, among Holdings and certain affiliates, stockholders and the other parties thereto, as amended or modified from time to time.

 

  1.29. Member ” shall mean an employee of the Company or an Affiliated Employer who becomes a participant in the Plan pursuant to Section 2, but excludes any Former Member or Vested Former Member.

 

  1.30. Merger ” shall mean the merger of Healthcare Technology Acquisition, Inc., a subsidiary of Holdings, into the Company pursuant to pursuant to an Agreement and Plan of Merger dated November 5, 2009.

 

  1.31.

Past Service ” shall mean a Member’s Service as of the date of his or her commencement of participation in the Plan including Service prior to the Effective Date of this Plan. If a Member was employed by a company acquired by the Company or an Affiliated Employer after the Effective Date, such Member’s service with that company prior to the date of acquisition will not constitute Past Service hereunder unless otherwise approved by the Committee. Upon commencement of participation

 

-11-


  hereunder in accordance with Section 2.1 hereof, the Committee may limit any Service otherwise to constitute Past Service hereunder with respect to periods prior to the date of participation in the Plan. The foregoing notwithstanding, Past Service shall include the number of additional years (or other additional period) credited as “service” for purposes of Past Service under the Plan to the Member or Vested Former Member under this Plan or under an employment agreement between the Company or an Affiliated Employer and such person in effect at the time of such person’s Separation from Service, or otherwise approved by the Committee.

 

  1.32. Past Service Contributions Rate ” shall mean, with respect to any Member, the percentage specified in Appendix A to this Plan which is applicable to a Member whose Past Service is the same as such Member’s Past Service.

 

  1.33. Plan ” shall mean this IMS Health Incorporated Defined Contribution Executive Retirement Plan, as embodied herein, and any amendments thereto.

 

  1.34. Plan Administrator ” shall mean the Company, except that any action authorized to be taken by the Plan Administrator hereunder may also be taken by any committee or person(s) duly authorized by the Board or the duly authorized delegees of such duly authorized committee or person(s).

 

  1.35.

Potential Change in Control ” If a “Potential Change in Control” shall have occurred or shall be deemed to have occurred under the terms of a

 

-12-


  Member’s Change in Control Agreement or employment agreement with the Company, if any, then a “Potential Change in Control” shall be deemed to have occurred under this Plan. Otherwise a “Potential Change in Control” shall be deemed to have occurred if:

 

  (a) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

 

  (b) any Person (including the Company), as defined in Section 1.9(a) hereof, publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or

 

  (c) the Board adopts a resolution to the effect that, for purposes of this Plan, a Potential Change in Control has occurred.

 

  1.36. Public Offering ” means a public offering and sale of Common Stock for cash pursuant to an effective registration statement under the Securities Act of 1933, as in effect from time to time.

 

  1.37. Regulations ” shall mean proposed and final Treasury Regulations, as the same may be amended from time to time.

 

  1.38. Retirement ” shall mean a Member’s or Vested Former Member’s Separation from Service for any reason other than Cause after completing five years of Service or by reason of such Member’s or Vested Former Member’s Disability.

 

-13-


  1.39. Retirement Account ” shall mean the notional account created and maintained for each Member and Vested Former Member, which shall be the sum of the Retirement Credits and Investment Credits thereon, as provided in Sections 3.1(c) and (d) hereof. A Member’s Retirement Account shall be comprised of a Designated Account and a Stock Account.

 

  1.40. Retirement Benefit ” shall mean the benefit described in Section 3.1(b) hereof.

 

  1.41. Retirement Credits ” shall mean notional additions to the Retirement Account determined in accordance with Section 3.1(c).

 

  1.42. Separation from Service ” shall mean termination of employment with the Company and any Affiliated Employer. Whether a Member or Vested Former Member has had a Separation from Service shall be determined by the Plan Administrator on the basis of all relevant facts and circumstances and with reference to Regulations Section 1.409A-1(h).

 

  1.43.

Service ” shall mean a Member’s or Vested Former Member’s period of employment with the Company or an Affiliated Employer that is counted as Service according to the Service Counting Rules set forth in Appendix B, except that (a) Service prior to the date of commencement of participation in this Plan will be disregarded; and (b) no service of a Former Member or Vested Former Member during any period after removal from participation under Section 2.2 shall constitute Service for

 

-14-


  purposes of the Plan. The foregoing notwithstanding, there shall be included as Service the number of additional years (or other additional period) credited as “service” for purposes of the Plan to the Member or Former Member or Vested Former Member under this Plan or under an employment agreement between the Company or an Affiliated Employer and such person in effect at the time of such person’s Separation from Service, or otherwise approved by the Committee.

 

  1.44. Specified Employee ” shall mean an employee who satisfies the requirements for being designated a “key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code at any time during a calendar year, in which case such employee shall be considered a Specified Employee for the twelve-month period beginning on the first day of the fourth month immediately following the end of such calendar year. Notwithstanding the foregoing, no employee shall be a Specified Employee unless stock of a member of the Company’s controlled group of corporations, as defined in Section 414(b) of the Code, is publicly traded on an established securities market or otherwise.

 

  1.45. Stock Account ” shall mean that portion of a Member’s Retirement Account the value of which is measured with reference to Common Stock. A Member’s Stock Account shall be credited with a number of Stock Units (as determined under Section 3.1(e) of the Plan).

 

-15-


  1.46. Stock Account Effective Date ” shall mean the closing date of the Merger, which is expected to be February 26, 2010.

 

  1.47. Stock Account Member ” shall mean a Member who has all or a portion of his or her Retirement Account allocated to the Stock Account.

 

  1.48. Stock Unit ” means a bookkeeping entry of which one Stock Unit is the equivalent of one share of Common Stock.

 

  1.49. Vested Former Member ” shall mean (a) a Member whose employment with the Company or an Affiliated Employer terminates on or after the date on which he or she has completed five or more years of Service, or (b) a Member who was removed from participation in the Plan, in accordance with Section 2.2 hereof, on or after the date on which he or she has completed five or more years of Service.

SECTION 2 - PARTICIPATION

 

  2.1. Commencement of Participation . Such key executives of the Company and its Affiliated Employers as are designated by the CEO in writing and approved by the Committee shall participate in the Plan as of a date determined by the Committee before July 1, 2012. Effective as of June 30, 2012, participation in the Plan shall be frozen, and no executive shall commence or recommence participation after such date.

 

  2.2.

Termination of Participation . A Member’s participation in the Plan shall terminate upon his or her Separation from Service. Prior to Separation

 

-16-


  from Service, a Member may be removed, upon written notice by the CEO, and as approved by the Committee, from further participation in the Plan. As of the date of Separation from Service or removal, no further benefits shall accrue to such individual hereunder except as provided in Sections 3 and 6 hereof.

SECTION 3 - AMOUNT AND FORM OF BENEFITS

 

  3.1. Retirement Benefit .

 

  (a) Eligibility . Upon the Retirement of a Member or Vested Former Member, he or she shall be entitled to the Retirement Benefit described in Section 3.1(b), payable in the form specified in Section 3.2.

 

  (b) Retirement Benefit . A notional Retirement Account shall be created and maintained for each Member and Vested Former Member and shall be the sum of the balance of the Retirement Credits and annual Investment Credits thereon, as provided in Sections 3.1(c) and (d), respectively and a Member’s Stock Account, as provided in Section 3.1(e). A Member’s or Vested Former Member’s Retirement Benefit shall be equal to the value of his or her Retirement Account, which shall be created and maintained solely for the purpose of calculating the Retirement Benefit under this Plan.

 

-17-


  (c) Retirement Credits .

 

  (i) For each calendar year ending before January 1, 2012, each Member shall have his or her Retirement Account credited with notional Retirement Credits in an amount equal to the Member’s Basic Rate times the Member’s Compensation for such calendar year. For the period beginning January 1, 2012 and ending June 30, 2012, each Member shall have his or her Retirement Account credited with notional Retirement Credits in an amount equal to the Member’s Basic Rate times the Member’s Compensation for such six-month period.

 

  (ii)

In addition, for each calendar year during the period beginning with a Member’s first calendar year of participation in the Plan and ending on the earlier of (A) December 31 of the Member’s tenth calendar year of participation in the Plan or (B) December 31, 2011, such Member shall have his or her Retirement Account credited with an additional notional Retirement Credit in an amount equal to the Member’s Past Service Contributions Rate times the Member’s Compensation for such calendar year. For the period beginning January 1, 2012 and ending June 30, 2012, such Member shall have his or her Retirement Account credited with an additional notional Retirement Credit in an amount equal to the Member’s Past Service Contributions Rate times the Member’s Compensation for such six-month period, provided that calendar

 

-18-


  year 2011 was not the Member’s tenth calendar year of participation in the Plan (in which case he or she shall not receive an additional notional Retirement Credit for such six-month period).

 

  (iii) A Member’s Retirement Credits shall be allocated to the Member’s Retirement Account as of the end of each calendar year. Notwithstanding the foregoing, (A) Retirement Credits made with respect to the calendar year in which a Member’s Separation from Service occurs shall be made as soon as administratively practicable following such Separation from Service rather than at the end of such calendar year and in no event later than the Member’s Benefit Payment Date; and (B) Retirement Credits made with respect to the six-month period ending June 30, 2012 may be allocated as soon as administrative practicable following such date.

 

  (iv) Notwithstanding anything contrary in the Plan, after the Stock Account Effective Date, Retirement Credits shall only be credited to that portion of a Member’s Retirement Account that is the Designated Account.

 

  (v)

Notwithstanding anything contrary in the Plan, the allocation of Retirement Credits shall be suspended effective as of June 30, 2012, and no Retirement Credits shall be credited to any Member’s

 

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  Retirement Account with respect to any period beginning on or after such date.

 

  (d) Investment Credits . A Member’s or a Vested Former Member’s Retirement Account shall be credited as of the last day of each calendar year with a notional Investment Credit calculated by multiplying the Member’s or Vested Former Member’s Retirement Account as of such date (before the addition of any Retirement Credits for such calendar year) by the average of the annual yields at the end of each month in such calendar year on the AA-AAA Rated/10+ Years Component of the Merrill Lynch U.S. Corporate Master Index for such calendar year. Notwithstanding the foregoing, Investment Credits made with respect to the calendar year in which a Member’s or Vested Former Member’s Benefit Payment Date occurs shall be made on the basis of the average of the annual yields of the AA-AAA Rated/10+ Years Component of the Merrill Lynch U.S. Corporate Master Index at the end of each of the months immediately preceding the month in which occurs such Member’s or Vested Former Member’s Benefit Payment Date and shall be credited as of such Member’s or Vested Former Member’s Benefit Payment Date. Investment Credits will cease to be credited after the Member’s or Vested Former Member’s Benefit Payment Date. Notwithstanding anything contrary in the Plan, after the Stock Account Effective Date, Investment Credits shall only be credited to that portion of a Member’s Retirement Account that is the Designated Account.

 

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  (e) Stock Account .

 

  (i) Notwithstanding the foregoing provisions of Section 3.1(d), a Member shall be permitted to make a one-time election (either as to a percentage or dollar amount of the Retirement Account) prior to the Stock Account Effective Date to have all or a portion of his or her Retirement Account as of the Stock Account Effective Date allocated to the Stock Account. This election must be filed with the Plan Administrator at the time and on such form or forms as the Plan Administrator shall determine. This election shall only apply to the amount credited to a Member’s Retirement Account as of the Stock Account Effective Date and shall not apply to any amounts credited to a Member’s Retirement Account after the Stock Account Effective Date.

 

  (ii) If a Member makes the election described in subsection (i) above, the number of Stock Units credited to the Member’s Stock Account shall be equal to that portion of the Member’s Retirement Account allocated to the Stock Account divided by $1. Unless a subsequent election is made pursuant to Section 3.1(f) below, on the Benefit Payment Date a Member’s Stock Account shall be distributed in the form of shares of Common Stock, with each Stock Unit credited to the Stock Account entitling the Member to receive one share of Common Stock, subject to withholding as provided in Section 6.7.

 

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  (f) Subsequent Stock Account Elections . In the event that an IPO is consummated prior to a Member’s Benefit Payment Date, a Stock Account Member shall be permitted to elect at any time to have any portion of the Stock Units allocated to the Stock Account reallocated to a Designated Account. The amount so reallocated shall be equal to the Stock Units with respect to which the reallocation election is made multiplied by the Fair Market Value of a share of Common Stock. To the extent a Member does not make any reallocation election, his or her Stock Account shall continue to be denominated in Stock Units. Once a reallocation election is made, a Member may not elect to reallocate any such amounts to the Stock Account. Any election contemplated by this subsection (f) must be filed with the Plan Administrator on such form or forms and in accordance with procedures as the Plan Administrator may reasonably determine.

 

  (g)

Stock Account Adjustments . Each Member’s Stock Account shall be adjusted in accordance with the following as of the last day of each calendar year and as of the Benefit Payment Date: (i) the balance of a Member’s Stock Account shall be determined by multiplying the number of Stock Units then allocated to the Member’s Stock Account by the Fair Market Value of a share of Common Stock; and (ii) if the outstanding shares of Common Stock shall at any time be changed by recapitalization, consolidation, combination, stock dividend or split, or other change in capitalization, the Plan Administrator shall make appropriate adjustments

 

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  to the Stock Units allocated to the Stock Account as would apply if the Member held shares of Common Stock directly. If a stock dividend is paid to holders of Common Stock, on the date on which such dividend is paid, a Member’s Stock Account shall be credited with additional Stock Units equal to the number of shares of Common Stock that the Member would have received had the Member held shares of Common Stock directly. For avoidance of doubt, if cash dividends are paid in respect of shares of Common Stock, the amount that would have been paid to the Member had he or she held shares of Common Stock directly shall be credited to the Designated Account on the date on which such dividend is paid.

 

  (h) Management Stockholders Agreement . It shall be a condition to a Member’s receipt of shares of Common Stock hereunder that such Member shall have executed a Management Stockholders Agreement prior to the delivery of such shares. For so long as a Member has Stock Units credited to his or her Stock Account, such Stock Units shall be treated in the same manner as shares of Common Stock for purposes of the Tag Along, Drag Along and other provisions of the Management Stockholders Agreement, provided that the effect of any such transaction or event governed by the Management Stockholders Agreement shall not accelerate the time of payment under the Plan.

 

  3.2. Time and Form of Payment .

 

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  (a) An employee may elect, on forms to be provided by the Plan Administrator, the Benefit Payment Date of any Retirement Benefit to which the Member may become entitled under the Plan. The Member may elect any age or date at which the Member’s Retirement Benefit shall be paid following the Member’s Retirement. The form of payment, however, shall be a lump sum. The election must be filed with the Plan Administrator on such form or forms as the Plan Administrator may require within 30 days after the Member’s commencement of participation in order to be effective; provided, however, that if the Member is a participant in another account balance plan, within the meaning provided in Regulations Section 1.409A-1(c)(2)(B), that is required to be aggregated with this Plan, such election must be made before the Member’s commencement of participation in this Plan. Notwithstanding the foregoing, a Member shall be permitted to make the election described in this Section 3.2(a) if the election is filed with the Plan Administrator on or before December 31, 2008 provided that any election filed in 2007 may apply only to amounts that would not otherwise be payable in 2007 and may not cause an amount to be paid in 2007 that would not otherwise be payable in 2007 and any election filed in 2008 may apply only to amounts that would not otherwise be payable in 2008 and may not cause an amount to be paid in 2008 that would not otherwise be payable in 2008.

 

  (b)

In the absence of an effective Benefit Payment Date election under Section 3.2(a), a Member shall be deemed to have elected that the

 

-24-


  Member’s Retirement Benefit shall be paid in a lump sum on the first day of the calendar month next following the calendar month in which the Member’s Retirement occurs.

 

  (c) Anything in this Plan to the contrary notwithstanding, payment to any Specified Employee upon Separation from Service shall not be made before the date that is six months after the date of Separation from Service (or, if earlier, the date of death of such Specified Employee). The six-month delay in payment described herein shall not apply, however, to any payment made under the circumstances described in Section 3.2(e). The Retirement Account of a Member or Vested Former Member who is a Specified Employee which is subject to the six-month delay in payment described in this Section 3.2(c) shall continue to be credited with Investment Credits and dividends credits in accordance with Sections 3.1(d) and 3.1(g), as applicable, following such Separation from Service until such Member’s or Vested Former Member’s Benefit Payment Date, but not Retirement Credits.

 

  (d) A Participant who has made or been deemed to make a Benefit Payment Date election under Section 3.2(a) or (b) (“initial election”) may make one subsequent election, on forms to be provided by the Plan Administrator, to delay the time of payment of the Member’s Retirement Benefit under the following conditions:

 

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  (i) Any subsequent election must be filed with the Plan Administrator at least 12 months prior to earliest date on which the Retirement Benefit could be payable pursuant to the Member’s initial election, and shall not be effective before the first anniversary of the date on which such election is filed with the Plan Administrator.

 

  (ii) The Benefit Payment Date must be deferred by not less than five years from the date on which the Member’s Retirement Benefit would have been paid under the Member’s initial election.

 

  (e) The provisions of Sections 3.2(a) through (d) to the contrary notwithstanding, a payment to or on behalf of a Member or Vested Former Member shall be accelerated under each of the following circumstances:

 

  (i) if payment is required to be made to an individual other than the Member or Vested Former Member to fulfill a domestic relations order as defined in Section 414(p)(1)(B) of the Code;

 

  (ii) to the extent that payment is reasonably necessary to avoid the violation of an applicable Federal, state, local or foreign ethics law or conflicts of interest law as provided in Regulations Section 1.409A-3(j)(4)(iii); or

 

  (iii)

if all or a portion of the Retirement Benefit payable to a Member, Vested Former Member or Designated Beneficiary constitutes taxable income to such Member, Vested Former Member or

 

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  Designated Beneficiary for any taxable year that is prior to the taxable year in which such Retirement Benefit is to be paid to such Member, Vested Former Member or Designated Beneficiary as a result of the Plan’s failure to comply with the requirements of Section 409A of the Code and the Regulations thereunder, the Retirement Benefit shall be immediately paid to such Member, Vested Former Member or Designated Beneficiary to the extent that such Retirement Benefit is required to be included in income. As provided in Section 6.8, the Company shall reimburse such Member, Vested Former Member or Designated Beneficiary on a fully grossed-up and after-tax basis for any tax penalty or interest payable in connection with such income inclusion (so that the recipient of such reimbursement is held economically harmless).

 

  (f)

The provisions of Sections 3.2(a) through (d) to the contrary notwithstanding, a payment to a Member or Vested Former Member (or his or her Designated Beneficiary) may be delayed to a date after the designated Benefit Payment Date if calculation of the amount of the payment is not administratively practicable due to events beyond the control of the Member or Vested Former Member (or his or her Designated Beneficiary) and such delay is for reasons that are commercially reasonable, provided that payment is made as soon as payment is administratively practicable. Investment Credits under Section 3.1(d) and dividend credits under Section 3.1(g) will continue to be

 

-27-


  credited to the Member’s or Vested Former Member’s Retirement Account during the period of any such delay until such Member’s or Vested Former Member’s Benefit Payment Date.

 

  3.3. Nonpayment of Benefits . Subject to Section 3.6 hereof, no benefits shall be paid to a Member, Vested Former Member or Designated Beneficiary if the Member or Vested Former Member has:

 

  (a) become a stockholder (unless such stock is listed on a national securities exchange or traded on a daily basis in the over-the-counter market and the Member’s or Vested Former Member’s ownership interest is not in excess of 2% of the company whose shares are being purchased), employee, officer, director or consultant of or to a company, or a member or an employee of or a consultant to a partnership or any other business or firm, which competes with any of the businesses identified in the Company’s Employee Protection Plan, or such Member or Vested Former Member accepts any form of compensation from such competing entity;

 

  (b) been discharged from employment with the Company or any Affiliated Employer for Cause;

 

  (c)

failed to retain in confidence any and all confidential information concerning the Company or any Affiliated Employer and its respective business which was known or became known to the Member or Vested Former Member, except as otherwise required by law and except information (i) ascertainable or obtained from public information, (ii)

 

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  received by the Member or Vested Former Member at any time after the Member’s or Vested Former Member’s Separation from Service, from a third party not employed by or otherwise affiliated with the Company or any Affiliated Employer, or (iii) which was or became known to the public by any means other than a breach of this Section 3.3; or

 

  (d) made disparaging comments about the Company or any Affiliated Employer in any communications, written or oral, with any individual, company, government body or agency or any other entity whatsoever. For purposes hereof, “disparage” shall mean any communication, including, but not limited to, any statements, actions or insinuations, made either directly or through a third party, that would tend to lessen the standing or stature of the Company or any Affiliated Employer in the eyes of a customer, a prospective customer, a shareholder or a prospective shareholder.

 

  3.4. Notification of Nonpayment of Benefits . Subject to Section 3.6 hereof, in any case described in Section 3.3, the Member, Vested Former Member or Designated Beneficiary shall be given prior written notice that no benefits will be paid to such Member, Vested Former Member or Designated Beneficiary and shall be provided an opportunity to be heard prior to any such nonpayment of benefits. Such written notice shall specify the particular act(s), or failures to act, and the basis on which the decision not to pay his or her benefits has been made.

 

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  3.5. Repayment of Benefits . Subject to Section 3.6 hereof, a Member or Vested Former Member who is paid his or her Retirement Benefit, shall receive such Retirement Benefit subject to the condition that if such Member or Vested Former Member engages in any of the acts described in Section 3.3, then such Member or Vested Former Member shall, within 60 days after written notice by the Company specifying the particular act(s), or failures to act, and the basis on which the decision to recover such Retirement Benefit has been made, repay to the Company the entire amount of the Retirement Benefit previously paid to such Member or Vested Former Member.

 

  3.6. Change in Control .

Anything in this Plan to the contrary notwithstanding:

 

  (a) Any Member whose employment with the Company or an Affiliated Employer is involuntarily terminated by the Company or an Affiliated Employer at or within five years following a Change in Control for a reason other than Cause or whose employment is voluntarily terminated by the Member with Good Reason at or within five years following a Change in Control shall be deemed to have completed five years of Service for purposes of determining such Member’s entitlement to his or her Retirement Benefit.

 

  (b)

Any Member whose employment with the Company or an Affiliated Employer is involuntarily terminated by the Company or an Affiliated

 

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  Employer at or within two years following a Change in Control for a reason other than Cause or whose employment is voluntarily terminated by the Member with Good Reason at or within two years following a Change in Control shall be credited with Retirement Credits at such Member’s Basic Rate and Retirement Credits at such Member’s Past Service Contributions Rate, determined:

 

  (i) on the basis of the Member’s annual base salary in effect immediately prior to the Member’s Separation from Service plus the greater of the Member’s annual target bonus for the year in which the Separation from Service occurs or, if no such target bonus has yet been determined for such year, the annual bonus actually earned in the year immediately preceding the year in which the Separation from Service occurs; and

 

  (ii) for the period with respect to which such Member is entitled to severance benefits under the Employee Protection Plan or under an employment, change in control, separation or other agreement between the Member and the Company, whichever shall apply to such Member and regardless of whether such severance benefits are denominated as such or are payable in installments over such period or in a lump sum;

provided, however, that the cumulative Past Service Contributions credited to a Member’s Account under Section 3.1(c) and under this

 

-31-


Section 3.6(b) shall not exceed the Past Service Contributions that would have been credited to such Member’s Account under Section 3.1(c) had such Member participated in the Plan for ten calendar years. Such Retirement Credits shall be credited as soon as practicable following the Member’s Separation from Service rather than at the end of the calendar year and in no event later than the Member’s Benefit Payment Date. Payment of the Member’s Retirement Benefit shall be made at the time and in the form provided in Section 3.2.

 

  (c)

In the event of a Potential Change in Control or Change in Control prior to the Stock Account Effective Date, the Company shall, not later than 15 days thereafter, have established one or more so-called “rabbi” trusts and shall deposit therein cash in an amount sufficient to provide for full payment of all potential benefits payable under the Plan at or following a Change in Control; provided, however, that no such deposit shall be made if it would cause a violation of the funding limitations of Section 409A(b)(3) of the Code or the Member shall have waived the Company’s obligation to deposit any amount related to his or her benefit under the Plan. Such rabbi trust(s) shall be irrevocable and shall provide that the Company may not, directly or indirectly, use or recover any assets of the trust(s) until such time as all obligations which potentially could arise hereunder have been settled and paid in full, subject only to the claims of creditors of the Company in the event of insolvency or bankruptcy of the Company; provided, however, that if no Change in Control has occurred

 

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  within two years after such Potential Change in Control, such rabbi trust(s) shall at the end of such two-year period become revocable and may thereafter be revoked by the Company.

 

  (d) The provisions of Sections 3.3 through 3.5 shall be of no force or effect with respect to any Member whose employment with the Company or an Affiliated Employer is involuntarily terminated by the Company or an Affiliated Employer at or within two years following a Change in Control for a reason other than Cause or whose employment is voluntarily terminated by the Member with Good Reason at or within two years following a Change in Control.

SECTION 4 - DEATH BENEFITS

 

  4.1. Death Prior to Benefit Payment Date . Upon the death of a Member or Vested Former Member, prior to his or her Benefit Payment Date, any such Member shall be deemed to have completed five years of Service for purposes of determining his or her entitlement to a Retirement Benefit under Section 3.1(a) and such Member’s or Vested Former Member’s Designated Beneficiary will be entitled to receive 100% of the Retirement Benefit that would have been provided from the Plan had the Member or Vested Member had a Separation from Service on the date of death, payable in a lump on the first day of the month next following the month in which such Member’s or Vested Former Member’s death occurred.

 

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  4.2. Death On or After Benefit Payment Date . No additional benefit shall be payable to the Designated Beneficiary of a Member or Vested Former Member who was previously paid his or her Retirement Benefit.

SECTION 5 - PLAN ADMINISTRATOR

 

  5.1. Duties and Authority . The Plan Administrator shall be responsible for the administration of the Plan and may delegate to any management committee, employee, director or agent its responsibility to perform any act hereunder, including, without limitation, those matters involving the exercise of discretion; provided, that such delegation shall be subject to revocation at any time at the Plan Administrator’s discretion. The Plan Administrator shall have the sole discretion to determine all questions arising in connection with the Plan, to interpret the provisions of the Plan and to construe all of its terms, to adopt, amend, and rescind rules and regulations for the administration of the Plan, and generally to conduct and administer the Plan and to make all determinations in connection with the Plan as may be necessary or advisable. All such actions of the Plan Administrator shall be conclusive and binding upon all Members, Former Members, Vested Former Members, Designated Beneficiaries and other persons.

 

  5.2.

Presentation of Claims . Claims for benefits shall be filed in writing with the Plan Administrator. Written or electronic notice of the disposition of a claim shall be furnished to the claimant within 90 days after the claim is filed (or within 180 days if special circumstances require an extension of

 

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  time for processing the claim and if notice of such extension and circumstances is provided to the claimant within the initial 90-day period.)

 

  5.3. Claims Denial Notification . If a claim is wholly or partially denied, the Plan Administrator shall furnish to the claimant a written notice setting forth in a manner calculated to be understood by the claimant:

 

  (a) the specific reason(s) for denial;

 

  (b) specific reference(s) to pertinent Plan provisions on which any denial is based;

 

  (c) a description of any additional material or information necessary for the claimant to perfect the claim, and an explanation of why such material or information is necessary;

 

  (d) an explanation of the Plan’s claims review procedures and the applicable time limits for such procedures; and

 

  (e) a statement that the claimant has a right to bring a civil action under Section 502(a) of ERISA following an adverse determination on review.

 

  5.4. Claims Review Procedure . Upon a denial, the claimant is entitled (either in person or by his duly authorized representative) to:

 

  (a)

request a subsequent review of the claim by the Plan Administrator upon written application for review made to the Plan Administrator. In the case of a denial as to which written notice of denial has been given to the

 

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  claimant, any such request for review of the claim must be made within 60 days after receipt by the claimant of such notice. A claimant must submit a written application for review before the claimant is permitted to bring a civil action for benefits;

 

  (b) review pertinent documents relating to the denial; and

 

  (c) submit written comments, documents, records and other information relating to the claim.

 

  5.5. Timing . The Plan Administrator shall make its decision and notify the claimant with respect to a claim not later than 60 days after receipt of the request. Such 60-day period may be extended for another period of 60 days if the Plan Administrator finds that special circumstances require an extension of time for processing and notice of the extension and special circumstances is provided to the claimant within the initial 60-day period.

 

  5.6.

Final Decision . The claim for review shall be given a full and fair review that takes into account all comments, documents, records and other information submitted that relates to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The Plan Administrator shall provide the claimant with written or electronic notice of the decision in a manner calculated to be understood by the claimant. The notice shall include specific reasons for the decision, specific references to the pertinent Plan provisions on which the decision is based, a statement that the claimant has a right to bring a

 

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  civil action under Section 502(a) of ERISA, and a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the claim. A document is relevant to the claim if it was relied upon in making the determination, was submitted, considered or generated in the course of making the determination or demonstrates that benefit determinations are made in accordance with the Plan and that Plan provisions have been applied consistently with respect to similarly situated claimants.

 

  5.7. Delayed Payments . If the Plan Administrator shall approve the payment of a claim for benefits filed in accordance with the claims procedures set forth hereinabove, Investment Credits under Section 3.1(d) and dividend credits under Section 3.1(g) will continue to be credited to the Member’s or Vested Former Member’s Retirement Account during the period of any delay in payment pending the resolution of such claim.

SECTION 6 - MISCELLANEOUS

 

  6.1.

Amendment; Suspension . The Board, may, in its sole discretion suspend or amend this Plan at any time or from time to time, in whole or in part and the Employee Benefits Committee of the Company may amend the Plan without the approval of the Board with respect to amendments that such Committee determines do not have a significant effect on the cost of the Plan; provided, however, that no such suspension or amendment of the Plan may (a) adversely affect a Member’s or Vested Former Member’s

 

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  benefit under the Plan to which he or she has become entitled in accordance with the Plan as in effect on the date immediately preceding the date of such suspension or amendment, or (b) adversely affect a Member’s or Vested Former Member’s right or the right of a Designated Beneficiary to receive a benefit in accordance with the Plan as in effect on the date immediately preceding the date of such suspension or amendment, or (c) cause any payment that a Member, Vested Former Member or Designated Beneficiary is entitled to receive under this Plan to become subject to an income tax penalty or interest payable under Section 409A of the Code. Notwithstanding the foregoing, in the event of any suspension or amendment of the Plan at or within five years following a Change in Control which has the effect of suspending or reducing the Retirement Credits and/or Investment Credits payable in accordance with Sections 3.1(c) and (d) of the Plan or in the event of the removal of a Member from participation in the Plan pursuant to Section 2.2 within five years following a Change in Control, all Members in the Plan affected by such suspension or amendment or removal shall be deemed to have completed five years of Service as of the date of such suspension or amendment or removal for purposes of determining such Members’ entitlement to their Retirement Benefits under this Plan and in the event that such suspension or amendment or removal occurs with two years following a Change in Control, all such Members shall be entitled to

 

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  Retirement Credits at their Basic Rate and Retirement Credits at their Past Service Contributions Rate, determined:

 

  (a) on the basis of the Member’s annual base salary in effect immediately prior to the effective date of the suspension or amendment or removal, as the case may be, plus the greater of the Member’s annual target bonus for the year in which such suspension or amendment or removal is effective or, if no such target bonus has yet been determined for such year, the annual bonus actually earned in the year immediately preceding the year in which such suspension or amendment or removal is effective; and

 

  (b) for the period with respect to which such Member would be entitled to severance benefits under the Employee Protection Plan or under an employment, change in control, separation or other agreement between the Member and the Company, whichever shall apply to such Member, if such Member had a Separation from Service in the year in which such suspension or amendment or removal is effective, regardless of whether such severance benefits would be denominated as such or would be payable in installments over such period or in a lump sum;

provided, however, that the cumulative Past Service Contributions credited to a Member’s Account under Section 3.1(c) and under this Section 6.1 shall not exceed the Past Service Contributions that would have been credited to such Member’s Account under Section 3.1(c) had such Member participated in the Plan for ten calendar years. Such

 

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Retirement Credits shall be credited prior to such suspension or amendment or removal. Payment of the Member’s Retirement Benefit shall be made at the time and in the form provided in Section 3.2.

 

  6.2. Termination . This Plan may be terminated and lump sum distributions made to Members, Vested Former Members (or their Designated Beneficiaries) of their Retirement Accounts hereunder only in accordance with one of the following methods:

 

  (a) within twelve months of a dissolution of the Company taxed under Section 331 of the Code, or with the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1(A), provided that Members’ or Vested Former Members’ Retirement Benefits are included in their gross incomes in the latest of : (i) the calendar year in which the Plan termination and liquidation occurs; or (ii) the first calendar year in which the payment is administratively practicable;

 

  (b)

within the thirty days preceding or the twelve months following a change in control as defined in Regulations Section 1.409A-2(g)(4)(i), provided that all agreements, methods, programs, and other arrangements sponsored by the service recipient, as defined in Regulations Section 1.409A-1(g), immediately after the time of the change in control event with respect to which deferrals of compensation are treated as having been deferred under a single plan under Regulations Section 1.409A-1(c)(2) are terminated and liquidated with respect to each participant who experienced the change in

 

-40-


  control event, so that under the terms of the termination and liquidation all such participants are required to receive all amounts of compensation deferred under the terminated agreements, methods, programs, and other arrangements within twelve months of the date the service recipient irrevocably takes all necessary action to terminate and liquidate the agreements, methods, programs, and other arrangements, provided that the service recipient with the discretion to liquidate and terminate the agreements, methods, programs, and other arrangements is the service recipient that is primarily liable immediately after the transaction for the payment of the deferred compensation;

 

  (c)

(i) the termination and liquidation does not occur proximate to a downturn in the financial health of the Company; (ii) all arrangements sponsored by the Company that would be aggregated with any terminated arrangement under Regulations Section 1.409A-1(c) if the same Member or Vested Former Member participated in all of the arrangements are terminated; (iii) no payments other than payments that would be payable under the terms of the arrangements if the termination had not occurred are made within twelve months of the date the Company takes all necessary action to irrevocably terminate and liquidate the arrangements; (iv) all payments are made within twenty-four months of the date the Company takes all necessary action to irrevocably terminate and liquidate the arrangements; and (v) the Company does not adopt a new arrangement that would be aggregated with any terminated arrangement under Regulations Section

 

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  1.409A-1(c) if the same Member or Vested Former Member participated in both arrangements, at any time within three years following the date the Company takes all necessary action to irrevocably terminate and liquidate the arrangements; or

 

  (d) such other events and conditions as the Internal Revenue Service may prescribe.

Anything in this Section 6.2 to the contrary notwithstanding, no such termination of the Plan may (i) adversely affect a Member’s or Vested Former Member’s benefit under the Plan to which he or she has become entitled in accordance with the Plan as in effect on the date immediately preceding the date of such termination, or (ii) adversely affect a Member’s or Vested Former Member’s right or the right of a Designated Beneficiary to receive a benefit in accordance with the Plan as in effect on the date immediately preceding the date of such termination, or (iii) cause any payment that a Member, Vested Former Member or Designated Beneficiary is entitled to receive under this Plan to become subject to an income tax penalty or interest payable under Section 409A of the Code. Notwithstanding the foregoing, in the event of any termination of the Plan at or within five years following a Change in Control, all Members in the Plan shall be deemed to have completed five years of Service as of the date of such termination for purposes of determining such Members’ entitlement to their Retirement Benefits under this Plan and in the event of termination of the Plan at or within two years following a Change in

 

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Control all such Members shall be entitled to Retirement Credits at their Basic Rate and Retirement Credits at their Past Service Contributions Rate, determined:

(A) on the basis of the Member’s annual base salary in effect immediately prior to the effective date of such termination of the Plan plus the greater of the Member’s annual target bonus for the year in which the termination is effective or, if no such target bonus has yet been determined for such year, the annual bonus actually earned in the year immediately preceding the year in which the termination is effective; and

(B) for the period with respect to which such Member would be entitled to severance benefits under the Employee Protection Plan or under an employment, change in control, separation or other agreement between the Member and the Company, whichever shall apply to such Member, if such Member had a Separation from Service in the year in which such termination is effective, regardless of whether such severance benefits would be denominated as such or would be payable in installments over such period or in a lump sum;

provided, however, that the cumulative Past Service Contributions credited to a Member’s Account under Section 3.1(c) and under this Section 6.2 shall not exceed the Past Service Contributions that would have been credited to such Member’s Account under Section 3.1(c) had such Member participated in the Plan for ten calendar years. Such

 

-43-


Retirement Credits shall be credited prior to such termination of the Plan. Payment of the Member’s Retirement Benefit shall be made at the time and in the form provided in Section 3.2.

 

  6.3. No Employment Rights . Nothing contained herein will confer upon any Member, Former Member or Vested Former Member the right to be retained in the service of the Company or any Affiliated Employer, nor will it interfere with the right of the Company or any Affiliated Employer to discharge or otherwise deal with Members, Former Members or Vested Former Members with respect to matters of employment.

 

  6.4. Unfunded Status . Members and Vested Former Members shall have the status of general unsecured creditors of the Company, and this Plan constitutes a mere promise by the Company to make benefit payments at the time or times required hereunder. It is the intention of the Company that this Plan be unfunded for tax purposes and for purposes of Title I of ERISA and any trust created by the Company and any assets held by such trust to assist the Company in meeting its obligations under the Plan shall meet the requirements necessary to retain such unfunded status.

 

  6.5.

Arbitration . Any dispute or controversy arising under or in connection with the Plan shall be settled exclusively by arbitration in Fairfield, Connecticut in accordance with the rules of the American Arbitration Association in effect at the time of such arbitration. The Company shall promptly pay or reimburse on a fully grossed-up and after-tax basis (so

 

-44-


  that the recipient of such reimbursement is held economically harmless) all reasonable costs and expenses (including fees and disbursements of counsel and pension experts) incurred to assert rights under this Plan for so long as such rights may exist or in any proceeding in connection therewith brought by a Member, Vested Former Member or Designated Beneficiary, whether or not such Member, Vested Former Member or Designated Beneficiary is ultimately successful in enforcing such rights or in such proceeding; provided, however, that no reimbursement shall be owed with respect to expenses relating to any unsuccessful assertion of rights or proceeding if and to the extent that such assertion or proceeding was initiated or maintained in bad faith or was frivolous as determined by the arbitrators or a court having jurisdiction over the matter. The amount of expense eligible for reimbursement in any one taxable year of the Member, Vested Former Member or Designated Beneficiary shall not affect the amount of expense eligible for reimbursement in any other taxable year of the Member, Vested Former Member or Designated Beneficiary. The reimbursement of expenses shall be made each calendar quarter and not later than the last day of the taxable year of the Member, Vested Former Member or Designated Beneficiary in which the expense was incurred. The right to reimbursement of any expense under this Section 6.5 shall not be subject to liquidation or exchange for another benefit.

 

-45-


  6.6. No Alienation . Except as otherwise provided in Section 3.2(e)(i), a Member’s or Vested Former Member’s right to benefit payments under the Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of such Member or Vested Former Member or his or her Designated Beneficiary.

 

  6.7. Withholding . The Company may withhold from any benefit under the Plan an amount sufficient to satisfy its tax withholding obligations. Except with respect to any Member whose employment is terminated for Cause or voluntarily resigns without Good Reason (other than Retirement, as defined in the Holdings 2010 Equity Incentive Plan) before February 26, 2015, a Member may elect to have his or her tax withholding obligations in respect of his or her Stock Account satisfied by having shares of Common Stock held back by the Company with a Fair Market Value equal to the minimum amount of such tax withholding obligations.

 

  6.8.

Governing Law . The Plan shall be governed by and construed in accordance with the laws of the State of Connecticut applicable to contracts made and to be performed in such state to the extent not preempted by federal law. Anything in this Plan to the contrary notwithstanding, the terms of this Plan shall be interpreted and applied in a manner consistent with the requirements of Section 409A of the Code and the Regulations thereunder so as not to subject any Member, Vested Former Member or Designated Beneficiary to the payment of any tax

 

-46-


  penalty or interest which may be imposed by Section 409A of the Code and the Company shall have no right to accelerate or make any payment under this Plan except to the extent such action would not subject any Member, Vested Former Member or Designated Beneficiary to the payment of any tax penalty or interest under Section 409A of the Code. If a Member, Vested Former Member or Designated Beneficiary becomes subject to any tax penalty or interest under Section 409A of the Code by reason of his or her participation in this Plan, the Company shall reimburse such Member, Vested Former Member or Designated Beneficiary, as the case may be, on a fully grossed-up and after-tax basis for any such tax penalty or interest (so that the recipient of such reimbursement is held economically harmless) ten business days prior to the date such tax penalty or interest is due and payable by such Member, Vested Former Member or Designated Beneficiary to the government.

 

  6.9. Successors . The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform the obligations of the Company under this Plan in the same manner and to the same extent that the Company would have been required to perform such obligations if no such succession had taken place and such assumption shall be an express condition to the consummation of any such purchase, merger, consolidation or other transaction.

 

-47-


  6.10. Integration . In the event of any conflict or ambiguity between this Plan and the terms of any employment agreement between a Member or Vested Former Member and the Company or any Change in Control Agreement between a Member or Vested Former Member and the Company (this Plan and any such employment agreement or Change in Control Agreement being collectively referred to herein as the “arrangements”), such conflict or ambiguity shall be resolved in accordance with the terms of that arrangement which are most beneficial to the Member or Vested Former Member; provided, however, that no such resolution of any such conflict or ambiguity shall operate to cause the Member or Vested Former Member to receive duplicate payments or benefits under the arrangements.

 

IMS Health Incorporated
By:  

/s/ Paul Thomson

Paul Thomson
Senior Vice President, Human Resources,on behalf of the IMS Health Incorporated
Employee Benefits Committee
Date:  

05/08/2012

 

-48-


Appendix A

Defined terms used in this Appendix A shall have the meanings ascribed to them in the Plan. Except as may be otherwise set forth in an individualized written agreement between the Company and a Member as approved by the Committee, the Basic Rate and Past Service Contributions Rate for any Member shall be determined in accordance with the table set forth below based on such Member’s Entry Age and Past Service. For purposes of calculating any Basic Rate or Past Service Contributions Rate, an interpolated percentage shall be used to determine the rate for any Member whose Entry Age and/or Past Service is between those provided in the following table:

 

           Past Service Contributions Rate For First 10 Years Of  Participation  

Entry Age

   Basic
Rate
    1 Year
Past
Service
    3 Years
Past
Service
    5 Years
Past
Service
    10 Years
Past
Service
    15 Years
Past
Service
    20 Years
Past
Service
 

40

     11.9     1.0     3.2     7.4     4.9     4.9     4.9

45

     12.4     1.1     3.5     5.8     13.9     13.9     13.9

50

     12.9     1.3     3.8     6.3     12.5     24.1     24.1

55

     12.0     1.6     4.8     6.9     12.3     21.7     21.7

For example, a Member whose Entry Age is 50 and whose Past Service is 3 years, would have: (1) a Basic Rate of 12.9%; plus (2) a Past Service Contributions Rate of 3.8% for the first 10 years of such Member’s participation in the Plan.

 

-49-


Appendix B

Service Counting Rules

(a) A Member or Vested Former Member shall be credited with Service equal to the total of (i) his or her Period(s) of Service with the Company or an Affiliated Employer and (ii) any Period(s) of Severance that are less than twelve (12) months. Service shall be computed in 1/12ths of a year, with a full month being granted for each completed or partial calendar month. Notwithstanding the foregoing, no month which is included in a Period of Service shall be included in a Period of Severance of less than twelve months for the purpose of determining Service.

(b) A Member or Vested Former Member shall be credited with Service for Periods of Service completed as an employee of D&B or Cognizant; provided, however, that any such Member or Vested Former Member who was not vested in his or her benefit under the D&B Plan or the Cognizant Plan shall not be credited with Service for Periods of Service completed as an employee of D&B or Cognizant if such Employee incurred a Break in Service prior to his or her employment by the Company or an Affiliated Employer.

(c) For purposes of sections (a) and (b) of this Appendix B, the following definitions shall apply:

Break in Service ” shall mean a Period of Severance that exceeds five years.

Cognizant ” shall mean Cognizant Corporation.

Cognizant Plan ” shall mean the Cognizant Retirement Plan.

D&B ” shall mean The Dun & Bradstreet Corporation.

D&B Plan ” shall mean the Master Retirement Plan of The Dun & Bradstreet Corporation.

Employment Commencement Date ” shall mean the date on which a Member or Vested Former Member is first credited with an Hour of Service.

Hour of Service ” — A Member or Vested Former Member shall be credited with an Hour of Service for:

(i) Each hour for which a person is directly or indirectly paid, or entitled to payment, by the Company or an Affiliated Employer for the performance of duties.

(ii) Each hour for which a person is directly or indirectly paid, or entitled to payment, by the Company or an Affiliated Employer for reasons other than for

 

-50-


the performance of duties (such as vacation, holiday, illness, incapacity including disability, jury duty, military duty, leave of absence or layoff).

(iii) Each hour for which an Employee is not paid or entitled to pay but during which the Employee is absent for a period of military service for which reemployment rights are protected by law, but only if the Employee returns to employment with the Company or an Affiliated Employer within the time required by law.

Period of Service ” shall mean the period of time commencing on the Member’s or Vested Former Member’s Employment Commencement Date or Re-Employment Commencement Date, whichever is applicable, and ending on the Severance Date following such Employment Commencement Date or Re-Employment Commencement Date. Periods of Service shall be computed in 1/l2ths of a year, with a full month being granted for each completed or partial month.

Period of Severance ” shall mean the period of time commencing on a Severance Date and ending on the date the Member or Vested Former Member again performs an Hour of Service for the Company or an Affiliated Employer.

Re-Employment Commencement Date ” shall mean the first date, following a Period of Severance, that the Member or Vested Former Member again performs an Hour of Service for the Company or an Affiliated Employer.

Severance Date ” shall mean the earliest of:

(i) the date on which the Member or Vested Former Member resigns, is discharged or dies; or

(ii) the date following a twelve-month period in which the Member or Vested Former Member remains absent from employment (with or without pay) for any reason other than maternity or paternity leave of absence, resignation, discharge or death (such as vacation, holiday, sickness, disability, leave of absence or layoff); or

(iii) the date following a twenty-four month period in which the Member or Vested Former Member remains absent from employment (with or without pay) for a maternity or paternity leave including:

 

  (A) the individual’s pregnancy; or

 

  (B) childbirth; or

 

  (C) adoption of a child; or

 

  (D)

child care immediately after the birth or adoption of a child;

 

-51-


in the case of a Member or Vested Former Member who is absent from employment beyond the first anniversary of the first day of absence by reason of maternity or paternity leave; provided, however the period between the first and second anniversary will be treated as neither a Period of Severance nor a Period of Service.

 

-52-

Exhibit 10.11

IMS HEALTH INCORPORATED

RETIREMENT EXCESS PLAN

As Amended and Restated Effective as of January 1, 2005


TABLE OF CONTENTS

 

              Page  

INTRODUCTION

     1   

SECTION 1 - DEFINITIONS

     2   
  1.1     

“Affiliated Employer”

     2   
  1.2     

“Benefit Payment Date”

     2   
  1.3     

“Board”

     2   
  1.4     

“Cause”

     2   
  1.5     

“Change in Control”

     3   
  1.6     

“Code”

     5   
  1.7     

“Committee”

     6   
  1.8     

“Company”

     6   
  1.9     

“Designated Beneficiary”

     6   
  1.10   

“Disability”

     6   
  1.11   

“Effective Date”

     6   
  1.12   

“ERISA”

     6   
  1.13   

“Good Reason”

     6   
  1.14   

“Member”

     9   
  1.15   

“Plan”

     9   
  1.16   

“Plan Administrator”

     9   
  1.17   

“Potential Change in Control”

     9   
  1.18   

“Qualified Plan”

     10   
  1.19   

“Regulations”

     10   
  1.20   

“Retirement Benefit”

     10   
  1.21   

“Separation from Service”

     10   
  1.22   

“Specified Employee”

     10   

SECTION 2 - PARTICIPATION

     11   
  2.1     

Commencement of Participation

     11   

SECTION 3 - AMOUNT AND FORM OF BENEFITS

     11   
  3.1     

Retirement Benefit

     11   
  3.2     

Time and Form of Payment

     12   
  3.3     

Nonpayment of Benefits

     17   
  3.4     

Notification of Nonpayment of Benefits

     18   

 

-i-


TABLE OF CONTENTS

(continued)

 

  3.5     

Repayment of Benefits

     18   
  3.6     

Change in Control

     18   

SECTION 4 - DEATH BENEFITS

     20   
  4.1     

Death Prior to Benefit Payment

     20   
  4.2     

Death On or After Benefit Payment

     21   

SECTION 5 - PLAN ADMINISTRATOR

     21   
  5.1     

Duties and Authority

     21   
  5.2     

Presentation of Claims

     22   
  5.3     

Claims Denial Notification

     22   
  5.4     

Claims Review Procedure

     23   
  5.5     

Timing

     23   
  5.6     

Final Decision

     24   
  5.7     

Delayed Payments

     24   

SECTION 6 - MISCELLANEOUS

     25   
  6.1     

Amendment; Suspension

     25   
  6.2     

Termination

     26   
  6.3     

No Employment Rights

     28   
  6.4     

Unfunded Status

     28   
  6.5     

Arbitration

     29   
  6.6     

No Alienation

     30   
  6.7     

Withholding

     30   
  6.8     

Governing Law

     30   
  6.9     

Successors

     31   
  6.10   

Integration

     31   
 

Appendix A

     33   
 

Appendix B

     34   
 

Appendix C

     35   

 

-ii-


IMS HEALTH INCORPORATED

RETIREMENT EXCESS PLAN

As Amended and Restated Effective as of January 1, 2005

INTRODUCTION

Effective as of July 1,1998, the IMS Health Incorporated Retirement Excess Plan (the “Plan”) was established to provide participating employees with retirement benefits in excess of those permitted to be paid under the IMS Health Incorporated Retirement Plan (the “Qualified Plan”) due to the limitations imposed by Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as amended (the “Code”) and the exclusion from the definition of compensation under the Qualified Plan of amounts deferred under any nonqualified deferred compensation plan. This document represents a complete restatement of the Plan effective as of January 1, 2005. The provisions of this amendment and restatement of the Plan shall apply to Members of the Plan who have not retired or terminated employment with the Company as of January 1, 2005. The rights to benefits, if any, of any former Member who retired or otherwise terminated employment before January 1, 2005, together with the amount of such benefits, shall continue to be governed by the provisions of the Plan in effect as of the date of such retirement or termination of employment. In addition, with respect to the Members identified on Appendix A to the Plan, the provisions of this amendment and restatement of the Plan shall apply to benefits they accrue under the Plan after December 31, 2004. The rights to vested benefits they had accrued under the Plan as of December 31, 2004, together with the amount of such benefits and any elections with respect to such benefits in effect on December 31, 2004, shall continue to be governed by the provisions of the Plan in effect as of December 31, 2004.


SECTION 1 - DEFINITIONS

 

  1.1 “Affiliated Employer” shall mean an entity affiliated with the Company.

 

  1.2 “Benefit Payment Date” shall mean the date on which a Member’s Retirement Benefit is paid to such Member in accordance with Section 3.2 or to such Member’s Designated Beneficiary in accordance with Section 4.1.

 

  1.3 “Board” shall mean the Board of Directors of IMS Health Incorporated, except that any action authorized to be taken by the Board hereunder may also be taken by a duly authorized committee of the Board or its duly authorized delegees.

 

  1.4 “Cause” A Member shall not be deemed to have been terminated for “Cause” under this Plan unless such Member shall have been terminated for “Cause” under the terms of such Member’s employment agreement or change in control agreement with the Company, if any. If no such employment agreement or change in control agreement containing a definition of “Cause” shall be in effect, for purposes of this Plan “Cause” shall mean a Member’s:

 

  (a)

willful and continued failure to substantially perform his or her duties (other than any such failure resulting from incapacity due to physical or

 

-2-


  mental illness or Disability or any failure after the issuance of a notice of termination by the Member for Good Reason) which failure is demonstrably and materially damaging to the financial condition or reputation of the Company and/or its Affiliated Employers, and which failure continues more than 48 hours after a written demand for substantial performance is delivered to the Member by the Company, which demand specifically identifies the manner in which the Company believes that the Member has not substantially performed his or her duties; or

 

  (b) the willful engaging by the Member in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise.

No act, or failure to act, on the part of the Member shall be deemed “willful” unless done, or omitted to be done, by the Member not in good faith and without reasonable belief that his or her action or omission was in the best interest of the Company.

 

  1.5 “Change in Control” If a “Change in Control” shall have occurred or shall be deemed to have occurred under the terms of a Member’s Change in Control Agreement or employment agreement with the Company, if any, then a “Change in Control” shall be deemed to have occurred under this Plan. Otherwise a “Change in Control” shall be deemed to have occurred if:

 

  (a)

any “Person” as such term is used for purposes of Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)

 

-3-


  (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), becomes the “Beneficial Owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities;

 

  (b) during any period of 24 months (not including any period prior to the Effective Date), individuals who at the beginning of such period constitute the Board, and any new director (other than (i) a director nominated by a Person who has entered into an agreement with the Company to effect a transaction described in Sections 1.5(a), (c), or (d) hereof, (ii) a director nominated by any Person (including the Company) who publicly announces an intention to take or to consider taking actions (including, but not limited to, an actual or threatened proxy contest) which if consummated would constitute a Change in Control, or (iii) a director nominated by any Person who is the Beneficial Owner, directly or indirectly, of securities of the Company representing 10% or more of the combined voting power of the Company’s securities) whose election by the Board or nomination for election by the Company’s stockholders was approved in advance by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;

 

-4-


  (c) any transaction (or series of transactions) is consummated under which the Company is merged or consolidated with any other company, other than a merger or consolidation (i) which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 66 2/3% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, and (ii) after which no Person holds 20% or more of the combined voting power of the then outstanding securities of the Company or such surviving entity;

 

  (d) a sale or disposition by the Company of all or substantially all of the Company’s assets is consummated or the stockholders of the Company approve a plan of complete liquidation of the Company; or

 

  (e) the Board adopts a resolution to the effect that, for purposes of this Plan, a Change in Control has occurred.

 

  1.6 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

-5-


  1.7 “Committee” shall mean the the Human Resources Committee of the Board (the Compensation and Benefits Committee before January 1, 2007) or any successor thereto.

 

  1.8 “Company” shall mean IMS Health Incorporated.

 

  1.9 “Designated Beneficiary” shall mean one or more persons, estates or other entities, designated in accordance with such procedures as may be specified by the Plan Administrator, that are entitled to receive benefits under the Plan upon the death of a Member and, in the absence of any such designation, the Member’s estate.

 

  1.10 “Disability” shall mean with respect to any Member, disability or disabled for purposes of the long-term disability plan of the Company or an Affiliated Employer pursuant to which long-term disability benefits are payable to such Member.

 

  1.11 “Effective Date” shall mean July 1, 1998. The Effective Date of this amendment and restatement shall mean January 1, 2005.

 

  1.12 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

 

  1.13

“Good Reason” If a Member shall have terminated employment for “Good Reason” under the terms of such Member’s Change in Control Agreement or employment agreement with the Company, if any, then such Member shall be deemed to have terminated employment for “Good

 

-6-


  Reason” under this Plan. Otherwise “Good Reason” shall mean, without the Member’s express written consent, the occurrence of any of the following circumstances unless such circumstances are fully corrected prior to the date of termination specified in the notice of termination given in respect thereof:

 

  (a) the assignment to the Member of any duties inconsistent with the Member’s position in the Company, or an adverse alteration in the nature or status of the Member’s responsibilities or the conditions of the Member’s employment;

 

  (b) a reduction by the Company in the Member’s annual base salary, target bonus or perquisites except for across-the-board perquisite reductions similarly affecting all senior executives of the Company and all senior executives of any Person, as such term is used for purposes of Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, in control of the Company;

 

  (c) the relocation of the principal place of the Member’s employment to a location more than 50 miles from the location of such place of employment; for this purpose, required travel on the Company’s business will not constitute a relocation so long as the extent of such travel is substantially consistent with the Member’s customary business travel obligations;

 

-7-


  (d) the failure by the Company to pay to the Member any portion of the Member’s compensation or to pay to the Member any portion of an installment of deferred compensation under any deferred compensation program of the Company within seven days of the date such compensation is due;

 

  (e) the failure by the Company to continue in effect any material compensation or benefit plan in which the Member participated unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Member’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amounts of benefits provided and the level of the Member’s participation relative to other participants;

 

  (f) the failure of the Company to obtain a satisfactory agreement from any successor to the Company to fully assume the Company’s obligations and to perform under this Plan, as contemplated in Section 6.9 hereof;

 

  (g) with respect to any Member who is a party to an employment agreement or a Change in Control Agreement, any purported termination of such Member’s employment that is not effected pursuant to the notice provisions, if any, in such Member’s employment agreement or Change in Control Agreement.

 

-8-


  1.14 “Member” shall mean an employee of the Company or an Affiliated Employer who becomes a participant in the Plan pursuant to Section 2.

 

  1.15 “Plan” shall mean this IMS Health Incorporated Retirement Excess Plan, as embodied herein, and any amendments thereto.

 

  1.16 “Plan Administrator” shall mean the Company, except that any action authorized to be taken by the Plan Administrator hereunder may also be taken by any committee or person(s) duly authorized by the Board or the duly authorized delegees of such duly authorized committee or person(s).

 

  1.17 “Potential Change in Control” If a “Potential Change in Control” shall have occurred or shall be deemed to have occurred under the terms of a Member’s Change in Control Agreement or employment agreement with the Company, if any, then a “Potential Change in Control” shall be deemed to have occurred under this Plan. Otherwise a “Potential Change in Control” shall be deemed to have occurred if:

 

  (a) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

 

  (b) any Person (including the Company), as defined in Section 1.5(a) hereof, publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or

 

  (c) the Board adopts a resolution to the effect that, for purposes of this Plan, a Potential Change in Control has occurred.

 

-9-


  1.18 “Qualified Plan” shall mean the IMS Health Incorporated Retirement Plan, as the same may be amended from time to time.

 

  1.19 “Regulations” shall mean proposed and final Treasury Regulations, as the same may be amended from time to time.

 

  1.20 “Retirement Benefit ” shall mean the benefit described in Section 3.1 (a) hereof

 

  1.21 “Separation from Service” shall mean termination of employment with the Company and any Affiliated Employer. Whether a Member has had a Separation from Service shall be determined by the Plan Administrator on the basis of ail relevant facts and circumstances and with reference to Regulations Section 1.409A-1(h).

 

  1.22 “Specified Employee” shall mean an employee who satisfies the requirements for being designated a “key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code at any time during a calendar year, in which case such employee shall be considered a Specified Employee for the twelve-month period beginning on the first day of the fourth month immediately following the end of such calendar year.

 

-10-


SECTION 2 - PARTICIPATION

 

  2.1 Commencement of Participation . All participants in the Qualified Plan shall be Members in this Plan whenever their benefits under the Qualified Plan, as from time to time in effect, are reduced by reason of the limitations imposed by Sections 401(a)(17) and 415 of the Code or the exclusion from the definition of compensation under the Qualified Plan of amounts deferred under any nonqualified deferred compensation plan.

SECTION 3 - AMOUNT AND FORM OF BENEFITS

 

  3.1 Retirement Benefit

 

  (a) Retirement Benefit . The Company shall pay to each Member (or such Member’s Designated Beneficiary) a benefit equal to the excess of (i) over (ii), where:

 

  (i) equals the amount of the annual benefit that would be payable to the Member (or his or her Designated Beneficiary) under the Qualified Plan if the limitations imposed by Sections 401(a)(17) and 415 of the Code and the exclusion from the definition of compensation under the Qualified Plan of amounts deferred under any nonqualified deferred compensation plan did not apply; and

 

-11-


  (ii) equals the sum of (A) the actual annual benefit payable to the Member (or his or her Designated Beneficiary) from the Qualified Plan and (B) the annual benefit payable to the Member (or his or her Designated Beneficiary) from the Pension Benefit Equalization Plan of The Dun & Bradstreet Corporation (as in effect on October 31, 1996), as determined by the Company in accordance with the methods and assumptions specified in Appendix B to this Plan.

For purposes of this Section 3.1, the annual benefit under the Qualified Plan shall be determined as a life annuity commencing on the Benefit Payment Date, calculated in accordance with the assumptions provided in the Qualified Plan for purposes of determining the accrued benefit thereunder with respect to Benefit Payment Dates occurring on or after the Member’s attainment of age 55 and the assumptions specified in Appendix B for Benefit Payment Dates occurring before the Member’s attainment of age 55.

Notwithstanding the foregoing, no benefits shall be payable hereunder unless the Member has a nonforfeitable right to benefits under the Qualified Plan.

 

  3.2 Time and Form of Payment .

 

  (a)

Until January 1, 2009, a Member’s Retirement Benefit shall be payable at the same time and in the same form as the Member’s benefits under the Qualified Plan; however, if a Member shall have made an election in

 

-12-


  accordance with Section 3.2(c) to receive his or her Retirement Benefit in the form of a lump sum, such Retirement Benefit shall be paid in a lump sum at the same time as the Member’s benefits under the Qualified Plan.

 

  (b) Effective January 1, 2009, a Member’s Retirement Benefit shall automatically be paid in the form of a lump sum in the payroll period next following the payroll period in which occurs the later of: (i) the Member’s attainment of age 55; or (ii) the Member’s Separation from Service.

 

  (c) Notwithstanding Section 3.2(a), any lump sum election made in accordance with the terms of the Plan in effect prior to January 1, 2005 shall continue to be effective with respect to a Retirement Benefit or Deferred Vested Benefit payable before January 1, 2009. In addition, a Member (i) who accrues a Retirement Benefit with respect to periods prior to January 1, 2009, and (ii) to whom distributions have not commenced, shall be permitted to elect, on or before December 31, 2008, on forms to be provided by the Plan Administrator, whether payment of the Retirement Benefit to which such Member may become entitled shall be paid in a lump sum provided that with respect to an election made in 2005, 2006, 2007 or 2008, the election may apply only to Retirement Benefits that would not otherwise be payable in the calendar year in which the election is made and may not cause a Retirement Benefit to be paid in such calendar year that would not otherwise be payable in such calendar year.

 

-13-


  (d) The lump sum payment of a Member’s Retirement Benefit shall equal the present value of such benefit, and such present value shall be determined on the basis of: (i) a discount rate equal to 85% of the average of the 15-year non-callable U.S. Treasury bond yields (or, in the event that 15-year non-callable U.S. Treasury bond yields are unavailable, such proxy for the same as the Plan Administrator may reasonably select) as of the close of business on the last business day of each of the three months immediately preceding the Benefit Payment Date, and (ii) the 1983 Group Annuity Mortality Table.

 

  (e) Anything in this Plan to the contrary notwithstanding, payment to any Specified Employee upon Separation from Service shall not be made before the date that is six months after the date of Separation from Service (or, if earlier, the date of death of such Specified Employee). Any payment due within such six-month period will be adjusted to reflect the deferred payment date by multiplying the payment by the product of the six-month CMT Treasury Bill annualized yield rate as published by the U.S. Treasury for the date on which such payment would have been made but for the delay multiplied by a fraction, the numerator of which is the number of days by which such payment was delayed and the denominator of which is 365. The adjusted lump sum payment shall be made at the beginning of the seventh month following the Member’s Separation from Service. The six-month delay in payment described herein shall not apply, however, to any payment made under the circumstances described in Section 3.2(f).

 

-14-


  (f) The preceding provisions of this Section 3.2 to the contrary notwithstanding, a payment to or on behalf of a Member shall be accelerated under each of the following circumstances:

 

  (i) if payment is required to be made to an individual other than the Member to fulfill a domestic relations order as defined in Section 414(p)(1)(B) of the Code;

 

  (ii) to the extent that payment is reasonably necessary to avoid the violation of an applicable Federal, state, local or foreign ethics law or conflicts of interest law as provided in Regulations Section 1.409A-3(j)(4)(iii); or

 

  (iii)

if all or a portion of the Retirement Benefit payable to a Member or Designated Beneficiary constitutes taxable income to such Member or Designated Beneficiary for any taxable year that is prior to the taxable year in which such Retirement Benefit is to be paid to such Member or Designated Beneficiary as a result of the Plan’s failure to comply with the requirements of Section 409A of the Code and the Regulations thereunder, the Retirement Benefit shall be immediately paid to such Member or Designated Beneficiary to the extent that such Retirement Benefit is required to be included in income. As provided in Section 6.8, the

 

-15-


  Company shall reimburse such Member or Designated Beneficiary on a fully grossed-up and after-tax basis for any tax penalty or interest payable in connection with such income inclusion (so that the recipient of such reimbursement is held economically harmless).

 

  (g) The provisions of this Section 3.2 to the contrary notwithstanding, a payment to a Member (or his or her Designated Beneficiary) may be delayed to a date after the designated Benefit Payment Date if calculation of the amount of the payment is not administratively practicable due to events beyond the control of the Member (or his or her Designated Beneficiary) and such delay is for reasons that are commercially reasonable, provided that payment is made as soon as payment is administratively practicable. Any payment delayed pursuant to this Section 3.2(g) will be adjusted to reflect the deferred payment date by multiplying the payment by the product of the six-month CMT Treasury Bill annualized yield rate as published by the U.S. Treasury for the date on which such payment would have been made but for the delay multiplied by a fraction, the numerator of which is the number of days by which such payment was delayed and the denominator of which is 365.

 

-16-


  3.3 Nonpayment of Benefits . Subject to Section 3.6 hereof, no benefits shall be paid to a Member or Designated Beneficiary if the Member has:

 

  (a) become a stockholder (unless such stock is listed on a national securities exchange or traded on a daily basis in the over-the-counter market and the Member’s ownership interest is not in excess of 2% of the company whose shares are being purchased), employee, officer, director or consultant of or to a company, or a member or an employee of or a consultant to a partnership or any other business or firm, which competes with any of the businesses identified in the Company’s Employee Protection Plan, or such Member accepts any form of compensation from such competing entity;

 

  (b) been discharged from employment with the Company or any Affiliated Employer for Cause;

 

  (c) failed to retain in confidence any and all confidential information concerning the Company or any Affiliated Employer and its respective business which was known or became known to the Member, except as otherwise required by law and except information (i) ascertainable or obtained from public information, (ii) received by the Member at any time after the Member’s Separation from Service, from a third party not employed by or otherwise affiliated with the Company or any Affiliated Employer, or (iii) which was or became known to the public by any means other than a breach of this Section 3.3; or

 

  (d)

made disparaging comments about the Company or any Affiliated Employer in any communications, written or oral, with any individual, company, government body or agency or any other entity whatsoever. For

 

-17-


  purposes hereof, “disparage” shall mean any communication, including, but not limited to, any statements, actions or insinuations, made either directly or through a third party, that would tend to lessen the standing or stature of the Company or any Affiliated Employer in the eyes of a customer, a prospective customer, a shareholder or a prospective shareholder.

 

  3.4 Notification of Nonpayment of Benefits . Subject to Section 3.6 hereof, in any case described in Section 3.3, the Member or Designated Beneficiary shall be given prior written notice that no benefits will be paid to such Member or Designated Beneficiary and shall be provided an opportunity to be heard prior to any such nonpayment of benefits. Such written notice shall specify the particular act(s), or failures to act, and the basis on which the decision not to pay his or her benefits has been made.

 

  3.5 Repayment of Benefits . Subject to Section 3.6 hereof, a Member who is paid his or her Retirement Benefit, shall receive such Retirement Benefit subject to the condition that if such Member engages in any of the acts described in Section 3.3, then such Member shall, within 60 days after written notice by the Company specifying the particular act(s), or failures to act, and the basis on which the decision to recover such Retirement Benefit has been made, repay to the Company the entire amount of the Retirement Benefit previously paid to such Member.

 

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  3.6 Change in Control .

 

  (a) Anything in this Plan to the contrary notwithstanding:

 

  (i) Any Member, whose employment with the Company or an Affiliated Employer is involuntarily terminated by the Company or an Affiliated Employer at or within two years following a Change in Control for a reason other than Cause or whose employment is voluntarily terminated by the Member with Good Reason at or within two years following a Change in Control shall be deemed to have a nonforfeitable right to his or her Retirement Benefit under this Plan and the time of payment of such Retirement Benefit under Section 3.2 shall be determined without regard to whether the Member has attained age 55.

 

  (ii)

In the event of a Potential Change in Control or Change in Control, the Company shall, not later than 15 days thereafter, have established one or more so-called “rabbi” trusts and shall deposit therein cash in an amount sufficient to provide for full payment of all potential benefits payable under the Plan at or following a Change in Control; provided, however, that no such deposit shall be made if it would cause a violation of the funding limitations of Section 409A(b)(3) of the Code. Such rabbi trust(s) shall be irrevocable and shall provide that the Company may not, directly or indirectly, use or recover any assets of the trust(s) until such time as all obligations which potentially could arise hereunder have been settled and paid in full, subject only to the claims of

 

-19-


  creditors of the Company in the event of insolvency or bankruptcy of the Company; provided, however, that if no Change in Control has occurred within two years after such Potential Change in Control, such rabbi trust(s) shall at the end of such two-year period become revocable and may thereafter be revoked by the Company.

 

  (iii) The provisions of Sections 3.3 through 3.5 shall be of no force or effect with respect to Members who have a Separation from Service for the reasons described in Section 3.6(a)(i) within a two-year period following a Change in Control.

SECTION 4 - DEATH BENEFITS

 

  4.1

Death Prior to Benefit Payment . Until January 1, 2009, if a Member who is vested in his or her benefit under the Qualified Plan dies prior to his or Benefit Payment Date under this Plan, such Member’s Designated Beneficiary shall be paid the benefit provided in Section 3.1(a) in the same form and at the same time as provided under the Qualified Plan unless such Member shall have made a lump sum election as provided in Section 3.2(c) in which case such benefit shall be payable to the Member’s Designated Beneficiary in the form of a lump sum as provided in such election. From and after January 1, 2009, if a Member who is vested in his or her benefit under the Qualified Plan dies prior to his or her Benefit Payment Date under this Plan, such Member’s Designated Beneficiary shall be paid the benefit provided in Section 3.1(a) in the form of a lump

 

-20-


  sum. The amount of any lump sum payment shall be determined using the actuarial assumptions set forth in Section 3.2(d). Payment of such benefit upon the death of a Member shall be made on the first day of the month next following the month in which the Member’s death occurs.

 

  4.2 Death On or After Benefit Payment . No benefit shall be payable to the Designated Beneficiary of a Member whose Retirement Benefit was paid or commenced prior to his or her death except to the extent that such Retirement Benefit commenced to be paid prior to January 1, 2009 in the form of an annuity that included survivor benefits, in which case the survivor benefits shall be payable in accordance with such annuity.

SECTION 5 - PLAN ADMINISTRATOR

 

  5.1

Duties and Authority . The Plan Administrator shall be responsible for the administration of the Plan and may delegate to any management committee, employee, director or agent its responsibility to perform any act hereunder, including, without limitation, those matters involving the exercise of discretion; provided, that such delegation shall be subject to revocation at any time at the Plan Administrator’s discretion. The Plan Administrator shall have the sole discretion to determine all questions arising in connection with the Plan, to interpret the provisions of the Plan and to construe all of its terms, to adopt, amend, and rescind rules and regulations for the administration of the Plan, and generally to conduct and administer the Plan and to make all determinations in connection with the

 

-21-


  Plan as may be necessary or advisable. All such actions of the Plan Administrator shall be conclusive and binding upon all Members, Designated Beneficiaries and other persons.

 

  5.2 Presentation of Claims . Claims for benefits shall be filed in writing with the Plan Administrator. Written or electronic notice of the disposition of a claim shall be furnished to the claimant within 90 days after the claim is filed (or within 180 days if special circumstances require an extension of time for processing the claim and if notice of such extension and circumstances is provided to the claimant within the initial 90-day period.)

 

  5.3 Claims Denial Notification . If a claim is wholly or partially denied, the Plan Administrator shall furnish to the claimant a written notice setting forth in a manner calculated to be understood by the claimant:

 

  (a) the specific reason(s) for denial;

 

  (b) specific reference(s) to pertinent Plan provisions on which any denial is based;

 

  (c) a description of any additional material or information necessary for the claimant to perfect the claim, and an explanation of why such material or information is necessary;

 

  (d) an explanation of the Plan’s claims review procedures and the applicable time limits for such procedures; and

 

  (e) a statement that the claimant has a right to bring a civil action under Section 502(a) of ERISA following an adverse determination on review.

 

-22-


  5.4 Claims Review Procedure . Upon a denial, the claimant is entitled (either in person or by his duly authorized representative) to:

 

  (a) request a subsequent review of the claim by the Plan Administrator upon written application for review made to the Plan Administrator. In the case of a denial as to which written notice of denial has been given to the claimant, any such request for review of the claim must be made within 60 days after receipt by the claimant of such notice. A claimant must submit a written application for review before the claimant is permitted to bring a civil action for benefits;

 

  (b) review pertinent documents relating to the denial; and

 

  (c) submit written comments, documents, records and other information relating to the claim.

 

  5.5 Timing . The Plan Administrator shall make its decision and notify the claimant with respect to a claim not later than 60 days after receipt of the request. Such 60-day period may be extended for another period of 60 days if the Plan Administrator finds that special circumstances require an extension of time for processing and notice of the extension and special circumstances is provided to the claimant within the initial 60-day period.

 

-23-


  5.6 Final Decision . The claim for review shall be given a full and fair review that takes into account all comments, documents, records and other information submitted that relates to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The Plan Administrator shall provide the claimant with written or electronic notice of the decision in a manner calculated to be understood by the claimant, The notice shall include specific reasons for the decision, specific references to the pertinent Plan provisions on which the decision is based, a statement that the claimant has a right to bring a civil action under Section 502(a) of ERISA, and a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the claim. A document is relevant to the claim if it was relied upon in making the determination, was submitted, considered or generated in the course of making the determination or demonstrates that benefit determinations are made in accordance with the Plan and that Plan provisions have been applied consistently with respect to similarly situated claimants.

 

  5.7

Delayed Payments . If the Plan Administrator shall approve the payment of a claim for benefits filed in accordance with the claims procedures set forth hereinabove, any payment delayed pending the resolution of such claim will be adjusted to reflect the deferred payment date by multiplying the payment by the product of the six-month CMT Treasury Bill

 

-24-


  annualized yield rate as published by the U.S. Treasury for the date on which such payment would have been made but for the delay multiplied by a fraction, the numerator of which is the number of days by which such payment was delayed and the denominator of which is 365.

SECTION 6 - MISCELLANEOUS

 

  6.1 Amendment; Suspension . The Board, may, in its sole discretion suspend or amend this Plan at any time or from time to time, in whole or in part and the Employee Benefits Committee of the Company may amend the Plan without the approval of the Board with respect to amendments that such Committee determines do not have a significant effect on the cost of the Plan; provided, however, that no such suspension or amendment of the Plan may (a) adversely affect a Member’s benefit under the Plan to which he or she has become entitled in accordance with the Plan as in effect on the date immediately preceding the date of such suspension or amendment, or (b) adversely affect a Member’s right or the right of a Designated Beneficiary to receive a benefit in accordance with the Plan as in effect on the date immediately preceding the date of such suspension or amendment, or (c) cause any payment that a Member or Designated Beneficiary is entitled to receive under this Plan to become subject to an income tax penalty or interest payable under Section 409A of the Code.

 

-25-


  6.2 Termination This Plan may be terminated and lump sum distributions made to Members (or their Designated Beneficiaries) of their Retirement Benefits hereunder only in accordance with one of the following methods:

 

  (a) within twelve months of a dissolution of the Company taxed under Section 331 of the Code, or with the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1(A), provided that Members’ Retirement Benefits are included in their gross incomes in the latest of: (i) the calendar year in which the Plan termination and liquidation occurs; or (ii) the first calendar year in which the payment is administratively practicable;

 

  (b)

within the thirty days preceding or the twelve months following a change in control as defined in Regulations Section 1.409A-2(g)(4)(i), provided that all agreements, methods, programs, and other arrangements sponsored by the service recipient, as defined in Regulations Section 1.409A-1(g), immediately after the time of the change in control event with respect to which deferrals of compensation are treated as having been deferred under a single plan under Regulations Section 1.409A-1(c)(2) are terminated and liquidated with respect to each participant who experienced the change in control event, so that under the terms of the termination and liquidation all such participants are required to receive all amounts of compensation deferred under the terminated agreements, methods, programs, and other arrangements within twelve months of the date the service recipient irrevocably takes all necessary action to terminate and liquidate the agreements, methods, programs, and other arrangements, provided that the

 

-26-


  service recipient with the discretion to liquidate and terminate the agreements, methods, programs, and other arrangements is the service recipient that is primarily liable immediately after the transaction for the payment of the deferred compensation;

 

  (c) (i) the termination and liquidation does not occur proximate to a downturn in the financial health of the Company; (ii) all arrangements sponsored by the Company that would be aggregated with any terminated arrangement under Regulations Section 1.409A-1(c) if the same Member participated in all of the arrangements are terminated; (iii) no payments other than payments that would be payable under the terms of the arrangements if the termination had not occurred are made within twelve months of the date the Company takes all necessary action to irrevocably terminate and liquidate the arrangements; (iv) all payments are made within twenty-four months of the date the Company takes all necessary action to irrevocably terminate and liquidate the arrangements; and (v) the Company does not adopt a new arrangement that would be aggregated with any terminated arrangement under Regulations Section 1.409A-1(c) if the same Member participated in both arrangements, at any time within three years following the date the Company takes all necessary action to irrevocably terminate and liquidate the arrangements; or

 

  (d)

such other events and conditions as the Internal Revenue Service may prescribe.

 

-27-


  Anything in this Section 6.2 to the contrary notwithstanding, no such termination of the Plan may (a) adversely affect a Member’s benefit under the Plan to which he or she has become entitled in accordance with the Plan as in effect on the date immediately preceding the date of such termination, or (b) adversely affect a Member’s right or the right of a Designated Beneficiary to receive a benefit in accordance with the Plan as in effect on the date immediately preceding the date of such termination, or (c) cause any payment that a Member or Designated Beneficiary is entitled to receive under this Plan to become subject to an income tax penalty or interest payable under Section 409A of the Code.

 

  6.3 No Employment Rights . Nothing contained herein will confer upon any Member the right to be retained in the service of the Company or any Affiliated Employer, nor will it interfere with the right of the Company or any Affiliated Employer to discharge or otherwise deal with Members with respect to matters of employment.

 

  6.4 Unfunded Status . Members shall have the status of general unsecured creditors of the Company, and this Plan constitutes a mere promise by the Company to make benefit payments at the time or times required hereunder. It is the intention of the Company that this Plan be unfunded for tax purposes and for purposes of Title I of ERISA and any trust created by the Company and any assets held by such trust to assist the Company in meeting its obligations under the Plan shall meet the requirements necessary to retain such unfunded status.

 

-28-


  6.5 Arbitration . Any dispute or controversy arising under or in connection with the Plan shall be settled exclusively by arbitration in Fairfield, Connecticut in accordance with the rules of the American Arbitration Association in effect at the time of such arbitration. The Company shall promptly pay or reimburse on a fully grossed-up and after-tax basis (so that the recipient of such reimbursement is held economically harmless) all reasonable costs and expenses (including fees and disbursements of counsel and pension experts) incurred by a Member or Designated Beneficiary to assert rights under this Plan for so long as such rights may exist or in any proceeding in connection therewith brought by a Member or Designated Beneficiary, whether or not such Member or Designated Beneficiary is ultimately successful in enforcing such rights or in such proceeding; provided, however, that no reimbursement shall be owed with respect to expenses relating to any unsuccessful assertion of rights or proceeding if and to the extent that such assertion or proceeding was initiated or maintained in bad faith or was frivolous as determined by the arbitrators or a court having jurisdiction over the matter. The amount of expense eligible for reimbursement in any one taxable year of the Member or Designated Beneficiary shall not affect the amount of expense eligible for reimbursement in any other taxable year of the Member or Designated Beneficiary. The reimbursement of expenses shall be made each calendar quarter and not later than the last day of the taxable year of the Member or Designated Beneficiary in which the expense was incurred. The right to reimbursement of any expense under this Section 6.5 shall not be subject to liquidation or exchange for another benefit.

 

-29-


  6.6 No Alienation . Except as otherwise provided in Section 3.2(f)(i), a Member’s right to benefit payments under the Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of such Member or his or her Designated Beneficiary.

 

  6.7 Withholding . The Company may withhold from any benefit under the Plan an amount sufficient to satisfy its tax withholding obligations.

 

  6.8

Governing Law . The Plan shall be governed by and construed in accordance with the laws of the State of Connecticut applicable to contracts made and to be performed in such state to the extent not preempted by federal law. Anything in this Plan to the contrary notwithstanding, the terms of this Plan shall be interpreted and applied in a manner consistent with the requirements of Section 409A of the Code and the Regulations thereunder so as not to subject any Member or Designated Beneficiary to the payment of any tax penalty or interest which may be imposed by Section 409A of the Code and the Company shall have no right to accelerate or make any payment under this Plan except to the extent such action would not subject any Member or Designated Beneficiary to the payment of any tax penalty or interest under Section 409A of the Code. If a Member or Designated Beneficiary becomes

 

-30-


  subject to any tax penalty or interest under Section 409A of the Code by reason of his or her participation in this Plan, the Company shall reimburse such Member or Designated Beneficiary, as the case may be, on a fully grossed-up and after-tax basis for any such tax penalty or interest (so that the recipient of such reimbursement is held economically harmless) ten business days prior to the date such tax penalty or interest is due and payable by such Member or Designated Beneficiary to the government.

 

  6.9 Successors . The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform the obligations of the Company under this Plan in the same manner and to the same extent that the Company would have been required to perform such obligations if no such succession had taken place and such assumption shall be an express condition to the consummation of any such purchase, merger, consolidation or other transaction.

 

  6.10

Integration . In the event of any conflict or ambiguity between this Plan and the terms of any employment agreement between a Member and the Company or any Change in Control Agreement between a Member and the Company (this Plan and any such employment agreement or Change in Control Agreement being collectively referred to herein as the “arrangements”), such conflict or ambiguity shall be resolved in

 

-31-


  accordance with the terms of that arrangement which are most beneficial to the Member; provided, however, that no such resolution of any such conflict or ambiguity shall operate to cause the Member to receive duplicate payments or benefits under the arrangements.

 

IMS Health Incorporated
By:   LOGO
Senior Vice President, Human Resources, on behalf of the IMS Health Incorporated Employee Benefits Committee
Date:  

5/27/08

 

-32-


Appendix A

David R. Carlucci

Robert H. Steinfeld

David M. Thomas

 

-33-


Appendix B

The benefits payable from the Pension Benefit Equalization Plan of the Dun & Bradstreet Corporation (the “Excess Plan”) to Members of this Plan shall be determined as the benefit accrued by the Member under the Excess Plan as of December 31, 1996, calculated on the assumption that such benefit is payable monthly in the form of a single life annuity commencing on the first day of the month coincident with or next following the date the Member attains age 55 and computed on the basis of the mortality rates shown in Appendix C of this Plan and 6.75% interest.

 

-34-


APPENDIX C

MORTALITY RATES

 

Age   Participant     Beneficiary     Age   Participant     Beneficiary  
25     .000581        .000470      68     .024559        .018359   
26     .000610        .000497      69     .026871        .020335   
27     .000644        .000526      70     .029559        .022766   
28     .000681        .000557      71     .032952        .025919   
29     .000720        .000591      72     .036762        .029529   
30     .000763        .000629      73     .040907        .033496   
31     .000811        .000669      74     .045427        .037808   
32     .000866        .000714      75     .050298        .042428   
33     .000923        .000762      76     .055809        .047551   
34     .000988        .000814      77     .062080        .053217   
35     .001059        .000873      78     .069068        .059419   
36     .001136        .000936      79     .076746        .066162   
37     .001223        .001077      80     .084955        .073330   
38     .001318        .001084      81     .093582        .080901   
39     .001423        .001168      82     .102603        .088868   
40     .001539        .001261      83     .111984        .097236   
41     .001682        .001369      84     .121754        .106074   
42     .001869        .001497      85     .131910        .115436   
43     .002097        .001647      86     .142522        .125403   
44     .002364        .001815      87     .153693        .136075   
45     .002670        .002005      88     .165518        .147557   
46     .003011        .002216      89     .178093        .159954   
47     .003388        .002449      90     .191529        .173397   
48     .003797        .002705      91     .203702        .185997   
49     .004241        .002983      92     .216646        .199614   
50     .004717        .003289      93     .230478        .214387   
51     .005216        .003594      94     .245331        .230463   
52     .005746        .003926      95     .261353        .248008   
53     .006310        .004288      96     .278704        .267202   
54     .006907        .004683      97     .297562        .288242   
55     .007538        .005112      98     .318124        .311344   
56     .008206        .005588      99     .340598        .336741   
57     .008916        .006123      100     .365204        .364688   
58     .009679        .006729      101     .392179        .395460   
59     .010510        .007415      102     .421772        .429358   
60     .011426        .008190      103     .455805        .467222   
61     .012449        .009063      104     .496440        .510917   
62     .013608        .010042      105     .545840        .562310   
63     .014928        .011131      106     .606167        .623265   
64     .016449        .012338      107     .679585        .695646   
65     .018207        .013671      108     .768255        .781319   
66     .020245        .015129      109     .874340        .882150   
67     .022388        .016662      110     .999999        .999999   

 

-35-

Exhibit 10.12

First Amendment to the

IMS Health Incorporated

Retirement Excess Plan

The IMS Health Incorporated Retirement Excess Plan, as amended and restated effective as of January 1, 2005 (the “Plan”), is amended effective January 1, 2009 as follows:

Section 1.9 of the Plan is amended to read in its entirety as follows:

“Designated Beneficiary” shall mean one or more persons, estates or other entities (including a trust(s)), designated in accordance with such procedures as may be specified by the Plan Administrator, that are entitled to receive benefits under the Plan upon the death of a Member and, in the absence of any such designation, the person or persons, estates or other entities (including a trust(s)), that shall be entitled to receive benefits payable pursuant to the provisions of the Qualified Plan by virtue of such Member’s death.

The authorized officers of IMS Health Incorporated have caused this instrument of amendment to be executed this 17 th day of March, 2009.

 

IMS Health Incorporated
By   LOGO
 

 

Its  

SVP, Human Resources

37289-6222_First Amendment REP 3.09

March 9, 2009 4:44 PM

Exhibit 10.13

Second Amendment to the

IMS Health Incorporated

Retirement Excess Plan

The IMS Health Incorporated Retirement Excess Plan, as amended and restated effective as of January 1, 2005 (the “Plan”), is amended effective January 1, 2010 as follows:

Appendix A to the Plan is amended by deleting the names David R. Carlucci and Robert H. Steinfeld.

The authorized officers of IMS Health Incorporated have caused this instrument of amendment to be executed this 8 th day of December, 2009.

 

IMS Health Incorporated
By   LOGO
 

 

Its  

SVP, Human Resources

37289-6222_Second Amendment REP 3.09

December 22, 2009 4:26 PM

Exhibit 10.14

Third Amendment to the

IMS Health Incorporated

Retirement Excess Plan

The IMS Health Incorporated Retirement Excess Plan, as amended and restated effective as of January 1, 2005 (the “Plan”), is amended as follows:

1. Section 1.22 of the Plan is amended by adding the following new sentence to the end thereof:

“Notwithstanding the foregoing, no employee shall be a Specified Employee unless stock of a member of the Company’s controlled group of corporations, as defined in Section 414(b) of the Code, is publicly traded on an established securities market or otherwise.”

2. The penultimate paragraph of Section 3.1(a) of the Plan is amended to read in its entirety as follows:

“For purposes of this Section 3.1, effective April 1, 2011, the annual benefit under the Qualified Plan shall be determined as a life annuity commencing on the first day of the month immediately preceding the month in which occurs the Benefit Payment Date, calculated in accordance with the assumptions provided in the Qualified Plan for purposes of determining the accrued benefit thereunder with respect to Members who have attained age 55 as of such date and the assumptions specified in Appendix B with respect to Members who have not attained age 55 as of such date.”

3. Section 3.2(b) of the Plan is amended by adding the following new sentence to the end thereof:

“Effective April 1, 2011, a Member’s Retirement Benefit shall automatically be paid in the form of a lump sum in the second month following the month in which occurs the later of: (i) the Member’s attainment of age 55; or (ii) the Member’s Separation from Service.”

4. The last sentence of Section 4.1 of the Plan is amended to read in its entirety as follows:

“Effective April 1, 2011, payment of such benefit upon the death of a Member shall be made in the second month following the month in which the Member’s death occurs.”

The authorized officers of IMS Health Incorporated have caused this instrument of amendment to be executed this 5 th day of April, 2011.

 

IMS Health Incorporated
By   LOGO
 

 

Its  

SVP, General Counsel & External Affairs

37289-6232_Third Amendment REP 4 11

March 30, 2011 11:37 AM

Exhibit 10.15

IMS HEALTH INCORPORATED

SAVINGS EQUALIZATION PLAN

As Amended and Restated Effective January 1, 2011

 

I. Purpose of the Plan

The purpose of the IMS Health Incorporated Savings Equalization Plan (the “Plan”) is to provide a means of equalizing the benefits of those employees participating in the IMS Health Incorporated Savings Plan (the “401 (k) Plan”) whose matching contributions under the 401(k) Plan are or will be limited by the application of Sections 401(a)(17) or 415 of the Internal Revenue Code of 1986, as amended (the “Code”), or by reason of the exclusion from the definition of compensation under the 401(k) Plan of amounts deferred under any nonqualified deferred compensation plan maintained by IMS Health Incorporated (the “Corporation”). The Plan is intended to be an “excess benefit plan” as that term is defined in section 3(36) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) with respect to those participants whose benefits under the 401(k) Plan have been limited by Section 415 of the Code, and a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of ERISA.

 

II. Participation in the Plan

All members of the 401 (k) Plan shall be eligible to participate in this Plan whenever their benefits under the 401(k) Plan as from time to time in effect would exceed the limitations on benefits and contributions imposed by Sections 401(a)(17) or 415 of the Code or would be limited by reason of the exclusion from the definition of compensation under the 401(k) Plan of amounts deferred under any nonqualified deferred compensation plan maintained by the Corporation. For purposes of this Plan, benefits of a participant in this Plan shall be determined as though no provisions were contained in the 401(k) Plan incorporating limitations imposed by Sections 401(a)(17) or 415 of the Code or excluding from the definition of compensation under the 401(k) Plan amounts deferred under any nonqualified deferred compensation plan maintained by the Corporation.


III. Equalized Benefits

If member participating contributions or Corporation contributions to the 401(k) Plan for any calendar year are limited by reason of the application of Sections 401(a)(17) or 415 of the Code or the exclusion from the definition of compensation under the 401(k) Plan of amounts deferred under any nonqualified deferred compensation plan maintained by the Corporation, the Corporation shall pay the participant in this Plan, on or after January 1 st and on or before March 15th of the following year, provided such participant is actively employed by the Corporation on such payment date, an amount equal to:

 

  (1) the Corporation matching contributions that otherwise would have been credited to such participant’s account under the 401(k) Plan if the limitations imposed by Sections 401(a)(17) and 415 of the Code and the exclusion from the definition of compensation under the 401 (k) Plan of amounts deferred under any nonqualified deferred compensation plan maintained by the Corporation did not apply, plus

 

  (2) an interest factor equal to one-half of the annual return which would have been received by the participant had such payment been invested eighty percent (80%) in the fixed income fund and twenty percent (20%) in the equity index fund available as investment funds under the 401(k) Plan during the year prior to the year of payment, less

 

  (3) any applicable withholding taxes.

 

IV. Death

Upon the death of a participant in this Plan, the benefits otherwise payable to such participant pursuant to Article III shall be paid at the time provided in Article III to such participant’s designated beneficiary and in the absence of any such designation, to such participant’s estate.

 

V. Administration of the Plan

The Corporation shall administer the Plan, except that any action authorized to be taken by the Corporation hereunder may also be taken by any committee or person(s) duly authorized by the Board of Directors of the Corporation or the duly authorized delegees of such duly authorized committee or person(s). The Corporation shall have full authority to determine all questions arising in connection with the Plan, including interpreting its provisions and construing all of its terms; may adopt procedural rules; and may employ and rely on such legal counsel, such actuaries, such accountants and such agents as it may deem advisable to assist in the administration of the Plan. All of its rules, interpretations and decisions shall be applied in a uniform manner to all participants similarly situated and decisions of the Corporation shall be conclusive and binding on all persons.

 

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VI. Claims

Presentation of Claims . Claims for benefits shall be filed in writing with the Plan Administrator. Written or electronic notice of the disposition of a claim shall be furnished to the claimant within 90 days after the claim is filed (or within 180 days if special circumstances require an extension of time for processing the claim and if notice of such extension and circumstances is provided to the claimant within the initial 90-day period.)

Claims Denial Notification . If a claim is wholly or partially denied, the Plan Administrator shall furnish to the claimant a written notice setting forth in a manner calculated to be understood by the claimant:

 

    the specific reason(s) for denial;

 

    specific reference(s) to pertinent Plan provisions on which any denial is based;

 

    a description of any additional material or information necessary for the claimant to perfect the claim, and an explanation of why such material or information is necessary;

 

    an explanation of the Plan’s claims review procedures and the applicable time limits for such procedures; and

 

    a statement that the claimant has a right to bring a civil action under Section 502(a) of ERISA following an adverse determination on review.

Claims Review Procedure . Upon a denial, the claimant is entitled (either in person or by his duly authorized representative) to:

 

    request a subsequent review of the claim by the Plan Administrator upon written application for review made to the Plan Administrator. Any such request for review of the claim must be made within 60 days after receipt by the claimant of such notice. A claimant must submit a written application for review before the claimant is permitted to bring a civil action for benefits;

 

    review pertinent documents relating to the denial; and

 

    submit written comments, documents, records and other information relating to the claim.

Timing . The Plan Administrator shall make its decision and notify the claimant with respect to a claim not later than 60 days after receipt of the request. Such 60-day period may be extended for another period of 60 days if the Plan Administrator finds that special circumstances require an extension of time for processing and notice of the extension and special circumstances is provided to the claimant within the initial 60-day period.

 

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Final Decision . The claim for review shall be given a full and fair review that takes into account all comments, documents, records and other information submitted that relates to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The Plan Administrator shall provide the claimant with written or electronic notice of the decision in a manner calculated to be understood by the claimant. The notice shall include specific reasons for the decision, specific references to the pertinent Plan provisions on which the decision is based, a statement that the claimant has a right to bring a civil action under Section 502(a) of ERISA, and a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the claim. A document is relevant to the claim if it was relied upon in making the determination, was submitted, considered or generated in the course of making the determination or demonstrates that benefit determinations are made in accordance with the Plan and that Plan provisions have been applied consistently with respect to similarly situated claimants.

Delayed Payments . If the Plan Administrator shall approve the payment of a claim for benefits filed in accordance with the claims procedures set forth hereinabove, any payment delayed pending the resolution of such claim will be adjusted to reflect the deferred payment date by multiplying the payment by the product of the six-month CMT Treasury Bill annualized yield rate as published by the U.S. Treasury for the date on which such payment would have been made but for the delay multiplied by a fraction, the numerator of which is the number of days by which such payment was delayed and the denominator of which is 365.

Arbitration . Any dispute or controversy arising under or in connection with the Plan shall be settled exclusively by arbitration in Fairfield, Connecticut in accordance with the rules of the American Arbitration Association in effect at the time of such arbitration. The Corporation shall promptly pay or reimburse on a fully grossed-up and after-tax basis (so that the recipient of such reimbursement is held economically harmless) all reasonable costs and expenses (including fees and disbursements of counsel and pension experts) incurred by a participant or beneficiary to assert rights under this Plan, for so long as such rights may exist, or in any proceeding in connection therewith brought by a participant or beneficiary, whether or not such participant or beneficiary is ultimately successful in enforcing such rights or in such proceeding; provided, however, that no reimbursement shall be owed with respect to expenses relating to any unsuccessful assertion of rights or proceeding if and to the extent that such assertion or proceeding was initiated or maintained in bad faith or was frivolous as determined by the arbitrators or a court having jurisdiction over the matter. The amount of expense eligible for reimbursement in any one taxable year of the participant or beneficiary shall not affect the amount of expense eligible for reimbursement in any other taxable year of the participant or beneficiary. The reimbursement of expenses shall be made each calendar quarter and not later than the last day of the taxable year of the participant or beneficiary in which the expense was incurred. The right to reimbursement of any expense hereunder shall not be subject to liquidation or exchange for another benefit.

 

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VII. Miscellaneous

This Plan may be terminated at any time by the Board of Directors of the Corporation, in which event the rights of participants to their accrued benefits shall become nonforfeitable. This Plan may also be amended at any time by the Board of Directors of the Corporation and the Employee Benefits Committee of the Corporation may amend the Plan without the approval of the Board of Directors of the Corporation with respect to amendments that such Committee determines do not have a significant effect on the cost of the Plan; provided, however, that no such amendment of the Plan may (1) adversely affect a participant’s benefit under the Plan to which he or she has become entitled in accordance with the Plan as in effect on the date immediately preceding the date of such amendment, or (2) adversely affect a participant’s right or the right of a participant’s beneficiary to receive a benefit in accordance with the Plan as in effect on the date immediately preceding the date of such amendment, or (3) cause any payment that a participant or beneficiary is entitled to receive under this Plan to become subject to an income tax penalty or interest payable under Section 409A of the Code.

Benefits payable under this Plan shall not be funded and shall be made out of the general funds of the Corporation; provided, however, that the Corporation reserves the right to establish a trust fund as an alternate source of benefits payable under the Plan and to the extent payments are made from such trust, such payments will satisfy the Corporation’s obligations under this Plan.

No right to payment or any other interest under this Plan may be alienated, sold, transferred, pledged, assigned, or made subject to attachment, execution, or levy of any kind.

Nothing in this Plan shall be construed as giving any employee the right to be retained in the employ of the Corporation. The Corporation expressly reserves the right to dismiss any employee at any time without regard to the effect which such dismissal might have upon him under the Plan.

The Corporation may withhold from any benefits under the Plan an amount sufficient to satisfy its tax withholding obligations.

This Plan shall be construed, administered and enforced according to the laws of the State of Connecticut applicable to contracts made and to be performed in such state to the extent not preempted by federal law. Anything in this Plan to the contrary notwithstanding, the terms of this Plan shall be interpreted and applied in a manner consistent with the requirements of Section 409A of the Code and the Treasury Regulations thereunder including the exception for short- term deferrals under Section 1.409A-1(b)(4) of the Treasury Regulations so as not to subject any participant or beneficiary to the payment of any tax penalty or interest which may be imposed by Section 409A of the Code and the Corporation shall have no right to accelerate, defer or make any payment under this Plan except to the extent such action would not subject any participant or beneficiary to the payment of any tax penalty or interest under Section 409A of the Code. If a participant or beneficiary becomes subject to any tax penalty or interest under Section 409A of the Code by reason of his or her participation in this Plan, the Corporation shall reimburse such participant or beneficiary, as the case may be, on a fully grossed-up and after-tax basis for any such tax penalty or interest (so that the recipient of such reimbursement is held economically harmless) ten business days prior to the date such tax penalty or interest is due and payable by such participant or beneficiary to the government.

 

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The Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Corporation to expressly assume and agree to perform the obligations of the Corporation under this Plan in the same manner and to the same extent that the Corporation would have been required to perform such obligations if no such succession had taken place and such assumption shall be an express condition to the consummation of any such purchase, merger, consolidation or other transaction.

 

  Date:  

31 DEC 10

    IMS Health Incorporated
        By:   LOGO
        Its:   S R . V ICE P RESIDENT

 

6

Exhibit 10.16

HEALTHCARE TECHNOLOGY HOLDINGS, INC.

2010 EQUITY INCENTIVE PLAN

(As Amended and Restated)

 

1. DEFINED TERMS

Exhibit A, which is incorporated by reference, defines the terms used in the Plan and sets forth certain operational rules related to those terms.

 

2. PURPOSE

The Plan has been established to advance the interests of the Company and its Affiliates by providing for the grant to Participants of Stock-based and other incentive Awards.

 

3. ADMINISTRATION

The Administrator has discretionary authority, subject only to the express provisions of the Plan, to interpret the Plan; determine eligibility for and grant Awards, subject only to Section 5 and other express provisions of the Plan; determine or, subject to the express provisions of an Award Agreement, modify or waive the terms and conditions of any Award; prescribe forms, rules and procedures; and otherwise do all things necessary to carry out the purposes of the Plan. All determinations of the Administrator made under the Plan will be conclusive and will bind all parties.

 

4. LIMITS ON AWARDS UNDER THE PLAN

(a) Number of Shares . Subject to Section 4(b) and Section 7, a maximum of 253,417,637 shares of Stock may be delivered in satisfaction of Awards under the Plan (of which 229,217,637 may be delivered upon the exercise of ISOs), together with a maximum of 3,000,000 additional shares which may be delivered solely in satisfaction of Awards to non-employee directors of the Company or its Affiliates under the Plan. The number of shares of Stock delivered in satisfaction of Awards shall, for purposes of the preceding sentence, be determined net of shares of Stock withheld by the Company under any Award in payment of any exercise price or in satisfaction of tax withholding requirements with respect to such Award. For the avoidance of doubt, any shares of Stock subject to an Award that is cancelled, forfeited, lapses or is otherwise terminated without an issuance of shares of Stock being made thereunder or that is settled for cash will no longer be counted against the foregoing maximum share limitation and may again be subject to Awards under the Plan.

(b) Certain Replacement Awards . Reference is made to the Awards specified on Exhibit B (the “Replacement Awards”), which represent SARs granted in substitution for certain stock appreciation rights granted under the 1998 IMS Health Incorporated Employees’ Stock Incentive Plan and/or the IMS Health Incorporated 2000 Stock Incentive Plan. Shares of Stock subject to the Replacement Awards shall be in addition to the shares specified in Section 4(a), but if any Replacement Award expires unexercised or is satisfied in whole or in part without the issuance of shares, the shares of Stock previously subject to such Award shall not be available


for future grants under the Plan. Notwithstanding Section 6(a)(4), each Replacement Award shall be fully vested and exercisable upon the date of grant.

(c) Type of Shares . Stock delivered under the Plan may be authorized but unissued Stock or previously issued Stock acquired by the Company. Replacement Awards may be granted with respect to fractional shares of Stock, but no fractional shares of Stock shall be delivered under the Plan. Any fractional shares that would otherwise be deliverable hereunder shall be settled for cash.

 

5. ELIGIBILITY AND PARTICIPATION

The Administrator, after consultation with the CEO, will select Participants from among those key Employees and directors of, and consultants and advisors to, the Company or its Affiliates who, in the opinion of the Administrator, are in a position to make a significant contribution to the success of the Company and its Affiliates. Eligibility for ISOs is limited to employees of the Company or of a “parent corporation” or “subsidiary corporation” of the Company as those terms are defined in Section 424 of the Code. Eligibility for Stock Options other than ISOs is limited to individuals described in the first sentence of this Section 5 who are providing direct services on the date of grant of the Stock Option to the Company or to a subsidiary of the Company that would be described in the first sentence of Treas. Regs. § 1.409A-1(b)(5)(iii)(E).

Awards covering any shares of Stock that remain available under Section 4(a) during the five-year period beginning on the effective date of the Plan shall be allocated and awarded to the persons eligible for participation in the Plan as selected by the CEO, subject to the approval of the Administrator, with the objective of allocating and awarding any remaining shares of Stock by the end of such five-year period, or, if earlier, by the occurrence of a Covered Transaction.

 

6. RULES APPLICABLE TO AWARDS

(a) All Awards

(1) Award Provisions . The Administrator will determine the terms of all Awards, subject to the limitations provided herein, and will furnish to each Participant an Award Agreement setting forth the terms applicable to the Participant’s Award. By entering into an Award Agreement or by accepting (or, under such rules as the Administrator may prescribe, being deemed to have accepted) an Award, the Participant agrees or shall be deemed to have agreed to the terms of the Award and of the Plan. Notwithstanding any provision of the Plan to the contrary, awards of an acquired company that are converted, replaced or adjusted in connection with the acquisition may contain terms and conditions that are inconsistent with the terms and conditions specified herein, as determined by the Administrator.

(2) Fair Market Value . In determining the fair market value of any share of Stock under the Plan, the Administrator shall make the determination in good faith consistent with the rules of Section 422 and Section 409A, to the extent applicable. If at the applicable reference date the Stock is not readily tradable on an established securities market, in accordance with Treas. Regs. § 1.409A-1(b)(5)(iv)(B), the Administrator’s determination of fair market value shall be based on the reasonable application of a reasonable valuation method, and shall

 

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take into account an independent third-party valuation obtained not less frequently than annually. Such determination shall be made in a manner that is consistent with the manner in which the Company determines the fair market value of shares of Stock held by the Investors (as such term is defined in the Management Stockholders Agreement).

(3) Transferability . Neither ISOs, nor, except as the Administrator otherwise expressly provides, other Awards may be transferred other than by will or by the laws of descent and distribution, and during a Participant’s lifetime ISOs (and, except as the Administrator otherwise expressly provides, other non-transferable Awards requiring exercise) may be exercised only by the Participant. The Administrator may permit Awards other than ISOs to be transferred by gift, subject to the terms of the Management Stockholders Agreement, to the extent applicable, and such other limitations as the Administrator may impose.

(4) Vesting, etc . The Administrator may determine and shall set forth in an Award Agreement the time or times at which an Award will vest or become exercisable and the terms on which an Award requiring exercise will remain exercisable. Without limiting the foregoing, the Administrator may at any time accelerate the vesting or exercisability of an Award, regardless of any adverse or potentially adverse tax or other consequences resulting from such acceleration. Unless the Administrator expressly provides otherwise in an Award Agreement, however, the following rules will apply if a Participant’s Employment ceases:

(A) Immediately upon the cessation of Employment, each Award requiring exercise held by the Participant or the Participant’s permitted transferees, if any, will immediately cease to be exercisable and will immediately terminate except as otherwise provided at (B), (C) or (D) below, and all other Awards held by the Participant or the Participant’s permitted transferees, if any, to the extent not already vested, will be immediately forfeited.

(B) Subject to (C), (D), and (E) below, all Stock Options and SARs held by the Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment, to the extent then exercisable, will remain exercisable for the shorter of (i) a period of 30 days or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.

(C) All Stock Options and SARs held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the Participant’s death or Disability, to the extent then exercisable, will remain exercisable for the shorter of (i) the one year period ending with the first anniversary of the Participant’s death or Disability, as the case may be, or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.

(D) All Stock Options and SARs held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the termination of the Participant’s Employment by the Company other than for Cause or, to the extent that the Award Agreement for such Participant expressly provides for the treatment of an Award upon a

 

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termination for Good Reason, by the Participant for Good Reason, to the extent then exercisable, will remain exercisable for the shorter of (i) a period of 90 days, or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4), and will thereupon immediately terminate.

(E) For the avoidance of doubt, all Stock Options and SARs held by a Participant or the Participant’s permitted transferees, if any, immediately prior to the cessation of the Participant’s Employment will immediately terminate upon such cessation if such cessation of Employment has resulted in connection with an act or failure to act constituting Cause (or such Participant’s Employment could have been terminated for Cause (without regard to the lapsing of any required notice or cure periods in connection therewith) at the time such Participant terminated Employment).

(5) Competing Activity . To the extent set forth in an Award Agreement, the Administrator may cancel, rescind, withhold or otherwise limit or restrict any Award at any time if the Participant is not in compliance with all applicable provisions of the Award Agreement and the Plan, or if the Participant breaches any agreement with the Company or its Affiliates with respect to non-competition, non-solicitation or confidentiality.

(6) Taxes . The delivery, vesting and retention of Stock under an Award are conditioned upon full satisfaction by the Participant of all tax withholding requirements with respect to the Award. The Administrator will make such provision for the withholding of taxes as it deems necessary. Except as expressly provided in an Award Agreement, the Administrator may, but need not, hold back shares of Stock from an Award or permit a Participant to tender previously owned shares of Stock, in each case, having a Fair Market Value equal to the applicable minimum statutory withholding amount in satisfaction of tax withholding requirements.

(7) Dividend Equivalents, etc. To the extent consistent with Section 409A (and with Section 422, in the case of ISOs), and subject to Section 7(c), the Administrator in its sole discretion may provide for supplemental cash payments in lieu of Stock-based dividends or other distributions to the holder of any Award that is not entitled to share in the actual dividend or distribution.

(8) Rights Limited . Nothing in the Plan will be construed as giving any person the right to continued Employment with the Company or its Affiliates, or any rights as a stockholder except as to shares of Stock actually issued under the Plan. The loss of existing or potential profit in an Award will not constitute an element of damages in the event of termination of Employment for any reason, even if the termination is in violation of an obligation of the Company or any Affiliate to the Participant, provided that nothing herein shall preclude a claim by a Participant arising from a breach by the Company of the terms of such Participant’s Award Agreement.

(9) Management Stockholders Agreement . Unless otherwise specifically provided, all Awards issued under the Plan and all Stock issued thereunder will be subject to the Management Stockholders Agreement. No Award will be granted to a Participant and no Stock

 

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will be delivered to a Participant, in either case, until the Participant has executed and become a party to the Management Stockholders Agreement.

(b) Additional Rules Applicable to Awards Requiring Exercise

(1) Time and Manner of Exercise . Unless the Administrator expressly provides otherwise, an Award requiring exercise by the holder will not be deemed to have been exercised until the Administrator receives a notice of exercise (in form acceptable to the Administrator), which may be an electronic notice, signed (including electronic signature in form acceptable to the Administrator) by the appropriate person and accompanied by any payment required under the Award. If the Award is exercised by any person other than the Participant, the Administrator may require satisfactory evidence that the person exercising the Award has the right to do so.

(2) Exercise Price . The Administrator will determine and set forth in an Award Agreement the exercise price (or the base value from which appreciation is to be measured) of each Award requiring exercise. The initial exercise or base price as so determined by the Administrator shall in no event be less than 100% (in the case of an ISO granted to a ten-percent shareholder within the meaning of subsection (b)(6) of Section 422, 110%) of the Fair Market Value of the Stock subject to the Award, determined as of the date of grant.

(3) Payment of Exercise Price . Where the exercise of an Award is to be accompanied by payment, the exercise price shall be paid as follows: (a) by cash or check acceptable to the Administrator, (b) to the extent permitted by the Administrator or specifically provided for in an Award Agreement, on a cashless basis under which shares of Stock otherwise deliverable under the Award and having a Fair Market Value equal to the exercise price are withheld by the Company, (c) by such other means, if any, as may be acceptable to the Administrator, (d) following an IPO, subject to restrictions applicable to such Shares, by means of a broker assisted exercise program acceptable to the Administrator, or (e) by any combination of the foregoing permissible forms of payment. No Award requiring exercise or portion thereof may be exercised unless, at the time of exercise, the Fair Market Value of the shares of Stock subject to such Award or portion thereof exceeds the exercise price for the Award or such portion.

(4) Maximum Term . The maximum term of each Award requiring exercise shall be ten (10) years from the date of grant (five (5) years from the date of grant in the case of an ISO granted to a ten-percent shareholder within the meaning of subsection (b)(6) of Section 422).

(5) ISOs . No ISO may be granted under the Plan after February 26, 2020, but ISOs previously granted may extend beyond that date.

(c) Lawful Consideration

Awards of Restricted Stock and Unrestricted Stock, whether delivered outright or under Awards of Stock Units, may be made in exchange for such lawful consideration, including services, as the Administrator determines.

 

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7. EFFECT OF CERTAIN TRANSACTIONS

(a) Mergers, etc . Except as otherwise provided in an Award Agreement, the following provisions shall apply in the event of a Covered Transaction:

(1) Assumption or Substitution . If the Covered Transaction is one in which there is an acquiring or surviving entity, the Administrator may provide for the assumption or continuation of some or all outstanding Awards or for the grant of new awards in substitution therefor by the acquiror or survivor or an affiliate of the acquiror or survivor.

(2) Cash-Out of Awards . If the Covered Transaction is one in which holders of Stock will receive upon consummation a payment (whether cash, non-cash or a combination of the foregoing), then subject to Section 7(a)(5) below, the Administrator may provide for payment (a “cash-out”), with respect to some or all Awards or any portion thereof, equal in the case of each affected Award or portion thereof to the excess, if any, of (A) the Fair Market Value of one share of Stock times the number of shares of Stock subject to the Award or such portion, over (B) the aggregate exercise or purchase price, if any, under the Award or such portion (in the case of an SAR, the aggregate base value above which appreciation is measured), in each case on such payment terms (which need not be the same as the terms of payment to holders of Stock) and other terms, and subject to such conditions, as the Administrator determines; provided , that the Administrator shall not exercise its discretion under this Section 7(a)(2) with respect to an Award or portion thereof providing for “nonqualified deferred compensation” subject to Section 409A in a manner that would constitute an extension or acceleration of, or other change in, payment terms if such change would be inconsistent with the applicable requirements of Section 409A.

(3) Acceleration of Certain Awards . If the Covered Transaction (whether or not there is an acquiring or surviving entity) is one in which there is no assumption, continuation, substitution or cash-out, then subject to Section 7(a)(5) below, the Administrator may provide that each Award requiring exercise will become exercisable, and the delivery of any shares of Stock remaining deliverable under each outstanding Award of Stock Units (including Restricted Stock Units and Performance Awards to the extent consisting of Stock Units) will be accelerated and such shares will be delivered, prior to the Covered Transaction, in each case on a basis that gives the holder of the Award a reasonable opportunity, as determined by the Administrator, following exercise of the Award or the delivery of the shares, as the case may be, to participate as a stockholder in the Covered Transaction; provided , that to the extent acceleration and/or delivery pursuant to this Section 7(a)(3) of an Award subject to Section 409A would cause the Award to fail to satisfy the requirements of Section 409A, the Award shall not be accelerated and/or delivered and the Administrator in lieu thereof shall take such steps as are necessary to ensure that payment of the Award is made in a medium other than Stock and on terms that as nearly as possible, but taking into account adjustments required or permitted by this Section 7, replicate the prior terms of the Award.

 

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(4) Termination of Awards Upon Consummation of Covered Transaction . Each Award will terminate upon consummation of the Covered Transaction, other than the following: (i) Awards assumed pursuant to Section 7(a)(1) above; (ii) Awards converted pursuant to the proviso in Section 7(a)(3) above into an ongoing right to receive payment other than Stock; and (iii) outstanding shares of Restricted Stock (which shall be treated in the same manner as other shares of Stock, subject to Section 7(a)(5) below).

(5) Additional Limitations . Any share of Stock and any cash or other property delivered pursuant to Section 7(a)(2) or Section 7(a)(3) above with respect to an Award may, in the discretion of the Administrator, contain such restrictions, if any, consistent with Section 409A, as the Administrator deems appropriate to reflect any performance or other vesting conditions to which the Award was subject and that did not lapse (and were not satisfied) in connection with the Covered Transaction. For purposes of the immediately preceding sentence, a cash-out under Section 7(a)(2) above or the acceleration of exercisability of an Award under Section 7(a)(3) above shall not, in and of itself, be treated as the lapsing (or satisfaction) of a performance or other vesting condition. In the case of Restricted Stock that does not vest in connection with the Covered Transaction, the Administrator may require that any amounts delivered, exchanged or otherwise paid in respect of such Stock in connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate to carry out the intent of the Plan.

(b) In the event of a Change of Control (whether or not constituting a Covered Transaction), the Administrator shall provide, to the extent consistent with Section 409A, that any Award continued or assumed in such transaction, and any new award substituted for an Award that terminates in connection with such transaction, (any of the foregoing, a “Continuing Award”), to the extent not otherwise vested, shall be subject to the following special rule: To the extent the vesting of any Continuing Award depends solely on the continued Employment of the Participant and the Participant’s Employment is either (i) involuntarily terminated (other than for Cause) within two years following the Change of Control, or is (ii) voluntarily terminated by the Participant, within two years following the Change of Control, for Good Reason, any remaining Employment-related vesting conditions shall be treated as having been satisfied immediately prior to such termination. Nothing in this Section 7(b) shall be construed to affect any performance-based vesting condition to which a Participant’s Award may be subject.

(c) Changes in, Distributions With Respect To and Redemptions of the Stock

(1) Basic Adjustment Provisions . In the event of a stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in the Company’s capital structure, the Administrator shall make appropriate adjustments to the maximum number of shares specified in Section 4(a) that may be delivered under the Plan and shall also make appropriate adjustments to the number and kind of shares of stock or securities subject to Awards then outstanding or subsequently granted, any exercise prices relating to Awards and any other provision of Awards affected by such change.

(2) Certain Other Adjustments . The Administrator may also make adjustments of the type described in Section 7(c)(1) above to take into account distributions to stockholders other than those provided for in Section 7(a) and 7(c)(1), or any other event, if the

 

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Administrator determines that adjustments are appropriate to avoid distortion in the operation of the Plan and to preserve the value of Awards made hereunder, subject to requirements for qualification, including continued qualification, of ISOs under Section 422 and to the requirements of Section 409A. Without limiting the generality of the foregoing, upon the occurrence of a cash distribution with respect to the Stock that constitutes a “corporate transaction” described in Treasury Regs. §1.424-1(a)(3)(ii) (an “extraordinary dividend”), the per share exercise price of each outstanding Stock Option shall be reduced following the extraordinary dividend by an amount equal to the lesser of (i) the per share extraordinary dividend, or (ii) the maximum reduction that can be made without jeopardizing the Stock Option’s status as an exempt stock right under Section 409A and without otherwise resulting in an acceleration of taxable income under the Stock Option, all as determined by the Administrator; provided, however, that, to the extent permitted by Section 409A, the Administrator may determine, in its sole discretion, to pay a cash bonus on such terms as the Administrator determines with respect to all or a portion of the Stock Options outstanding on the date of the extraordinary dividend in lieu of reducing the exercise price of such Stock Options as provided for in this Section 7(c)(2).

(3) Continuing Application of Plan Terms . References in the Plan to shares of Stock will be construed to include any stock or securities resulting from an adjustment pursuant to this Section 7.

 

8. LEGAL CONDITIONS ON DELIVERY OF STOCK

The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or remove any restriction from shares of Stock previously delivered under the Plan until: (i) the Company is satisfied that all legal matters in connection with the issuance and delivery of such shares have been addressed and resolved; (ii) if the outstanding Stock is at the time of delivery listed on any stock exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance; and (iii) all conditions of the Award have been satisfied or waived. If the sale of Stock has not been registered under the Securities Act of 1933, as amended, the Company may require, as a condition to exercise of the Award, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of such Act or any applicable state or foreign securities laws. The Company may require that certificates evidencing Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer applicable to such Stock, and the Company may hold the certificates pending lapse of the applicable restrictions.

 

9. AMENDMENT AND TERMINATION

The Administrator may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by law, and may at any time terminate the Plan as to any future grants of Awards; provided , that except as otherwise expressly provided in the Plan the Administrator may not, without the Participant’s consent, alter the terms of an Award (whether by amendment to the Plan or the applicable Award Agreement) so as to affect adversely the Participant’s rights under the Award, unless the Administrator expressly reserved the right to do so in an Award Agreement or the Plan at the time of the Award. Any amendments to the Plan shall be conditioned upon stockholder approval only to the extent, if

 

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any, such approval is required by applicable law (including the Code), as determined by the Administrator.

 

10. OTHER COMPENSATION ARRANGEMENTS

The existence of the Plan or the grant of any Award will not in any way affect the right of the Company or an Affiliate to award a person bonuses or other compensation in addition to Awards under the Plan.

 

11. WAIVER OF JURY TRIAL

By accepting an Award under the Plan, each Participant waives any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan and any Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees that any such action, proceedings or counterclaim shall be tried before a court and not before a jury. By accepting an Award under the Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers.

 

12. ESTABLISHMENT OF SUB-PLANS

The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements to the Plan setting forth (i) such limitations on the Administrator’s discretion under the Plan as the Board deems necessary or desirable and (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any jurisdiction that is not affected.

 

13. GOVERNING LAW

Except as otherwise provided by the express terms of an Award Agreement or under a sub-plan described in Section 12, the provisions of the Plan and of Awards under the Plan and all claims or disputes arising out of our based upon the Plan or any Award under the Plan or relating to the subject matter hereof or thereof shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

 

14. EFFECTIVE DATE

The Plan shall be effective upon approval by the Board.

 

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EXHIBIT A

Definitions of Terms

The following terms, when used in the Plan, will have the meanings and be subject to the provisions set forth below:

“Administrator”: The Board or, if one has been appointed, the Committee. The Board may delegate (i) to one or more of its members such of its duties, powers and responsibilities as it may determine; (ii) to one or more officers of the Company the power to grant rights or options to the extent permitted by Section 157(c) of the Delaware General Corporation Law; and (iii) to such Employees or other persons as it determines such ministerial tasks as it deems appropriate. In the event of any such delegation, the term “Administrator” shall include the person or persons so delegated to the extent of such delegation.

“Affiliate”: Any corporation or other entity that is an “Affiliate” of the Company within the meaning of the Management Stockholders Agreement.

“Award”: Any or a combination of the following:

 

  (i) Stock Options,

 

  (ii) SARs

 

  (iii) Restricted Stock,

 

  (iv) Unrestricted Stock,

 

  (v) Stock Units, including Restricted Stock Units; and

 

  (vi) Performance Awards.

“Award Agreement”: A written agreement between the Company and the Participant evidencing the Award.

“Board”: The Board of Directors of Healthcare Technology Holdings, Inc.

“Cause”: In the case of any Participant who is party to an employment, severance-benefit or change in control agreement that contains a definition of “Cause,” the definition set forth in such agreement shall apply with respect to such Participant under the Plan during the term of such agreement. In the case of any other Participant, “Cause” shall mean: (i) a material breach by the Participant of his or her employment agreement with the Company or an Affiliate, any equity grant agreement, or any policy of the Company or its Affiliates; (ii) the failure by the Participant to reasonably and substantially perform his or her duties to the Company or any of its Affiliates, which failure is materially damaging to the financial condition or reputation of the Company or its Affiliates; (iii) the Participant’s willful misconduct or gross negligence which is injurious to the Company or an Affiliate; or (iv) the commission by the Participant of a felony or other serious crime involving moral turpitude. In the case of clauses (i) and (ii) above, the

 

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Company shall permit the Participant up to fifteen days to cure such breach or failure if reasonably susceptible to cure. If, subsequent to the Participant’s termination of employment hereunder for other than Cause, it is determined in good faith by the Company that the Participant’s employment could have been terminated for Cause, the Participant’s employment shall be deemed to have been terminated for Cause retroactively to the date the events giving rise to such Cause occurred.

“Change of Control”: “Change of Control” as that term is defined in the Management Stockholders Agreement.

“CEO”: The chief executive officer of IMS Health Incorporated.

“Code”: The U.S. Internal Revenue Code of 1986 as from time to time amended and in effect, or any successor statute as from time to time in effect. References to the Code shall include any regulations promulgated thereunder.

“Committee”: One or more committees of the Board.

“Company”: Healthcare Technology Holdings, Inc.

“Covered Transaction”: Any of (i) a consolidation, merger, or similar transaction or series of related transactions, including a sale or other disposition of stock, in which the Company or an Affiliate is not the surviving corporation or which results in the acquisition of all or substantially all of the Company’s then outstanding common stock by a single person or entity or by a group of persons and/or entities acting in concert, (ii) a sale or transfer of all or substantially all the Company’s assets, or (iii) a dissolution or liquidation of the Company. Where a Covered Transaction involves a tender offer that is reasonably expected to be followed by a merger described in clause (i) (as determined by the Administrator), the Covered Transaction shall be deemed to have occurred upon consummation of the tender offer.

“Disability”: In the case of any Participant who is a party to an employment or severance-benefit agreement that contains a definition of “Disability,” the definition set forth in such agreement shall apply with respect to such Participant under the Plan. In the case of any other Participant, “Disability” shall mean a disability that would entitle a Participant to long-term disability benefits under the Company’s long-term disability plan in which the Participant participates. Notwithstanding the foregoing, in any case in which a benefit that constitutes or includes “nonqualified deferred compensation” subject to Section 409A would be payable by reason of Disability, the term “Disability” shall mean a disability described in Treas. Regs. § 1.409A-3(i)(4)(i)(A).

“Employee”: Any person who is employed by the Company or an Affiliate.

“Employment”: A Participant’s employment or other service relationship with the Company and its Affiliates. Unless the Administrator provides otherwise: A Participant who receives an Award in his or her capacity as an Employee will be deemed to cease Employment when the employee-employer relationship with the Company and its Affiliates ceases. A Participant who receives an Award in any other capacity will be deemed to continue Employment so long as the Participant is providing services in a capacity described in Section 5.

 

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If a Participant’s relationship is with an Affiliate and that entity ceases to be an Affiliate, the Participant will be deemed to cease Employment when the entity ceases to be an Affiliate unless the Participant transfers Employment to the Company or its remaining Affiliates. In any case where a cessation of a Participant’s Employment would affect the Participant’s rights to payment under an Award that includes nonqualified deferred compensation subject to 409A, references to termination or cessation of Employment or similar or correlative terms shall be construed to require a “separation from service” (as that term is defined in Treas. Regs. § 1.409A-1(h)) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single “service recipient” with the Company under Treas. Regs. § 1.409A-1(h)(3). The Company may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in Treas. Regs. § 1.409A-1(h) for purposes of determining whether a “separation from service” has occurred. Any such written election shall be deemed a part of the Plan.

“Fair Market Value”: Fair market value determined in accordance with Section 6(a)(2).

“Good Reason”: In the case of any Participant who is party to an employment, severance-benefit or change in control agreement that contains a definition of “Good Reason,” the definition set forth in such agreement shall apply with respect to such Participant under the Plan during the term of such agreement. In the case of any other Participant, “Good Reason” shall mean any of the following events or conditions occurring without the Participant’s express written consent, provided that the Participant shall have given notice of such event or condition within a period not to exceed ninety (90) days of the initial existence of such event or condition and the Company shall not have remedied such event or condition within thirty (30) days after receipt of such notice: (i) a materially adverse alteration in the nature or status of the Participant’s responsibilities or the conditions of employment; (ii) a material reduction in the Participant’s annual base salary or any target bonus; (iii) a change of fifty (50) miles or more in the Participant’s principal place of employment, except for required travel on business to an extent substantially consistent with the Participant’s business travel obligations; or (iv) the failure by the Company or its Affiliates, as applicable, to pay to the Participant any material portion of the Participant’s compensation or to pay any material portion of an installment of deferred compensation under any deferred compensation program of the Company or its Affiliates, as applicable, within a reasonable time after the date such compensation is due.

“IPO”: “Initial Public Offering” as that term is defined in the Management Stockholders Agreement.

“ISO”: A Stock Option intended to be an “incentive stock option” within the meaning of Section 422. Each option granted pursuant to the Plan will be treated as providing by its terms that it is to be a non-incentive stock option unless, as of the date of grant, it is expressly designated as an ISO.

“Management Stockholders Agreement”: Management Stockholders Agreement, dated as of February 26, 2010, among the Company and certain affiliates, stockholders and Participants, as amended or modified from time to time.

 

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“Participant”: A person who is granted an Award under the Plan.

“Performance Award”: An Award subject to Performance Criteria.

“Performance Criteria”: Specified criteria the satisfaction of which is a condition for the grant, exercisability, vesting or full enjoyment of an Award. If a Performance Award so provides, such criteria may be made subject to appropriate adjustments taking into account the effect of significant corporate transactions or similar events for the purpose of maintaining the probability that the specified criteria will be satisfied. Such adjustments shall be made only in the amount deemed reasonably necessary, after consultation with the Company’s accountants, and the CEO if required by the Award Agreement, to reflect accurately the direct and measurable effect of such event on such criteria, to the extent required by the Award Agreement.

“Plan”: The Healthcare Technology Holdings, Inc. 2010 Equity Incentive Plan as from time to time amended and in effect.

“Restricted Stock”: An Award of Stock for so long as the Stock remains subject to restrictions under this Plan or such Award requiring that it be redelivered or offered for sale to the Company if specified conditions are not satisfied.

“Restricted Stock Unit”: A Stock Unit that is, or as to which the delivery of Stock or cash in lieu of Stock is, subject to the satisfaction of specified performance or other vesting conditions.”

“Retirement:” Retirement from active employment with the Company or an Affiliate after age 65, or after age 55 and completion of at least 5 years of employment with the Company or an Affiliate (including employment with IMS Health Incorporated and its subsidiaries prior to February 26, 2010).

“SAR”: A right entitling the holder upon exercise to receive an amount (payable in cash or in shares of Stock of equivalent value) equal to the excess of the Fair Market Value of the shares of Stock subject to the right over the base value from which appreciation under the SAR is to be measured.

“Section 409A”: Section 409A of the Code.

“Section 422”: Section 422 of the Code.

“Stock”: Common Stock of the Company, par value $0.001 per share.

“Stock Option”: An option entitling the recipient to acquire shares of Stock upon payment of the exercise price.

“Stock Unit”: An unfunded and unsecured promise, denominated in shares of Stock, to deliver Stock or cash measured by the value of Stock in the future.

“Unrestricted Stock”: An Award of Stock not subject to any restrictions under the Plan .

 

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EXHIBIT B

[Replacement Award]

 

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EXHIBIT C

[Option Agreement]

 

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CALIFORNIA SUPPLEMENT

Pursuant to Section 12 of the Plan, this supplement has been adopted for purposes of satisfying the requirements of Section 25102(o) of the California Corporations Code, to the extent applicable. This supplement may be amended by the Administrator without the approval of the Company, as necessary or desirable to comply with California law. Any Awards granted under the Plan to a Participant who is a resident of the State of California on the date of grant (a “California Participant”) shall be subject to the following additional limitations, terms and conditions, to the extent applicable:

1. Maximum Duration of Awards . No Award granted to a California Participant will be for a term in excess of 10 years.

2. Minimum Conversion Period Following Termination . Unless the employment of a California Participant holding an otherwise vested Stock Option is terminated for Cause, in the event of termination of employment of such Participant, he or she shall have the right to exercise the vested Stock Option as follows: (i) for a period of at least six months from the date of termination, if termination was caused by such Participant’s death or “permanent and total disability” (within the meaning of Section 22(e)(3) of the Code) and (ii) for a period of at least 30 days from the date of termination, if termination was caused other than by such Participant’s death or “permanent and total disability” (within the meaning of Section 22(e)(3) of the Code), but in no event later than the latest date on which such Participant could have exercised such Stock Option in the absence of a termination of employment.

 

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Exhibit 10.17

 

    Type: Time- and Performance-Based Option
    Name:
    Number of Shares Subject to Option:
    Price per Share:
    Date of Grant:

H EALTHCARE T ECHNOLOGY H OLDINGS , I NC .

2010 E QUITY I NCENTIVE P LAN

THIS AWARD AND ANY SECURITIES ISSUED UPON EXERCISE OF THIS OPTION ARE SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER AND REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET FORTH IN THE MANAGEMENT STOCKHOLDERS AGREEMENT (AS DEFINED IN THE HEALTHCARE TECHNOLOGY HOLDINGS, INC. 2010 EQUITY INCENTIVE PLAN).

HEALTHCARE TECHNOLOGY HOLDINGS, INC. STRONGLY ENCOURAGES YOU TO SEEK THE ADVICE OF YOUR OWN LEGAL AND FINANCIAL ADVISORS WITH RESPECT TO YOUR AWARD AND ITS TAX CONSEQUENCES.

S ENIOR M ANAGEMENT N ONSTATUTORY O PTION A GREEMENT

1. Grant of Option . This agreement (the “ Agreement ”) evidences the grant by Healthcare Technology Holdings, Inc. (the “ Company ”) to the undersigned (the “ Optionee ”) on [                ] (the “ Date of Grant ”) of an option (the “ Option ”) under the Healthcare Technology Holdings, Inc. 2010 Equity Incentive Plan (the “ Plan ”), the terms of which are incorporated herein by reference, to purchase, in whole or in part, on the terms provided herein and in the Plan, the number of shares of Stock set forth in Schedule A (the “ Shares ”) with an exercise price of $[        ] per share (the Fair Market Value of the Stock on the Date of Grant), in each case subject to adjustment pursuant to Section 7 of the Plan. The Option will vest in accordance with Section 3 below.

The Option evidenced by this Agreement is intended to be a nonstatutory option (that is, an option not described in subsection (b) of Section 422) and is granted to the Optionee in connection with the Optionee’s Employment by the Company and its qualifying subsidiaries. For purposes of the immediately preceding sentence, “qualifying subsidiary” means a subsidiary of the Company as to which the Company has a “controlling interest” as described in Treas. Regs. § 1.409A-1(b)(5)(iii)(E)(1).

2. Meaning of Certain Terms . Except as otherwise defined herein, all capitalized terms used in this Agreement shall have the same meaning as in the Plan. The following terms shall have the following meanings:

(a) “ Annual EBITDA ” means Consolidated Adjusted EBITDA for the applicable fiscal year ending December 31.


(b) “ Annual EBITDA Target ” has the meaning set forth in Schedule A.

(c) “ Beneficiary ” means, in the event of the Optionee’s death, the beneficiary named in the written designation (in form acceptable to the Administrator) most recently filed with the Administrator by the Optionee prior to death and not subsequently revoked, or, if there is no such designated beneficiary, the executive or administrator of the Optionee’s estate. An effective beneficiary designation shall be treated as having been revoked only upon receipt by the Administrator, prior to the Optionee’s death, of an instrument of revocation in form acceptable to the Administrator. If the Option or any portion thereof has been transferred to a Permitted Transferee who is a natural person and such Permitted Transferee dies while the Option or transferred portion thereof is outstanding, the Option or portion thereof so transferred may thereafter be exercised, to the extent it remains exercisable and subject to such limitations as the Administrator may impose, by the person or persons to whom it passed from the Permitted Transferee by the applicable laws of descent and distribution.

(d) “ Cash Proceeds ” means, as of any Determination Date occurring after the Closing Date, the cumulative total of all cash and Marketable Securities actually received by the Investors after the Closing Date and on or before such Determination Date in respect of the Investors’ Initial Equity Investment, excluding, for the avoidance of doubt, management, consulting, monitoring, advisory or similar fees paid to affiliates of the Investors that are contemplated by the Management Services Agreement dated February 26, 2010 by and among the Company, Healthcare Acquisition, Inc., Healthcare Technology Intermediate Holdings, Inc., Healthcare Technology Intermediate, Inc., TPG Capital, L.P. and the other parties thereto (the “ Management Agreement ”) or associated with the termination of such agreement.

(e) “ Closing Date ” means February 26, 2010.

(f) “ Consolidated Adjusted EBITDA ” has the meaning set forth in the Credit and Guaranty Agreement dated as of February 26, 2010 among IMS Health Incorporated, IMS AG, IMS Japan K.K., Healthcare Technology Intermediate Holdings, Inc., Goldman Sachs Lending Partners LLC, Bank of America, N.A., Barclays Capital, HSBC Securities (USA) Inc., RBC Capital Markets, Fifth Third Bank, General Electric Capital Corporation, Mizuho Corporate Bank, Ltd., Suntrust Bank and the other parties thereto, except that for purposes of this Agreement, Consolidated Adjusted EBITDA shall be determined without regard to subsection (i) of such definition.

(g) “ Cumulative EBITDA ” means the sum of the Annual EBITDA for the relevant fiscal year and the immediately preceding fiscal year. This amount is then used to test whether the applicable Cumulative EBITDA Target has been met.

 

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(h) “ Cumulative EBITDA Target ” has the meaning set forth in Schedule A.

(i) “ Determination Date ” means as to any cash received by the Investors in respect of their Initial Equity Investment, the date such cash is actually received, or as to any Marketable Securities actually received by the Investors in respect of their Initial Equity Investment, the “measurement date” as referred to in Section 2(p) below.

(j) “ Initial Equity Investment ” means the Shares issued to the Investors as of February 26, 2010, including any stock, securities or other property or interests received by the Investors in respect of such shares in connection with any stock dividend or other similar distribution, stock split or combination of shares, recapitalization, conversion, reorganization, consolidation, split-up, spin-off, combination, repurchase, merger, exchange of stock or other transaction or event that affects the Company’s capital stock occurring after the date of issuance, but not including, for the avoidance of doubt, any stock or other securities issued to the Investors or any of them in respect of any subsequent investment or capital contribution made by the Investors or any of them.

(k) “ Initial Investment Value ” means $[        ].

(l) “ Investors ” has the same meaning as set forth in the Management Stockholders Agreement.

(m) “ IRR ” means the internal rate of return actually earned by the Investors on their cash investment to purchase shares of Stock. The internal rate of return shall take into account the amount and timing of all (i) cash dividends and distributions to such Investors in respect of the shares of Stock owned by them (excluding, for the avoidance of doubt, management, consulting, monitoring, advisory or similar fees paid to affiliates of the Investors that are contemplated by the Management Agreement or associated with the termination of such agreement), (ii) cash proceeds from the sale or other disposition of any such shares of Stock and (iii) Marketable Securities received in respect of such shares of Stock.

(n) “ Merger ” has the same meaning as that term is defined in the Management Stockholders Agreement.

(o) “ Option Holder ” means the Optionee or, if as of the relevant time the Option has passed to a Beneficiary or Permitted Transferee, the Beneficiary or Permitted Transferee, as the case may be, who holds the Option pursuant to the terms of this Agreement.

(p) “ Marketable Securities ” means any equity security (including Stock or any security issued by the Company in substitution or exchange for such Stock) that is both (i) of a class that includes equity securities that are listed on a national securities exchange and (ii) registered under the Securities Exchange Act of 1934, as amended, in each case as of the applicable determination date; provided , however , that Marketable Securities shall not include any such equity securities described above to

 

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the extent that, and only for so long as, the equity securities of such type or class received by the Investors are subject to a contractual lock-up or similar agreement restricting transferability or may not be distributed or resold without volume limitation or other restrictions on transfer under Rule 144 under the Securities Act of 1933, as amended (or any successor provision thereof), including without application of paragraphs (c), (e), (f) and (h) of such Rule 144. For purposes of this Agreement, the value of the Marketable Securities on any “measurement date” (which shall be the date of initial receipt of Marketable Securities by the Investors, the date any such contractual lockup or similar restriction expires or the last day of each calendar quarter beginning with the calendar quarter within which the initial receipt of Marketable Securities by the Investors occurred) shall be equal to the average of the Trading Price of such Marketable Securities over each of the forty-five (45) consecutive Trading Days immediately preceding (and including) such measurement date; provided , however , that the Administrator shall be entitled to make equitable adjustments to such valuation methodology in the event of an extraordinary transaction occurring during any such forty-five (45) Trading Day period ending on such measurement date.

(q) “ Performance Period ” means the five (5) year period beginning on [            ] and ending on [            ].

(r) “ Permitted Transferee ” means a transferee of the Option pursuant to a transfer described at Section 7 below.

(s) “ Trading Day ” means each business day during such calendar quarter in which the Trading Price of the Stock or Marketable Securities, as applicable, is reported by the principal securities exchange or, solely in the case of Stock, furnished by a member of the National Association of Securities Dealers, inc. (“ NASD ”) selected by the Board or determined by the Board in good faith.

(t) “ Trading Price ” means (i) the closing price on such day of a share of Stock or Marketable Securities, as applicable, as reported on the principal securities exchange on which shares of Stock or Marketable Securities, as applicable, are then listed or admitted to trade or (ii) if not so reported, as furnished by any member of the NASD selected by the Board. In the event that the price of a share of Stock is not so reported or furnished, the Trading Price will be determined by the Board in good faith.

(u) “ Tranche 1 Options ” means the portion of the Option to purchase the number of shares of Stock set forth in Schedule A that is subject to time-based vesting in accordance with the terms of this Agreement, including Schedule A, and the Plan.

(v) “ Tranche 2 Options ” means the portion of the Option to purchase the number of shares of Stock set forth in Schedule A that is subject to time-based and performance-based vesting in accordance with the terms of this Agreement, including Schedule A, and the Plan.

 

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3. Vesting; Method of Exercise; Treatment of the Option Upon Cessation of Employment .

(a) Generally . As used herein with respect to the Option or any portion thereof, the term “vest” means to become exercisable. Unless earlier terminated, relinquished or expired, the Tranche 1 Options and the Tranche 2 Options shall vest in accordance with the terms of Schedule A applicable thereto.

(b) Exercise of the Option . No portion of the Option may be exercised until such portion vests and, with respect to the Tranche 2 Options, is earned under Schedule A. Each election to exercise any vested, and with respect to the Tranche 2 Options, earned portion of the Option shall be subject to the terms and conditions of the Plan and shall be in writing, signed by the Optionee or by the Beneficiary or Permitted Transferee to whom such portion of the Option has passed (subject to any restrictions provided under the Plan and the Management Stockholders Agreement). Each such written exercise election must be received by the Company at its principal office and be accompanied by payment in full as provided in the Plan. The purchase price may be paid (i) by cash or check acceptable to the Administrator, (ii) by such other means, if any, as may be acceptable to the Administrator, or (iii) by any combination of the foregoing permissible forms of payment; provided , however , that in addition to the foregoing, in the event of an exercise of the Option, or a portion of the Option, in connection with or following a cessation of Employment as result of death, Disability, termination by the Company without Cause, voluntary resignation for Good Reason or due to the Optionee’s Retirement, or a voluntary resignation without Good Reason after [            ], or in the event of an exercise of the Option, or a portion of the Option on or immediately prior to the Final Exercise Date while the Optionee remains employed, the purchase price may be paid, at the Optionee’s election, on a cashless basis under which shares of Stock otherwise deliverable under the Option and having a Fair Market Value equal to the exercise price are withheld by the Company in accordance with the Plan. In the event that the Option is exercised by a person other than the Optionee, the Company will be under no obligation to deliver Shares hereunder unless and until it is satisfied as to the authority of the Option Holder to exercise the Option. The latest date on which the Option or any portion thereof may be exercised is the 10th anniversary of the Date of Grant, (the “ Final Exercise Date ”), and if not exercised by such date the Option or any remaining portion thereof will thereupon immediately terminate.

(c) Treatment of the Option Upon Cessation of Employment . If the Optionee’s Employment ceases, the Option to the extent not already vested will be immediately forfeited and any vested portion of the Option will be treated as follows:

(i) Subject to (ii), (iii), (iv), (v) and (vi) below and Schedule A (with respect to Tranche 2 Options), the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 30 days following cessation of Employment or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

 

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(ii) In the event of cessation of the Optionee’s Employment by reason of death or Disability, the Option, to the extent exercisable immediately prior to Optionee’s death or Disability, will remain exercisable until the earlier of (i) the first anniversary of the Optionee’s death or Disability, or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(iii) In the event of cessation of the Optionee’s Employment by the Company without Cause or by the Optionee for Good Reason, the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 90 days following cessation of Employment, or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(iv) In the event of cessation of the Optionee’s Employment due to the Optionee’s Retirement, the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 90 days following cessation of Employment, or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(v) The Option will terminate immediately prior to a cessation of the Optionee’s Employment if such cessation of Employment has resulted in connection with an act or failure to act constituting Cause.

(vi) In the event the Optionee terminates Employment for any reason and, within 18 months of such termination date, breaches any non-competition or non-solicitation covenant or materially breaches any confidentiality, non-disclosure or other similar covenant, the Option will be treated as having terminated immediately prior to such cessation of Employment.

4. Adjustment of Annual and Cumulative EBITDA Targets . Annual and Cumulative EBITDA targets for a particular fiscal year as described in Schedule A will be adjusted to reflect the consequences of future acquisitions and dispositions, future reasonable management and investment banking fees consistent with industry standards, the impact of foreign currency exchange rates or in the event of changes in GAAP. Any such adjustments shall be made in good faith by the Administrator in its discretion after consultation with the CEO and due consideration of his recommendations related to the foregoing.

5. Share Restrictions, etc . Except as expressly provided herein, the Optionee’s rights hereunder and with respect to Shares received upon exercise are subject to the restrictions and other provisions contained in the Management Stockholders Agreement.

6. Legends, etc . Shares issued upon exercise shall bear such legends as may be required or provided for under the terms of the Management Stockholders Agreement.

 

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7. Transfer of Option . The Option may only be transferred to a legal representative in the event of the Optionee’s incapacity or to one or more transferees permitted under Section 6(a)(3) of the Plan.

8. Withholding . The exercise of the Option will give rise to “wages” subject to withholding. The Optionee expressly acknowledges and agrees that the Optionee’s rights hereunder, including the right to be issued Shares upon exercise, are subject to the Optionee promptly paying to the Company in cash (or by such other means as may be acceptable to the Administrator in its discretion) all taxes required to be withheld. In the event of an exercise of the Option, or a portion of the Option, in connection with or following a cessation of Employment as result of death, Disability, termination by the Company without Cause, voluntary resignation for Good Reason or the Optionee’s Retirement, or a voluntary resignation without Good Reason after [            ], or in the event of an exercise of the Option, or a portion of the Option, on or immediately prior to the Final Exercise Date while the Optionee remains employed, the Optionee may elect to have shares of Stock held back by the Company having a Fair Market Value equal to the applicable minimum tax withholding requirements in accordance with the Plan. The Optionee also authorizes the Company and its subsidiaries to withhold such amount from any amounts otherwise owed to the Optionee and the Company may so withhold.

9. Treatment of the Option upon Consummation of a Covered Transaction .

(a) Notwithstanding Section 7(a)(3) of the Plan that permits the Administrator, in its discretion, to accelerate the exercisability of Awards in connection with a Covered Transaction in which there is no assumption, continuation, substitution or cash-out of an Award, the portion of the Tranche 1 Option that is outstanding immediately prior the consummation of a Covered Transaction, to the extent that it is not assumed, continued, substituted or cashed-out in connection with the Covered Transaction in accordance with the terms of the Plan, shall vest in full immediately prior to the consummation of such Covered Transaction.

(b) For the avoidance of doubt, the Tranche 2 Option (or portion thereof) that does not vest and become earned in connection with a Covered Transaction occurring on or prior to [            ] as a result of the targets set forth in the penultimate paragraph of Schedule A hereto not having been satisfied in connection with such Covered Transaction shall, to the extent practicable, remain outstanding and eligible to vest and become earned based on attainment of the Annual EBITDA Target(s) or Cumulative EBITDA Target(s) set forth in Schedule A hereto, and if such treatment is not practicable, such Tranche 2 Option (or portion thereof) shall vest and become earned immediately prior to the consummation of such Covered Transaction. On or after [            ], to the extent that the Tranche 2 Options do not vest and become earned in connection with a Covered Transaction, such Tranche 2 Options shall thereupon terminate upon the consummation of the Covered Transaction with no consideration due to the Optionee.

10. Effect on Employment . Neither the grant of the Option, nor the issuance of Shares upon exercise of the Option, shall give the Optionee any right to be retained in

 

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the employ of the Company or any of its Affiliates, affect the right of the Company or any of its Affiliates to discharge or discipline such Optionee at any time, or affect any right of such Optionee to terminate his or her Employment at any time.

11. Other Undertakings .

(a) To protect the interests of the Company and its direct and indirect subsidiaries (collectively, the “ IMS Companies ”), including the confidential information of the IMS Companies and the confidential information of their respective customers, data suppliers, prospective customers and other companies with which the IMS Companies have a business relationship, and in consideration of the covenants and promises and other valuable consideration described in this Agreement, the Company and the Optionee agree as follows:

(b) The Optionee acknowledges and agrees that he is bound by the confidentiality and other covenants contained in the restrictive covenant and confidentiality agreements that he has executed with an IMS Company, which covenants and agreements are incorporated herein by reference and shall survive any exercise, expiration, forfeiture or other termination of this Agreement or the Option issuable hereunder. The Optionee also acknowledges and agrees that the Company shall be an affiliate for purposes of such restrictive covenant and confidentiality agreements.

(c) The Optionee acknowledges the opportunity to participate in the Plan and the financial benefits that may accrue from such participation, is good, valuable and sufficient consideration for the following:

(i) The Optionee acknowledges and agrees that he is and will remain bound by the non-competition and non-solicitation covenants contained in the restrictive covenant agreement(s) that he has executed with any of the IMS Companies.

(ii) The Optionee further acknowledges and agrees that the period during which the non-competition and non-solicitation covenants will apply following a termination of employment shall be extended from twelve months to eighteen months; provided , however , that the remedies available for breach of any non-competition or non-solicitation covenants during such extended six-month period shall be limited to the following: (x) the rights and remedies of the Company set forth in Section 5 of the Management Stockholders Agreement, (y) the forfeiture of the Option for no consideration, and (z) in respect of the Option (or portion thereof) exercised by the Optionee prior to any such breach or subsequent thereto and prior to the forfeiture of such award required by this Section 11(c)(ii), the Optionee shall pay to the Company an amount equal to the difference between the exercise price of the Option and the per-share proceeds of any sale of Stock acquired upon such exercise multiplied by the number of shares of Stock so sold. The Company shall also be entitled to the foregoing remedies in the event of a material breach of any confidentiality, non-disclosure or other similar covenant contained in the restrictive covenant and confidentiality agreements that the Optionee has executed with an IMS Company.

 

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12. Governing Law . This Agreement and all claims arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

By acceptance of the Option, the undersigned agrees hereby to become a party to, and be bound by the terms of, the Management Stockholders Agreement.

[The remainder of this page is intentionally left blank]

 

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Executed as of the      day of             ,         .

 

Healthcare Technology Holdings, Inc.     HEALTHCARE TECHNOLOGY HOLDINGS, INC.
    By:  

 

    Name:  
    Title:  
Optionee    

 

    Signature
   

 

    Print Name

[Signature Page to Management Nonstatutory Option Agreement]

Exhibit 10.18

 

    Type: Time-Based Option
    Name:
    Number of Shares Subject to Option:
    Price per Share:
    Date of Grant:

H EALTHCARE T ECHNOLOGY H OLDINGS , I NC .

2010 E QUITY I NCENTIVE P LAN

THIS AWARD AND ANY SECURITIES ISSUED UPON EXERCISE OF THIS OPTION ARE SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER AND REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET FORTH IN THE MANAGEMENT STOCKHOLDERS AGREEMENT (AS DEFINED IN THE HEALTHCARE TECHNOLOGY HOLDINGS, INC. 2010 EQUITY INCENTIVE PLAN).

HEALTHCARE TECHNOLOGY HOLDINGS, INC. STRONGLY ENCOURAGES YOU TO SEEK THE ADVICE OF YOUR OWN LEGAL AND FINANCIAL ADVISORS WITH RESPECT TO YOUR AWARD AND ITS TAX CONSEQUENCES.

S ENIOR M ANAGEMENT N ONSTATUTORY O PTION A GREEMENT

1. Grant of Option . This agreement (the “ Agreement ”) evidences the grant by Healthcare Technology Holdings, Inc. (the “ Company ”) to the undersigned (the “ Optionee ”) on [                ] (the “ Date of Grant ”) of an option (the “ Option ”) under the Healthcare Technology Holdings, Inc. 2010 Equity Incentive Plan (the “ Plan ”), the terms of which are incorporated herein by reference, to purchase, in whole or in part, on the terms provided herein and in the Plan, the number of shares of Stock set forth in Schedule A (the “ Shares ”) with an exercise price of $[        ] per share ([    ]% of the Fair Market Value of the Stock on the Date of Grant), in each case subject to adjustment pursuant to Section 7 of the Plan. The Option will vest in accordance with Section 3 below.

The Option evidenced by this Agreement is intended to be a nonstatutory option (that is, an option not described in subsection (b) of Section 422) and is granted to the Optionee in connection with the Optionee’s Employment by the Company and its qualifying subsidiaries. For purposes of the immediately preceding sentence, “qualifying subsidiary” means a subsidiary of the Company as to which the Company has a “controlling interest” as described in Treas. Regs. § 1.409A-1(b)(5)(iii)(E)(1).


2. Meaning of Certain Terms . Except as otherwise defined herein, all capitalized terms used in this Agreement shall have the same meaning as in the Plan. The following terms shall have the following meanings:

(a) “ Beneficiary ” means, in the event of the Optionee’s death, the beneficiary named in the written designation (in form acceptable to the Administrator) most recently filed with the Administrator by the Optionee prior to death and not subsequently revoked, or, if there is no such designated beneficiary, the executive or administrator of the Optionee’s estate. An effective beneficiary designation shall be treated as having been revoked only upon receipt by the Administrator, prior to the Optionee’s death, of an instrument of revocation in form acceptable to the Administrator. If the Option or any portion thereof has been transferred to a Permitted Transferee who is a natural person and such Permitted Transferee dies while the Option or transferred portion thereof is outstanding, the Option or portion thereof so transferred may thereafter be exercised, to the extent it remains exercisable and subject to such limitations as the Administrator may impose, by the person or persons to whom it passed from the Permitted Transferee by the applicable laws of descent and distribution.

(b) “ Option Holder ” means the Optionee or, if as of the relevant time the Option has passed to a Beneficiary or Permitted Transferee, the Beneficiary or Permitted Transferee, as the case may be, who holds the Option pursuant to the terms of this Agreement.

(c) “ Permitted Transferee ” means a transferee of the Option pursuant to a transfer described at Section 7 below.

3. Vesting; Method of Exercise; Treatment of the Option Upon Cessation of Employment .

(a) Generally . As used herein with respect to the Option or any portion thereof, the term “vest” means to become exercisable. Unless earlier terminated, relinquished or expired, the Options shall vest in accordance with the terms of Schedule A applicable thereto.

(b) Exercise of the Option . No portion of the Option may be exercised until such portion vests. Each election to exercise any vested portion of the Option shall be subject to the terms and conditions of the Plan and shall be in writing, signed by the Optionee or by the Beneficiary or Permitted Transferee to whom such portion of the Option has passed (subject to any restrictions provided under the Plan and the Management Stockholders Agreement). Each such written exercise election must be received by the Company at its principal office and be accompanied by payment in full as provided in the Plan. The purchase price may be paid (i) by cash or check acceptable to the Administrator, (ii) by such other means, if any, as may be acceptable to the Administrator, or (iii) by any combination of the foregoing permissible forms of payment; provided , however , that in addition to the foregoing, in the event of an exercise of the Option, or a portion of the Option, in connection with or following a cessation of Employment as result of death, Disability, termination by the Company without Cause, voluntary resignation for Good Reason, or due to the Optionee’s Retirement, or a voluntary resignation without Good Reason after [            ], or in the event of an exercise of the Option, or a portion of the Option on or immediately

 

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prior to the Final Exercise Date while the Optionee remains employed, the purchase price may be paid, at the Optionee’s election, on a cashless basis under which shares of Stock otherwise deliverable under the Option and having a Fair Market Value equal to the exercise price are withheld by the Company in accordance with the Plan. In the event that the Option is exercised by a person other than the Optionee, the Company will be under no obligation to deliver Shares hereunder unless and until it is satisfied as to the authority of the Option Holder to exercise the Option. The latest date on which the Option or any portion thereof may be exercised is the 10th anniversary of the Date of Grant, (the “ Final Exercise Date ”), and if not exercised by such date the Option or any remaining portion thereof will thereupon immediately terminate.

(c) Treatment of the Option Upon Cessation of Employment . If the Optionee’s Employment ceases, the Option to the extent not already vested will be immediately forfeited and any vested portion of the Option will be treated as follows:

(i) Subject to (ii), (iii), (iv), (v) and (vi) below, the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 30 days following cessation of Employment or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(ii) In the event of cessation of the Optionee’s Employment by reason of death or Disability, the Option, to the extent exercisable immediately prior to Optionee’s death or Disability, will remain exercisable until the earlier of (i) the first anniversary of the Optionee’s death or Disability, or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(iii) In the event of cessation of the Optionee’s Employment by the Company without Cause or by the Optionee for Good Reason, the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 90 days following cessation of Employment, or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(iv) In the event of cessation of the Optionee’s Employment due to the Optionee’s Retirement, the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 90 days following cessation of Employment, or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(v) The Option will terminate immediately prior to a cessation of the Optionee’s Employment if such cessation of Employment has resulted in connection with an act or failure to act constituting Cause.

(vi) In the event the Optionee terminates Employment for any reason and, within 18 months of such termination date, breaches any non-competition or

 

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non-solicitation covenant or materially breaches any confidentiality, non-disclosure or other similar covenant, the Option will be treated as having terminated immediately prior to such cessation of Employment.

4. Share Restrictions, etc . Except as expressly provided herein, the Optionee’s rights hereunder and with respect to Shares received upon exercise are subject to the restrictions and other provisions contained in the Management Stockholders Agreement.

5. Legends, etc . Shares issued upon exercise shall bear such legends as may be required or provided for under the terms of the Management Stockholders Agreement.

6. Transfer of Option . The Option may only be transferred to a legal representative in the event of the Optionee’s incapacity or to one or more transferees permitted under Section 6(a)(3) of the Plan.

7. Withholding . The exercise of the Option will give rise to “wages” subject to withholding. The Optionee expressly acknowledges and agrees that the Optionee’s rights hereunder, including the right to be issued Shares upon exercise, are subject to the Optionee promptly paying to the Company in cash (or by such other means as may be acceptable to the Administrator in its discretion) all taxes required to be withheld. In the event of an exercise of the Option, or a portion of the Option, in connection with or following a cessation of Employment as result of death, Disability, termination by the Company without Cause, voluntary resignation for Good Reason or the Optionee’s Retirement, or a voluntary resignation without Good Reason after [            ] or in the event of an exercise of the Option, or a portion of the Option, on or immediately prior to the Final Exercise Date while the Optionee remains employed, the Optionee may elect to have shares of Stock held back by the Company having a Fair Market Value equal to the applicable minimum tax withholding requirements in accordance with the Plan. The Optionee also authorizes the Company and its subsidiaries to withhold such amount from any amounts otherwise owed to the Optionee and the Company may so withhold.

8. Treatment of the Option upon Consummation of a Covered Transaction . Notwithstanding Section 7(a)(3) of the Plan that permits the Administrator, in its discretion, to accelerate the exercisability of Awards in connection with a Covered Transaction in which there is no assumption, continuation, substitution or cash-out of an Award, the portion of the Option that is outstanding immediately prior the consummation of a Covered Transaction, to the extent that it is not assumed, continued, substituted or cashed-out in connection with the Covered Transaction in accordance with the terms of the Plan, shall vest in full immediately prior to the consummation of such Covered Transaction.

9. Effect on Employment . Neither the grant of the Option, nor the issuance of Shares upon exercise of the Option, shall give the Optionee any right to be retained in the employ of the Company or any of its Affiliates, affect the right of the Company or any of its Affiliates to discharge or discipline such Optionee at any time, or affect any right of such Optionee to terminate his or her Employment at any time.

 

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10. Other Undertakings .

(a) To protect the interests of the Company and its direct and indirect subsidiaries (collectively, the “ IMS Companies ”), including the confidential information of the IMS Companies and the confidential information of their respective customers, data suppliers, prospective customers and other companies with which the IMS Companies have a business relationship, and in consideration of the covenants and promises and other valuable consideration described in this Agreement, the Company and the Optionee agree as follows:

(b) The Optionee acknowledges and agrees that he is bound by the confidentiality and other covenants contained in the restrictive covenant and confidentiality agreements that he has executed with an IMS Company, which covenants and agreements are incorporated herein by reference and shall survive any exercise, expiration, forfeiture or other termination of this Agreement or the Option issuable hereunder. The Optionee also acknowledges and agrees that the Company shall be an affiliate for purposes of such restrictive covenant and confidentiality agreements.

(c) The Optionee acknowledges the opportunity to participate in the Plan and the financial benefits that may accrue from such participation, is good, valuable and sufficient consideration for the following:

(i) The Optionee acknowledges and agrees that he is and will remain bound by the non-competition and non-solicitation covenants contained in the restrictive covenant agreement(s) that he has executed with any of the IMS Companies.

(ii) The Optionee further acknowledges and agrees that the period during which the non-competition and non-solicitation covenants will apply following a termination of employment shall be extended from twelve months to eighteen months; provided, however, that the remedies available for breach of any non-competition or non-solicitation covenants during such extended six-month period shall be limited to, the following: (x) the rights and remedies of the Company set forth in Section 5 of the Management Stockholders Agreement, (y) the forfeiture of the Option for no consideration, and (z) in respect of the Option (or portion thereof) exercised by the Optionee prior to any such breach or subsequent thereto and prior to the forfeiture of such award required by this Section 11(c)(ii), the Optionee shall pay to the Company an amount equal to the difference between the exercise price of the Option and the per-share proceeds of any sale of Stock acquired upon such exercise multiplied by the number of shares of Stock so sold. The Company shall also be entitled to the foregoing remedies in the event of a material breach of any confidentiality, non-disclosure or other similar covenant contained in the restrictive covenant and confidentiality agreements that the Optionee has executed with an IMS Company.

 

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11. Governing Law . This Agreement and all claims arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

12. Provisions of the Plan . This Agreement is subject in its entirety to the provisions of the Plan, which are incorporated herein by reference. A copy of the Plan as in effect on the Date of Grant has been furnished to the Optionee and the Optionee agrees to be bound by the terms of the Plan and this Agreement. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of this Agreement shall control. The Company acknowledges and agrees that, for purposes of this Agreement and the Plan, the terms “Cause” and “Good Reason” shall be determined in accordance with and pursuant to the Management Stockholders Agreement.

By acceptance of the Option, the undersigned agrees hereby to become a party to, and be bound by the terms of, the Management Stockholders Agreement.

[The remainder of this page is intentionally left blank]

 

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Executed as of the      day of         ,         .

 

Healthcare Technology Holdings, Inc.     HEALTHCARE TECHNOLOGY HOLDINGS, INC.
    By:  

 

    Name:  
    Title:  
Optionee    

 

    Name:  

[Signature Page to Senior Management Nonstatutory Option Agreement – Time-Based]

Exhibit 10.19

 

      Type: Time-Based Option
      Name:
      Number of Shares Subject to Option:
      Price per Share:
      Date of Grant:

H EALTHCARE T ECHNOLOGY H OLDINGS , I NC .

2010 E QUITY I NCENTIVE P LAN

THIS AWARD AND ANY SECURITIES ISSUED UPON EXERCISE OF THIS OPTION ARE SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER AND REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET FORTH IN THE MANAGEMENT STOCKHOLDERS AGREEMENT (AS DEFINED IN THE HEALTHCARE TECHNOLOGY HOLDINGS, INC. 2010 EQUITY INCENTIVE PLAN).

HEALTHCARE TECHNOLOGY HOLDINGS, INC. STRONGLY ENCOURAGES YOU TO SEEK THE ADVICE OF YOUR OWN LEGAL AND FINANCIAL ADVISORS WITH RESPECT TO YOUR AWARD AND ITS TAX CONSEQUENCES.

D IRECTOR N ONSTATUTORY O PTION A GREEMENT

1. Grant of Option . This agreement (the “ Agreement ”) evidences the grant by Healthcare Technology Holdings, Inc. (the “ Company ”) to the undersigned (the “ Optionee ”) on [                ] (the “ Date of Grant ”) of an option (the “ Option ”) under the Healthcare Technology Holdings, Inc. 2010 Equity Incentive Plan (the “ Plan ”), the terms of which are incorporated herein by reference, to purchase, in whole or in part, on the terms provided herein and in the Plan, the number of shares of Stock set forth in Schedule A (the “ Shares ”) with an exercise price of $[        ] per share (the Fair Market Value of the Stock on the Date of Grant), in each case subject to adjustment pursuant to Section 7 of the Plan. The Option will vest in accordance with Section 3 below.

The Option evidenced by this Agreement is intended to be a nonstatutory option (that is, an option not described in subsection (b) of Section 422) and is granted to the Optionee in connection with the Optionee’s Employment by the Company and its qualifying subsidiaries. For purposes of the immediately preceding sentence, “qualifying subsidiary” means a subsidiary of the Company as to which the Company has a “controlling interest” as described in Treas. Regs. § 1.409A-1(b)(5)(iii)(E)(1).


2. Meaning of Certain Terms . Except as otherwise defined herein, all capitalized terms used in this Agreement shall have the same meaning as in the Plan. The following terms shall have the following meanings:

(a) “ Beneficiary ” means, in the event of the Optionee’s death, the beneficiary named in the written designation (in form acceptable to the Administrator) most recently filed with the Administrator by the Optionee prior to death and not subsequently revoked, or, if there is no such designated beneficiary, the executive or administrator of the Optionee’s estate. An effective beneficiary designation shall be treated as having been revoked only upon receipt by the Administrator, prior to the Optionee’s death, of an instrument of revocation in form acceptable to the Administrator. If the Option or any portion thereof has been transferred to a Permitted Transferee who is a natural person and such Permitted Transferee dies while the Option or transferred portion thereof is outstanding, the Option or portion thereof so transferred may thereafter be exercised, to the extent it remains exercisable and subject to such limitations as the Administrator may impose, by the person or persons to whom it passed from the Permitted Transferee by the applicable laws of descent and distribution.

(b) “ Disability ” means the Optionee becomes disabled during his or her service to the Company through any illness, injury, accident or condition of either a physical or psychological nature and, as a result, is unable to perform substantially all of his or her duties and responsibilities as a member of the Board (notwithstanding the provision of any reasonable accommodation) for one hundred eighty (180) days during any period of three hundred and sixty-five (365) consecutive calendar days. The definition of Disability in this Agreement shall apply for purposes of this Agreement, the Management Stockholders Agreement and the Plan.

(c) “ Option Holder ” means the Optionee or, if as of the relevant time the Option has passed to a Beneficiary or Permitted Transferee, the Beneficiary or Permitted Transferee, as the case may be, who holds the Option pursuant to the terms of this Agreement.

(d) “ Permitted Transferee ” means a transferee of the Option pursuant to a transfer described at Section 6 below.

3. Vesting; Method of Exercise; Treatment of the Option Upon Cessation of Employment .

(a) Generally . As used herein with respect to the Option or any portion thereof, the term “vest” means to become exercisable. Unless earlier terminated, relinquished or expired, the Option shall vest in accordance with the terms of Schedule A.

(b) Exercise of the Option . No portion of the Option may be exercised until such portion vests. Each election to exercise any vested portion of the Option shall be subject to the terms and conditions of the Plan and shall be in writing, signed by the Optionee or by the Beneficiary or Permitted Transferee to whom such portion of the Option has passed (subject to any restrictions provided under the Plan and the Management Stockholders Agreement). Each such written exercise election must be received by the Company at its principal office and be accompanied by payment in

 

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full as provided in the Plan. The purchase price may be paid (i) by cash or check acceptable to the Administrator, (ii) by such other means, if any, as may be acceptable to the Administrator, or (iii) by any combination of the foregoing permissible forms of payment; provided , however , that in addition to the foregoing, in the event of an exercise of the Option, or a portion of the Option, in connection with or following a cessation of Employment as result of death, Disability or termination by the Company without Cause, or in the event of an exercise of the Option, or a portion of the Option, on or immediately prior to the Final Exercise Date while the Optionee remains a member of the Board, the purchase price may be paid, at the Optionee’s election, on a cashless basis under which shares of Stock otherwise deliverable under the Option and having a Fair Market Value equal to the exercise price are withheld by the Company in accordance with the Plan. In the event that the Option is exercised by a person other than the Optionee, the Company will be under no obligation to deliver Shares hereunder unless and until it is satisfied as to the authority of the Option Holder to exercise the Option. The latest date on which the Option or any portion thereof may be exercised is the 10th anniversary of the Date of Grant, (the “ Final Exercise Date ”), and if not exercised by such date the Option or any remaining portion thereof will thereupon immediately terminate.

(c) Treatment of the Option Upon Cessation of Employment . If the Optionee’s Employment ceases, the Option to the extent not already vested will be immediately forfeited and any vested portion of the Option will be treated as follows:

(i) Subject to (ii), (iii) and (iv) below, the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 30 days following cessation of Employment or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(ii) In the event of cessation of the Optionee’s Employment by reason of death or Disability, the Option, to the extent exercisable immediately prior to Optionee’s death or Disability, will remain exercisable until the earlier of (i) the first anniversary of the Optionee’s death or Disability, or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(iii) In the event of cessation of the Optionee’s Employment by the Company without Cause, the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 90 days following cessation of Employment, or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(iv) The Option will terminate immediately prior to a cessation of the Optionee’s Employment if such cessation of Employment has resulted in connection with an act or failure to act constituting Cause.

4. Share Restrictions, etc . Except as expressly provided herein, the Optionee’s rights hereunder and with respect to Shares received upon exercise are subject

 

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to the restrictions and other provisions contained in the Management Stockholders Agreement. The Optionee shall execute the Management Stockholders Agreement as a Manager (as such term is defined in the Management Stockholders Agreement). For purposes of the Management Stockholders Agreement, “employment” shall mean the Optionee’s provision of services as a member of the Board. The Optionee acknowledges that the provisions in the Management Stockholders Agreement relating to “Retirement” shall not apply to the Optionee.

5. Legends, etc . Shares issued upon exercise shall bear such legends as may be required or provided for under the terms of the Management Stockholders Agreement.

6. Transfer of Option . The Option may only be transferred to a legal representative in the event of the Optionee’s incapacity or to one or more transferees permitted under Section 6(a)(3) of the Plan.

7. Withholding . The Optionee shall be responsible for satisfying and paying all taxes arising from or due in connection with the exercise of the Option. The Company and its subsidiaries shall have no liability or obligation related to the foregoing.

8. Treatment of the Option upon Consummation of a Covered Transaction . Notwithstanding Section 7(a)(3) of the Plan that permits the Administrator, in its discretion, to accelerate the exercisability of Awards in connection with a Covered Transaction in which there is no assumption, continuation, substitution or cash-out of an Award, the portion of the Option that is outstanding immediately prior the consummation of a Covered Transaction, to the extent that it is not assumed, continued, substituted or cashed-out in connection with the Covered Transaction in accordance with the terms of the Plan, shall vest in full immediately prior to the consummation of such Covered Transaction.

9. Effect on Employment . Neither the grant of the Option, nor the issuance of Shares upon exercise of the Option, shall give the Optionee any right to be retained in the employ or service of the Company or any of its Affiliates, affect the right of the Company or any of its Affiliates to discharge or discipline such Optionee at any time, or affect any right of such Optionee to terminate his or her Employment at any time.

10. Miscellaneous . The Optionee agrees not to disclose confidential information of the Company and its subsidiaries (referred to collectively in this Section 10 as “ IMS ”) to anyone outside of IMS except as specifically described below; neither will the Optionee use such information for his or her own personal benefit. Confidential information may only be disclosed to someone outside of IMS if it is (a) to further a legitimate business purpose of IMS, and (b) disclosed after the intended recipient has signed an IMS approved agreement containing the appropriate confidentiality provisions. In addition, the Optionee agrees to make every reasonable effort to (a) ensure the confidentiality and integrity of confidential information of IMS and (b) protect it against reasonably anticipated threats or hazards to its security or integrity. “Confidential information,” as referred to here, means information not generally known outside IMS. Examples of confidential information include, but are not limited to, non-public technical

 

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knowledge of methodologies, computer programs, and work processes of IMS; business information regarding costs, profits, sales, licensing arrangements, markets, and customer lists of IMS; knowledge of future activities within IMS, such as products or services in research and development or marketing plans; data obtained or created from sources outside IMS; and information provided to IMS by a third party which IMS has agreed to keep confidential.

Upon IMS’s request, the Optionee will promptly return to IMS or destroy all company materials that came into his or her possession, custody or control in connection with his or her service as a member of the Board. The term “materials” includes, but is not limited to, all notes, correspondence, reports, computer programs, customer lists, data, manuals, presentations, and contracts which in any way relates to IMS’s business, and any confidential information referred to above. Upon cessation of service as a member of the Board, the Optionee will promptly return all such materials without retaining any copies.

11. Governing Law . This Agreement and all claims arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

By acceptance of the Option, the undersigned agrees hereby to become a party to, and be bound by the terms of, the Management Stockholders Agreement.

[The remainder of this page is intentionally left blank]

 

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Executed as of the      day of         ,         .

 

Healthcare Technology Holdings, Inc.     HEALTHCARE TECHNOLOGY HOLDINGS, INC.
    By:  

 

Optionee    

 

    Name:

[Signature Page to Director Nonstatutory Option Agreement]

Exhibit 10.20

Name of Participant: [    ]

HEALTHCARE TECHNOLOGY HOLDINGS, INC.

2010 EQUITY INCENTIVE PLAN

THIS AWARD AND ANY SECURITIES DELIVERED HEREUNDER ARE SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER AND REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET FORTH IN THE MANAGEMENT STOCKHOLDERS AGREEMENT (AS DEFINED IN THE HEALTHCARE TECHNOLOGY HOLDINGS, INC. 2010 EQUITY INCENTIVE PLAN).

HEALTHCARE TECHNOLOGY HOLDINGS, INC. STRONGLY ENCOURAGES YOU TO SEEK THE ADVICE OF YOUR OWN LEGAL AND FINANCIAL ADVISORS WITH RESPECT TO YOUR AWARD AND ITS TAX CONSEQUENCES.

Restricted Stock Unit Award Agreement

Healthcare Technology Holdings, Inc.

c/o IMS Health Incorporated

83 Wooster Heights Road

Danbury, CT 06810

Agreement made this [    ] day of [                ] (the “ Grant Date ”), between Healthcare Technology Holdings, Inc., a Delaware corporation (the “ Company ”), and [                ] (the “ Participant ”).

1. Restricted Stock Unit Award . The Participant is hereby awarded, pursuant to the Company’s 2010 Equity Incentive Plan (the “ Plan ”) and subject to its terms (except as provided herein), a Restricted Stock Unit award (the “ Award ”) giving the Participant the conditional right to receive, without payment but subject to the conditions and limitations set forth in this Agreement and in the Plan, [                ] shares of Stock (the “ Shares ”). Except as expressly provided herein, all capitalized terms used and not defined herein shall have the same meaning as in the Plan.

2. Vesting . This Award shall become fully vested and payable to the Participant on [                ], provided the Participant is on such date, and has been at all times since the date of this Agreement, employed by the Company or one of its subsidiaries.

3. Delivery of Shares . Subject to Section 5 below, the Company shall, as soon as practicable upon the vesting of the Award (but in no event later than March 15 of the calendar year following the calendar year of such vesting) effect delivery of the Shares to the Participant.


No Shares will be issued pursuant to this Award unless and until all legal requirements applicable to the issuance or transfer of such Shares have been complied with to the satisfaction of the Administrator.

4. Dividends; Other Rights . The Award shall not be interpreted to bestow upon the Participant any equity interest or ownership in the Company or any Affiliate prior to the date on which the Company delivers Shares to the Participant. The Participant is not entitled to vote any Shares by reason of the granting of this Award or to receive or be credited with any dividends declared and payable on any Share prior to the delivery date with respect to such Share. The Participant shall have the rights of a shareholder only as to those Shares, if any, that are actually delivered under this Award and only at such time as such Shares are so delivered to the Participant.

5. Withholding . The vesting of the Award will give rise to “wages” subject to withholding. The Participant expressly acknowledges and agrees that the Participant’s rights hereunder, including the right to be issued Shares upon vesting of the Award, are subject to the Participant promptly paying to the Company in cash (or by such other means as may be acceptable to the Administrator in its discretion) all taxes required to be withheld; provided, upon the vesting of the Award, the Participant may elect to have shares of Stock held back by the Company having a Fair Market Value equal to the applicable minimum tax withholding requirements in accordance with the Plan. The Participant also authorizes the Company and its subsidiaries to withhold such amount from any amounts otherwise owed to the Participant and the Company may so withhold.

6. Nontransferability . Neither this Award nor any rights with respect thereto may be sold, assigned, transferred (other than by will or the laws of descent and distribution), pledged or otherwise encumbered, except as the Administrator may otherwise determine.

7. Provisions of the Plan . This Award is subject in its entirety to the provisions of the Plan, which are incorporated herein by reference. A copy of the Plan as in effect on the date of grant has been furnished to the Participant and the Participant agrees to be bound by the terms of the Plan and this Award. In the event of any conflict between the terms of this Award and the terms of the Plan, the terms of this Award shall control.

8. Other Agreements . The Participant acknowledges and agrees that the Shares delivered under this Award shall be subject to the Management Stockholders Agreement and the transfer and other restrictions, rights, and obligations set forth therein. By executing this Award Agreement, the Participant hereby becomes a party to and bound by the Management Stockholders Agreement as a Manager (as such term is defined in the Stockholders Agreement), without any further action on the part of the Participant, the Company or any other Person.

9. Effect on Employment Rights . This Award shall not confer upon the Participant any right to continue as an employee of the Company or any of its subsidiaries or affiliates and shall not affect in any way the right of the Company or any subsidiary or affiliate of the Company to terminate the Participant’s employment at any time.

 

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10. S-8 Registration . As soon as practicable after the time that Shares are first registered by the Company pursuant to an effective registration on Form S-1, the Company shall register the Shares issued to the Participant pursuant to this Agreement pursuant to a Form S-8 (or successor registration form); provided that the Participant shall agree to bound by any applicable lock-up agreement in connection with such registration, pursuant to Section 3.6 of the Management Stockholders Agreement or otherwise.

11. Compliance with Section 409A . [ Intentionally omitted. ]

12. Amendments . No amendment of any provision of this Agreement shall be valid unless the same shall be in writing.

[ Remainder of the page intentionally left blank. ]

 

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The Company, by its duly authorized officer, and the Participant have executed this Agreement as of the date first set forth above.

 

HEALTHCARE TECHNOLOGY HOLDINGS, INC.
By:  

 

  Name:
  Title:

 

Agreed and Accepted:

 

[SIGNATURE PAGE TO RESTRICTED STOCK UNIT AWARD AGREEMENT]

Exhibit 10.21

Name of Participant: [    ]

HEALTHCARE TECHNOLOGY HOLDINGS, INC.

2010 EQUITY INCENTIVE PLAN

THIS AWARD AND ANY SECURITIES DELIVERED HEREUNDER ARE SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER AND REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET FORTH IN THE MANAGEMENT STOCKHOLDERS AGREEMENT (AS DEFINED IN THE HEALTHCARE TECHNOLOGY HOLDINGS, INC. 2010 EQUITY INCENTIVE PLAN).

HEALTHCARE TECHNOLOGY HOLDINGS, INC. STRONGLY ENCOURAGES YOU TO SEEK THE ADVICE OF YOUR OWN LEGAL AND FINANCIAL ADVISORS WITH RESPECT TO YOUR AWARD AND ITS TAX CONSEQUENCES.

Director Restricted Stock Unit Award Agreement

Healthcare Technology Holdings, Inc.

c/o IMS Health Incorporated

901 Main Avenue

Norwalk, CT 06851

Agreement made this [    ] day of [            ] (the “ Grant Date ”), between Healthcare Technology Holdings, Inc., a Delaware corporation (the “ Company ”), and [            ] (the “ Participant ”).

1. Restricted Stock Unit Award . The Participant is hereby awarded, pursuant to the Healthcare Technology Holdings, Inc. 2010 Equity Incentive Plan (the “ Plan ”) and subject to its terms, a Restricted Stock Unit award (the “ Award ”) giving the Participant the conditional right to receive, without payment but subject to the conditions and limitations set forth in this Agreement and in the Plan, [            ] shares of Stock (the “ Shares ”). Except as otherwise expressly provided herein, all terms used herein shall have the same meaning as in the Plan.

2. Vesting . This Award shall become vested on each of the dates set forth below as to the number of Shares specified below in respect of such date, provided the Participant is serving on such date, and has served at all times since the date of this Agreement, as a member of the Board:

[            ]


Notwithstanding the foregoing, this Award, if not earlier terminated or forfeited, shall become fully vested immediately prior to the effective date of a Covered Transaction, unless the Administrator provides for the cash-out or assumption of this Award (or the substitution of another award) by the acquiring entity (if any) or an affiliate thereof.

3. Delivery of Shares . Subject to Section 4 below, the Company shall, as soon as practicable upon the vesting of any portion of the Award (but in no event later than March 15 of the year following the year in which the relevant portion of the Award vests), effect delivery of the Shares with respect to such vested portion to the Participant (or, in the event of the Participant’s death, to the person to whom the Award has passed by will or the laws of descent and distribution). No Shares will be issued pursuant to this Award unless and until all legal requirements applicable to the issuance or transfer of such Shares have been complied with to the satisfaction of the Administrator.

4. Dividends; Other Rights . The Award shall not be interpreted to bestow upon the Participant any equity interest or ownership in the Company or any Affiliate prior to the date on which the Company delivers Shares to the Participant. The Participant is not entitled to vote any Shares by reason of the granting of this Award or to receive or be credited with any dividends declared and payable on any Share prior to the delivery date with respect to such Share. The Participant shall have the rights of a shareholder only as to those Shares, if any, that are actually delivered under this Award and only at such time as such Shares are so delivered to the Participant.

5. Certain Tax Matters . The Participant expressly acknowledges that because this Award consists of an unfunded and unsecured promise by the Company to deliver Shares in the future, subject to the terms hereof, it is not possible to make a so-called “83(b) election” with respect to the Award.

The Participant shall be responsible for satisfying and paying all taxes arising from or due in connection with respect to the grant or vesting of, and the delivery of Shares under, the Award. The Company and its subsidiaries shall have no liability or obligation related to the foregoing.

6. Nontransferability . Neither this Award nor any rights with respect thereto may be sold, assigned, transferred (other than by will or the laws of descent and distribution), pledged or otherwise encumbered, except as the Administrator may otherwise determine.

7. Other Agreements . The Participant acknowledges and agrees that the Shares delivered under this Award, if any, shall be subject to the Management Stockholders Agreement and the transfer and other restrictions, rights, and obligations set forth therein. The Participant shall execute the Management Stockholders Agreement as a Manager (as such term is defined in the Management Stockholders Agreement). For purposes of the Management Stockholders Agreement, “employment” shall mean the Participant’s provision of services as a member of the Board. For purposes of the Management Stockholders Agreement, “Disability” means the Participant becomes disabled during his or her service to the Company through any illness, injury, accident or condition of either a physical or psychological nature and, as a result, is unable to perform substantially all of his or her duties and responsibilities as a member of the

 

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Board (notwithstanding the provision of any reasonable accommodation) for one hundred eighty (180) days during any period of three hundred and sixty-five (365) consecutive calendar days. The Participant acknowledges that provisions in the Management Stockholders Agreement relating to “Retirement” shall not apply to the Participant.

8. Effect on Employment . Neither the grant of this Award, nor the delivery of Shares under this Award, shall give the Participant any right to be retained in the employ or service of the Company or any of its Affiliates, affect the right of the Company or any of its Affiliates to discharge or discipline such Participant at any time, or affect any right of such Participant to terminate his or her Employment at any time.

9. Legends, etc . Shares delivered under this Award, if any, shall bear such legends as may be required or provided for under the terms of the Management Stockholders Agreement.

10. Miscellaneou s. The Participant agrees not to disclose confidential information of the Company and its subsidiaries (referred to collectively in this Section 10 as “ IMS ”) to anyone outside of IMS except as specifically described below; neither will the Participant use such information for his or her own personal benefit. Confidential information may only be disclosed to someone outside of IMS if it is (a) to further a legitimate business purpose of IMS, and (b) disclosed after the intended recipient has signed an IMS approved agreement containing the appropriate confidentiality provisions. In addition, the Participant agrees to make every reasonable effort to (a) ensure the confidentiality and integrity of confidential information of IMS and (b) protect it against reasonably anticipated threats or hazards to its security or integrity. “Confidential information,” as referred to here, means information not generally known outside IMS. Examples of confidential information include, but are not limited to, non-public technical knowledge of methodologies, computer programs, and work processes of IMS; business information regarding costs, profits, sales, licensing arrangements, markets, and customer lists of IMS; knowledge of future activities within IMS, such as products or services in research and development or marketing plans; data obtained or created from sources outside IMS; and information provided to IMS by a third party which IMS has agreed to keep confidential.

Upon IMS’s request, the Participant will promptly return to IMS or destroy all company materials that came into his or her possession, custody or control in connection with his or her service as a member of the Board. The term “materials” includes, but is not limited to, all notes, correspondence, reports, computer programs, customer lists, data, manuals, presentations, and contracts which in any way relates to IMS’s business, and any confidential information referred to above. Upon cessation of service as a member of the Board, the Participant will promptly return all such materials without retaining any copies.

11. Amendments . No amendment of any provision of this Agreement shall be valid unless the same shall be in writing.

12. Governing Law . This Agreement shall be governed and construed by and determined in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

 

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By acceptance of this Award, the undersigned agrees hereby to become a party to, and be bound by the terms of, the Management Stockholders Agreement.

[ Remainder of the page intentionally left blank. ]

 

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The Company, by its duly authorized officer, and the Participant have executed this Agreement as of the date first set forth above.

 

HEALTHCARE TECHNOLOGY HOLDINGS, INC.

 

By:  
Title:  

 

Agreed and Accepted:

 

Name:

[SIGNATURE PAGE TO RESTRICTED STOCK UNIT AWARD AGREEMENT]

Exhibit 10.22

 

    Type: Management Rollover Stock Appreciation Right
    Name:
    Number of Shares Subject to Rollover SARs:
    Price per Share: $[        ]
    Date of Grant:

H EALTHCARE T ECHNOLOGY H OLDINGS , I NC .

2010 E QUITY I NCENTIVE P LAN

THIS AWARD AND ANY SECURITIES ISSUED UPON EXERCISE OF THIS STOCK APPRECIATION RIGHT ARE SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER AND REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET FORTH IN THE MANAGEMENT STOCKHOLDERS AGREEMENT (AS DEFINED IN THE HEALTHCARE TECHNOLOGY HOLDINGS, INC. 2010 EQUITY INCENTIVE PLAN).

HEALTHCARE TECHNOLOGY HOLDINGS, INC. STRONGLY ENCOURAGES YOU TO SEEK THE ADVICE OF YOUR OWN LEGAL AND FINANCIAL ADVISORS WITH RESPECT TO YOUR AWARD AND ITS TAX CONSEQUENCES.

M ANAGEMENT R OLLOVER S TOCK A PPRECIATION R IGHT A GREEMENT

This agreement (the “ Agreement ”) evidences a rollover stock appreciation right granted by Healthcare Technology Holdings, Inc. (the “ Company ”) to the undersigned (the “ Grantee ” and together with the Company, the “ Parties ”), pursuant to and subject to the terms of the Healthcare Technology Holdings, Inc. 2010 Equity Incentive Plan (as amended from time to time, the “ Plan ”), which is incorporated herein by reference. Unless defined herein, all capitalized terms shall have the meaning set forth in the Plan.

WHEREAS, on [            ], the Company, Healthcare Technology Acquisition, a Delaware corporation and indirect, wholly owned subsidiary of the Company (“ Merger Sub ”), and IMS Health Incorporated (“ IMS ”), a Delaware corporation, entered into an Agreement and Plan of Merger (the “ Merger Agreement ”) pursuant to which Merger Sub will merge with and into IMS, with IMS as the surviving corporation (the “ Merger ”) on the terms and subject to the conditions set forth in the Merger Agreement;

WHEREAS, immediately prior to the Merger, the Grantee held certain stock appreciation rights (the “ IMS SARs ”), that were granted pursuant to the IMS Health Incorporated 2000 Stock Incentive Plan or the 1998 IMS Health Incorporated Employees’ Stock Incentive Plan (including predecessor plans, collectively, the “ IMS Plans ”) with respect to shares of IMS common stock, all of which became fully vested in connection with the Merger;


WHEREAS, the Company has agreed to substitute stock appreciation rights with respect to shares of Stock on the terms hereinafter set forth (the “ Rollover SARs ”) in exchange for the IMS SARs;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Treatment of IMS SARs . Each IMS SAR previously entitling the Grantee to acquire shares of IMS stock on the terms set forth in such IMS SAR and the applicable IMS Plan is hereby exchanged for a Rollover SAR to acquire, in whole or in part, on the terms provided herein and in the Plan, the number of shares of Stock set forth on Schedule I (the “ Shares ”) with an exercise price per share of Stock as set forth on Schedule I across from such Rollover SAR, in each case subject to adjustment pursuant to Section 7 of the Plan in respect of transactions following the date hereof. The exchange of Rollover SARs for IMS SARs is intended to qualify as a stock right substitution under Treas. Regs. §1.409A-1(b)(5)(v)(D) and shall be construed accordingly. Without limiting the foregoing, each Rollover SAR shall (i) be fully vested at all times; (ii) expire not later than the latest date on which the corresponding IMS SAR would have expired (the “ Final Exercise Date ”); and (iii) be governed in all respects by the terms of the corresponding IMS SAR, except for (A) the number and type of shares of Stock subject to the Rollover SAR, (B) the exercise price of the Rollover SAR, (C) the provisions of Section 7 of the Plan, (D) the provisions of the Plan applicable to governance, amendment, termination, administration, interpretation and similar matters, (E) the provisions set forth in Section 7 of this Agreement and (F) all other provisions of the Plan that as applied to the Rollover SAR would not be treated as inconsistent with satisfaction of the requirements of Treas. Regs. § 1.409A-1(b)(5)(v)(D). The Rollover SAR is granted to the Grantee in connection with the Grantee’s employment by the Company in substitution of an IMS SAR.

2. Representations and Warranties of the Company . The Company represents and warrants to the Grantee that the statements in this Section 2 are true and correct as of the date of this Agreement.

 

  (a) Organization of the Company . The Company is a corporation duly organized and validly existing under the laws of the State of Delaware.

 

  (b) Authorization, Execution and Delivery of the Agreement . The Company has the capacity, full corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Company and constitutes the valid and legally binding obligation of the Company, enforceable in accordance with its terms and conditions. The Company need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.

 

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  (c) Valid Issuance of the Rollover SARs . The shares of Stock issuable upon exercise of the Rollover SARs that are being granted to the Grantee hereunder, when issued in accordance with the terms hereof for the consideration expressed herein, will be validly issued, fully paid and nonassessable.

3. Representations and Warranties of the Grantee . The Grantee represents and warrants to the Company that the statements in this Section 3 are true and correct as of the date of this Agreement.

 

  (a) Ownership of IMS Securities . The Grantee holds and is the owner of the IMS SARs. Except for the provisions of the applicable IMS Plan and any transfer restrictions under applicable securities law, the IMS SARs are held free and clear of all mortgages, liens, licenses, pledges, charges, claims, security interests, encumbrances, agreements, rights of first refusal, options or restrictions of any kind whatsoever (including, without limitation, restrictions on the right to sell or otherwise dispose of such IMS SARs) or other defects in title.

 

  (b) Authorization, Execution and Delivery of the Agreement . The Grantee has the capacity, full power and authority to execute and deliver this Agreement, to perform the Grantee’s obligations hereunder, and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Grantee and constitutes the valid and legally binding obligation of the Grantee, enforceable in accordance with its terms and conditions. The Grantee need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.

 

  (c) Investment . The Grantee understands that the holding of Rollover SARs involves substantial risk. The Grantee understands that, following the effective time of the Merger, IMS, as the surviving corporation of the Merger, intends to file a Form 15 to deregister the IMS common stock under the Securities Exchange Act of 1934, as amended, and suspend its duty to file periodic and current reports thereunder. There is not expected to be any public or other market for the Shares, and there can be no assurance as to when, or whether, any such market will develop. The Grantee is electing to receive the Rollover SARs for his or her own account, for investment purposes only and not with a view to the distribution or public offering thereof in violation of the United States Securities Act of 1933, as amended (the “ Securities Act ”), or any applicable United States federal or state securities laws or regulations.

 

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  (d) No Registration . The Grantee has been advised that neither the Rollover SARs nor the shares of Stock issuable upon exercise thereof are being registered under the Securities Act, upon the basis that the transaction is exempt from such registration requirements pursuant to regulations promulgated by the Securities and Exchange Commission, and that reliance by the Company on such exemptions are predicated in part on the Grantee’s representations set forth herein, and, as a result, none of the Rollover SARs, or any shares issued upon exercise or distribution thereof, may be transferred, sold, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and any other provisions of applicable state securities laws or pursuant to an applicable exemption therefrom. The Grantee is aware that the Company is not under any obligation to effect any such registration with respect to the Rollover SARs or the shares of Stock issuable upon exercise thereof or to file for or comply with any exemption from registration. The Grantee further acknowledges that his or her rights and interests under and with respect to the Rollover SARs and Shares issued upon any exercise or distribution thereof will be subject to the terms and conditions of the Plan and the Management Stockholders Agreement and the Grantee will have no further rights under the IMS SARs exchanged for such Rollover SARs. The Grantee has such knowledge and experience in financial and business matters that the Grantee is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment and is able to bear the economic risk of such investment for an indefinite period of time. The Grantee is an “accredited investor” as that term is defined in Regulation D under the Securities Act. The address of the Grantee is as set forth under the Grantee’s name on the signature page hereof.

 

  (e) No Other Representations or Warranties; Acknowledgments . No representations or warranties, oral or otherwise, have been made to the Grantee (or any party acting on the Grantee’s behalf) in connection with the offer and issuance of the Rollover SARs other than the representations and warranties specifically set forth in this Agreement. The Grantee has had an opportunity to consult an independent tax and legal advisor and the Grantee’s decision to enter into this Agreement has been based solely upon the Grantee’s evaluation. The Grantee is aware that the Management Stockholders Agreement provides significant restrictions on the Grantee’s ability to transfer or dispose of the Rollover SARs and the shares of Stock issuable upon exercise thereof.

 

  (f)

Disclosure . The Grantee is employed by IMS or one of its subsidiaries. In connection with the Grantee’s exchange of IMS SARs for Rollover SARs, the Grantee has received a copy of the proxy statement dated December 29, 2009 related to the Merger and a confidential memorandum dated February 17, 2010 relating to the opportunity to invest in the Rollover SARs and describing the equity securities of the Company, including the Rollover SARs, and has been given access to all other information

 

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  regarding the financial condition and the proposed business and operations of the Company, IMS and its subsidiaries that the Grantee has requested in order to evaluate his or her investment in the Company. The Company has made available to the Grantee the opportunity to ask questions of, and to receive answers from, persons acting on behalf of the Company and IMS concerning the terms and conditions of the offering of the Rollover SARs, and to obtain any additional information desired by the Grantee with respect to the Company, IMS and its subsidiaries.

4. Share Restrictions, Etc . Not later than upon the execution of this Agreement and effective as of the date hereof, the Grantee has executed and become a party to the Management Stockholders Agreement. Except as expressly provided herein, the Grantee’s rights hereunder and with respect to Shares received upon exercise are subject to the restrictions and other provisions contained in the Management Stockholders Agreement.

5. Legends, Etc. Shares issued upon exercise shall bear such legends as may be required or provided for under the terms of the Management Stockholders Agreement.

6. Transfer of Rollover SARs . Any transfer of Rollover SARs by a Grantee shall be governed by and subject to the terms and conditions of the Plan.

7. Exercise . The Rollover SAR shall be exercised by the Grantee under the terms set forth in the Plan, as modified by this Section 7. Upon a cessation of Employment, the Grantee shall be entitled to exercise the Rollover SAR until the Final Exercise Date. Notwithstanding the foregoing, if the Grantee’s Employment terminates as a result of a voluntary resignation without Good Reason (other than Retirement) on or prior to [            ] or as a result of a termination by the Company for Cause, or if the Grantee Competes (as such term is defined in the Management Stockholders Agreement) with the Company within eighteen (18) months of any cessation of Employment, the Grantee shall be required to exercise the Rollover SAR within ninety (90) days of such cessation of Employment or within thirty (30) days of the date on which the Company receives notice that the Grantee has Competed, as applicable. The Rollover SAR, to the extent not so exercised, shall terminate at the expiration of such period with no consideration due to the Grantee.

8. Withholding . The exercise of the Rollover SARs will give rise to “wages” subject to withholding. The Grantee expressly acknowledges and agrees that the Grantee’s rights hereunder, including the right to be issued Shares upon exercise, are subject to the Grantee promptly paying to the Company in cash (or by such other means as may be acceptable to the Administrator in its discretion) all taxes required to be withheld. In the event of an exercise of the Rollover SAR, or a portion of the Rollover SAR, in connection with or following a cessation of Employment as result of death, Disability, termination by the Company without Cause, voluntary resignation for Good Reason or the Grantee’s Retirement, or a voluntary resignation without Good Reason after [            ], or in the event of an exercise of the Rollover SAR, or a portion of the Rollover SAR, on or immediately prior to the Final Exercise Date while the Grantee

 

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remains employed, the Grantee may elect to have shares of Stock held back by the Company having a Fair Market Value equal to the applicable minimum tax withholding requirements in accordance with the Plan. The Grantee also authorizes the Company and its subsidiaries to withhold such amount from any amounts otherwise owed to the Grantee and the Company may so withhold.

9. Effect on Employment . Neither the grant of the Rollover SARs, nor the issuance of Shares upon exercise of the Rollover SARs, shall give the Grantee any right to be retained in the employ of the Company or any of its Affiliates, affect the right of the Company or any of its Affiliates to discharge or discipline such Grantee at any time, or affect any right of such Grantee to terminate his or her Employment at any time.

10. Termination . The Grantee hereby acknowledges and agrees that none of the Company or any of its subsidiaries, or any of their respective officers, directors or employees shall have any liability or obligation to the Grantee as a result of this Agreement in the event the Merger Agreement is terminated (or the Merger otherwise does not occur), and that nothing set forth in this Agreement shall limit or otherwise affect the Company’s ability to exercise any of its rights under the Merger Agreement, including its rights under Article VIII thereof. This Section 10 shall survive any termination of this Agreement.

11. Governing Law . This Agreement and all claims or disputes arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

By acceptance of the Rollover SARs, the undersigned agrees hereby to become a party to, and be bound by the terms of, the Management Stockholders Agreement.

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Executed as of the      day of             ,         .

 

Healthcare Technology Holdings, Inc.     HEALTHCARE TECHNOLOGY HOLDINGS, INC.
    By:  

 

      Name:
      Title:


Grantee    

 

    Name:
    Address:

[Signature Page to Management Rollover Stock Appreciation Rights Agreement]

Exhibit 10.23

 

  Type: Special Time-Based Option
  Name: Ari Bousbib
 

Number of Shares Subject to

Option: 10,000,000

  Price per Share: $1.50
  Date of Grant: September 1, 2010

H EALTHCARE T ECHNOLOGY H OLDINGS , I NC .

2010 E QUITY I NCENTIVE P LAN

THIS AWARD AND ANY SECURITIES ISSUED UPON EXERCISE OF THIS OPTION ARE SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER AND REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET FORTH IN THE MANAGEMENT STOCKHOLDERS AGREEMENT (AS DEFINED IN THE HEALTHCARE TECHNOLOGY HOLDINGS, INC. 2010 EQUITY INCENTIVE PLAN).

HEALTHCARE TECHNOLOGY HOLDINGS, INC. STRONGLY ENCOURAGES YOU TO SEEK THE ADVICE OF YOUR OWN LEGAL AND FINANCIAL ADVISORS WITH RESPECT TO YOUR AWARD AND ITS TAX CONSEQUENCES.

S ENIOR M ANAGEMENT N ONSTATUTORY O PTION A GREEMENT

1. Grant of Option . This agreement (the “ Agreement ”) evidences the grant by Healthcare Technology Holdings, Inc. (the “ Company ”) to the undersigned (the “ Optionee ”) on September 1, 2010 (the “ Date of Grant ”) of an option (the “ Option ”) under the Healthcare Technology Holdings, Inc. 2010 Equity Incentive Plan (the “ Plan ”), the terms of which are incorporated herein by reference, to purchase, in whole or in part, on the terms provided herein and in the Plan, the number of shares of Stock set forth in Schedule A (the “ Shares ”) with an exercise price of $1.50 per share (150% of the Fair Market Value of the Stock on the Date of Grant), in each case subject to adjustment pursuant to Section 7 of the Plan. The Option will vest in accordance with Section 3 below.

The Option evidenced by this Agreement is intended to be a nonstatutory option (that is, an option not described in subsection (b) of Section 422) and is granted to the Optionee in connection with the Optionee’s Employment by the Company and its qualifying subsidiaries. For purposes of the immediately preceding sentence, “qualifying subsidiary” means a subsidiary of the Company as to which the Company has a “controlling interest” as described in Treas. Regs. § 1.409A-1(b)(5)(iii)(E)(1).


2. Meaning of Certain Terms . Except as otherwise defined herein, all capitalized terms used in this Agreement shall have the same meaning as in the Plan. The following terms shall have the following meanings:

(a) “ Beneficiary ” means, in the event of the Optionee’s death, the beneficiary named in the written designation (in form acceptable to the Administrator) most recently filed with the Administrator by the Optionee prior to death and not subsequently revoked, or, if there is no such designated beneficiary, the executive or administrator of the Optionee’s estate. An effective beneficiary designation shall be treated as having been revoked only upon receipt by the Administrator, prior to the Optionee’s death, of an instrument of revocation in form acceptable to the Administrator. If the Option or any portion thereof has been transferred to a Permitted Transferee who is a natural person and such Permitted Transferee dies while the Option or transferred portion thereof is outstanding, the Option or portion thereof so transferred may thereafter be exercised, to the extent it remains exercisable and subject to such limitations as the Administrator may impose, by the person or persons to whom it passed from the Permitted Transferee by the applicable laws of descent and distribution.

(b) “ Employment Agreement ” means the Employment Agreement between the Optionee, the Company and IMS Health Incorporated dated as of August 16, 2010 and effective as of September 1, 2010.

(c) “ Option Holder ” means the Optionee or, if as of the relevant time the Option has passed to a Beneficiary or Permitted Transferee, the Beneficiary or Permitted Transferee, as the case may be, who holds the Option pursuant to the terms of this Agreement.

(d) “ Permitted Transferee ” means a transferee of the Option pursuant to a transfer described at Section 7 below.

3. Vesting; Method of Exercise; Treatment of the Option Upon Cessation of Employment .

(a) Generally . As used herein with respect to the Option or any portion thereof, the term “vest” means to become exercisable. Unless earlier terminated, relinquished or expired, the Options shall vest in accordance with the terms of Schedule A applicable thereto.

(b) Exercise of the Option . No portion of the Option may be exercised until such portion vests. Each election to exercise any vested portion of the Option shall be subject to the terms and conditions of the Plan and shall be in writing, signed by the Optionee or by the Beneficiary or Permitted Transferee to whom such portion of the Option has passed (subject to any restrictions provided under the Plan and the Management Stockholders Agreement). Each such written exercise election must be received by the Company at its principal office and be accompanied by payment in full as provided in the Plan. The purchase price may be paid (i) by cash or check acceptable to the Administrator, (ii) by such other means, if any, as may be acceptable to the Administrator, or (iii) by any combination of the foregoing permissible forms of payment; provided , however , that in addition to the foregoing, in the event of an exercise of the Option, or a portion of the Option, in connection with

 

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or following a cessation of Employment as result of death, Disability, termination by the Company without Cause, voluntary resignation for Good Reason, an Expiration Termination (as defined in the Employment Agreement), the Optionee’s Retirement, or a voluntary resignation without Good Reason after September 1, 2013, or in the event of an exercise of the Option, or a portion of the Option on or immediately prior to the Final Exercise Date while the Optionee remains employed, the purchase price may be paid, at the Optionee’s election, on a cashless basis under which shares of Stock otherwise deliverable under the Option and having a Fair Market Value equal to the exercise price are withheld by the Company in accordance with the Plan. In the event that the Option is exercised by a person other than the Optionee, the Company will be under no obligation to deliver Shares hereunder unless and until it is satisfied as to the authority of the Option Holder to exercise the Option. The latest date on which the Option or any portion thereof may be exercised is the 10th anniversary of the Date of Grant, (the “ Final Exercise Date ”), and if not exercised by such date the Option or any remaining portion thereof will thereupon immediately terminate.

(c) Treatment of the Option Upon Cessation of Employment . If the Optionee’s Employment ceases, the Option to the extent not already vested will be immediately forfeited and any vested portion of the Option will be treated as follows:

(i) Subject to (ii), (iii), (iv), (v) and (vi) below, the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 30 days following cessation of Employment or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(ii) In the event of cessation of the Optionee’s Employment by reason of death or Disability, the Option, to the extent exercisable immediately prior to Optionee’s death or Disability, will remain exercisable until the earlier of (i) the first anniversary of the Optionee’s death or Disability, or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(iii) In the event of cessation of the Optionee’s Employment by the Company without Cause, by the Optionee for Good Reason, or upon an Expiration Termination, the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 90 days following cessation of Employment, or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(iv) In the event of cessation of the Optionee’s Employment due to the Optionee’s Retirement, the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 90 days following cessation of Employment, or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

 

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(v) The Option will terminate immediately prior to a cessation of the Optionee’s Employment if such cessation of Employment has resulted in connection with an act or failure to act constituting Cause.

(vi) In the event the Optionee terminates Employment for any reason and, within 24 months of such termination date, breaches any non-competition or non-solicitation covenant or materially breaches any confidentiality, non-disclosure or other similar covenant, the Option will be treated as having terminated immediately prior to such cessation of Employment.

4. Share Restrictions, etc . Except as expressly provided herein, the Optionee’s rights hereunder and with respect to Shares received upon exercise are subject to the restrictions and other provisions contained in the Management Stockholders Agreement.

5. Legends, etc . Shares issued upon exercise shall bear such legends as may be required or provided for under the terms of the Management Stockholders Agreement.

6. Transfer of Option . The Option may only be transferred to a legal representative in the event of the Optionee’s incapacity or to one or more transferees permitted under Section 6(a)(3) of the Plan.

7. Withholding . The exercise of the Option will give rise to “wages” subject to withholding. The Optionee expressly acknowledges and agrees that the Optionee’s rights hereunder, including the right to be issued Shares upon exercise, are subject to the Optionee promptly paying to the Company in cash (or by such other means as may be acceptable to the Administrator in its discretion) all taxes required to be withheld. In the event of an exercise of the Option, or a portion of the Option, in connection with or following a cessation of Employment as result of death, Disability, termination by the Company without Cause, voluntary resignation for Good Reason, an Expiration Termination, the Optionee’s Retirement, or a voluntary resignation without Good Reason after September 1, 2013, or in the event of an exercise of the Option, or a portion of the Option, on or immediately prior to the Final Exercise Date while the Optionee remains employed, the Optionee may elect to have shares of Stock held back by the Company having a Fair Market Value equal to the applicable minimum tax withholding requirements in accordance with the Plan. The Optionee also authorizes the Company and its subsidiaries to withhold such amount from any amounts otherwise owed to the Optionee and the Company may so withhold.

8. Treatment of the Option upon Consummation of a Covered Transaction . Notwithstanding Section 7(a)(3) of the Plan that permits the Administrator, in its discretion, to accelerate the exercisability of Awards in connection with a Covered Transaction in which there is no assumption, continuation, substitution or cash-out of an Award, the portion of the Option that is outstanding immediately prior the consummation of a Covered Transaction, to the extent that it is not assumed, continued, substituted or cashed-out in connection with the Covered Transaction in accordance with the terms of the Plan, shall vest in full immediately prior to the consummation of such Covered Transaction.

 

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9. Effect on Employment . Neither the grant of the Option, nor the issuance of Shares upon exercise of the Option, shall give the Optionee any right to be retained in the employ of the Company or any of its Affiliates, affect the right of the Company or any of its Affiliates to discharge or discipline such Optionee at any time, or affect any right of such Optionee to terminate his or her Employment at any time.

10. Other Undertakings .

(a) To protect the interests of the Company and its direct and indirect subsidiaries (collectively, the “ IMS Companies ”), including the confidential information of the IMS Companies and the confidential information of their respective customers, data suppliers, prospective customers and other companies with which the IMS Companies have a business relationship, and in consideration of the covenants and promises and other valuable consideration described in this Agreement, the Company and the Optionee agree as follows:

(b) The Optionee acknowledges and agrees that he is bound by the confidentiality and other covenants contained in the restrictive covenant and confidentiality agreements that he has executed with an IMS Company, which covenants and agreements are incorporated herein by reference and shall survive any exercise, expiration, forfeiture or other termination of this Agreement or the Option issuable hereunder. The Optionee also acknowledges and agrees that the Company shall be an affiliate for purposes of such restrictive covenant and confidentiality agreements.

(c) The Optionee acknowledges the opportunity to participate in the Plan and the financial benefits that may accrue from such participation, is good, valuable and sufficient consideration for the following:

(i) The Optionee acknowledges and agrees that he is and will remain bound by the non-competition and non-solicitation covenants contained in the Employment Agreement.

(ii) The Optionee further acknowledges and agrees that the remedies available for breach of any non-competition or non-solicitation covenants shall include, but not be limited to, the following: (v) actual damages, (w) all equitable remedies available to the Company, (x) the rights and remedies of the Company set forth in Section 5 of the Management Stockholders Agreement, (y) the forfeiture of the Option for no consideration, and (z) in respect of the Option (or portion thereof) exercised by the Optionee prior to any such breach or subsequent thereto and prior to the forfeiture of such award required by this Section 12(c)(ii), the Optionee shall pay to the Company an amount equal to the difference between the exercise price of the Option and the per-share proceeds of any sale of Stock acquired upon such exercise multiplied by the number of shares of Stock so sold.

 

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The Company shall also be entitled to the foregoing remedies in the event of a material breach of any confidentiality, non-disclosure or other similar covenant contained in the restrictive covenant and confidentiality agreements that the Optionee has executed with an IMS Company.

11. Governing Law . This Agreement and all claims arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

12. Provisions of the Plan . This Agreement is subject in its entirety to the provisions of the Plan, which are incorporated herein by reference. A copy of the Plan as in effect on the Date of Grant has been furnished to the Optionee and the Optionee agrees to be bound by the terms of the Plan and this Agreement. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of this Agreement shall control. The Company acknowledges and agrees that, for purposes of this Agreement and the Plan, the terms “Cause” and “Good Reason” shall be determined in accordance with and pursuant to the Employment Agreement.

13. S-8 Registration . As soon as practicable after the time that Shares are first registered by the Company pursuant to an effective registration on Form S-1, the Company shall register the Shares, issuable to the Optionee upon the exercise of any portion of the Option, pursuant to a Form S-8 (or successor registration form); provided that the Optionee shall agree to bound by any applicable lock-up agreement in connection with such registration, pursuant to Section 3.6 of the Management Stockholders Agreement or otherwise.

By acceptance of the Option, the undersigned agrees hereby to become a party to, and be bound by the terms of, the Management Stockholders Agreement.

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Executed as of the      day of September, 2010.

 

Healthcare Technology Holdings, Inc.     HEALTHCARE TECHNOLOGY HOLDINGS, INC.
    By:  

 

Optionee    

 

    Name: Ari Bousbib

[Signature Page to Senior Management Nonstatutory Option Agreement]

Exhibit 10.24

 

   Type: Time- and Performance-Based Option
   Name: Ari Bousbib
   Number of Shares Subject to Option: 30,000,000
   Price per Share: $1.00
   Date of Grant: December 1, 2010

H EALTHCARE T ECHNOLOGY H OLDINGS , I NC .

2010 E QUITY I NCENTIVE P LAN

THIS AWARD AND ANY SECURITIES ISSUED UPON EXERCISE OF THIS OPTION ARE SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER AND REQUIREMENTS OF SALE AND OTHER PROVISIONS AS SET FORTH IN THE MANAGEMENT STOCKHOLDERS AGREEMENT (AS DEFINED IN THE HEALTHCARE TECHNOLOGY HOLDINGS, INC. 2010 EQUITY INCENTIVE PLAN).

HEALTHCARE TECHNOLOGY HOLDINGS, INC. STRONGLY ENCOURAGES YOU TO SEEK THE ADVICE OF YOUR OWN LEGAL AND FINANCIAL ADVISORS WITH RESPECT TO YOUR AWARD AND ITS TAX CONSEQUENCES.

S ENIOR M ANAGEMENT N ONSTATUTORY O PTION A GREEMENT

1. Grant of Option . This agreement (the “ Agreement ”) evidences the grant by Healthcare Technology Holdings, Inc. (the “ Company ”) to the undersigned (the “ Optionee ”) on December 1, 2010 (the “ Date of Grant ”) of an option (the “ Option ”) under the Healthcare Technology Holdings, Inc. 2010 Equity Incentive Plan (the “ Plan ”), the terms of which are incorporated herein by reference, to purchase, in whole or in part, on the terms provided herein and in the Plan, the number of shares of Stock set forth in Schedule A (the “ Shares ”) with an exercise price of $1.00 per share (the Fair Market Value of the Stock on the Date of Grant), in each case subject to adjustment pursuant to Section 7 of the Plan. The Option will vest in accordance with Section 3 below.

The Option evidenced by this Agreement is intended to be a nonstatutory option (that is, an option not described in subsection (b) of Section 422) and is granted to the Optionee in connection with the Optionee’s Employment by the Company and its qualifying subsidiaries. For purposes of the immediately preceding sentence, “qualifying subsidiary” means a subsidiary of the Company as to which the Company has a “controlling interest” as described in Treas. Regs. § 1.409A-1(b)(5)(iii)(E)(1).


2. Meaning of Certain Terms . Except as otherwise defined herein, all capitalized terms used in this Agreement shall have the same meaning as in the Plan. The following terms shall have the following meanings:

(a) “ Annual EBITDA ” means Consolidated Adjusted EBITDA for the applicable fiscal year ending December 31.

(b) “ Annual EBITDA Target ” has the meaning set forth in Schedule A.

(c) “ Beneficiary ” means, in the event of the Optionee’s death, the beneficiary named in the written designation (in form acceptable to the Administrator) most recently filed with the Administrator by the Optionee prior to death and not subsequently revoked, or, if there is no such designated beneficiary, the executive or administrator of the Optionee’s estate. An effective beneficiary designation shall be treated as having been revoked only upon receipt by the Administrator, prior to the Optionee’s death, of an instrument of revocation in form acceptable to the Administrator. If the Option or any portion thereof has been transferred to a Permitted Transferee who is a natural person and such Permitted Transferee dies while the Option or transferred portion thereof is outstanding, the Option or portion thereof so transferred may thereafter be exercised, to the extent it remains exercisable and subject to such limitations as the Administrator may impose, by the person or persons to whom it passed from the Permitted Transferee by the applicable laws of descent and distribution.

(d) “ Cash Proceeds ” means, as of any Determination Date occurring after the Closing Date, the cumulative total of all cash and Marketable Securities actually received by the Investors after the Closing Date and on or before such Determination Date in respect of the Investors’ Initial Equity Investment, excluding, for the avoidance of doubt, management, consulting, monitoring, advisory or similar fees paid to affiliates of the Investors that are contemplated by the Management Services Agreement dated February 26, 2010 by and among the Company, Healthcare Acquisition, Inc., Healthcare Technology Intermediate Holdings, Inc., Healthcare Technology Intermediate, Inc., TPG Capital, L.P. and the other parties thereto (the “ Management Agreement ”) or associated with the termination of such agreement.

(e) “ Closing Date ” means February 26, 2010.

(f) “ Consolidated Adjusted EBITDA ” has the meaning set forth in the Credit and Guaranty Agreement dated as of February 26, 2010 among IMS Health Incorporated, IMS AG, IMS Japan K.K., Healthcare Technology Intermediate Holdings, Inc., Goldman Sachs Lending Partners LLC, Bank of America, N.A., Barclays Capital, HSBC Securities (USA) Inc., RBC Capital Markets, Fifth Third Bank, General Electric Capital Corporation, Mizuho Corporate Bank, Ltd., Suntrust Bank and the other parties thereto, except that for purposes of this Agreement, Consolidated Adjusted EBITDA shall be determined without regard to subsection (i) of such definition.

(g) “ Cumulative EBITDA ” means the sum of the Annual EBITDA for the relevant fiscal year and the immediately preceding fiscal year. This amount is then used to test whether the applicable Cumulative EBITDA Target has been met.

 

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(h) “ Cumulative EBITDA Target ” has the meaning set forth in Schedule A.

(i) “ Determination Date ” means as to any cash received by the Investors in respect of their Initial Equity Investment, the date such cash is actually received, or as to any Marketable Securities actually received by the Investors in respect of their Initial Equity Investment, the “measurement date” as referred to in Section 2(p) below.

(j) “ Employment Agreement ” means the Employment Agreement between the Optionee, the Company and IMS Health Incorporated dated as of August 16, 2010 and effective as of September 1, 2010.

(k) “ Initial Equity Investment ” means the Shares issued to the Investors as of February 26, 2010, including any stock, securities or other property or interests received by the Investors in respect of such shares in connection with any stock dividend or other similar distribution, stock split or combination of shares, recapitalization, conversion, reorganization, consolidation, split-up, spin-off, combination, repurchase, merger, exchange of stock or other transaction or event that affects the Company’s capital stock occurring after the date of issuance, but not including, for the avoidance of doubt, any stock or other securities issued to the Investors or any of them in respect of any subsequent investment or capital contribution made by the Investors or any of them.

(l) “ Initial Investment Value ” means $2,770,000,000.

(m) “ Investors ” has the same meaning as set forth in the Management Stockholders Agreement.

(n) “ IRR ” means the internal rate of return actually earned by the Investors on their cash investment to purchase shares of Stock. The internal rate of return shall take into account the amount and timing of all (i) cash dividends and distributions to such Investors in respect of the shares of Stock owned by them (excluding, for the avoidance of doubt, management, consulting, monitoring, advisory or similar fees paid to affiliates of the Investors that are contemplated by the Management Agreement or associated with the termination of such agreement), (ii) cash proceeds from the sale or other disposition of any such shares of Stock and (iii) Marketable Securities received in respect of such shares of Stock.

(o) “ Merger ” has the same meaning as that term is defined in the Management Stockholders Agreement.

(p) “ Option Holder ” means the Optionee or, if as of the relevant time the Option has passed to a Beneficiary or Permitted Transferee, the Beneficiary or Permitted Transferee, as the case may be, who holds the Option pursuant to the terms of this Agreement.

(q) “ Marketable Securities ” means any equity security (including Stock or any security issued by the Company in substitution or exchange for such Stock) that is

 

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both (i) of a class that includes equity securities that are listed on a national securities exchange and (ii) registered under the Securities Exchange Act of 1934, as amended, in each case as of the applicable determination date; provided , however , that Marketable Securities shall not include any such equity securities described above to the extent that, and only for so long as, the equity securities of such type or class received by the Investors are subject to a contractual lock-up or similar agreement restricting transferability or may not be distributed or resold without volume limitation or other restrictions on transfer under Rule 144 under the Securities Act of 1933, as amended (or any successor provision thereof), including without application of paragraphs (c), (e), (f) and (h) of such Rule 144. For purposes of this Agreement, the value of the Marketable Securities on any “measurement date” (which shall be the date of initial receipt of Marketable Securities by the Investors, the date any such contractual lockup or similar restriction expires or the last day of each calendar quarter beginning with the calendar quarter within which the initial receipt of Marketable Securities by the Investors occurred) shall be equal to the average of the Trading Price of such Marketable Securities over each of the forty-five (45) consecutive Trading Days immediately preceding (and including) such measurement date; provided , however , that the Administrator shall be entitled to make equitable adjustments to such valuation methodology in the event of an extraordinary transaction occurring during any such forty-five (45) Trading Day period ending on such measurement date.

(r) “ Performance Period ” means the five (5) year period beginning on January 1, 2011 and ending on December 31, 2015.

(s) “ Permitted Transferee ” means a transferee of the Option pursuant to a transfer described at Section 7 below.

(t) “ Trading Day ” means each business day during such calendar quarter in which the Trading Price of the Stock or Marketable Securities, as applicable, is reported by the principal securities exchange or, solely in the case of Stock, furnished by a member of the National Association of Securities Dealers, inc. (“ NASD ”) selected by the Board or determined by the Board in good faith.

(u) “ Trading Price ” means (i) the closing price on such day of a share of Stock or Marketable Securities, as applicable, as reported on the principal securities exchange on which shares of Stock or Marketable Securities, as applicable, are then listed or admitted to trade or (ii) if not so reported, as furnished by any member of the NASD selected by the Board. In the event that the price of a share of Stock is not so reported or furnished, the Trading Price will be determined by the Board in good faith.

(v) “ Tranche 1 Options ” means the portion of the Option to purchase the number of shares of Stock set forth in Schedule A that is subject to time-based vesting in accordance with the terms of this Agreement, including Schedule A, and the Plan.

 

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(w) “ Tranche 2 Options ” means the portion of the Option to purchase the number of shares of Stock set forth in Schedule A that is subject to time-based and performance-based vesting in accordance with the terms of this Agreement, including Schedule A, and the Plan.

3. Vesting; Method of Exercise; Treatment of the Option Upon Cessation of Employment .

(a) Generally . As used herein with respect to the Option or any portion thereof, the term “vest” means to become exercisable. Unless earlier terminated, relinquished or expired, the Tranche 1 Options and the Tranche 2 Options shall vest in accordance with the terms of Schedule A applicable thereto.

(b) Exercise of the Option . No portion of the Option may be exercised until such portion vests and, with respect to the Tranche 2 Options, is earned under Schedule A. Each election to exercise any vested and, with respect to the Tranche 2 Options, earned portion of the Option shall be subject to the terms and conditions of the Plan and shall be in writing, signed by the Optionee or by the Beneficiary or Permitted Transferee to whom such portion of the Option has passed (subject to any restrictions provided under the Plan and the Management Stockholders Agreement). Each such written exercise election must be received by the Company at its principal office and be accompanied by payment in full as provided in the Plan. The purchase price may be paid (i) by cash or check acceptable to the Administrator, (ii) by such other means, if any, as may be acceptable to the Administrator, or (iii) by any combination of the foregoing permissible forms of payment; provided , however , that in addition to the foregoing, in the event of an exercise of the Option, or a portion of the Option, in connection with or following a cessation of Employment as result of death, Disability, termination by the Company without Cause, voluntary resignation for Good Reason, an Expiration Termination (as defined in the Employment Agreement), the Optionee’s Retirement, or a voluntary resignation without Good Reason after September 1, 2013, or in the event of an exercise of the Option, or a portion of the Option on or immediately prior to the Final Exercise Date while the Optionee remains employed, the purchase price may be paid, at the Optionee’s election, on a cashless basis under which shares of Stock otherwise deliverable under the Option and having a Fair Market Value equal to the exercise price are withheld by the Company in accordance with the Plan. In the event that the Option is exercised by a person other than the Optionee, the Company will be under no obligation to deliver Shares hereunder unless and until it is satisfied as to the authority of the Option Holder to exercise the Option. The latest date on which the Option or any portion thereof may be exercised is the 10th anniversary of the Date of Grant, (the “ Final Exercise Date ”), and if not exercised by such date the Option or any remaining portion thereof will thereupon immediately terminate.

 

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(c) Treatment of the Option Upon Cessation of Employment . If the Optionee’s Employment ceases, the Option to the extent not already vested will be immediately forfeited and any vested portion of the Option will be treated as follows:

(i) Subject to (ii), (iii), (iv), (v) and (vi) below and Schedule A (with respect to Tranche 2 Options), the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 30 days following cessation of Employment or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(ii) In the event of cessation of the Optionee’s Employment by reason of death or Disability, the Option, to the extent exercisable immediately prior to Optionee’s death or Disability, will remain exercisable until the earlier of (i) the first anniversary of the Optionee’s death or Disability, or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(iii) In the event of cessation of the Optionee’s Employment by the Company without Cause, by the Optionee for Good Reason, or upon an Expiration Termination, the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 90 days following cessation of Employment, or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(iv) In the event of cessation of the Optionee’s Employment due to the Optionee’s Retirement, the Option, to the extent exercisable immediately prior to the cessation of the Optionee’s Employment, will remain exercisable until the earlier of (i) 90 days following cessation of Employment, or (ii) the Final Exercise Date, and, unless previously exercised, will thereupon immediately terminate.

(v) The Option will terminate immediately prior to a cessation of the Optionee’s Employment if such cessation of Employment has resulted in connection with an act or failure to act constituting Cause.

(vi) In the event the Optionee terminates Employment for any reason and, within 24 months of such termination date, breaches any non-competition or non-solicitation covenant or materially breaches any confidentiality, non-disclosure or other similar covenant, the Option will be treated as having terminated immediately prior to such cessation of Employment.

4. Adjustment of Annual and Cumulative EBITDA Targets . Annual and Cumulative EBITDA targets for a particular fiscal year as described in Schedule A will be adjusted to reflect the consequences of future acquisitions and dispositions, future reasonable management and investment banking fees consistent with industry standards, the impact of foreign currency exchange rates or in the event of changes in GAAP. Any such adjustments shall be made in good faith by the Administrator in its discretion after consultation with the CEO and due consideration of his recommendations related to the foregoing.

5. Share Restrictions, etc . Except as expressly provided herein, the Optionee’s rights hereunder and with respect to Shares received upon exercise are subject to the restrictions and other provisions contained in the Management Stockholders Agreement.

 

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6. Legends, etc . Shares issued upon exercise shall bear such legends as may be required or provided for under the terms of the Management Stockholders Agreement.

7. Transfer of Option . The Option may only be transferred to a legal representative in the event of the Optionee’s incapacity or to one or more transferees permitted under Section 6(a)(3) of the Plan.

8. Withholding . The exercise of the Option will give rise to “wages” subject to withholding. The Optionee expressly acknowledges and agrees that the Optionee’s rights hereunder, including the right to be issued Shares upon exercise, are subject to the Optionee promptly paying to the Company in cash (or by such other means as may be acceptable to the Administrator in its discretion) all taxes required to be withheld. In the event of an exercise of the Option, or a portion of the Option, in connection with or following a cessation of Employment as result of death, Disability, termination by the Company without Cause, voluntary resignation for Good Reason, an Expiration Termination, the Optionee’s Retirement, or a voluntary resignation without Good Reason after September 1, 2013, or in the event of an exercise of the Option, or a portion of the Option, on or immediately prior to the Final Exercise Date while the Optionee remains employed, the Optionee may elect to have shares of Stock held back by the Company having a Fair Market Value equal to the applicable minimum tax withholding requirements in accordance with the Plan. The Optionee also authorizes the Company and its subsidiaries to withhold such amount from any amounts otherwise owed to the Optionee and the Company may so withhold.

9. Treatment of the Option upon Consummation of a Covered Transaction .

(a) Notwithstanding Section 7(a)(3) of the Plan that permits the Administrator, in its discretion, to accelerate the exercisability of Awards in connection with a Covered Transaction in which there is no assumption, continuation, substitution or cash-out of an Award, the portion of the Tranche 1 Option that is outstanding immediately prior the consummation of a Covered Transaction, to the extent that it is not assumed, continued, substituted or cashed-out in connection with the Covered Transaction in accordance with the terms of the Plan, shall vest in full immediately prior to the consummation of such Covered Transaction.

(b) For the avoidance of doubt, the Tranche 2 Option (or portion thereof) that does not vest and become earned in connection with a Covered Transaction occurring on or prior to February 26, 2016 as a result of the targets set forth in the penultimate paragraph of Schedule A hereto not having been satisfied in connection with such Covered Transaction shall, to the extent practicable, remain outstanding and eligible to vest and become earned based on attainment of the Annual EBITDA Target(s) or Cumulative EBITDA Target(s) set forth in Schedule A hereto, and if such treatment is not practicable, such Tranche 2 Option (or portion thereof) shall vest and become earned immediately prior to the consummation of such Covered Transaction. On or

 

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after February 26, 2016, to the extent that the Tranche 2 Options do not vest and become earned in connection with a Covered Transaction, such Tranche 2 Options shall thereupon terminate upon the consummation of the Covered Transaction with no consideration due to the Optionee.

10. Effect on Employment . Neither the grant of the Option, nor the issuance of Shares upon exercise of the Option, shall give the Optionee any right to be retained in the employ of the Company or any of its Affiliates, affect the right of the Company or any of its Affiliates to discharge or discipline such Optionee at any time, or affect any right of such Optionee to terminate his or her Employment at any time.

11. Other Undertakings .

(a) To protect the interests of the Company and its direct and indirect subsidiaries (collectively, the “ IMS Companies ”), including the confidential information of the IMS Companies and the confidential information of their respective customers, data suppliers, prospective customers and other companies with which the IMS Companies have a business relationship, and in consideration of the covenants and promises and other valuable consideration described in this Agreement, the Company and the Optionee agree as follows:

(b) The Optionee acknowledges and agrees that he is bound by the confidentiality and other covenants contained in the restrictive covenant and confidentiality agreements that he has executed with an IMS Company, which covenants and agreements are incorporated herein by reference and shall survive any exercise, expiration, forfeiture or other termination of this Agreement or the Option issuable hereunder. The Optionee also acknowledges and agrees that the Company shall be an affiliate for purposes of such restrictive covenant and confidentiality agreements.

(c) The Optionee acknowledges the opportunity to participate in the Plan and the financial benefits that may accrue from such participation, is good, valuable and sufficient consideration for the following:

(i) The Optionee acknowledges and agrees that he is and will remain bound by the non-competition and non-solicitation covenants contained in the Employment Agreement.

(ii) The Optionee further acknowledges and agrees that the remedies available for breach of any non-competition or non-solicitation covenants shall include, but not be limited to, the following: (v) actual damages, (w) all equitable remedies available to the Company, (x) the rights and remedies of the Company set forth in Section 5 of the Management Stockholders Agreement, (y) the forfeiture of the Option for no consideration, and (z) in respect of the Option (or portion thereof) exercised by the Optionee prior to any such breach or subsequent thereto and prior to the forfeiture of such award required by this Section 12(c)(ii), the Optionee shall pay to the Company an amount equal to the difference between

 

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the exercise price of the Option and the per-share proceeds of any sale of Stock acquired upon such exercise multiplied by the number of shares of Stock so sold. The Company shall also be entitled to the foregoing remedies in the event of a material breach of any confidentiality, non-disclosure or other similar covenant contained in the restrictive covenant and confidentiality agreements that the Optionee has executed with an IMS Company.

12. Provisions of the Plan . This Agreement is subject in its entirety to the provisions of the Plan, which are incorporated herein by reference. A copy of the Plan as in effect on the Date of Grant has been furnished to the Optionee and the Optionee agrees to be bound by the terms of the Plan and this Agreement. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of this Agreement shall control. The Company acknowledges and agrees that, for purposes of this Agreement and the Plan, the terms “Cause” and “Good Reason” shall be determined in accordance with and pursuant to the Employment Agreement.

13. S-8 Registration . As soon as practicable after the time that Shares are first registered by the Company pursuant to an effective registration on Form S-1, the Company shall register the Shares, issuable to the Optionee upon the exercise of any portion of the Option, pursuant to a Form S-8 (or successor registration form); provided that the Optionee shall agree to bound by any applicable lock-up agreement in connection with such registration, pursuant to Section 3.6 of the Management Stockholders Agreement or otherwise.

14. Governing Law . This Agreement and all claims arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.

By acceptance of the Option, the undersigned agrees hereby to become a party to, and be bound by the terms of, the Management Stockholders Agreement.

[The remainder of this page is intentionally left blank]

 

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Executed as of the      day of December, 2010.

 

Healthcare Technology Holdings, Inc.       HEALTHCARE TECHNOLOGY HOLDINGS, INC.
    By:  

 

      Name:   Harvey A. Ashman
      Title:   SVP, General Counsel, External Affairs and Corporate Secretary
Optionee      

 

      Name:   Ari Bousbib

[Signature Page to Senior Management Nonstatutory Option Agreement]

Exhibit 21.1

IMS Health Incorporated

Active Subsidiaries

as of December 31, 2013

 

Name

  

State or Other
Jurisdiction of
Incorporation

   % Ownership
100% except
as noted

360 VANTAGE LLC

   Arizona   

APPATURE, INC.

   Washington   

COORDINATED MANAGEMENT SYSTEMS, INC.

   Delaware   

Coordinated Management Holdings L.L.C.

   Delaware   

DATA NICHE ASSOCIATES, INC.

   Illinois   

ENTERPRISE ASSOCIATES, LLC

   Delaware   

IMS CHINAMETRIK INCORPORATED

   Delaware   

IMS Market Research Consulting (Shanghai) Co., Ltd.

   China   

IMS CHINAMETRIK LIMITED

   Hong Kong   

Global Crown Investment Limited

   Hong Kong   

United Research China (Shanghai) Ltd.

   China   

IMS Meridian Limited

   Hong Kong   

IMS Meridian Research Limited

   British Virgin Islands   

Meridian Research Vietnam Ltd.

   Vietnam   

IMS CONTRACTING & COMPLIANCE, INC.

   Delaware   

IMS GOVERNMENT SOLUTIONS, INC.

   Delaware   

IMS HEALTH ASIA PTE. LTD.

   Singapore   

IMS HEALTH CANADA INC.

   Canada   

IMS HEALTH FINANCE, INC.

   Delaware   

IMS Trading Management, Inc.

   Delaware   

IMS HEALTH GROUP LIMITED

   United Kingdom   

IMS Health HQ Limited

   United Kingdom   

IMS Holdings (U.K.) Limited

   United Kingdom   

IMS Health Global Holdings UK Ltd.

   United Kingdom   

IMS Health Finance UK II Ltd.

   United Kingdom   

IMS Health UK Investments Ltd.

   United Kingdom   

IMS Health Finance UK III Ltd.

   United Kingdom   

Pharma Deals Limited

   United Kingdom   

IMS Health Limited

   United Kingdom   

IMSWorld Publications Ltd.

   United Kingdom   

Cambridge Pharma Consultancy, Ltd.

   United Kingdom   

IMS Health Surveys Limited

   United Kingdom   

IMS Hospital Group Limited

   United Kingdom   

IMS (UK) Pension Plan Trustee Company Limited

   United Kingdom   

IMS HEALTH INDIA HOLDING CORPORATION

   Delaware   

RX India Corporation

   Delaware   

IMS Health India Private Limited

   India   

IMS HEALTH KOREA LTD.

   Korea   

IMS HEALTH LICENSING ASSOCIATES, L.L.C.

   Delaware   

Spartan Leasing Corporation

   Delaware   

IMS HEALTH PHILIPPINES, INC.

   Philippines   


IMS HEALTH PUERTO RICO INC.

   Puerto Rico   

IMS HEALTH TAIWAN LTD.

   Taiwan   

IMS HEALTH TRADING CORPORATION

   Delaware   

IMS Health Holdings (Pty.) Ltd.

   South Africa   

IMS Health (Pty.) Ltd.

   South Africa   

IMS HEALTH TRANSPORTATION SERVICES CORPORATION

   Delaware   

IMS INFORMATION MEDICAL STATISTICS (ISRAEL) LTD.

   Israel   

IMS JAPAN K.K.

   Japan and Delaware   

IMS (GIBRALTAR) HOLDING LIMITED

   Gibraltar   

IMS Health Finance UK I Ltd.

   United Kingdom   

Ardentia Limited

   United Kingdom   

Cambridge Pharma Consultancy, Inc.

   Delaware   

Pharmadat Marktforschumgs Gesellschaft m.b.H.

   Austria   

IMS Health S.A.

   Spain   

IMS Cyprus LTD

   Cyprus   

IMS Netherlands Holding B.V.

   Netherlands   

IMS Health Limited

   Ireland   

IMS Health S.P.A.

   Italy   

IMS Hellas EPE.

   Greece   

IMS Health, LDA.

   Portugal   

IMS AB

   Sweden   

IMS Medical Radar AB

   Sweden   

IMS Health Sweden AB

   Sweden   

IMS AG

   Switzerland   

IMS Health Argentina S.A.

   Argentina   

Phama S.A.

   Argentina   

IMS Health Marktforschung GmbH

   Austria   

IMS Health S.P.R.L.

   Belgium   

IMS Health Consulting bvba

   Belgium   

Source Belgium sprl

   Belgium   

IMS Health Bolivia S.R.L.

   Bolivia   

IMS Health Do Brasil Ltda.

   Brazil   

IMS Bulgaria E.o.o.D.

   Bulgaria   

Asesorias IMS Health Chile Limitada

   Chile   

Operaciones Centralizadas Latinoamericana Limitada

   Chile   

Intercomunicaciones Y Servicio de Datos Interdata S.A.

   Colombia   

IMS Adriatic d.o.o. za konzalting

   Croatia   

IMS Health a.s.

   Czech Republic   

IMS Republica Dominicana, S.A.

   Dominican Republic   

Datadina Ecuador S.A.

   Ecuador   

IMS Health Egypt Limited

   Egypt   

IMS Health Finance UK V Ltd.

   United Kingdom   

IMS Health Oy

   Finland   

Suomen Lääkedata Oy

   Finland   

IMS Health S.A.S.

   France   

PR International S.A.S.

   France   

PR Editions S.A.S.

   France   

IMS Health Deutschland GmbH

   Germany   

IMS Health Beteiligungs-gesellschaft mbH

   Germany   

IMS Health GmbH & Co. OHG

   Germany   

IMS Software GmbH

   Germany   

Asserta Centroamerica Medicion de Mercados, S.A.

   Guatemala   

IMS Health Services Ltd.

   Hungary   

IMS Health Analytics Services Private Limited

   India   

PharmARC Consulting Services GmbH

   Switzerland   

PharmARC Inc.

   New Jersey   

IMS Health Information and Consulting Services India Private Limited

   India   

IMS Health Bangladesh Limited

   Bangladesh   

 

2


IMS Health Lanka (Private) Limited

   Sri Lanka   

PT IMS Health Indonesia

   Indonesia      95.00   

Pharm-Consult Limited Liability Partnership

   Kazakhstan   

UAB IMS Health

   Lithuania   

IMS Health Malaysia Sdn. Bhd.

   Malaysia   

IPP Informacion Promocional y Publicitaria S.A. de C.V.

   Mexico   

Informations Medicales & Statistiques S.A.R.L.

   Morocco   

IMS Health B.V.

   Netherlands   

IMS Health Finance B.V.

   Netherlands   

IMS Health Norway A/S

   Norway   

IMS Health Pakistan (Private) Limited

   Pakistan   

IMS Health Paraguaya S.A.

   Paraguay   

IMS Health Del Peru S.A.

   Peru   

IMS Poland Limited Sp.z.o.o.

   Poland   

IMS Health Consulting Sp.z.o.o.

   Poland   

IMS Pharmaceutical Services Srl.

   Romania   

IMS Health LLC

   Russia   

RMBC Pharma Ltd.

   Russia   

IMS Information Medical Statistics, spol.s.r.o.

   Slovak Republic   

Pharmadata s.r.o.

   Slovak Republic   

IMS Services, pharmaceutical marketing services Ltd.

   Slovenia   

Mercados Y Analisis, S.A.

   Spain   

CORE Holding GmbH

   Switzerland   

CORE Center for Outcomes Research GmbH

   Switzerland   

IMS Health GmbH

   Switzerland   

IMS Informatics Holding AG

   Switzerland   

IMS Informatics AG

   Switzerland   

M&H Informatics (BD) LTD.

   Bangladesh   

Interstatistik AG

   Switzerland   

Datec Industria e Comercio, Distribuidora Grafica e Mala Direta Ltda.

   Brazil   

IMS Health Tunisia sarl

   Tunisia   

IMS Health Tibbi Istatistik Ticaret ve Musavirlik Ltd Sirketi

   Turkey   

IMS Health Uruguay S.A.

   Uruguay   

IMS Health de Venezuela C.A.

   Venezuela   

IMS (GIBRALTAR) INVESTMENTS LIMITED

   Gibraltar   

IMS Bermuda Investments Ltd.

   Bermuda   

IMS (Gibraltar) Systems Limited

   Gibraltar   

IMS (Gibraltar) Properties Ltd.

   Gibraltar   

IMS Bermuda Holdings Ltd.

   Bermuda   

IMS Health Scottish L.P.

   United Kingdom   

IMS SERVICES, LLC

   Delaware   

IMS Health (Australia) Partnership

   Australia   

IMS Health Australia Holding Pty. Ltd.

   Australia   

IMS Health Australia Pty. Ltd.

   Australia   

M-Tag Pty. Limited

   Australia   

Battaerd Mansley Pty. Ltd.

   Australia   

IMS Health (N.Z.) Limited

   New Zealand   

IMS SOFTWARE SERVICES LTD.

   Delaware   

INTERCONTINENTAL MEDICAL STATISTICS INTERNATIONAL, LTD. (DE)

   Delaware   

MED-VANTAGE, INC.

   Delaware   

PHARMETRICS, INC.

   Delaware   

SEMANTELLI, LLC

   Delaware   

TTC ACQUISITION CORPORATION

   Delaware   

The Tar Heel Trading Company, LLC

   Pennsylvania   

VALUEMEDICS RESEARCH, LLC

   Delaware   

 

3

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form S-1 of IMS Health Holdings, Inc. of our report dated March 4, 2011, except for the effect of earnings per share discussed in Note 16, as to which the date is January 2, 2014, relating to the financial statements and financial statement schedule of IMS Health Incorporated, which appear in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/PricewaterhouseCoopers LLP

New York, NY

January 2, 2014

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form S-1 of IMS Health Holdings, Inc. of our report dated January 2, 2014 relating to the financial statements and financial statement schedules of IMS Health Holdings, Inc., which appear in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/PricewaterhouseCoopers LLP

New York, NY

January 2, 2014