e424b3
Filed Pursuant to Rule 424(b)(3)
Registration File No. 333-170144
PROSPECTUS
Fidelity National Information
Services, Inc.
Offers to Exchange
7.625% Senior Notes Due
2017
Registered under the Securities
Act
For
A Like Principal Amount of
7.625% Senior Notes Due 2017
($600,000,000 Aggregate
Principal Amount)
And
7.875% Senior Notes Due
2020
Registered under the Securities
Act
For
A Like Principal Amount of
7.875% Senior Notes Due 2020
($500,000,000 Aggregate
Principal Amount)
Fidelity National Information Services, Inc. is offering, upon
the terms and subject to the conditions set forth in this
prospectus and the accompanying letter of transmittal, to
exchange (i) an aggregate principal amount of up to
$600,000,000 of our 7.625% senior notes due 2017 (which we
refer to as the 2017 Exchange Notes) for an
equal principal amount of our outstanding 7.625% senior
notes due 2017 (which we refer to as the 2017 Original
Notes) and (ii) an aggregate principal amount of
up to $500,000,000 of our 7.875% senior notes due 2020
(which we refer to as the 2020 Exchange
Notes, and collectively with the 2017 Exchange Notes
as the Exchange Notes) for an equal principal
amount of our outstanding 7.875% senior notes due 2020
(which we refer to as the 2020 Original
Notes, and collectively with the 2017 Original Notes
as the Original Notes). The Exchange Notes
will represent the same debt as the respective series of
Original Notes, and we will issue the Exchange Notes under the
same indenture as the Original Notes.
The
exchange offers expire at 5:00 p.m., New York City time, on
January 6, 2011, unless extended.
Terms of
the Exchange Offers
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We are offering to exchange each series of Exchange Notes for
the respective series of Original Notes that are validly
tendered and not withdrawn prior to the expiration of the
exchange offers.
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You may withdraw tendered Original Notes at any time prior to
the expiration of the exchange offers.
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The terms of the Exchange Notes are identical in all material
respects (including principal amount, interest rate, maturity
and redemption rights) to the respective series of Original
Notes for which they may be exchanged, except that the Exchange
Notes generally will not be subject to transfer restrictions or
be entitled to registration rights, and the Exchange Notes will
not have the right to earn additional interest under
circumstances relating to our registration obligations.
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Certain of our subsidiaries will guarantee our obligations under
the Exchange Notes, including the payment of principal of,
premium, if any, and interest on the Exchange Notes. These
guarantees of the Exchange Notes will be senior unsecured
obligations of the guarantors. Additional subsidiaries will be
required to guarantee the Exchange Notes, and the guarantees of
the guarantors will terminate, in each case in the circumstances
described under Description of the Exchange
Notes Guarantees.
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The exchange of Original Notes for Exchange Notes generally will
not be a taxable event for U.S. federal income tax
purposes. See Certain U.S. Federal Income Tax
Considerations.
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There is no existing market for the Exchange Notes to be issued,
and we do not intend to apply for listing or quotation on any
securities exchange or market.
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See Risk Factors beginning on page 16 for a
discussion of the factors you should consider in connection with
the exchange offers.
Each broker-dealer that receives Exchange Notes for its own
account pursuant to the exchange offers must acknowledge that it
will deliver a prospectus in connection with any resale of such
Exchange Notes. The letter of transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an
underwriter within the meaning of the Securities Act
of 1933, as amended, and the rules and regulations thereunder
(the Securities Act). This prospectus, as it
may be amended or supplemented from time to time, may be used by
a broker-dealer in connection with resales of Exchange Notes
received in exchange for Original Notes where such Original
Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities. We have
agreed to make this prospectus available to any broker-dealer
for use in connection with any such resale until the earlier of
90 days after the date the exchange offers registration
statement becomes effective and the date on which a
broker-dealer is no longer required to deliver a prospectus in
connection with market-making or other trading activities. See
Plan of Distribution.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this prospectus is November 29, 2010.
TABLE OF
CONTENTS
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iii
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Unless otherwise indicated or required by the context, in this
prospectus, the terms FIS, we,
our, us and the Company
refer to Fidelity National Information Services, Inc. and all of
its subsidiaries that are consolidated under GAAP (except in the
section entitled Summary Summary Terms of the
Exchange Offers and in the section entitled
Description of the Exchange Notes, in which cases
such terms refer only to Fidelity National Information Services,
Inc. and not to any of its subsidiaries); and notes
refers to the Original Notes and the Exchange Notes collectively.
You should rely only on the information contained in this
prospectus. We have not authorized any other person to provide
you with different information. If anyone provides you with
different or inconsistent information, you should not rely on
it. We are not making an offer to exchange and issue the
Exchange Notes in any state or other jurisdiction where the
offer or exchange is not permitted. You should not assume that
the information contained in this prospectus is accurate as of
any date other than the date printed on the front of this
prospectus.
INFORMATION
INCORPORATED BY REFERENCE
The Securities and Exchange Commission (the
SEC) allows us to incorporate by
reference in this prospectus the information in other
documents that we file with it, which means that we can disclose
important information to you by referring you to those
documents. The information incorporated by reference is
considered to be a part of this prospectus, and information in
documents that we file later with the SEC will automatically
update and supersede information contained in documents filed
earlier with the SEC or contained in this prospectus or a
prospectus supplement. We incorporate by reference in this
prospectus the documents listed below and any future filings
that we may make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended
(the Exchange Act), prior to the later of
(a) the completion or termination of the exchange offers
and (b) if either of the exchange offers is completed, the
termination of the period of time described under Plan of
Distribution during which we have agreed to make available
this prospectus to broker-dealers in connection with certain
resales of the Exchange Notes:
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our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009;
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our Quarterly Reports on
Form 10-Q
for the fiscal quarters ended March 31, 2010, June 30,
2010 and September 30, 2010;
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information required by Part III, Items 10 through 13,
of
Form 10-K
(incorporated by reference from our Definitive Proxy Statement,
filed with the SEC on April 15, 2010);
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our Current Reports on
Form 8-K
filed on October 2, 2009 (Item 9.01(b) only),
March 3, 2010, June 2, 2010, June 7, 2010,
July 2, 2010, July 6, 2010, July 9, 2010,
July 20, 2010 (such July 20, 2010 Current Report on
Form 8-K
to refer to the
8-K filing
that contained Item 1.01, Item 2.03, Item 8.01
and Item 9.01 disclosures), July 30, 2010,
August 23, 2010, and October 26, 2010 (two filings)
(such October 26, 2010 Current Reports on
Form 8-K
to refer to the
8-K filings
that each contained Item 8.01 and Item 9.01
disclosures);
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the audited consolidated balance sheet of Metavante and its
consolidated subsidiaries as of December 31, 2008, and the
related consolidated statements of income, shareholders
equity, and cash flows for each of the three years in the period
ended December 31, 2008, the notes related thereto, and the
Report of Independent Registered Public Accounting Firm of
Metavante, dated February 17, 2009, set forth under the
caption Item 8. Financial Statements and
Supplementary Data in Metavantes Annual Report on
Form 10-K
for the fiscal year ended December 31, 2008, as
amended; and
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the unaudited condensed consolidated balance sheet of Metavante
and its consolidated subsidiaries as of June 30, 2009, and
the related unaudited condensed consolidated statements of
income and cash flows for each of the six-month periods ended
June 30, 2009 and 2008, and the notes related thereto,
under the caption Item 1. Financial Statements
in Metavantes Quarterly Report on
Form 10-Q
for the period ended June 30, 2009.
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Notwithstanding the foregoing, to the extent that any
information contained in any Current Report on
Form 8-K,
or any exhibit thereto, was or is furnished to, rather than
filed with, the SEC, such information or exhibit is not
incorporated by reference into this document (unless
specifically stated otherwise). You may obtain a copy of any or
all of the documents referred to above which may have been or
may be incorporated by reference into this prospectus (excluding
certain exhibits to the documents) at no cost to you by writing
or telephoning us at the following address:
Fidelity
National Information Services, Inc.
601 Riverside Avenue
Jacksonville, Florida 32204
Attn: Investor Relations
Telephone:
(904) 854-3282
To obtain timely delivery of any of our filings, agreements
or other documents, you must make your request to us no later
than December 29, 2010. In the event that we extend either
of the exchange offers, you must submit your request at least
five business days before the expiration date of the applicable
exchange offer, as extended. We may extend the exchange offers
in our sole discretion. See Exchange Offers for more
detailed information.
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WHERE YOU
CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on
Form S-4
under the Securities Act that registers the Exchange Notes that
will be offered in exchange for the Original Notes. The
registration statement, including the attached exhibits and
schedules, contains additional relevant information about us and
the Exchange Notes. The rules and regulations of the SEC allow
us to omit from this document certain information included in
the registration statement.
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. Our SEC filings are
available to the public from the SECs web site at
www.sec.gov. You may also read and copy any document we
file at the SECs public reference room in
Washington, D.C. located at 100 F Street, N.E.,
Room 1580, Washington, D.C. 20549. Please call the SEC
at
1-800-SEC-0330
for further information on the operation of the SECs
public reference room.
FORWARD-LOOKING
STATEMENTS
This prospectus, the documents incorporated by reference and
other written reports and oral statements made from time to time
by Fidelity National Information Services, Inc. contain
forward-looking statements (within the meaning of
the U.S. federal securities laws) regarding our
expectations, hopes, intentions, or strategies regarding the
future. These statements relate to future events and our future
results, and involve a number of risks and uncertainties.
Forward-looking statements are based on managements
beliefs, as well as assumptions made by, and information
currently available to, management and can generally be
identified by the use of expressions such as may,
will, should, could,
would, likely, predict,
potential, continue, future,
estimate, believe, expect,
anticipate, intend, plan,
foresee, and other similar words or phrases, as well
as statements in the future tense; however, these words are not
the exclusive means of identifying such statements. In addition,
any statements that refer to beliefs, expectations, projections
or other characterizations of future events or circumstances and
other statements that are not historical facts are
forward-looking statements.
Actual results, performance or achievement could differ
materially from those contained in these forward-looking
statements for a variety of reasons, including, without
limitation, those discussed elsewhere in this prospectus, the
documents incorporated by reference and in our other reports
filed with the SEC. The risks and uncertainties that
forward-looking statements are subject to include, without
limitation:
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changes and conditions in general economic, business and
political conditions, including the possibility of intensified
international hostilities, acts of terrorism, and changes and
conditions in either or both the United States and international
lending, capital and financial markets;
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the effect of legislative initiatives or proposals, statutory
changes, governmental or other applicable regulations
and/or
changes in industry requirements, including privacy regulations;
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the effects of our substantial leverage which may limit the
funds available to make acquisitions and invest in our business;
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the risks of reduction in revenue from the elimination of
existing and potential customers due to consolidation in or new
laws or regulations affecting the banking, retail and financial
services industries or due to financial failures or other
setbacks suffered by firms in those industries;
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changes in the growth rates of the markets for core processing,
card issuer, and transaction processing services;
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failures to adapt our services and products to changes in
technology or in the marketplace;
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internal or external security breaches of our systems, including
those relating to the theft of personal information and computer
viruses affecting our software;
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the failure to achieve some or all of the benefits that we
expect from the Metavante Acquisition (as defined below),
including the possibility that the Metavante Acquisition may not
be accretive to our
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earnings due to undisclosed liabilities, management or
integration issues, loss of customers, the inability to achieve
targeted cost savings, or other factors;
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our potential inability to find suitable acquisition candidates
or finance such acquisitions, which depends upon the
availability of adequate cash reserves from operations or of
acceptable financing terms and the variability of our stock
price, or difficulties in integrating past and future acquired
technology or business operations, services, clients and
personnel;
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competitive pressures on product pricing and services including
the ability to attract new, or retain existing, customers;
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an operational or natural disaster at one of our major
operations centers; and
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other risks detailed in Risk Factors in this
prospectus and in Statement Regarding Forward-Looking
Information, Risk Factors and other sections
of the Companys Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009, the
Companys Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2010 (the June 2010
10-Q),
and other filings with the SEC.
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Other unknown or unpredictable factors also could have a
material adverse effect on our business, financial condition,
results of operations and prospects. Accordingly, readers should
not place undue reliance on these forward-looking statements.
These forward-looking statements are inherently subject to
uncertainties, risks and changes in circumstances that are
difficult to predict. Except as required by applicable law or
regulation, we do not undertake (and expressly disclaim) any
obligation and do not intend to publicly update or review any of
these forward-looking statements, whether as a result of new
information, future events or otherwise. You should carefully
consider the possibility that actual results may differ
materially from our forward-looking statements. Please carefully
review and consider the various disclosures made in this
prospectus and in our reports filed with the SEC, including with
respect to the risks and factors that may affect our business,
financial condition, results of operations or prospects.
MARKET
AND INDUSTRY DATA
Certain market and industry data included in this prospectus
have been obtained from third-party sources that we believe to
be reliable. Market estimates are calculated by using
independent industry publications, government publications and
third party forecasts in conjunction with our assumptions about
our markets. We have not independently verified such third party
information and cannot assure you of its accuracy or
completeness. While we are not aware of any misstatements
regarding any market, industry or similar data presented herein,
such data involves risks and uncertainties and is subject to
change based on various factors, including those discussed under
the headings Forward-Looking Statements and
Risk Factors in this prospectus.
WEBSITES
The information contained on or that can be accessed through any
of our websites is not incorporated in, and is not part of, this
prospectus, and you should not rely on any such information in
connection with your decision to participate in the exchange
offers.
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SUMMARY
This summary contains basic information about our company and
the offering. This summary highlights selected information
contained elsewhere in this prospectus. This summary is not
complete and does not contain all of the information that may be
important to you. For a more complete understanding of our
company and the exchange offers, you should read this entire
prospectus, including Risk Factors and the financial
information and the notes thereto and other information
incorporated by reference herein. The information in this
summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this
prospectus or incorporated by reference herein.
Our
Company
FIS is a leading global provider of banking and payments
technology solutions, processing services and information-based
services. We offer financial institution core processing, card
issuer and transaction processing services, including the NYCE
Network, a leading national electronic funds transfer network.
FIS is a member of the Standard and Poors
500®
Index and holds a leading ranking in the annual FinTech 100
rankings.
As of September 30, 2010, FIS had more than 300 solutions
serving over 14,000 financial institutions and business
customers in over 100 countries spanning most segments of the
financial services industry. These customers include 40 of the
top 50 global banks, including nine of the top ten, as ranked by
Bankersalmanac.com as of November 2009, as well as mid-tier and
community banks, credit unions, commercial lenders, automotive
financial institutions, healthcare providers and governments.
Additionally, we provide services to numerous retailers via our
check processing and guarantee services. No individual customer
represents more than 5% of our revenues.
Fidelity National Information Services, Inc. is a Georgia
corporation. Our executive offices are located at 601 Riverside
Avenue, Jacksonville, Florida 32204, and our telephone number at
that location is
(904) 854-5000.
Summary
Terms of the Exchange Offers
The following is a brief summary of the terms of the exchange
offers. For a more complete description of the exchange offers,
see Exchange Offers.
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Original Notes |
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$600.0 million aggregate principal amount of
7.625% Senior Notes due 2017. |
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$500.0 million aggregate principal amount of
7.875% Senior Notes due 2020. |
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Exchange Notes |
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Up to $600.0 million aggregate principal amount of
7.625% Senior Notes due 2017. |
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Up to $500.0 million aggregate principal amount of
7.875% Senior Notes due 2020. |
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Each series of Exchange Notes has been registered under the
Securities Act. The terms of the Exchange Notes are identical in
all material respects to the terms of the Original Notes, except
that the Exchange Notes are registered under the Securities Act
and are generally not subject to transfer restrictions, are not
entitled to registration rights and do not have the right to
earn additional interest under circumstances relating to our
registration obligations. |
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Exchange Offers |
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We are offering to exchange each series of Exchange Notes for a
like principal amount of Original Notes of the applicable
series. |
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Currently, there is $600.0 million in aggregate principal
amount of 2017 Original Notes outstanding and
$500.0 million in aggregate principal amount of 2020
Original Notes outstanding. |
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Original Notes may be exchanged only in minimum denominations of
$2,000 and integral multiples of $1,000 in excess of $2,000.
Exchange Notes will be issued only in minimum denominations of
$2,000 and integral multiples of $1,000 in excess of $2,000. |
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Subject to the terms of the exchange offers, we will exchange
the Exchange Notes for all of the Original Notes of each series
that are validly tendered and not withdrawn prior to the
expiration of the applicable exchange offer. |
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Expiration Date |
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Each exchange offer will expire at 5:00 p.m., New York City
time, on January 6, 2011, unless we extend it. We do not
currently intend to extend the expiration date. |
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Withdrawal of Tenders |
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You may withdraw the tender of your Original Notes at any time
prior to the expiration date. |
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Certain U.S. Federal Income Tax Considerations |
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The exchange by a Holder (as defined in Certain U.S.
Federal Income Tax Considerations) of Original Notes for
Exchange Notes in the exchange offers generally will not
constitute a taxable exchange for U.S. federal income tax
purposes. See Certain U.S. Federal Income Tax
Considerations. |
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Conditions to the Exchange Offers |
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The exchange offers are subject to customary conditions, which
we may waive. See Exchange Offers
Conditions. |
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Procedures for Tendering |
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If you wish to accept the applicable exchange offer and your
Original Notes are held by a custodial entity such as a bank,
broker, dealer, trust company or other nominee, you must
instruct this custodial entity to tender your Original Notes on
your behalf pursuant to the procedures of the custodial entity.
If your Original Notes are registered in your name, you must
complete, sign and date the accompanying letter of transmittal,
or a facsimile of the letter of transmittal, according to the
instructions contained in this prospectus and the letter of
transmittal. You must also mail or otherwise deliver the letter
of transmittal, or a facsimile of the letter of transmittal,
together with the Original Notes and any other required
documents, to the exchange agent at the address set forth on the
cover page of the letter of transmittal. |
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Custodial entities that are participants in The Depository
Trust Company, or DTC, may tender
Original Notes through DTCs Automated Tender Offer
Program, or ATOP, which enables a custodial
entity, and the beneficial owner on whose behalf the custodial
entity is acting, to electronically agree to be bound by the
letter of transmittal. A letter of transmittal need not
accompany tenders effected through ATOP. |
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By signing, or agreeing to be bound by, the letter of
transmittal, you will represent to us that, among other things: |
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you are acquiring the Exchange Notes in the ordinary
course of your business;
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you are not engaged in, and do not intend to engage
in, a distribution (within the meaning of the Securities Act) of
the Exchange Notes;
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you have no arrangement or understanding with any
person to participate in a distribution (within the meaning of
the Securities Act) of the Exchange Notes;
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you are not an affiliate of the Company (within the
meaning of Rule 405 under the Securities Act); and
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if you are a broker-dealer registered under the
Exchange Act, you are participating in the applicable exchange
offer for your own account and are exchanging Original Notes
acquired as a result of market-making activities or other
trading activities and you will deliver a prospectus in
connection with any resale of the Exchange Notes.
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See Exchange Offers Eligibility;
Transferability. |
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Guaranteed Delivery Procedures |
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If you wish to tender your Original Notes, and time will not
permit your required documents to reach the exchange agent by
the expiration date, or the procedure for book-entry transfer
cannot be completed on time, you may tender your Original Notes
under the procedures described under Exchange
Offers Guaranteed Delivery Procedures. |
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Transferability |
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Under existing interpretations of the Securities Act by the
staff of the SEC contained in several no-action letters to third
parties, and subject to the immediately following sentence, we
believe that the Exchange Notes will generally be freely
transferable by holders after the exchange offers without
further compliance with the registration and prospectus delivery
requirements of the Securities Act (subject to representations
required to be made by each holder of Exchange Notes, as set
forth above). However any holder of Original Notes who: |
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is one of our affiliates (as defined in
Rule 405 under the Securities Act),
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does not acquire the Exchange Notes in the ordinary
course of business,
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distributes, intends to distribute, or has an
arrangement or understanding with any person to distribute the
Exchange Notes as part of the respective exchange offer, or
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is a broker-dealer who purchased Original Notes
directly from us
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will not be able to rely on the interpretations of the staff of
the SEC, will not be permitted to tender Original Notes in the
exchange offers and, in the absence of any exemption, must
comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale
of the notes. |
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Our belief is based on interpretations by the Staff of the SEC
given to other, unrelated issuers in similar exchange offers. We
cannot assure you that the SEC would make a similar
interpretation with respect to |
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these exchange offers. We will not be responsible for or
indemnify you against any liability you may incur under the
Securities Act. |
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Each broker-dealer that receives Exchange Notes for its own
account under the exchange offers in exchange for Original Notes
that were acquired by the broker-dealer as a result of
market-making or other trading activity must acknowledge that it
will deliver a prospectus in connection with any resale of the
Exchange Notes. See Plan of Distribution. |
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See Exchange Offers Eligibility;
Transferability. |
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Consequences of Failure to Exchange |
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Any Original Notes that are not tendered in the exchange offers,
or that are not accepted in the exchange offers, will remain
subject to the restrictions on transfer. Since the Original
Notes have not been registered under the U.S. federal securities
laws, you will not be able to offer or sell the Original Notes
except under an exemption from the requirements of the
Securities Act or unless the Original Notes are registered under
the Securities Act. Upon the completion of the exchange offers,
we will have no further obligations, except under limited
circumstances, to provide for registration of the notes under
the U.S. federal securities laws. See Exchange
Offers Consequences of Failure to Tender. |
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Use of Proceeds |
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We will not receive any proceeds from the exchange of notes
pursuant to the exchange offers. We will pay all expenses
incident to the exchange offers. |
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Exchange Agent |
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The Bank of New York Mellon Trust Company, N.A., is serving
as the exchange agent for the exchange offers. See
Exchange Offers Exchange Agent for the
address and telephone number of the exchange agent. |
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Summary
of Terms of the Exchange Notes
The summary below describes the principal terms of the
Exchange Notes. Certain of the terms and conditions described
below are subject to important limitations and exceptions. The
Description of the Exchange Notes section of this
prospectus contains a more detailed description of the terms and
conditions of the Exchange Notes. As used in this section, the
terms our, we, us,
Issuer and the Company refer to Fidelity
National Information Services, Inc. and not to any of its
subsidiaries; the term Notes refers collectively to
the Exchange Notes and the Original Notes; the term 2017
Notes refers collectively to the 2017 Original Notes and
the 2017 Exchange Notes; and the term 2020 Notes
refers collectively to the 2020 Original Notes and the 2020
Exchange Notes.
The terms of the Exchange Notes will be identical in all
material respects to the respective series of Original Notes for
which they have been exchanged, except:
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the Exchange Notes have been registered under the
U.S. federal securities laws and will not bear any legend
restricting their transfer;
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the Exchange Notes bear a different CUSIP number from the
Original Notes;
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the Exchange Notes generally will not be subject to transfer
restrictions and will not be entitled to registration
rights; and
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the holders of the Exchange Notes will not be entitled to earn
additional interest under circumstances relating to our
registration obligations under the registration rights agreement.
|
|
|
|
Issuer |
|
Fidelity National Information Services, Inc. |
|
Exchange Notes Offered |
|
$600,000,000 aggregate principal amount of 7.625% senior
notes due 2017. |
|
|
|
$500,000,000 aggregate principal amount of 7.875% senior
notes due 2020. |
|
Maturity Date |
|
The 2017 Exchange Notes will mature on July 15, 2017. The
2020 Exchange Notes will mature on July 15, 2020. |
|
Interest Payment |
|
Interest on the 2017 Exchange Notes will accrue at a rate of
7.625% per annum, payable semi-annually in cash in arrears on
January 15 and July 15 of each year, commencing January 15,
2011. |
|
|
|
Interest on the 2020 Exchange Notes will accrue at a rate of
7.875% per annum, payable semi-annually in cash in arrears on
January 15 and July 15 of each year, commencing January 15,
2011. |
|
Guarantors |
|
The Exchange Notes will be fully and unconditionally guaranteed
on a senior unsecured basis by each of our domestic subsidiaries
that is a guarantor under our amended credit facility. |
|
Ranking |
|
The Exchange Notes will be general unsecured obligations of the
Issuer and will (1) rank equally in right of payment with
all existing and future senior debt of the Issuer, (2) be
effectively junior to all of the Issuers existing and
future secured debt to the extent of the value of the assets
securing that secured debt, (3) be effectively junior to
all existing and future debt and liabilities of the
Issuers non-guarantor subsidiaries, and (4) rank
senior in right of payment to all |
5
|
|
|
|
|
of the Issuers future debt, if any, that is by its terms
expressly subordinated to the Notes. |
|
|
|
Each note guarantee is and will be a general unsecured
obligation of each guarantor and will (1) rank equally in
right of payment with all existing and future senior debt of
such guarantor, (2) be effectively junior to all of such
guarantors existing and future secured debt to the extent
of the value of the assets securing that secured debt and
(3) rank senior in right of payment to all existing and
future debt of such guarantor, if any, that is by its terms
expressly subordinated to such guarantors note guarantee. |
|
Optional Redemption |
|
On or after July 15, 2013, for the 2017 Notes, and
July 15, 2014, for the 2020 Notes, the Issuer may redeem
some or all of the applicable series of Notes at any time at the
redemption prices described in the section Description of
Exchange Notes Optional Redemption. Before
July 15, 2013, for the 2017 Notes, and July 15, 2014,
for the 2020 Notes, the Issuer may also redeem some or all of
the applicable series of Notes at a redemption price of 100% of
the principal amount plus accrued and unpaid interest, if any,
to the redemption date, plus a make-whole premium. |
|
|
|
Additionally, prior to July 15, 2013, the Issuer may redeem
up to 35% of the aggregate principal amount of either series of
the Notes with the net proceeds of specified equity offerings at
the redemption prices specified for the applicable series of
notes in the Description of Exchange Notes
Optional Redemption. |
|
Asset Sale Proceeds |
|
Upon certain sales of assets, we are required to make an offer
to purchase the Notes at 100% of the principal amount thereof,
plus accrued and unpaid interest. |
|
Change of Control |
|
If the Issuer experiences certain kinds of changes of control,
it must offer to purchase the Notes at 101% of their principal
amount, plus accrued and unpaid interest, in cash. For more
details, see the section Description of the Exchange
Notes Repurchase at the Option of
Holders Change of Control. |
|
Certain Covenants |
|
The indenture for the Notes contains covenants that limit, among
other things, the ability of the Issuer and its subsidiaries
to:
incur or guarantee additional indebtedness;
make certain restricted payments;
create or incur certain liens;
create restrictions on the payment of dividends or
other distributions to the Issuer from its restricted
subsidiaries;
engage in sale and leaseback transactions;
transfer all or substantially all of the assets of
the Issuer or any restricted subsidiary or enter into merger or
consolidation transactions; and
engage in certain transactions with affiliates.
|
|
|
|
These covenants are subject to certain important qualifications
and limitations described under the heading Description of
the Exchange Notes. Certain covenants will cease to apply
to a particular series of Notes at all times after such series
of notes has obtained investment grade ratings from both
Moodys Investors |
6
|
|
|
|
|
Service, Inc. (Moodys) and
Standard & Poors Ratings Group
(S&P); provided that at such time
no default has occurred and is continuing under the indenture. |
|
Absence of an Established Market for the Exchange Notes
|
|
The Exchange Notes generally are freely transferable but are
also new securities for which there is not initially a market.
We do not intend to list the Exchange Notes on any exchange or
maintain a trading market for them. Accordingly, there can be no
assurance as to the development or liquidity of any market for
the Exchange Notes. |
7
SUMMARY
HISTORICAL FINANCIAL DATA
The following tables set forth certain of our historical
financial data. The statement of earnings data for the years
ended December 31, 2007, 2008 and 2009 and the balance
sheet data as of December 31, 2009 have been derived from
our audited consolidated financial statements, which have been
audited by KPMG LLP, independent registered public accounting
firm, and which are incorporated by reference in this prospectus.
The statement of earnings data and the balance sheet data as of
September 30, 2010 and for the nine months ended
September 30, 2009 and 2010 have been derived from our
unaudited condensed consolidated financial statements
incorporated by reference in this prospectus. Our unaudited
financial statements have been prepared on a basis consistent
with our audited consolidated financial statements, and, in the
opinion of management, the historical unaudited statement of
earnings and balance sheet data set forth below reflect all
adjustments, consisting of normal and recurring adjustments,
necessary for a fair presentation of our financial position and
results of operations for those periods. The historical results
of operations for any period are not necessarily indicative of
the results to be expected for any future period. The following
information should be read in conjunction with our consolidated
financial statements and the related notes thereto and the
information under the caption Managements Discussion
and Analysis of Financial Condition and Results of
Operations in our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009, and in our
Quarterly Report on Form
10-Q for the
quarter ended September 30, 2010 (the
September 2010
10-Q),
which reports have been incorporated by reference in this
prospectus.
On October 1, 2009, we completed the acquisition of
Metavante Technologies, Inc. (Metavante, and
the Metavante Acquisition). The results of
operations and financial position of Metavante are included in
our consolidated financial statements since the date of the
acquisition.
On July 2, 2008, we completed the spin-off of our former
lender processing services segment into a separate publicly
traded company, Lender Processing Services, Inc.
(LPS, and the LPS
Spin-off). For accounting purposes, the results of LPS
are presented as discontinued operations. Accordingly all prior
periods have been restated to present the results of FIS on a
stand-alone basis and include the results of LPS up to
July 1, 2008 as discontinued operations.
On September 12, 2007, we completed the acquisition of
eFunds Corporation (eFunds, and the
eFunds Acquisition). The results of
operations and financial position of eFunds are included in our
consolidated financial statements since the date of acquisition.
FIDELITY
NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
CONDENSED HISTORICAL FINANCIAL INFORMATION
(In millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
September 30,
|
|
|
Year Ended December 31,
|
|
|
|
2010
|
|
|
2009(1)
|
|
|
2009(1)
|
|
|
2008
|
|
|
2007(2)
|
|
|
Statement of Earnings Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Processing and services revenues
|
|
$
|
3,873.2
|
|
|
$
|
2,428.1
|
|
|
$
|
3,769.5
|
|
|
$
|
3,427.7
|
|
|
$
|
2,892.9
|
|
Cost of revenues
|
|
|
2,680.9
|
|
|
|
1,822.2
|
|
|
|
2,800.6
|
|
|
|
2,689.3
|
|
|
|
2,315.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
1,192.3
|
|
|
|
605.9
|
|
|
|
968.9
|
|
|
|
738.4
|
|
|
|
577.6
|
|
Selling, general and administrative expenses
|
|
|
489.8
|
|
|
|
275.7
|
|
|
|
554.1
|
|
|
|
388.6
|
|
|
|
302.5
|
|
Impairment charges
|
|
|
154.9
|
|
|
|
|
|
|
|
136.9
|
|
|
|
26.0
|
|
|
|
13.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
547.6
|
|
|
|
330.2
|
|
|
|
277.9
|
|
|
|
323.8
|
|
|
|
261.6
|
|
Other income (expense)
|
|
|
(108.4
|
)
|
|
|
(86.3
|
)
|
|
|
(121.9
|
)
|
|
|
(155.7
|
)
|
|
|
102.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes and
equity in earnings (loss) of unconsolidated entities
|
|
|
439.2
|
|
|
|
243.9
|
|
|
|
156.0
|
|
|
|
168.1
|
|
|
|
363.7
|
|
Provision for income taxes
|
|
|
161.2
|
|
|
|
83.8
|
|
|
|
52.1
|
|
|
|
53.3
|
|
|
|
128.4
|
|
Equity in earnings (loss) of unconsolidated entities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
2.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing operations, net of tax
|
|
|
278.0
|
|
|
|
160.1
|
|
|
|
103.9
|
|
|
|
114.6
|
|
|
|
238.1
|
|
Earnings (loss) from discontinued operations, net of tax(3)
|
|
|
(32.4
|
)
|
|
|
1.2
|
|
|
|
4.6
|
|
|
|
104.9
|
|
|
|
323.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
September 30,
|
|
|
Year Ended December 31,
|
|
|
|
2010
|
|
|
2009(1)
|
|
|
2009(1)
|
|
|
2008
|
|
|
2007(2)
|
|
|
Net earnings
|
|
|
245.6
|
|
|
|
161.3
|
|
|
|
108.5
|
|
|
|
219.5
|
|
|
|
561.1
|
|
Net (earnings) loss attributable to noncontrolling interest
|
|
|
48.3
|
|
|
|
(1.5
|
)
|
|
|
(2.6
|
)
|
|
|
(4.7
|
)
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to FIS common stockholders
|
|
$
|
293.9
|
|
|
$
|
159.8
|
|
|
$
|
105.9
|
|
|
$
|
214.8
|
|
|
$
|
561.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The results of operations of
Metavante are included in earnings from October 1, 2009,
the date of the Metavante Acquisition.
|
|
|
|
(2)
|
|
The results of operations of eFunds
are included in earnings from September 12, 2007, the date
of the eFunds Acquisition.
|
|
|
|
(3)
|
|
Discontinued operations include the
results of operations of LPS, ClearPar, Certegy Australia, Ltd.,
Certegy Gaming Services, FIS Credit Services, Homebuilders
Financial Network and Property Insight through the day of
disposition.
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
2010
|
|
|
2009(1)
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
389.4
|
|
|
$
|
430.9
|
|
Goodwill
|
|
|
8,222.5
|
|
|
|
8,232.9
|
|
Other intangible assets
|
|
|
2,105.3
|
|
|
|
2,396.8
|
|
Total assets
|
|
|
13,555.7
|
|
|
|
13,997.6
|
|
Total long-term debt
|
|
|
5,096.3
|
|
|
|
3,253.3
|
|
Total FIS stockholders equity
|
|
|
6,260.7
|
|
|
|
8,308.9
|
|
Noncontrolling interest
|
|
|
160.2
|
|
|
|
209.7
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
$
|
6,420.9
|
|
|
$
|
8,518.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
On October 1, 2009, we consummated the Metavante
Acquisition. |
9
SUMMARY
UNAUDITED PRO FORMA FINANCIAL DATA
The following tables set forth certain pro forma financial data.
The summary unaudited pro forma financial data for the year
ended December 31, 2009 have been derived from our
consolidated financial statements, which have been audited by
KPMG LLP, independent registered public accounting firm, and are
incorporated by reference in this prospectus. The pro forma
statement of earnings data for the nine months ended
September 30, 2010 have been derived from our unaudited
condensed consolidated financial statements incorporated by
reference in this prospectus. The summary unaudited pro forma
consolidated financial data give effect to our recently
completed purchase of 86.2 million shares of our common
stock at a price of $29.00 per share (the Tender
Offer), as if such purchase had occurred on
January 1, 2009 for the condensed consolidated statement of
earnings for the year ended December 31, 2009, and give
effect to the Metavante Acquisition as if it had occurred
January 1, 2009. The summary unaudited pro forma
consolidated financial data for the nine months ended
September 30, 2010 give effect to the purchase of shares
pursuant to the Tender Offer, as if such purchase had occurred
on January 1, 2010 for the condensed consolidated statement
of earnings. Such pro forma data also assumes that the purchase
of shares pursuant to the Tender Offer is financed with the debt
transactions completed in June and July 2010 described in our
September 2010
10-Q, as if
such transactions had occurred on January 1 of each
respective year. Because the Tender Offer and the debt
transactions occurred prior to September 30, 2010, there
would be no pro forma adjustments to the balance sheet as of
that date and, therefore, one is not included herein.
The following information should be read in conjunction with the
information under the caption Summary
Historical Financial Data in this prospectus and the
Unaudited Pro Forma Condensed Combined Financial Information and
the related notes thereto included in our Current Report on
Form 8-K
filed with the SEC on October 2, 2009, and with the
consolidated financial statements of FIS and the related notes
thereto included in our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009 and our
September 2010
10-Q, which
financial statements have been incorporated by reference in this
prospectus. The summary unaudited pro forma financial data set
forth below are presented for informational purposes only,
should not be considered indicative of actual results of
operations that would have been achieved had the Metavante
Acquisition been consummated on the date indicated, and do not
purport to be indicative of our results of operations for any
future period. In addition, future results may vary
significantly from the results reflected in such statements due
to certain factors beyond our control. See Risk
Factors.
10
FIDELITY
NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31, 2009
|
|
|
|
|
|
|
Metavante:
|
|
|
Pro Forma
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1-
|
|
|
Adjustments
|
|
|
Combined
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
to Include
|
|
|
FIS and
|
|
|
Adjustments-
|
|
|
|
|
|
|
As Reported
|
|
|
2009
|
|
|
Metavante
|
|
|
Metavante
|
|
|
Recapitalization
|
|
|
Pro Forma
|
|
|
|
(In millions, except per share data)
|
|
|
Processing and services revenues
|
|
$
|
3,769.5
|
|
|
$
|
1,292.2
|
|
|
$
|
(78.6
|
)(e)(f)
|
|
$
|
4,983.1
|
|
|
|
|
|
|
$
|
4,983.1
|
|
Cost of revenues
|
|
|
2,800.6
|
|
|
|
830.1
|
|
|
|
85.9
|
(e)(g)
|
|
|
3,716.6
|
|
|
|
|
|
|
|
3,716.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
968.9
|
|
|
|
462.1
|
|
|
|
(164.5
|
)
|
|
|
1,266.5
|
|
|
|
|
|
|
|
1,266.5
|
|
Selling, general and administrative expenses
|
|
|
554.1
|
|
|
|
165.5
|
|
|
|
(23.5
|
)(e) (h)(i)
|
|
|
696.1
|
|
|
|
|
|
|
|
696.1
|
|
Impairment charges
|
|
|
136.9
|
|
|
|
|
|
|
|
|
|
|
|
136.9
|
|
|
|
|
|
|
|
136.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
277.9
|
|
|
|
296.6
|
|
|
|
(141.0
|
)
|
|
|
433.5
|
|
|
|
|
|
|
|
433.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
3.4
|
|
|
|
0.3
|
|
|
|
|
|
|
|
3.7
|
|
|
|
|
|
|
|
3.7
|
|
Interest expense
|
|
|
(134.0
|
)
|
|
|
(84.1
|
)
|
|
|
|
|
|
|
(218.1
|
)
|
|
$
|
(163.5
|
)(a)
|
|
|
(381.6
|
)
|
Other income (expense), net
|
|
|
8.7
|
|
|
|
0.4
|
|
|
|
|
|
|
|
9.1
|
|
|
|
(14.5
|
)(b)
|
|
|
(5.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
(121.9
|
)
|
|
|
(83.4
|
)
|
|
|
|
|
|
|
(205.3
|
)
|
|
|
(178.0
|
)
|
|
|
(383.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
156.0
|
|
|
|
213.2
|
|
|
|
(141.0
|
)
|
|
|
228.2
|
|
|
|
(178.0
|
)
|
|
|
50.2
|
|
Provision for income taxes
|
|
|
52.1
|
|
|
|
78.1
|
|
|
|
(47.1
|
)(c)
|
|
|
83.1
|
|
|
|
(59.4
|
)(c)
|
|
|
23.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations, net of tax
|
|
|
103.9
|
|
|
|
135.1
|
|
|
|
(93.9
|
)
|
|
|
145.1
|
|
|
|
(118.6
|
)
|
|
|
26.5
|
|
Earnings from discontinued operations, net of tax
|
|
|
4.6
|
|
|
|
|
|
|
|
|
|
|
|
4.6
|
|
|
|
|
|
|
|
4.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
108.5
|
|
|
|
135.1
|
|
|
|
(93.9
|
)
|
|
|
149.7
|
|
|
|
(118.6
|
)
|
|
|
31.1
|
|
Net earnings attributable to noncontrolling interest
|
|
|
(2.6
|
)
|
|
|
1.1
|
|
|
|
|
|
|
|
(1.5
|
)
|
|
|
|
|
|
|
(1.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to FIS common stockholders
|
|
$
|
105.9
|
|
|
$
|
136.2
|
|
|
$
|
(93.9
|
)
|
|
$
|
148.2
|
|
|
$
|
(118.6
|
)
|
|
$
|
29.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share-basic from continuing operations
attributable to FIS common stockholders
|
|
$
|
0.43
|
|
|
|
|
|
|
|
|
|
|
$
|
0.39
|
|
|
|
|
|
|
$
|
0.09
|
|
Net earnings per share-basic from discontinued operations
attributable to FIS common stockholders
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share-basic attributable to FIS common
stockholders
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
$
|
0.40
|
|
|
|
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding-basic
|
|
|
236.4
|
|
|
|
|
|
|
|
134.8
|
(j)
|
|
|
371.2
|
|
|
|
(79.8
|
)(d)
|
|
|
291.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share-diluted from continuing operations
attributable to FIS common stockholders
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
|
$
|
0.39
|
|
|
|
|
|
|
$
|
0.09
|
|
Net earnings per share-diluted from discontinued operations
attributable to FIS common stockholders
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share-diluted attributable to FIS common
stockholders
|
|
$
|
0.44
|
|
|
|
|
|
|
|
|
|
|
$
|
0.40
|
|
|
|
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding-diluted
|
|
|
239.4
|
|
|
|
|
|
|
|
134.8
|
(j)
|
|
|
374.2
|
|
|
|
(81.2
|
)(d)
|
|
|
293.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to FIS common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations, net of tax
|
|
$
|
101.3
|
|
|
$
|
136.2
|
|
|
$
|
(93.9
|
)
|
|
$
|
143.6
|
|
|
$
|
(118.6
|
)
|
|
$
|
25.0
|
|
Earnings from discontinued operations, net of tax
|
|
|
4.6
|
|
|
|
|
|
|
|
|
|
|
|
4.6
|
|
|
|
|
|
|
|
4.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to FIS
|
|
$
|
105.9
|
|
|
$
|
136.2
|
|
|
$
|
(93.9
|
)
|
|
$
|
148.2
|
|
|
$
|
(118.6
|
)
|
|
$
|
29.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
FIDELITY
NATIONAL INFORMATION SERVICES, INC.
AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended
|
|
|
|
September 30, 2010
|
|
|
|
|
|
|
Pro Forma
|
|
|
|
|
|
|
As Reported
|
|
|
Adjustments
|
|
|
Pro Forma
|
|
|
|
(In millions, except per share data)
|
|
|
Processing and services revenues
|
|
$
|
3,873.2
|
|
|
|
|
|
|
$
|
3,873.2
|
|
Cost of revenues
|
|
|
2,680.9
|
|
|
|
|
|
|
|
2,680.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
1,192.3
|
|
|
|
|
|
|
|
1,192.3
|
|
Selling, general and administrative expenses
|
|
|
489.8
|
|
|
|
|
|
|
|
489.8
|
|
Impairment charges
|
|
|
154.9
|
|
|
|
|
|
|
|
154.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
547.6
|
|
|
|
|
|
|
|
547.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(108.4
|
)
|
|
$
|
(106.1
|
)(a)
|
|
|
(214.5
|
)
|
Other income (expense), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
(108.4
|
)
|
|
|
(106.1
|
)
|
|
|
(214.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
439.2
|
|
|
|
(106.1
|
)
|
|
|
333.1
|
|
Provision for income taxes
|
|
|
161.2
|
|
|
|
(38.9
|
)(c)
|
|
|
122.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations, net of tax
|
|
|
278.0
|
|
|
|
(67.2
|
)
|
|
|
210.8
|
|
Loss from discontinued operations, net of tax
|
|
|
(32.4
|
)
|
|
|
|
|
|
|
(32.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
245.6
|
|
|
|
(67.2
|
)
|
|
|
178.4
|
|
Net (earnings) losses attributable to noncontrolling interest
|
|
|
48.3
|
|
|
|
|
|
|
|
48.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to FIS common stockholders
|
|
$
|
293.9
|
|
|
$
|
(67.2
|
)
|
|
$
|
226.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share-basic from continuing operations
attributable to FIS common stockholders
|
|
$
|
0.91
|
|
|
|
|
|
|
$
|
0.92
|
|
Net earnings (loss) per share-basic from discontinued operations
attributable to FIS common stockholders
|
|
|
(0.09
|
)
|
|
|
|
|
|
|
(0.11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share-basic attributable to FIS common
stockholders
|
|
$
|
0.82
|
|
|
|
|
|
|
$
|
0.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding-basic
|
|
|
360.5
|
|
|
|
(79.8
|
)(d)
|
|
|
280.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share-diluted from continuing operations
attributable to FIS common stockholders
|
|
$
|
0.89
|
|
|
|
|
|
|
$
|
0.91
|
|
Net earnings (loss) per share-diluted from discontinued
operations attributable to FIS common stockholders
|
|
|
(0.09
|
)
|
|
|
|
|
|
|
(0.11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share-diluted attributable to FIS common
stockholders
|
|
$
|
0.80
|
|
|
|
|
|
|
$
|
0.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding-diluted
|
|
|
367.7
|
|
|
|
(82.2
|
)(d)
|
|
|
285.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to FIS common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations, net of tax
|
|
$
|
326.3
|
|
|
$
|
(67.2
|
)
|
|
$
|
259.1
|
|
Loss from discontinued operations, net of tax
|
|
|
(32.4
|
)
|
|
|
|
|
|
|
(32.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to FIS common stockholders
|
|
$
|
293.9
|
|
|
$
|
(67.2
|
)
|
|
$
|
226.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
(a) |
|
Reflects the net increase in interest expense and debt issue
cost amortization, as follows: |
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
Year Ended
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Reverse interest expense recorded on existing debt facilities
|
|
$
|
(25.5
|
)
|
|
$
|
(87.1
|
)
|
Term Loan A
|
|
|
30.7
|
|
|
|
62.9
|
|
New Term Loan B
|
|
|
43.2
|
|
|
|
79.8
|
|
$1,100 million Notes
|
|
|
46.1
|
|
|
|
85.1
|
|
Extended Revolver
|
|
|
5.3
|
|
|
|
10.8
|
|
Amortization of debt issue costs
|
|
|
6.3
|
|
|
|
12.0
|
|
|
|
|
|
|
|
|
|
|
Incremental interest expense
|
|
$
|
106.1
|
|
|
$
|
163.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) |
|
For the year ended December 31, 2009, recognition of
$3.2 million loss on recapitalization of Term Loan B,
write-off of $0.9 million of deferred issue costs on
original Term Loan A, plus $10.4 million consent fees and
other costs associated with deemed extinguished debt. |
|
|
|
(c) |
|
Reflects the tax benefit associated with the pro forma
adjustments at an effective tax rate of 36.7% for the nine
months ended September 30, 2010 and 33.4% for the year
ended December 31, 2009. |
|
|
|
(d) |
|
Reflects the purchase of 79.8 million shares of common
stock (basic), plus the impact of the 6.4 million tendered
stock options on the diluted calculation, which added
1.4 million shares and 2.4 million shares for the year
ended December 31, 2009 and nine months ended
September 30, 2010, respectively. |
|
|
|
(e) |
|
To eliminate activity between FIS and Metavante and to conform
Metavantes classifications to those of FIS. |
|
(f) |
|
To reduce revenue $53.4 million for the fair value purchase
accounting adjustment to deferred revenue as if the acquisition
had occurred on January 1, 2009. |
|
(g) |
|
To reverse amortization of Metavante deferred conversion costs
of $10.1 million eliminated in purchase accounting, and to
record estimated intangible asset amortization and incremental
software amortization of $119.1 million for the nine-month
period. |
|
(h) |
|
To reverse Metavante intangible asset amortization originally
recorded for the nine-month period of $22.2 million, and to
reduce commission expense $6.0 million to conform
recognition of expense to FIS policy. |
|
(i) |
|
To account for the net increase in stock compensation expense of
$5.3 million that would have been recognized for the
nine-month period. |
|
(j) |
|
Reflects the issuance of shares to Metavante stockholders in
connection with the Metavante Acquisition and to THL and FNF in
connection with the private placement completed on
October 1, 2009 as if those issuances had been completed on
January 1, 2009. |
13
CONSOLIDATED
RATIO OF EARNINGS TO FIXED CHARGES
The following table reflects our consolidated ratio of earnings
to fixed charges for the periods indicated. Earnings included in
the calculation of this ratio consist of income from continuing
operations before income taxes and equity in earnings (losses)
of unconsolidated entities plus fixed charges and amortization
of capitalized interest, less interest capitalized. Fixed
charges include interest expense, capitalized interest,
amortization of debt issue costs, as well as the imputed
interest component of rental expense.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30
|
|
Year Ended December 31
|
|
|
2010
|
|
2009
|
|
2009
|
|
2008
|
|
2007
|
|
2006(1)
|
|
2005(1)
|
|
Ratio of earnings to fixed charges
|
|
|
4.1
|
|
|
|
3.0
|
|
|
|
1.9
|
|
|
|
1.8
|
|
|
|
2.6
|
|
|
|
1.0
|
|
|
|
0.4
|
|
|
|
|
(1) |
|
Ratio indicates less than
one-to-one
coverage. The deficiency is $10.1 million and
$83.5 million for 2006 and 2005, respectively. |
14
RISK
FACTORS
You should carefully consider the following risks and all of
the other information included in or incorporated by reference
in this prospectus, including the risk factors identified in our
Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009, and in our
June 2010
10-Q, before
deciding to exchange the Original Notes. The risks set out below
and incorporated by reference in this prospectus are not the
only risks we face. If any of these risks occurs, our business,
financial condition and results of operations could be
materially adversely affected. In such case, you may lose all or
part of your investment.
Risks
Related to the Exchange Notes and Exchange Offers
Our
substantial indebtedness could adversely affect our financial
condition or operating flexibility and prevent us from
fulfilling our obligations under our outstanding indebtedness
and the Exchange Notes.
As of September 30, 2010, we had total debt of
approximately $5.1 billion. Our substantial indebtedness
could have important consequences for you. For example, it could:
|
|
|
|
|
make it difficult for us to satisfy our obligations with respect
to the Exchange Notes or other outstanding indebtedness;
|
|
|
|
increase our vulnerability to general adverse economic and
industry conditions;
|
|
|
|
require us to dedicate a portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of cash flow to fund working capital, capital
expenditures, acquisitions and investments and other general
corporate purposes;
|
|
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make it difficult for us to optimally capitalize and manage the
cash flow for our businesses;
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limit our flexibility in planning for, or reacting to, changes
in our businesses and the markets in which we operate;
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place us at a competitive disadvantage compared to our
competitors that have less debt;
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limit, along with the financial and other restrictive covenants
in our indebtedness, among other things, our ability to borrow
additional funds or dispose of assets; and
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result in an event of default if we fail to satisfy our
obligations under the Exchange Notes or other debt or fail to
comply with the financial or other restrictive covenants
contained in the indenture governing the Exchange Notes or our
senior secured credit facility, which event of default could
result in all of our debt becoming due and payable and could
permit the lenders under our senior secured credit facility to
foreclose on the assets securing such debt.
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If future debt financing is not available to us when required or
is not available on acceptable terms, we may be unable to grow
our business, take advantage of business opportunities, respond
to competitive pressures or refinance maturing debt, any of
which could have a material adverse effect on our operating
results and financial condition.
The
covenants relating to the Exchange Notes and our senior secured
credit facility are limited and do not prohibit us from
incurring additional debt or taking other actions that could
exacerbate the risks described in the preceding risk factor or
otherwise negatively impact holders of the Exchange
Notes.
We may be able to incur substantially more debt in the future.
Although the indenture governing the Exchange Notes and the
agreements governing our senior secured credit facility and
other indebtedness each contain restrictions on our incurrence
of additional indebtedness, these restrictions are subject to a
number of qualifications and exceptions, and under certain
circumstances, indebtedness incurred in compliance with these
restrictions could be substantial. Also, the restrictions of the
indenture do not prevent us from incurring obligations that do
not constitute debt under the terms thereof. As of
September 30, 2010, we had approximately
$874.2 million of borrowing capacity available under our
existing FIS credit facility and $145.0 million available
for borrowing under the accounts receivable facility described
in our September 2010
10-Q under
the heading
15
Managements Discussion and Analysis of Financial
Condition and Results of Operations Financing.
To the extent new debt is added to our current levels, the risks
described above could substantially increase.
Our
holding company structure may impact your ability to receive
payment on the Exchange Notes.
We are a holding company with no significant operations or
material assets other than the capital stock of our
subsidiaries. As a result, our ability to repay our
indebtedness, including the Exchange Notes, is dependent on the
generation of cash flow by our subsidiaries and their ability to
make such cash available to us, by dividend, distribution, loan,
debt repayment or otherwise. Unless they are guarantors of the
Exchange Notes, our subsidiaries do not have any obligation to
pay amounts due on the Exchange Notes or to make funds available
for that purpose. In addition, our subsidiaries may not be able
to, or be permitted to, make distributions to enable us to make
payments in respect of our indebtedness, including the Exchange
Notes. Each of our subsidiaries is a distinct legal entity, and,
under certain circumstances, legal and contractual restrictions,
as well as the financial condition and operating requirements of
our subsidiaries, may limit our ability to obtain cash from our
subsidiaries. Further, while the guarantors will unconditionally
guarantee the Exchange Notes, such guarantees could be rendered
unenforceable for the reasons described in A
court could void our subsidiaries guarantees of the
Exchange Notes under fraudulent transfer laws.
Effective
subordination of the Exchange Notes and the guarantees to
substantially all of our existing and future secured debt and
the existing and future secured debt of the guarantors may
reduce amounts available for payment of the Exchange Notes and
the guarantees.
The Exchange Notes and the guarantees are unsecured.
Accordingly, the Exchange Notes will effectively rank junior to
all of our secured obligations and, so long as the guarantees
are in effect, a guarantors guarantees will effectively
rank junior to all of that guarantors secured obligations,
in each case, to the extent of the assets securing those
obligations. In the event of bankruptcy, liquidation or similar
proceeding, or if payment under any secured obligation is
accelerated, claims of any secured creditors for the assets
securing the obligation will be prior to any claim of the
holders of the Exchange Notes for these assets. After the claims
of the secured creditors are satisfied, there may not be assets
remaining to satisfy our obligations under the Exchange Notes or
the guarantees. As of September 30, 2010, we and our
subsidiaries had $3,974.9 million in secured indebtedness,
including $3,958.9 million under the FIS Credit Agreement
and $16.0 million in capital lease obligations. The
indenture governing the Exchange Notes permits us and our
subsidiaries to incur additional secured debt under specified
circumstances.
Effective
subordination of the Exchange Notes and the guarantees to
indebtedness of our existing and future non-guarantor
subsidiaries may reduce amounts available for payment of the
Exchange Notes and the guarantees.
The Exchange Notes and the guarantees will also be effectively
subordinated to the unsecured indebtedness and other liabilities
of our subsidiaries that are not guarantors and of those
guarantors whose guarantees of the Exchange Notes are released
or terminated. Except to the extent that we or a guarantor is a
creditor with recognized claims against our other subsidiaries,
all claims of creditors (including trade creditors) and holders
of preferred stock, if any, of our other subsidiaries will have
priority with respect to the assets of such subsidiaries over
our and the guarantors claims (and therefore the claims of
our creditors, including holders of the Exchange Notes). As of
September 30, 2010, our subsidiaries (other than the
guarantors) had approximately $528.4 million of liabilities
(including $108.1 million of deferred revenue).
A
court could void our subsidiaries guarantees of the
Exchange Notes under fraudulent transfer laws.
Although the guarantees provide you with a direct claim against
the assets of the subsidiary guarantors, under the federal
bankruptcy laws and comparable provisions of state fraudulent
transfer laws, a guarantee could be voided, or claims with
respect to a guarantee could be subordinated to all other debts
of that guarantor. In addition, a bankruptcy court could void
(i.e., cancel) any payments by that guarantor pursuant to its
guarantee and require those payments to be returned to the
guarantor or to a fund for the benefit of the other creditors of
the guarantor. Each guarantee will contain a provision intended
to limit the guarantors
16
liability to the maximum amount that it could incur without
causing the incurrence of obligations under its guarantee to be
a fraudulent transfer. This provision may not be effective to
protect the guarantees from being voided under fraudulent
transfer law, or may eliminate the guarantors obligations
or reduce the guarantors obligations to an amount that
effectively makes the guarantee worthless.
The bankruptcy court might take these actions if it found, among
other things, that when a subsidiary guarantor executed its
guarantee (or, in some jurisdictions, when it became obligated
to make payments under its guarantee):
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such subsidiary guarantor received less than reasonably
equivalent value or fair consideration for the incurrence of its
guarantee; and
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such subsidiary guarantor:
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was (or was rendered) insolvent by the incurrence of the
guarantee;
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was engaged or about to engage in a business or transaction for
which its assets constituted unreasonably small capital to carry
on its business;
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intended to incur, or believed that it would incur, obligations
beyond its ability to pay as those obligations matured; or
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was a defendant in an action for money damages, or had a
judgment for money damages docketed against it and, in either
case, after final judgment, the judgment was unsatisfied.
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A bankruptcy court would likely find that a subsidiary guarantor
received less than fair consideration or reasonably equivalent
value for its guarantee to the extent that it did not receive
direct or indirect benefit from the issuance of the Exchange
Notes. A bankruptcy court could also void a guarantee if it
found that the subsidiary issued its guarantee with actual
intent to hinder, delay or defraud creditors.
Although courts in different jurisdictions measure solvency
differently, in general, an entity would be deemed insolvent if
the sum of its debts, including contingent and unliquidated
debts, exceeds the fair value of its assets, or if the present
fair salable value of its assets is less than the amount that
would be required to pay the expected liability on its debts,
including contingent and unliquidated debts, as they become due.
If a court voided a guarantee, it could require that noteholders
return any amounts previously paid under such guarantee. If any
guarantee were voided, noteholders would retain their rights
against us and any other subsidiary guarantors, although there
is no assurance that those entities assets would be
sufficient to pay the Exchange Notes in full.
The
guarantees will be released under certain
circumstances.
On the issue date, the Exchange Notes will be guaranteed by any
of our subsidiaries that is a borrower under or is a guarantor
of obligations under our amended FIS credit facility. Upon the
occurrence of certain events, including if the obligations of
any guarantor as a borrower and guarantor under such credit
agreements terminate or are released, such guarantors
guarantee of the Exchange Notes will also be released. See
Description of Exchange Notes
Guarantees. In such event, the risks applicable to our
subsidiaries that are not guarantors upon consummation of the
offering will also be applicable to such guarantor.
Our
foreign subsidiaries may become borrowers under our existing
credit agreement without guaranteeing the Exchange
Notes.
Under the terms of our existing credit agreement, we may
designate foreign subsidiaries as borrowers, and such foreign
subsidiaries would not be required to guarantee the Exchange
Notes. As of the time of these offerings, each of our
subsidiaries that is a borrower or a guarantor under our
existing credit agreement is a domestic subsidiary, and will be
a guarantor guaranteeing the Exchange Notes. However, if a
foreign subsidiary is designated as a borrower under our credit
agreement and borrows under the credit agreement, the Exchange
Notes and the guarantees will be effectively subordinated to the
claims of the lenders under the credit agreement with respect to
such borrowings and with respect to the assets of such foreign
subsidiary.
17
If on
any date following the issuance of the Exchange Notes the
Exchange Notes of either series have investment grade ratings,
many of the restrictive covenants will cease to be in
effect.
If on any date following the issuance of the Exchange Notes, the
Exchange Notes of either series are rated at least BBB-(or the
equivalent) by S&P and at least Baa3 (or the equivalent) by
Moodys and certain other conditions are met, many of the
restrictive covenants in the indenture will cease to be in
effect with respect to such series of notes. We cannot assure
you that the Exchange Notes will ever be rated investment grade
or that, if they are, that they will maintain such ratings.
Termination of these covenants would allow us to engage in
certain actions that would not be permitted while these
covenants are in effect and any such actions that we take after
the covenants are terminated will be permitted even if the
Exchange Notes of the applicable series subsequently fail to
maintain investment grade ratings. See Description of
Exchange Notes Certain Covenants.
The
credit ratings assigned to the Exchange Notes may not reflect
all risks of an investment in the Exchange Notes.
The credit ratings assigned to the Exchange Notes reflect the
rating agencies assessments of our ability to make
payments on the Exchange Notes when due. Consequently, actual or
anticipated changes in these credit ratings will generally
affect the market value of the Exchange Notes. These credit
ratings, however, may not reflect the potential impact of risks
related to structure, market or other factors related to the
value of the Exchange Notes.
We may
not be able to repurchase the Exchange Notes upon a change of
control.
We may not be able to repurchase the Exchange Notes upon a
change of control because we may not have sufficient funds. Upon
certain kinds of changes of control, holders of the Exchange
Notes may require us to make offers to purchase the Exchange
Notes for cash at a purchase price equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid
interest. Our failure to purchase tendered notes upon the
occurrence of such changes of control would result in an event
of default under the indenture governing the Exchange Notes and
a cross-default under the agreements governing certain of our
other indebtedness which may result in the acceleration of such
indebtedness requiring us to repay that indebtedness
immediately. If such a change of control were to occur, we may
not have sufficient funds to repay any such accelerated
indebtedness, which may give the lenders under our senior
secured credit facility the ability to foreclose on the assets
securing such debt. In addition, you may not be able to require
us to repurchase the Exchange Notes under the change of control
provisions in the indenture in the event of certain important
corporate events, such as a leveraged recapitalization (which
would increase the level of our indebtedness, potentially
resulting in a downgrade of our credit ratings, thereby
negatively affecting the value of the Exchange Notes),
reorganization, restructuring, merger or other similar
transaction, unless such transaction constitutes a change
of control under the indenture. Such a transaction may not
involve a change in voting power or beneficial ownership or,
even if it does, may not involve a change that constitutes a
change of control that would trigger our obligation
to repurchase the Exchange Notes. Therefore, if an event occurs
that does not constitute a change of control, as
defined in the indenture, we will not be required to make offers
to repurchase the Exchange Notes and you may be required to
continue to hold your Exchange Notes despite the event. See
Description of Exchange Notes Change of
Control.
If an
active trading market does not develop for the Exchange Notes,
you may be unable to sell the Exchange Notes or to sell them at
a price you deem sufficient.
The Exchange Notes will be securities for which there is no
established trading market. We do not intend to list the
Exchange Notes on any exchange or maintain a trading market for
them. We give no assurance as to:
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the liquidity of any trading market that may develop;
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the ability of holders to sell their Exchange Notes; or
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the price at which holders would be able to sell their Exchange
Notes.
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18
Even if a trading market develops, the Exchange Notes may trade
at higher or lower prices than their principal amount or
purchase price, depending on many factors, including:
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prevailing interest rates;
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the number of holders of the Exchange Notes;
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the interest of securities dealers in making a market for the
Exchange Notes;
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the market for similar debt securities; and
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our financial performance.
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You
may not receive the Exchange Notes in the exchange offers if the
exchange offer procedures are not properly
followed.
We will issue the Exchange Notes in exchange for your Original
Notes only if you properly tender the Original Notes before
expiration of the exchange offers. Neither we nor the exchange
agent are under any duty to give notification of defects or
irregularities with respect to the tenders of the Original Notes
for exchange. If you are the beneficial holder of Original Notes
that are held through your broker, dealer, commercial bank,
trust company or other nominee, and you wish to tender such
notes in the exchange offers, you should promptly contact the
person through whom your Original Notes are held and instruct
that person to tender on your behalf.
Broker-dealers
may become subject to the registration and prospectus delivery
requirements of the Securities Act and any profit on the resale
of the Exchange Notes may be deemed to be underwriting
compensation under the Securities Act.
Any broker-dealer that acquires Exchange Notes in the exchange
offers for its own account in exchange for Original Notes which
it acquired through market-making or other trading activities
must acknowledge that it will comply with the registration and
prospectus delivery requirements of the Securities Act in
connection with any resale transaction by that broker-dealer.
Any profit on the resale of the Exchange Notes and any
commission or concessions received by a broker-dealer may be
deemed to be underwriting compensation under the Securities Act.
If you
do not exchange your Original Notes, they may be difficult to
resell.
If you do not exchange your Original Notes for Exchange Notes in
the exchange offers, the Original Notes you hold will continue
to be subject to the existing transfer restrictions described in
the legend on the global security representing the outstanding
Original Notes. These restrictions on transfer exist because we
issued the Original Notes pursuant to an exemption from the
registration requirements of the Securities Act and applicable
state securities laws. The Original Notes that are not exchanged
for Exchange Notes will remain restricted securities.
Accordingly, those Original Notes may not be offered or sold,
unless registered under the Securities Act and applicable state
securities laws, except pursuant to an exemption from, or in a
transaction not subject to, the Securities Act and applicable
state securities laws. Because we anticipate that most holders
of Original Notes will elect to participate in the exchange
offers, we expect that the liquidity of the market for the
Original Notes after the completion of the exchange offers may
be substantially limited. Any Original Notes tendered and
exchanged in the exchange offers will reduce the aggregate
principal amount of the Original Notes not exchanged.
19
USE OF
PROCEEDS
We will not receive cash proceeds from the issuance of the
Exchange Notes in connection with the exchange offers. In
consideration for issuing the Exchange Notes in exchange for
Original Notes as described in this prospectus, we will receive
Original Notes of the respective series of equal principal
amount. The Original Notes surrendered in exchange for the
Exchange Notes will be retired and cancelled. We will pay all
expenses incident to the exchange offers.
20
DESCRIPTION
OF THE EXCHANGE NOTES
On July 16, 2010 we issued in private placements
(i) $600,000,000 aggregate principal amount of
7.625% senior notes due 2017 and (ii) $500,000,000
aggregate principal amount of 7.875% senior notes due 2020.
The Original Notes were not registered under the Securities Act
and were issued, and the Exchange Notes will be issued, under an
Indenture, dated as of July 16, 2010 (the
Indenture), among FIS, the Guarantors and The
Bank of New York Mellon Trust Company, N.A., as Trustee for
both series of Notes. For purposes of this section of this
prospectus, references to the Company,
we, us, our or similar terms
refer solely to Fidelity National Information Services, Inc.,
and not its subsidiaries. Unless the context otherwise requires,
the term Notes refers collectively to the Exchange
Notes and the Original Notes; the term 2017
Notes refers collectively to the 2017 Original Notes
and the 2017 Exchange Notes; and the term 2020
Notes refers collectively to the 2020 Original Notes
and the 2020 Exchange Notes.
The terms of the Exchange Notes are identical in all material
respects with the respective series of Original Notes for which
they have been exchanged, except that:
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the Exchange Notes have been registered under the
U.S. federal securities laws and will not bear any legend
restricting their transfer;
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the Exchange Notes bear a different CUSIP number from the
Original Notes;
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the Exchange Notes generally will not be subject to transfer
restrictions and will not be entitled to registration
rights; and
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the holders of the Exchange Notes will not be entitled to earn
additional interest under circumstances relating to our
registration obligations under the registration rights agreement.
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The Exchange Notes will evidence the same debt as the Original
Notes. Holders of Exchange Notes will be entitled to the
benefits of the indenture.
The statements under this caption relating to the Indenture and
the Notes are summaries and are not a complete description
thereof, and where reference is made to particular provisions,
such provisions, including the definitions of certain terms, are
qualified in their entirety by reference to all of the
provisions of the Indenture and the Notes and those terms made
part of the Indenture by the Trust Indenture Act of 1939,
as amended (the Trust Indenture Act).
Because this is a summary, it may not contain all of the
information that is important to you. You should read the
Indenture in its entirety. The definitions of certain
capitalized terms used in the following summary are set forth
below under Certain Definitions. Unless
otherwise indicated, references under this caption to Sections
or Articles are references to sections and articles of the
Indenture. Copies of the Indenture are available upon request
from the Company.
General
In the exchange offers, we are offering to exchange (i) up
to $600,000,000 in aggregate principal amount of our 2017
Exchange Notes for an equal principal amount of the 2017
Original Notes and (ii) up to $500,000,000 in aggregate
principal amount of our 2020 Exchange Notes for an equal
principal amount of the 2020 Original Notes. Subject to the
limitations described below under the covenant Limitation
on Incurrence of Debt, the Company may issue additional
notes (the Additional Notes) of either series
under the Indenture having the same terms as such series of
Notes except that interest will accrue on any Additional Notes
from their date of issuance. The Exchange Notes of a particular
series, together with any Original Notes of such series that
remain outstanding after the respective exchange offer and any
Additional Notes of such series subsequently issued under the
Indenture, will be treated as a single class for all purposes of
the Indenture, including, without limitation, waivers,
amendments, redemptions and offers to purchase.
Principal,
Maturity and Interest
Interest on the 2017 Notes will be payable at 7.625% per annum
and interest on the 2020 Notes will be payable at 7.875% per
annum. Interest on the Notes will be payable semi-annually in
cash in arrears on January 15 and July 15, commencing on
January 15, 2011. The Company will make each interest
payment to
21
the Holders of record of the Notes on the immediately preceding
January 1 and July 1. 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 and including the Issue Date.
Interest will be computed on the basis of a
360-day year
comprised of twelve
30-day
months.
Principal of and premium, if any, and interest on the Notes will
be payable, and the Notes will be exchangeable and transferable,
at the office or agency of the Company maintained for such
purposes, which, initially, will be the corporate trust office
of the Trustee in New York, New York; provided,
however, that payment of interest with respect to either
series of Notes may be made at the option of the Company by
check mailed to the Person entitled thereto as shown on the
security register or in accordance with the procedures of The
Depository Trust Company (DTC) for
global book-entry Notes. The Notes will be issued only in fully
registered form without coupons, in denominations of $2,000 and
any integral multiple of $1,000 in excess thereof. No service
charge will be made for any registration of transfer, exchange
or redemption of the Notes, except in certain circumstances for
any tax or other governmental charge that may be imposed in
connection therewith.
Guarantees
The Notes and any and all amounts due under the Indenture will
be guaranteed, on a full, joint and several basis, by the
Guarantors pursuant to a guarantee (the Note
Guarantees). On the Issue Date, each of our wholly
owned domestic Subsidiaries that guarantees our obligations
under the Credit Agreement will be Guarantors. None of our
Foreign Subsidiaries will guarantee the Notes. The Note
Guarantees will be senior obligations of each Guarantor and will
rank equal with all existing and future senior Debt of such
Guarantor and senior to all subordinated Debt of such Guarantor.
The Note Guarantees are effectively subordinated to any secured
Debt of such Guarantor to the extent of the assets securing such
Debt.
The Indenture provides that the obligations of a Guarantor under
its applicable Note Guarantee will be limited to the maximum
amount as will result in the obligations of such Guarantor under
the Note Guarantee not to be deemed to constitute a fraudulent
conveyance or fraudulent transfer under federal or state law. By
virtue of this limitation, a Guarantors obligations under
its Note Guarantees could be significantly less than amounts
payable with respect to the Notes, or a Guarantor may have
effectively no obligation under its Note Guarantees. See
Risk Factors Risk Factors Related to the
Exchange Notes and Exchange Offers.
On the Issue Date, all of our Subsidiaries will be
Restricted Subsidiaries. However, under the
circumstances described below under the subheading
Certain Covenants Limitation on
Creation of Unrestricted Subsidiaries, any of our
Subsidiaries may be designated as Unrestricted
Subsidiaries. Unrestricted Subsidiaries will not be
subject to many of the restrictive covenants in the Indenture
and will not guarantee the Notes. Claims of creditors of
non-guarantor Subsidiaries, including trade creditors, secured
creditors and creditors holding Debt and guarantees issued by
those Subsidiaries, and claims of preferred stockholders (if
any) of those Subsidiaries generally will have priority with
respect to the assets and earnings of those Subsidiaries over
the claims of creditors of the Company, including Holders of the
Notes.
The Note Guarantee of a Guarantor with respect to a series of
Notes will terminate and be discharged and of no further force
and effect and the applicable Guarantor will be automatically
and unconditionally released from all of its obligations
thereunder:
(1) concurrently with any direct or indirect sale or other
disposition (including by way of consolidation, merger or
otherwise) of the Guarantor or the sale or disposition
(including by way of consolidation, merger or otherwise) of all
or substantially all the assets of the Guarantor (other than to
the Company or a Restricted Subsidiary) as permitted by the
Indenture;
(2) upon the designation in accordance with the Indenture
of the Guarantor as an Unrestricted Subsidiary;
(3) at any time that such Guarantor is released from all of
its obligations (other than contingent indemnification
obligations that may survive such release) under all of its
Guarantees of all Debt of the
22
Company under the Credit Facilities except a discharge by or as
a result of payment under such Guarantee;
(4) upon the merger or consolidation of any Guarantor with
and into the Company or a Guarantor that is the surviving Person
in such merger or consolidation, or upon the liquidation of such
Guarantor following or contemporaneously with the transfer of
all of its assets to the Company or a Restricted Subsidiary, all
in accordance with the provisions of the Indenture;
(5) upon the defeasance or discharge of the Notes of such
series, as provided in the Indenture or upon satisfaction and
discharge of the Indenture; or
(6) upon the prior consent of the Holders of all the Notes
of such series then outstanding.
Not all of our Subsidiaries will guarantee the Notes. For the
nine months ended September 30, 2010, the non-Guarantor
Subsidiaries experienced a net loss. The positive net income of
the Company and its Restricted Subsidiaries was contributed by
the Guarantor Subsidiaries and parent company.
Ranking
The Notes will be general unsecured obligations of the Company.
As a result, the Notes will:
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rank equally in right of payment with all existing and future
senior Debt of the Company;
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be effectively junior to all secured Debt of the Company to the
extent of the value of the assets securing such Debt;
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be effectively junior to all existing and future Debt and other
liabilities, including trade payables, of the Companys
non-Guarantor Subsidiaries (other than any Debt owed to the
Company or any Restricted Subsidiary, if any), including the
Companys Foreign Subsidiaries and any Unrestricted
Subsidiaries; and
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rank senior in right of payment to all of the Companys
future Debt that is by its terms expressly subordinated to the
Notes.
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Each Note Guarantee is and will be a general unsecured
obligation of each Guarantor. As such, each Note Guarantee will:
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rank equally in right of payment with all existing and future
senior Debt of the Guarantors;
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rank senior in right of payment to all existing and future Debt
of the Guarantors, if any, that are by their terms expressly
subordinated to such Guarantors Note Guarantee; and
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be effectively subordinated to all secured Debt of such
Guarantors, to the extent of the value of the Guarantors
assets securing such Debt.
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As of September 30, 2010, the Company and its Subsidiaries
had total Debt of approximately $5,096.3 million, of which
(i) approximately $1,100 million is senior Debt
represented by the Notes offered hereby; (ii) approximately
$3,958.9 million is senior secured Debt issued and
outstanding under the Credit Facility, which includes
outstanding revolving credit loans in the approximate amount of
$144.5 million out of an aggregate revolving credit
commitment of $1,033.7 million (such Credit Facility also
has provisions that contemplate the possible addition of a
further $750 million in loan commitments subject to
obtaining such additional commitments); (iii) Capital Lease
Obligations in the aggregate amount of approximately
$16.0 million; and (iv) approximately
$21.4 million in other debt. In addition, the Company has
in place, through one of its wholly owned Subsidiaries, an
accounts receivable securitization facility, which, as of
September 30, 2010, had no outstanding obligations, but
which had committed funding availability of $145 million
(with provisions that contemplate the possible addition of a
further $55 million in funding availability subject to
obtaining additional funding commitments). As of
September 30, 2010, the Companys Foreign Subsidiaries
had outstanding Debt in the approximate amount of
$21.8 million. Although the Indenture contains limitations
on the amount of additional Debt that the Company and its
Restricted Subsidiaries may incur, the amount of additional Debt
could be substantial. See Certain
Covenants Limitation on
23
Incurrence of Debt and Managements Discussion
and Analysis of Financial Condition and Results of
Operations Financing, in our September 2010
10-Q.
In addition, substantially all of the operations of the Company
are conducted through its Subsidiaries. The Companys
Foreign Subsidiaries will not guarantee the Notes. Although the
Indenture limits the Incurrence of Debt and Redeemable Capital
Interests of Restricted Subsidiaries, the limitation is subject
to a number of significant exceptions. Moreover, the Indenture
does not impose any limitation on the incurrence by Restricted
Subsidiaries of liabilities that are not considered Debt or
Redeemable Capital Interests under the Indenture. See
Certain Covenants Limitation on
Incurrence of Debt.
Sinking
Fund
There are no mandatory sinking fund payment obligations with
respect to the Notes.
Optional
Redemption
2017
Notes
The 2017 Notes may be redeemed, in whole or in part, at any time
and on one or more occasions prior to July 15, 2013, at the
option of the Company upon not less than 30 (or such shorter
period as is acceptable to the Trustee) nor more than
60 days prior notice mailed by first-class mail to
each Holders registered address or sent in accordance with
the procedures of DTC for global book-entry notes, at a
Redemption Price equal to 100% of the principal amount of
the 2017 Notes to be redeemed plus the 2017 Note Applicable
Premium as of, and accrued and unpaid interest, if any, 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).
In addition, the 2017 Notes may be redeemed, in whole or in
part, at any time and on one or more occasions on or after
July 15, 2013, at the option of the Company upon not less
than 30 (or such shorter period as is acceptable to the Trustee)
nor more than 60 days notice at the following
Redemption Prices (expressed as percentages of the
principal amount to be redeemed) set forth below, plus accrued
and unpaid interest, if any, to, but not including, the
redemption date (subject to the right of Holders of record on
the relevant regular record date to receive interest due on an
interest payment date that is on or prior to the redemption
date), if redeemed during the
12-month
period beginning on July 15 of the years indicated:
|
|
|
|
|
|
|
Redemption
|
Year
|
|
Price
|
|
2013
|
|
|
105.719
|
%
|
2014
|
|
|
103.813
|
%
|
2015
|
|
|
101.906
|
%
|
2016 and thereafter
|
|
|
100.000
|
%
|
In addition to the optional redemption provisions of the 2017
Notes described in the two preceding paragraphs, prior to
July 15, 2013, the Company may, with the net proceeds of
one or more Qualified Equity Offerings, redeem up to 35% of the
aggregate principal amount of the outstanding 2017 Notes
(including Additional Notes of such series) at a
Redemption Price equal to 107.625% of the principal amount
thereof, plus accrued and unpaid interest thereon, if any, to
the date of redemption; provided that at least 65% of the
aggregate principal amount of 2017 Notes originally issued under
the Indenture (including Additional Notes of such series)
remains outstanding immediately after the occurrence of any such
redemption (excluding 2017 Notes held by the Company or its
Subsidiaries) and that any such redemption occurs within
120 days following the closing of any such Qualified Equity
Offering.
If less than all of the 2017 Notes are to be redeemed, the
Trustee will select the 2017 Notes or portions thereof to be
redeemed by lot, pro rata or by any other method customarily
authorized by the clearing systems (subject to DTC, Euroclear
and/or
Clearstream procedures, as applicable).
No 2017 Notes of $2,000 or less shall be redeemed in part and no
redemption shall result in a Holder holding a 2017 Note of less
than $2,000. Notices of redemption shall be sent to DTC, in the
case of
24
2017 Notes issued in global book-entry form, or shall be
mailed by first class mail, in the case of certificated
2017 Notes (and, to the extent permitted by applicable
procedures or regulations, electronically) at least 30 days
(or such shorter period as is acceptable to the Trustee) before
the redemption date to each Holder of 2017 Notes to be redeemed
at its registered address. If any 2017 Note is to be redeemed in
part only, the notice of redemption that relates to that 2017
Note shall state the portion of the principal amount thereof to
be redeemed. In the case of certificated 2017 Notes, a new 2017
Note in principal amount equal to the unredeemed portion of the
original 2017 Note will be issued in the name of the Holder
thereof upon cancellation of the original 2017 Note. 2017 Notes
called for redemption become due on the date fixed for
redemption. In the case of global 2017 Notes issued in
book-entry form, the outstanding balance of any such global 2017
Note shall be adjusted by the Trustee to reflect such
redemption. On and after the redemption date, interest ceases to
accrue on 2017 Notes or portions of them called for redemption.
The Company may at any time, and from time to time, purchase
2017 Notes in the open market or otherwise, at different market
prices, subject to compliance with applicable securities laws.
2020
Notes
The 2020 Notes may be redeemed, in whole or in part, at any time
and on one or more occasions prior to July 15, 2014, at the
option of the Company upon not less than 30 (or such shorter
period as is acceptable to the Trustee) nor more than
60 days prior notice mailed by first-class mail to
each Holders registered address or sent in accordance with
the procedures of DTC for global book-entry notes, at a
Redemption Price equal to 100% of the principal amount of
the 2020 Notes to be redeemed plus the 2020 Note Applicable
Premium as of, and accrued and unpaid interest, if any, 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).
In addition, the 2020 Notes may be redeemed, in whole or in
part, at any time and on one or more occasions on or after
July 15, 2014, at the option of the Company upon not less
than 30 (or such shorter period as is acceptable to the Trustee)
nor more than 60 days notice at the following
Redemption Prices (expressed as percentages of the
principal amount to be redeemed) set forth below, plus accrued
and unpaid interest, if any, to, but not including, the
redemption date (subject to the right of Holders of record on
the relevant regular record date to receive interest due on an
interest payment date that is on or prior to the redemption
date), if redeemed during the
12-month
period beginning on July 15 of the years indicated:
|
|
|
|
|
|
|
Redemption
|
|
Year
|
|
Price
|
|
|
2014
|
|
|
105.906
|
%
|
2015
|
|
|
103.938
|
%
|
2016
|
|
|
101.969
|
%
|
2017 and thereafter
|
|
|
100.000
|
%
|
In addition to the optional redemption provisions of the 2020
Notes described in the two preceding paragraphs, prior to
July 15, 2013, the Company may, with the net proceeds of
one or more Qualified Equity Offerings, redeem up to 35% of the
aggregate principal amount of the outstanding 2020 Notes
(including Additional Notes of such series) at a
Redemption Price equal to 107.875% of the principal amount
thereof, plus accrued and unpaid interest thereon, if any, to
the date of redemption; provided that at least 65% of the
aggregate principal amount of 2020 Notes originally issued under
the Indenture (including Additional Notes of such series)
remains outstanding immediately after the occurrence of any such
redemption (excluding 2020 Notes held by the Company or its
Subsidiaries) and that any such redemption occurs within
120 days following the closing of any such Qualified Equity
Offering.
If less than all of the 2020 Notes are to be redeemed, the
Trustee will select the 2020 Notes or portions thereof to be
redeemed by lot, pro rata or by any other method customarily
authorized by the clearing systems (subject to DTC, Euroclear
and/or
Clearstream procedures, as applicable).
No 2020 Notes of $2,000 or less shall be redeemed in part and no
redemption shall result in a Holder holding a 2020 Note of less
than $2,000. Notices of redemption shall be sent to DTC, in the
case of
25
2020 Notes issued in global book-entry form, or shall be
mailed by first class mail, in the case of certificated
2020 Notes (and, to the extent permitted by applicable
procedures or regulations, electronically) at least 30 days
(or such shorter period as is acceptable to the Trustee) before
the redemption date to each Holder of 2020 Notes to be redeemed
at its registered address. If any 2020 Note is to be redeemed in
part only, the notice of redemption that relates to that 2020
Note shall state the portion of the principal amount thereof to
be redeemed. In the case of certificated 2020 Notes, a new 2020
Note in principal amount equal to the unredeemed portion of the
original 2020 Note will be issued in the name of the Holder
thereof upon cancellation of the original 2020 Note. 2020 Notes
called for redemption become due on the date fixed for
redemption. In the case of global 2020 Notes issued in
book-entry form, the outstanding balance of any such global 2020
Note shall be adjusted by the Trustee to reflect such
redemption. On and after the redemption date, interest ceases to
accrue on 2020 Notes or portions of them called for redemption.
The Company may at any time, and from time to time, purchase
2020 Notes in the open market or otherwise, at different market
prices, subject to compliance with applicable securities laws.
Repurchase
at the Option of Holders
Change
of Control
Each series of Notes provides that if a Change of Control
occurs, unless the Company has previously or concurrently mailed
a redemption notice with respect to all the outstanding Notes of
such series as described above under the caption
Optional Redemption, the Company will
make a written offer to purchase all of the Notes of such series
pursuant to the offer described below (the Change of
Control Offer) at a Change of Control Purchase Price
in cash equal to 101% of the aggregate principal amount thereof
plus, in each case, accrued and unpaid interest and Additional
Interest, if any, to the date of purchase, subject to the right
of Holders of record of such series of Notes on the relevant
record date to receive interest due on the relevant interest
payment date. The Change of Control Offer will be sent by the
Company, in the case of global book-entry Notes, through the
facilities of DTC, and, in the case of certificated Notes, by
first class mail, postage prepaid, to each Holder at his address
appearing in the security register on the date of the Change of
Control Offer, offering to purchase up to the aggregate
principal amount of Notes of the applicable series set forth in
such Change of Control Offer at the purchase price set forth in
such Change of Control Offer (as determined pursuant to the
Indenture). Unless otherwise required by applicable law, the
Change of Control Offer shall specify an expiration date (the
Change of Control Expiration Date) which
shall be, subject to any contrary requirements of applicable
law, not less than 30 days or more than 60 days after
the date of mailing of such Change of Control Offer and a
settlement date (the Change of Control Payment
Date) for purchase of Notes of the applicable series
within five business days after the Expiration Date. The Company
shall notify the Trustee at least 15 days (or such shorter
period as is acceptable to the Trustee), in the case of global
book-entry Notes, prior to sending the Change of Control Offer
through the facilities of DTC, and, in the case of certificated
Notes, prior to the mailing of the Change of Control Offer of
the Companys obligation to make a Change of Control Offer,
and the Change of Control Offer shall be sent electronically or
mailed by the Company or, at the Companys request, by the
Trustee in the name and at the expense of the Company. The
Change of Control Offer shall contain all instructions and
materials necessary to enable such Holders to tender Notes of
the applicable series pursuant to the Change of Control Offer.
The Change of Control Offer shall also state:
(a) the Section of the Indenture pursuant to which the
Change of Control Offer is being made;
(b) the Change of Control Expiration Date and the Change of
Control Payment Date;
(c) the aggregate principal amount of the outstanding Notes
of the applicable series offered to be purchased pursuant to the
Change of Control Offer (including, if less than 100%, the
manner by which such amount has been determined pursuant to
Indenture covenants requiring the Change of Control Offer) (the
Change of Control Purchase Amount);
(d) the purchase price to be paid by the Company for Notes
of the applicable series accepted for payment (as specified
pursuant to the Indenture) (the Change of Control
Purchase Price);
26
(e) that the Holder may tender all or any portion of the
Notes of the applicable series registered in the name of such
Holder and that any portion of a Note of the applicable series
tendered must be tendered in integral multiples of $1,000 and
that, after a tender in part, no Holder may hold a Note of less
than $2,000;
(f) the place or places where Notes of the applicable
series are to be surrendered for tender pursuant to the Change
of Control Offer, if applicable;
(g) that, unless the Company defaults in making such
purchase, any Note of the applicable series accepted for
purchase pursuant to the Change of Control Offer will cease to
accrue interest on and after the Change of Control Purchase
Date, but that any Note of such series not tendered or tendered
but not purchased by the Company pursuant to the Change of
Control Offer will continue to accrue interest at the same rate;
(h) that, on the Change of Control Purchase Date, the
Change of Control Purchase Price will become due and payable
upon each Note of the applicable series accepted for payment
pursuant to the Change of Control Offer;
(i) that each Holder electing to tender a Note of the
applicable series pursuant to the Change of Control Offer will
be required to surrender such Note or cause such Note to be
surrendered at the place or places set forth in the Change of
Control Offer prior to the close of business on the Change of
Control Expiration Date (such Note being, if the Company or the
Trustee so requires, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or
his attorney duly authorized in writing);
(j) that Holders will be entitled to withdraw all or any
portion of Notes of the applicable series tendered if the
Company (or its paying agent) receives, not later than the close
of business on the Change of Control Expiration Date, a
facsimile transmission or letter setting forth the name of the
Holder, the aggregate principal amount of the Notes of such
series the Holder tendered, the certificate numbers of the Notes
of the applicable series the Holder tendered and a statement
that such Holder is withdrawing all or a stated portion of his
tender;
(k) that (i) if Notes of the applicable series having
an aggregate principal amount less than or equal to the Change
of Control Purchase Amount are duly tendered and not withdrawn
pursuant to the Change of Control Offer, the Company shall
purchase all such Notes and (ii) if Notes of the applicable
series having an aggregate principal amount in excess of the
Change of Control Purchase Amount are tendered and not withdrawn
pursuant to the Change of Control Offer, the Company shall
purchase Notes of such series having an aggregate principal
amount equal to the Change of Control Purchase Amount on a pro
rata basis (with such adjustments as may be deemed appropriate
so that only Notes in denominations of $2,000 principal amount
or integral multiples of $1,000 in excess thereof shall be
purchased); and
(l) if applicable, that, in the case of any Holder whose
Note is purchased only in part, the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such
Note without service charge, a new Note or Notes of the
applicable series, of any authorized denomination as requested
by such Holder, in the aggregate principal amount equal to and
in exchange for the unpurchased portion of the aggregate
principal amount of the Notes of such series so tendered.
A Change of Control Offer shall be deemed to have been made by
the Company with respect to a particular series of Notes if
(i) within 60 days following the date of the
consummation of a transaction or series of transactions that
constitutes a Change of Control, the Company commences a Change
of Control Offer for all outstanding Notes of such series at the
Change of Control Purchase Price (provided that the
running of such
60-day
period shall be suspended during any period when the
commencement of such Change of Control Offer is delayed or
suspended by reason of any courts or governmental
authoritys review of or ruling on any materials being
employed by the Company to effect such Change of Control Offer,
so long as the Company has used and continues to use its
commercially reasonable efforts to make and conclude such Change
of Control Offer promptly) and (ii) all Notes of such
series properly tendered pursuant to the Change of Control Offer
are purchased on the terms of such Change of Control Offer.
27
In addition, 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 launching the Change of Control Offer.
The phrase all or substantially all, as used in the
definition of Change of Control, has not been
interpreted under New York law (which is the governing law of
the Indenture) to represent a specific quantitative test. As a
consequence, in the event the Holders of the Notes of a
particular series elected to exercise their rights under the
Indenture and the Company elects to contest such election, there
could be no assurance how a court interpreting New York law
would interpret such phrase. As a result, it may be unclear as
to whether a Change of Control has occurred with respect to a
particular series of Notes and whether a Holder of Notes of such
series may require the Company to make a Change of Control Offer
with respect to the Notes of such series as described above.
The provisions of the Indenture may not afford Holders
protection in the event of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction
affecting the Company that may adversely affect Holders, if such
transaction is not the type of transaction included within the
definition of Change of Control. A transaction involving the
management of the Company or its Affiliates, or a transaction
involving a recapitalization of the Company, will result in a
Change of Control only if it is the type of transaction
specified in such definition. The definition of Change of
Control with respect to a particular series of Notes may be
amended or modified with the written consent of the Holders of a
majority in aggregate principal amount of outstanding Notes of
such series. See Amendment, Supplement and
Waiver.
The Company will comply with the requirements of
Rule 14e-1
under the Exchange Act and any other laws and regulations
thereunder to the extent such laws or regulations are applicable
in connection with the repurchase of either series of Notes
pursuant to a Change of Control Offer. To the extent that the
provisions of any such laws or regulations conflict with the
provisions of the Indenture, the Company will comply with the
applicable laws and regulations and shall not be deemed to have
breached its obligations described in the Indenture by virtue
thereof.
The Company will not be required to make a Change of Control
Offer with respect to a particular series of Notes upon a Change
of Control if (i) a third party makes such Change of
Control Offer contemporaneously with or upon a Change of Control
in the manner, at the times and otherwise in compliance with the
requirements of the Indenture and purchases all Notes of such
series validly tendered and not withdrawn under such Change of
Control Offer or (ii) a notice of redemption has been given
pursuant to the Indenture as described above under the caption
Optional Redemption.
The Companys ability to pay cash to the Holders of Notes
upon a Change of Control may be limited by the Companys
then existing financial resources. There can be no assurance
that sufficient funds will be available when necessary to make
the required purchase of the Notes. Further, under the Credit
Agreement, certain changes in ownership of the Company
constitute a default (which default may occur prior to such
changes in ownership constituting a Change of Control under the
terms of the Indenture). Future agreements of the Company with
respect to other Debt may contain similar provisions or
provisions prohibiting or restricting the actions that
constitute a Change of Control. If the exercise by the Holders
of Notes of either series of their right to require the Company
to repurchase the Notes of such series upon a Change of Control
occurred at the same time as an event under one or more of the
Companys other Debt agreements that caused an acceleration
of such Debt, the Companys ability to pay cash to the
Holders of Notes of such series upon a repurchase may be further
limited by the Companys then existing financial resources.
See Risk Factors Risks Related to the Exchange
Notes and Exchange Offers.
Even if sufficient funds were otherwise available, the terms of
the Credit Agreement prohibit the Companys prepayment of
Notes of either series before their scheduled maturity unless
the Company is in pro forma compliance with the financial
covenants contained in the Credit Agreement and no event of
default exists thereunder. Consequently, if the Company is not
able to satisfy such conditions or obtain requisite consents,
the Company will be unable to fulfill its repurchase
obligations, resulting in a Default with respect to such series
of Notes under the Indenture. Future agreements of the Company
with respect to other Debt may contain similar provisions or
provisions prohibiting prepayment of the Notes.
28
Asset
Sales
The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate, directly or indirectly, an Asset
Sale, unless:
(a) the Company 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
(b) except in the case of a Permitted Asset Swap, at least
75% of the consideration therefor received by the Company or
such Restricted Subsidiary, as the case may be, is in the form
of cash or Eligible Cash Equivalents; provided that the
amount of
(1) any liabilities (as reflected in the Companys or
such Restricted Subsidiarys most recent balance sheet or
in the footnotes thereto, or if Incurred or accrued subsequent
to the date of such balance sheet, such liabilities that would
have been shown on the Companys or such Restricted
Subsidiarys balance sheet or in the footnotes thereto if
such Incurrence or accrual had taken place on the date of such
balance sheet, as determined by the Company) of the Company 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 Company and all
of its Restricted Subsidiaries have been validly released by all
creditors in writing,
(2) any securities, notes or other obligations or assets
received by the Company or such Restricted Subsidiary from such
transferee that are converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received) within
720 days following the closing of such Asset Sale, and
(3) any Designated Non-Cash Consideration received by the
Company 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 (3) that is at that time outstanding, not to exceed
10% of the Total Assets of the Company and its Subsidiaries 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.
Within twelve months after the receipt of any Net Proceeds of
any Asset Sale, the Company or such Restricted Subsidiary, at
its option, may apply the Net Proceeds from such Asset Sale,
(a) to permanently reduce:
(1) obligations under the Credit Facility, or under any
other senior Debt which is secured Debt permitted by the
Indenture (and, to the extent the obligations being reduced
constitute revolving credit obligations, to correspondingly
reduce commitments with respect thereto); or
(2) Debt of a Restricted Subsidiary that is not a
Guarantor, other than Debt owed to the Company or another
Restricted Subsidiary (or any affiliate thereof); or
(b) to make an Asset Sale Offer to all Holders of the Notes
in accordance with the procedures set forth in the
Indenture; or
(c) to acquire all or substantially all of the assets of a
Similar Business, or a majority of the Voting Stock of another
person that thereupon becomes a Restricted Subsidiary engaged in
a Similar Business, or to make capital expenditures or otherwise
acquire or improve assets that are being used or are to be used
in a Similar Business, provided that, in the case of this
clause (c), a binding commitment (which may be subject to
customary conditions) entered into within twelve months after
receipt of such Net Proceeds shall be treated as a permitted
application of the Net Proceeds from the date of such commitment
so long as the Company, or such other Restricted Subsidiary
enters into such commitment with the good faith expectation that
such Net
29
Proceeds will be applied to satisfy such commitment within six
months after the end of such twelve month period (an
Acceptable Commitment).
Any Net Proceeds from Asset Sales that are not invested or
applied as provided and within the time period described in the
first sentence of the immediately preceding paragraph will be
deemed to constitute Excess Proceeds. When
the aggregate amount of Excess Proceeds exceeds
$50 million, the Company shall make an offer to all Holders
of the Notes, and, if required (or, at the Companys
election, if permitted) by the terms of any senior Debt, to the
holders of any such senior Debt (an Asset Sale
Offer), to purchase the maximum aggregate principal
amount of the Notes and such senior Debt that is a minimum of
$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% of the principal amount thereof,
plus accrued and unpaid interest and Additional Interest, if
any, to the date fixed for the closing of such offer, in
accordance with the procedures set forth in the Indenture. The
Company will commence an Asset Sale Offer with respect to Excess
Proceeds within 30 days after the date that Excess Proceeds
exceed $50 million by mailing the notice required pursuant
to the terms of the Indenture, with a copy to the Trustee.
To the extent that the aggregate amount of Notes and any other
senior Debt tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, the Company may use any remaining
Excess Proceeds for general corporate purposes, subject to other
covenants contained in the Indenture. If the aggregate principal
amount of Notes or the senior Debt surrendered by such holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes and the agent for such other senior Debt, as
applicable, shall select such other senior Debt to be purchased
by lot, pro rata or by any other method customarily
authorized by clearing systems (so long as an authorized
denomination results therefrom) based on the accreted value or
principal amount of the Notes or such other senior Debt
tendered. Upon completion of any such Asset Sale Offer, the
amount of Excess Proceeds shall be reset at zero. Additionally,
the Company may, at its option, make an Asset Sale Offer using
proceeds from any Asset Sale at any time after consummation of
such Asset Sale; provided that such Asset Sale Offer
shall be in an aggregate amount of not less than
$50 million. Upon consummation of such Asset Sale Offer,
any Net Proceeds not required to be used to purchase Notes or
such other senior Debt shall not be deemed Excess Proceeds.
Pending the final application of any Net Proceeds pursuant to
this covenant, the holder of such Net Proceeds may apply such
Net Proceeds temporarily to reduce Debt outstanding under a
revolving credit facility or otherwise invest such Net Proceeds
in any manner not prohibited by the Indenture.
The Company will comply with the requirements of
Rule 14e-1
under the Exchange Act and any other 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 such
laws or regulations conflict with the provisions of the
Indenture, the Company will comply with the applicable laws and
regulations and shall not be deemed to have breached its
obligations described in the Indenture by virtue thereof.
Certain
Covenants
Set forth below are summaries of certain covenants contained in
the Indenture. If on any date following the Issue Date
(i) the Notes of either series have Investment Grade
Ratings from both of the Rating Agencies, and (ii) no
Default has occurred and is continuing under the Indenture (the
occurrence of the events described in the foregoing
clauses (i) and (ii) being collectively referred to as
a Covenant Termination Event), the Company
and its Restricted Subsidiaries will no longer be subject to the
following covenants with respect to such series of Notes
(collectively, the Terminated Covenants):
(1) Limitation on Incurrence of Debt;
(2) Limitation on Restricted Payments;
(3) Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries;
(4) Transactions with
Affiliates; and
30
(5) Repurchase at the Option of
Holders Asset Sales.
There can be no assurance that either series of Notes will ever
achieve or maintain Investment Grade Ratings.
Limitation
on Incurrence of Debt
The Company will not, and will not permit any of its Restricted
Subsidiaries to, Incur any Debt (including Acquired Debt);
provided that the Company and any Restricted Subsidiary
may Incur Debt (including Acquired Debt) if, immediately after
giving effect to the Incurrence of such Debt and the receipt and
application of the proceeds therefrom, (a) the Consolidated
Fixed Charge Coverage Ratio of the Company and its Restricted
Subsidiaries, determined on a pro forma basis as if any
such Debt (including any other Debt being Incurred
contemporaneously), and any other Debt Incurred since the
beginning of the Four Quarter Period had been Incurred and the
proceeds thereof had been applied at the beginning of the Four
Quarter Period, and any other Debt repaid since the beginning of
the Four Quarter Period had been repaid at the beginning of the
Four Quarter Period, would be greater than 2.0 to 1.0 and
(b) no Default or Event of Default shall have occurred and
be continuing at the time or as a consequence of the Incurrence
of such Debt.
If, during the Four Quarter Period or subsequent thereto and
prior to the date of determination, the Company or any of its
Restricted Subsidiaries shall have engaged in any Asset Sale or
Asset Acquisition, Investments, mergers, consolidations,
discontinued operations (as determined in accordance with GAAP)
or shall have designated any Restricted Subsidiary to be an
Unrestricted Subsidiary or any Unrestricted Subsidiary to be a
Restricted Subsidiary, Consolidated Cash Flow Available for
Fixed Charges and Consolidated Interest Expense for the Four
Quarter Period shall be calculated on a pro forma basis
giving effect to such Asset Sale or Asset Acquisition,
Investments, mergers, consolidations, discontinued operations or
designation, as the case may be, and the application of any
proceeds therefrom as if such Asset Sale or Asset Acquisition or
designation had occurred on the first day of the Four Quarter
Period.
If the Debt which is the subject of a determination under this
provision is Acquired Debt, or Debt Incurred in connection with
the simultaneous acquisition of any Person, business, property
or assets, or Debt of an Unrestricted Subsidiary being
designated as a Restricted Subsidiary, then such ratio shall be
determined by giving effect (on a pro forma basis, as if
the transaction had occurred at the beginning of the Four
Quarter Period) to (x) the Incurrence of such Acquired Debt
or such other Debt by the Company or any of its Restricted
Subsidiaries and (y) the inclusion, in Consolidated Cash
Flow Available for Fixed Charges, of the Consolidated Cash Flow
Available for Fixed Charges of the acquired Person, business,
property or assets or redesignated Subsidiary.
Notwithstanding the provisions of the Indenture described in the
first paragraph of this Limitation on Incurrence of
Debt covenant, the Company and its Restricted Subsidiaries
may Incur Permitted Debt.
For purposes of determining any particular amount of Debt under
this Limitation on Incurrence of Debt covenant,
(x) Debt Incurred under the Credit Agreement on the Issue
Date shall at all times be treated as Incurred pursuant to
clause (i) of the definition of Permitted Debt,
and (y) Guarantees or obligations with respect to letters
of credit supporting Debt otherwise included in the
determination of such particular amount shall not be included.
For purposes of determining compliance with this
Limitation on Incurrence of Debt covenant, in the
event that an item of Debt meets the criteria of more than one
of the types of Debt described above, including categories of
Permitted Debt and under part (a) in the first paragraph of
this Limitation on Incurrence of Debt covenant, the
Company, in its sole discretion, may classify, and from time to
time may reclassify, all or any portion of such item of Debt in
any manner such that the item of Debt would be permitted to be
incurred at the time of such classification or reclassification,
as applicable.
For purposes of determining compliance with any
U.S. dollar-denominated restriction on the incurrence of
Debt, the U.S. dollar-equivalent principal amount of Debt
denominated in a foreign currency shall be utilized, calculated
based on the relevant currency exchange rate in effect on the
date such Debt was incurred. Notwithstanding any other provision
of this covenant, the maximum amount of Debt that the Company or
any
31
Restricted Subsidiary may incur pursuant to this covenant shall
not be deemed to be exceeded solely as a result of fluctuations
in exchange rates or currency values.
The Company and any Restricted Subsidiary will not Incur any
Debt that pursuant to its terms is subordinate or junior in
right of payment to any other Debt unless such Debt is
subordinated in right of payment to the Notes and the Note
Guarantees to the same extent; provided that Debt will
not be considered subordinate or junior in right of payment to
any other Debt solely by virtue of being unsecured or secured to
a greater or lesser extent or with greater or lower priority or
by virtue of structural subordination.
Limitation
on Restricted Payments
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any Restricted
Payment unless, at the time of and after giving effect to the
proposed Restricted Payment:
(a) no Default or Event of Default shall have occurred and
be continuing or will occur as a consequence thereof;
(b) after giving effect to such Restricted Payment on a
pro forma basis, the Company would be permitted to Incur
at least $1.00 of additional Debt (other than Permitted Debt)
pursuant to the provisions described in the first paragraph
under the Limitation on Incurrence of Debt
covenant; and
(c) after giving effect to such Restricted Payment on a
pro forma basis, the aggregate amount expended or
declared for all Restricted Payments made on or after the Issue
Date (excluding Restricted Payments permitted by clauses (ii),
(iii), (iv), (v), (vi) (vii), (viii), (x), (xi) and
(xii) of the next succeeding paragraph) shall not exceed
the sum (without duplication) of
(1) 50% of the Consolidated Net Income (or, if Consolidated
Net Income shall be a deficit, minus 100% of such deficit) of
the Company accrued on a cumulative basis during the period
(taken as one accounting period) beginning on January 1,
2010 and ending on the last day of the fiscal quarter
immediately preceding the date of such proposed Restricted
Payment, plus
(2) 100% of the aggregate net proceeds (including the Fair
Market Value of property other than cash) received by the
Company subsequent to the Issue Date either (i) as a
contribution to its common equity capital or (ii) from the
issuance and sale (other than to a Subsidiary) of its Qualified
Capital Interests, including Qualified Capital Interests issued
upon the conversion of Debt or Redeemable Capital Interests of
the Company, and from the exercise of options, warrants or other
rights to purchase such Qualified Capital Interests (other than,
in each case, Capital Interests or Debt sold to a Subsidiary of
the Company), plus
(3) 100% of the net reduction in Investments (other than
Permitted Investments), subsequent to the Issue Date, in any
Person, resulting from payments of interest on Debt, dividends,
repayments of loans or advances, or any sale or disposition of
such Investments (but only to the extent such items are not
included in the calculation of Consolidated Net Income), in each
case to the Company or any Restricted Subsidiary from any
Person, not to exceed, in the case of any Person, the amount of
Investments made after the Issue Date by the Company and its
Restricted Subsidiaries in such Person, plus
(4) an amount equal to the sum, for all Unrestricted
Subsidiaries, of the following:
(x) the cash return, after the Issue Date, on Investments
in an Unrestricted Subsidiary made after the Issue Date as a
result of dividends, distributions, cancellation of indebtedness
for borrowed money owed by the Company or any Restricted
Subsidiary to an Unrestricted Subsidiary, interest payments,
return of capital, repayments of Investments or other transfers
of assets to the Company or any Restricted Subsidiary from any
Unrestricted Subsidiary, any sale for cash, repayment,
redemption, liquidating distribution or other cash realization
(not included in Consolidated Net Income), plus
32
(y) the portion (proportionate to the Companys equity
interest in such Subsidiary) of the Fair Market Value of the
assets less liabilities of an Unrestricted Subsidiary at the
time such Unrestricted Subsidiary is designated a Restricted
Subsidiary,
not to exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments made after the Issue Date by the Company
and its Restricted Subsidiaries in such Unrestricted Subsidiary.
Notwithstanding the foregoing provisions, the Company and its
Restricted Subsidiaries may take the following actions,
provided that, in the case of clauses (iv) and (x),
immediately after giving effect to such action, no Default or
Event of Default has occurred and is continuing:
(i) the payment of any dividend on Capital Interests in the
Company or a Restricted Subsidiary within 60 days after
declaration thereof if at the declaration date such payment was
permitted by the foregoing provisions of this covenant;
(ii) the purchase, repurchase, redemption, defeasance or
other acquisition or retirement of any Qualified Capital
Interests of the Company by conversion into, or by or in
exchange for, Qualified Capital Interests, or out of net cash
proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary of the Company) of other Qualified Capital
Interests of the Company;
(iii) the redemption, defeasance, repurchase or acquisition
or retirement for value of any Debt of the Company or a
Guarantor that is subordinate in right of payment to the Notes
or the applicable Note Guarantee out of the net cash proceeds of
a substantially concurrent issue and sale (other than to a
Subsidiary of the Company) of (x) new subordinated Debt of
the Company or such Guarantor, as the case may be, Incurred in
accordance with the Indenture or (y) Qualified Capital
Interests of the Company;
(iv) the purchase, redemption, retirement or other
acquisition for value of Capital Interests in the Company held
by employees or former employees of the Company or any
Restricted Subsidiary (or their estates or beneficiaries under
their estates) upon death, disability, retirement or termination
of employment or alteration of employment status or pursuant to
the terms of any agreement under which such Capital Interests
were issued; provided that the aggregate cash
consideration paid for such purchase, redemption, retirement or
other acquisition of such Capital Interests does not exceed
$40 million in any calendar year; provided,
however, that such amount in any calendar year may be
increased by an amount not to exceed (A) the cash proceeds
received by the Company or any of its Restricted Subsidiaries
from the sale of Qualified Capital Interests of the Company to
employees of the Company and its Restricted Subsidiaries that
occurs after the Issue Date; provided, however,
that the amount of such cash proceeds utilized for any such
repurchase, retirement, other acquisition or dividend will not
increase the amount available for Restricted Payments under
clause (c) of the first paragraph of this covenant; plus
(B) the cash proceeds of key man life insurance policies
received by the Company and its Restricted Subsidiaries after
the Issue Date (provided, however, that the
Company may elect to apply all or any portion of the aggregate
increase contemplated by the proviso of this clause (iv) in
any calendar year and, to the extent any payment described under
this clause (iv) is made by delivery of Debt and not in
cash, such payment shall be deemed to occur only when, and to
the extent, the obligor on such Debt makes payments with respect
to such Debt);
(v) the repurchase of Capital Interests deemed to occur
upon the exercise of stock options, warrants or other
convertible or exchangeable securities;
(vi) the extension of credit that constitutes intercompany
Debt, the Incurrence of which was permitted pursuant to the
covenant described under Limitation on
Incurrence of Debt;
(vii) cash payment, in lieu of issuance of fractional
shares in connection with the exercise of warrants, options or
other securities convertible into or exchangeable for the
Capital Interests of the Company or a Restricted Subsidiary;
(viii) the declaration and payment of dividends to holders
of any class or series of Redeemable Capital Interests of the
Company or any Restricted Subsidiary issued or Incurred in
compliance with the
33
covenant described above under Limitation on
Incurrence of Debt to the extent such dividends are
included in the definition of Consolidated Fixed Charges;
(ix) the repurchase, redemption or other acquisition or
retirement for value of any subordinated Debt in accordance with
provisions substantially similar to those described under the
captions Repurchase at the Option of Holders
Change of Control and Repurchase at the Option of
Holders Asset Sales; provided, with
respect to the Notes of a particular series, that all Notes of
such series tendered by Holders in connection with a Change of
Control Offer or Asset Sale Offer, as applicable, have been
repurchased, redeemed or acquired for value;
(x) the making of any Restricted Payments if, at the time
of the making of such payments, and after giving effect thereto
(including, without limitation, the Incurrence of any Debt to
finance such payment), the Consolidated Total Leverage Ratio
would not exceed 3.00 to 1.00;
(xi) any Restricted Payment used to fund amounts owed to
Affiliates, in each case to the extent permitted by the covenant
described below under Transactions with
Affiliates;
(xii) the making of any other Restricted Payments not in
excess of $500 million in the aggregate;
(xiii) any Investment made in exchange for, or out of the
net cash proceeds of, a substantially concurrent offering of
Qualified Capital Interests of the Company;
(xiv) repurchases by the Company or any Restricted
Subsidiary of Capital Interests that were not theretofore owned
by the Company or a Subsidiary of the Company in any Restricted
Subsidiary;
(xv) Restricted Payments of the type described in either
clauses (a) or (b) of the definition of
Restricted Payment in an aggregate amount made under
this clause (xv) in any calendar year not to exceed
$80 million; and
(xvi) Restricted Payments made in connection with the
Tender Offer.
If the Company makes a Restricted Payment which, at the time of
the making of such Restricted Payment, in the good faith
judgment of the Company, would be permitted under the
requirements of the Indenture, such Restricted Payment shall be
deemed to have been made in compliance with the Indenture
notwithstanding any subsequent adjustment made in good faith to
the Companys financial statements affecting Consolidated
Net Income.
If any Person in which an Investment is made, which Investment
constitutes a Restricted Payment when made, thereafter becomes a
Restricted Subsidiary in accordance with the Indenture, all such
Investments previously made in such Person shall no longer be
counted as Restricted Payments for purposes of calculating the
aggregate amount of Restricted Payments pursuant to
clause (c) of the first paragraph under this
Limitation on Restricted Payments covenant, in each
case to the extent such Investments would otherwise be so
counted.
For purposes of this covenant, if a particular Restricted
Payment involves a non-cash payment, including a distribution of
assets, then such Restricted Payment shall be deemed to be an
amount equal to the cash portion of such Restricted Payment, if
any, plus an amount equal to the Fair Market Value of the
non-cash portion of such Restricted Payment.
Limitation
on Liens
The Company will not, and will not permit any of its Restricted
Subsidiaries, directly or indirectly, to enter into, create,
incur, assume or suffer to exist any Liens of any kind (other
than Permitted Liens), on or with respect to any of its property
or assets now owned or hereafter acquired or any interest
therein or any income or profits therefrom, which Liens secure
Debt, without securing the Notes and all other amounts due under
the Indenture equally and ratably with (or prior to) the Debt
secured by such Lien until such time as such Debt is no longer
secured by such Lien; provided that, if the Debt so
secured is subordinated by its terms to the Notes or a Note
Guarantee, the Lien securing such Debt will also be so
subordinated by its terms to the Notes and the Guarantees at
least to the same extent.
34
Any such Lien shall be automatically and unconditionally
released and discharged in all respects upon (i) the
release and discharge of the Lien securing the other Debt or
(ii) in the case of any such Lien in favor of any such Note
Guarantee, upon the termination and discharge of such Note
Guarantee in accordance with the terms of the Indenture.
Limitation
on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, cause or suffer to
exist or become effective or enter into any consensual
encumbrance or restriction (other than pursuant to the Indenture
or any law, rule, regulation or order) on the ability of any
Restricted Subsidiary to (i) pay dividends or make any
other distributions on its Capital Interests owned by the
Company or any Restricted Subsidiary or pay any Debt or other
obligation owed to the Company or any Restricted Subsidiary,
(ii) make loans or advances to the Company or any
Restricted Subsidiary or (iii) sell, lease or transfer any
of its property or assets to the Company or any Restricted
Subsidiary.
However, the preceding restrictions will not apply to the
following encumbrances or restrictions existing under or by
reason of:
(a) any encumbrance or restriction in existence on the
Issue Date, including those required by the Credit Agreement and
any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements, refinancings
thereof, provided that the amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacement or refinancings, in the good faith judgment of the
Company, are no more restrictive, taken as a whole, with respect
to such dividend or other payment restrictions than those
contained in these agreements on the Issue Date or refinancings
thereof;
(b) any encumbrance or restriction pursuant to an agreement
relating to an acquisition of property, so long as the
encumbrances or restrictions in any such agreement relate solely
to the property so acquired (and are not or were not created in
anticipation of or in connection with the acquisition thereof);
(c) any encumbrance or restriction which exists with
respect to a Person that becomes a Restricted Subsidiary or
merges with or into a Restricted Subsidiary of the Company on or
after the Issue Date, which is in existence at the time such
Person becomes a Restricted Subsidiary, but not created in
connection with or in anticipation of such Person becoming a
Restricted Subsidiary, and which is not applicable to any Person
or the property or assets of any Person other than such Person
or the property or assets of such Person becoming a Restricted
Subsidiary;
(d) any encumbrance or restriction pursuant to an agreement
effecting a permitted renewal, refunding, replacement,
refinancing or extension of Debt issued pursuant to an agreement
containing any encumbrance or restriction referred to in the
foregoing clauses (a) through (c), so long as the
encumbrances and restrictions contained in any such refinancing
agreement are no less favorable in any material respect to the
Holders than the encumbrances and restrictions contained in the
agreements governing the Debt being renewed, refunded, replaced,
refinanced or extended in the good faith judgment of the Company;
(e) any encumbrance or restriction by reason of applicable
law, rule, regulation or order (or required by any regulatory
authority having jurisdiction over the Company or any Restricted
Subsidiary or any of their businesses);
(f) any encumbrance or restriction under the Indenture, the
Notes and the Note Guarantees;
(g) any encumbrance or restriction under the sale of assets
or Capital Interests, including, without limitation, any
agreement for the sale or other disposition of a Subsidiary that
restricts distributions by that Subsidiary, pending its sale or
other disposition;
(h) restrictions on cash and other deposits or net worth
imposed by customers under contracts entered into the ordinary
course of business;
35
(i) customary provisions (i) restricting subletting or
assignment of any lease, contract, or license of the Company or
any Restricted Subsidiary or provisions in agreements that
restrict the assignment of such agreement or any rights
thereunder; (ii) with respect to the disposition or
distribution of assets or property in Joint Venture agreements,
asset sale agreements, stock sale agreements, sale leaseback
agreements and other similar agreements, (iii) restricting
dispositions of real property interests set forth in any
reciprocal easement agreements of the Company or any Restricted
Subsidiary, (iv) in Swap Contracts and Hedging Obligations,
permitted by the Indenture; and (v) contained in leases or
licenses of intellectual property and other agreements, in each
case entered into in the ordinary course of business;
(j) any instrument governing Debt or Capital Interests of a
Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition
(except to the extent such Debt or Capital Interests was
incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable
to any Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so
acquired, provided that, in the case of Debt, such Debt
was permitted by the terms of the Indenture to be incurred;
(k) purchase money obligations (including Capital Lease
Obligations) for property acquired in the ordinary course of
business that impose restrictions on that property so acquired
of the nature described in clause (iii) of the first
paragraph hereof;
(l) Liens securing Debt otherwise permitted to be incurred
under the Indenture, including the provisions of the covenant
described above under the caption Limitation
on Liens that limit the right of the debtor to dispose of
the assets subject to such Liens;
(m) any Debt or other contractual requirements of a
Securitization Vehicle that is a Restricted Subsidiary in
connection with a Securitization Financing; provided that
such restrictions apply only to such Securitization Vehicle or
the Securitization Assets which are subject to such
Securitization Financing; and
(n) any other agreement governing Debt entered into after
the Issue Date that contains encumbrances and restrictions that
are not materially more restrictive with respect to any
Restricted Subsidiary than those in effect on the Issue Date
with respect to that Restricted Subsidiary pursuant to
agreements in effect on the Issue Date.
Nothing contained in this Limitation on Dividend and Other
Payment Restrictions Affecting Restricted Subsidiaries
covenant shall prevent the Company or any Restricted Subsidiary
from (i) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in the Limitation on
Liens covenant or (ii) restricting the sale or other
disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Debt of the Company or any
of its Restricted Subsidiaries Incurred in accordance with the
Limitation on Incurrence of Debt and Limitation on Liens
covenants in the Indenture.
Limitation
on Sale and Leaseback Transactions
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction
unless:
(i) the consideration received in such Sale and Leaseback
Transaction is at least equal to the Fair Market Value of the
property sold, as determined by an Officers
Certificate; and
(ii) prior to and after giving effect to the Attributable
Debt in respect of such Sale and Leaseback Transaction, the
Company and such Restricted Subsidiary comply with the
Limitation on Incurrence of Debt covenant contained
herein.
Provision
of Financial Information
Whether or not required by the Commission, so long as any Notes
are outstanding, the Company will furnish to the Holders of
Notes, or file electronically with the Commission through the
Commissions
36
Electronic Data Gathering, Analysis and Retrieval System (or any
successor system), within the time periods specified in the
Commissions rules and regulations:
(1) all quarterly and annual financial information that
would be required to be contained in a filing with the
Commission on
Forms 10-Q
and 10-K if
the Company were required to file such Forms, including a
Managements Discussion and Analysis of Financial
Condition and Results of Operations and, with respect to
the annual information only, a report on the annual financial
statements by the Companys certified independent
accountants; and
(2) all current reports that would be required to be filed
with the Commission on
Form 8-K
if the Company were required to file such reports;
provided, however, that if the Company is not
required to file reports with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act (i.e., is a
voluntary filer), the reports described in
clauses (1) and (2) above shall not be required to
contain any information that a voluntary filer would not be
required to include in such reports.
In addition, whether or not required by the Commission, the
Company will file a copy of all of the information and reports
referred to in clauses (1) and (2) above with the
Commission for public availability within the time periods
specified in the Commissions rules and regulations (unless
the Commission will not accept such a filing) or otherwise make
such information available to prospective investors. In
addition, the Company and the Guarantors have agreed that, for
so long as any Notes remain outstanding, they will furnish to
the Holders and to prospective investors, upon their request,
the information, if any, required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act.
Additional
Note Guarantees
On the Issue Date, each of the Guarantors will guarantee the
Notes in the manner and on the terms set forth in the Indenture.
After the Issue Date, the Company will cause each of its wholly
owned Domestic Restricted Subsidiaries that Incurs any Debt
pursuant to clause (i) of the definition of Permitted
Debt to guarantee the Notes; provided,
however, that upon any such Domestic Restricted
Subsidiary being released from all Debt incurred by such
Domestic Restricted Subsidiary pursuant to clause (i) of
the definition of Permitted Debt, the Note
Guarantees of such Domestic Restricted Subsidiary shall
automatically be deemed to be released.
Each Note Guarantee by a Guarantor will be limited to an amount
not to exceed the maximum amount that can be guaranteed by that
Guarantor without rendering the Guarantee, as it relates to such
Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally. By virtue of this limitation, a
Guarantors obligations under its Note Guarantees could be
significantly less than amounts payable with respect to the
Notes, or a Guarantor may have effectively no obligation under
its Note Guarantees. See Risk Factors Risk
Factors Related to the Exchange Notes and Exchange Offers.
Limitation
on Creation of Unrestricted Subsidiaries
The Company may designate any Subsidiary of the Company to be an
Unrestricted Subsidiary as provided below, in which
event such Subsidiary and each other Person that is then or
thereafter becomes a Subsidiary of such Subsidiary will be
deemed to be an Unrestricted Subsidiary.
The Company may designate any Subsidiary to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Interests of,
or owns or holds any Lien on any property of, any other
Restricted Subsidiary of the Company, provided that
either:
(x) the Subsidiary to be so designated has Total Assets of
$1,000 or less; or
(y) the Company could make a Restricted Payment at the time
of designation in an amount equal to the greater of the Fair
Market Value or book value of such Subsidiary pursuant to the
Limitation on
37
Restricted Payments covenant and such amount is thereafter
treated as a Restricted Payment for the purpose of calculating
the amount available for Restricted Payments thereunder.
An Unrestricted Subsidiary may be designated as a Restricted
Subsidiary if (i) all the Debt of such Unrestricted
Subsidiary could be Incurred under the
Limitation on Incurrence of Debt
covenant and (ii) all the Liens on the property and assets
of such Unrestricted Subsidiary could be incurred pursuant to
the Limitation on Liens covenant.
Consolidation,
Merger, Conveyance, Transfer or Lease
The Company will not in any transaction or series of
transactions, consolidate with or merge into any other Person
(other than a merger of a Subsidiary into the Company in which
the Company is the continuing Person or the merger of a
Restricted Subsidiary into or with another Restricted Subsidiary
or another Person that as a result of such transaction becomes
or merges into a Restricted Subsidiary), or sell, assign,
convey, transfer, lease or otherwise dispose of all or
substantially all of the assets of the Company and its
Restricted Subsidiaries, taken as a whole, to any other Person,
unless:
(i) either: (a) the Company shall be the continuing
Person or (b) the Person (if other than the Company) formed
by such consolidation or into which the Company is merged, or
the Person that acquires, by sale, assignment, conveyance,
transfer, lease or other disposition, all or substantially all
of the property and assets of the Company (such Person, the
Surviving Entity), (1) shall be a
corporation, partnership, limited liability company or similar
entity organized and validly existing under the laws of the
United States, any political subdivision thereof or any state
thereof or the District of Columbia and (2) shall expressly
assume, by a supplemental indenture, the due and punctual
payment of all amounts due in respect of the principal of (and
premium, if any) and interest on all the Notes and the
performance of the covenants and obligations of the Company
under the Indenture; provided that at any time the
Company or its successor is not a corporation, there shall be a
co-issuer of the Notes that is a corporation;
(ii) immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including,
without limitation, any Debt Incurred or anticipated to be
Incurred in connection with or in respect of such transaction or
series of transactions), no Default or Event of Default shall
have occurred and be continuing or would result
therefrom; and
(iii) the Company delivers, or causes to be delivered, to
the Trustee, in form satisfactory to the Trustee, an
Officers Certificate and an opinion of counsel, each
stating that such consolidation, merger, sale, conveyance,
assignment, transfer, lease or other disposition complies with
the requirements of the Indenture and that such supplemental
indenture constitutes the legal, valid and binding obligation of
the Surviving Entity subject to customary exceptions.
Notwithstanding the foregoing, failure to satisfy the
requirements of the preceding clause (ii) will not prohibit:
(a) a merger between the Company and a Restricted
Subsidiary that is a wholly owned Subsidiary of the Company or a
sale, assignment, conveyance, transfer, lease or other
disposition of all or substantially all of the assets of the
Company and its Restricted Subsidiaries, taken as a whole, to a
Restricted Subsidiary that is a wholly owned Subsidiary of the
Company; or
(b) a merger between the Company and an Affiliate
incorporated solely for the purpose of converting the Company
into a corporation organized under the laws of the United States
or any political subdivision or state thereof; so long as, in
each case, the amount of Debt of the Company and its Restricted
Subsidiaries is not increased thereby.
For all purposes of the Indenture and the Notes, Subsidiaries of
any Surviving Entity will, upon such transaction or series of
transactions, become Restricted Subsidiaries or Unrestricted
Subsidiaries as provided pursuant to the Indenture and all Debt,
and all Liens on property or assets, of the Surviving Entity and
its Subsidiaries that was not Debt, or were not Liens on
property or assets, of the Company and its Subsidiaries
38
immediately prior to such transaction or series of transactions
shall be deemed to have been Incurred upon such transaction or
series of transactions.
Upon any transaction or series of transactions that are of the
type described in, and are effected in accordance with,
conditions described in the immediately preceding paragraphs,
the Surviving Entity shall succeed to, and be substituted for,
and may exercise every right and power of, the Company, under
the Indenture with the same effect as if such Surviving Entity
had been named as the Company therein; and when a Surviving
Person duly assumes all of the obligations and covenants of the
Company pursuant to the Indenture and the Notes, except in the
case of a lease, the predecessor Person shall be relieved of all
such obligations.
Transactions
with Affiliates
The Company 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 Company (each of the foregoing, an Affiliate
Transaction) involving aggregate payments or
consideration in excess of $25 million, unless:
(i) such Affiliate Transaction is on terms that are not
materially less favorable to the Company or its relevant
Restricted Subsidiary than those that would have been obtained
in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person on an arms-length
basis; and
(ii) the Company delivers to the Trustee with respect to
any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate payments or consideration in
excess of $50 million, a resolution adopted by the majority
of the Board of Directors of the Company approving such
Affiliate Transaction and set forth in an Officers
Certificate certifying that, in the good faith judgment of the
Company, such Affiliate Transaction complies with
clause (i) above.
The foregoing provisions will not apply to the following:
(a) transactions between or among the Company or any of its
Restricted Subsidiaries;
(b) Restricted Payments permitted by the provisions of the
Indenture described above under the covenant
Limitation on Restricted Payments and
the definition of Permitted Investments;
(c) the payment of reasonable and customary fees paid to,
and indemnities provided for the benefit of, former, current or
future officers, directors, employees or consultants of the
Company or any of its Restricted Subsidiaries;
(d) transactions in which the Company 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 Company or such Restricted
Subsidiary from a financial point of view or stating that the
terms are not materially less favorable to the Company or its
relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person on an
arms-length basis;
(e) any agreement or arrangement as in effect as of the
Issue Date, or any amendment thereto (so long as any such
amendment is not materially disadvantageous to the Holders when
taken as a whole as compared to the applicable agreement as in
effect on the Issue Date);
(f) the existence of, or the performance by the Company or
any of its Restricted Subsidiaries of its obligations under the
terms of, any stockholders agreement or its equivalent
(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 which it may enter into
thereafter; provided, however, that the existence
of, or the performance by the Company or any of its Restricted
Subsidiaries of obligations under any future amendment to any
such existing agreement or under any similar agreement entered
into after the Issue Date shall only be permitted by this
clause (f) to the extent that the terms of any such
amendment or new
39
agreement are customary or are not otherwise materially
disadvantageous to the Holders when taken as a whole;
(g) transactions with customers, clients, suppliers, or
purchasers or sellers of goods or services, in each case in the
ordinary course of business and otherwise in compliance with the
terms of the Indenture which are fair to the Company and its
Restricted Subsidiaries, in the good faith judgment of the
Company, or are on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated
party;
(h) any transaction with a Securitization Vehicle as part
of a Securitization Financing permitted under clause (xvi)
of the definition of Permitted Debt;
(i) payments or loans (or cancellation of loans) to
employees, officers, directors, management personnel or
consultants of the Company or any of its Restricted Subsidiaries
and employment agreements, collective bargaining agreements,
stock option plans, benefit plans, other similar arrangements
and related trust arrangements with (or for the benefit of) such
Persons which, in each case, are approved by the Company in good
faith;
(j) payments to and from, and transactions with, any Joint
Venture in the ordinary course of business;
(k) payments by the Company and its Subsidiaries pursuant
to tax sharing agreements among the Company and its Subsidiaries
on customary terms to the extent attributable to the ownership
or operation of the 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 Company, its Restricted
Subsidiaries and its Unrestricted Subsidiaries (to the extent of
amounts received from Unrestricted Subsidiaries) would be
required to pay in respect of foreign, federal, state and local
taxes for such fiscal year were the Company, its Restricted
Subsidiaries and its Unrestricted Subsidiaries (to the extent
described above) to pay such taxes separately from any such
parent entity;
(l) transactions engaged in (i) among the Company and
its Subsidiaries (or between such Subsidiaries) to facilitate
the operations, governance, administration and corporate
overhead of the Company and its Subsidiaries, and (ii) by
the Company and its Restricted Subsidiaries and any Unrestricted
Subsidiary to effect the Cash Management Practices or Vault Cash
Operations;
(m) transactions with Persons solely in their capacity as
holders of a minority of any class of Debt or Capital Interests
of the Company or any of its Restricted Subsidiaries, where such
Persons are treated no more favorably than holders of such class
of Debt or Capital Interests of the Company or such Restricted
Subsidiary generally;
(n) sales of Qualified Capital Interests of the
Company; and
(o) any transaction with any Person who is not an Affiliate
of the Company immediately before the consummation of such
transaction that becomes an Affiliate as a result of such
transaction, provided that such transaction was not
entered into in contemplation of such Person becoming an
Affiliate.
Events of
Default
Each of the following is an Event of Default
with respect to the Notes of a particular series under the
Indenture:
(i) default in the payment in respect of the principal of
(or premium, if any, on) any Note of such series when due and
payable (whether at Stated Maturity or upon repurchase,
acceleration, optional redemption or otherwise);
(ii) default in the payment of any interest (including any
Additional Interest) upon any Note of such series when it
becomes due and payable, and continuance of such default for a
period of 30 days;
40
(iii) except for a release in accordance with or as
otherwise permitted by the Indenture, any Note Guarantee of any
Significant Subsidiary (or any group of Restricted Subsidiaries
that, taken together, would constitute a Significant Subsidiary)
with respect to the Notes of such series shall for any reason
cease to be, or it shall be asserted by any Guarantor or the
Company not to be, in full force and effect and enforceable in
accordance with its terms;
(iv) failure by the Company or any of its Restricted
Subsidiaries to comply with the provisions described under the
captions Repurchase at the Option of Holders
Change of Control, Repurchase at the Option of
Holders Asset Sales, or Certain
Covenants Consolidation, Merger, Conveyance,
Transfer or Lease;
(v) default in the performance, or breach, of any other
covenant or agreement of the Company or any Guarantor in the
Indenture (other than a covenant or agreement a default in whose
performance or whose breach is specifically dealt with in clause
(1), (2), (3) or (4) above), and continuance of such
default or breach for a period of 60 days after written
notice thereof (or 120 days in the case of the covenant
described under Certain Covenants
Provision of Financial Information) has been given to the
Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the
outstanding Notes of such series;
(vi) a default or defaults under any bonds, debentures,
notes or other evidences of Debt (other than the applicable
series of Notes) by the Company or any Restricted Subsidiary
that is a Significant Subsidiary having, individually or in the
aggregate, a principal or similar amount outstanding of at least
$300 million, whether such Debt now exists or shall
hereafter be created, which default or defaults shall have
resulted in the acceleration of the maturity of such Debt prior
to its express maturity or shall constitute a failure to pay at
least $300 million of such Debt when due and payable after
the expiration of any applicable grace period with respect
thereto;
(vii) the entry against the Company or any Restricted
Subsidiary that is a Significant Subsidiary of a final judgment
or final judgments for the payment of money in an aggregate
amount in excess of $300 million (in excess of amounts
covered by independent third-party insurance as to which the
insurer has been notified of such judgment and does not deny
coverage), by a court or courts of competent jurisdiction, which
judgments remain undischarged, unwaived, unstayed, unbonded or
unsatisfied for a period of 60 consecutive days; or
(viii) certain events in bankruptcy, insolvency or
reorganization affecting the Company or any Significant
Subsidiary (or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary).
If an Event of Default (other than an Event of Default described
in clause (8) above with respect to the Company) with
respect to a series of Notes occurs and is continuing, then and
in every such case the Trustee or the Holders of not less than
25% in aggregate principal amount of the outstanding Notes of
such series may declare the principal of the Notes of such
series and any accrued interest on the Notes of such series to
be due and payable immediately by a notice in writing to the
Company (and to the Trustee if given by Holders);
provided, however, that after such acceleration,
but before a judgment or decree based on acceleration, the
Holders of a majority in aggregate principal amount of the
outstanding Notes of such series may, under certain
circumstances, rescind and annul such acceleration if all Events
of Default, other than the nonpayment of accelerated principal
of or interest on the Notes of such series, have been cured or
waived as provided in the Indenture.
In the event of a declaration of acceleration of the Notes of
either series solely because an Event of Default described in
clause (6) above has occurred and is continuing, the
declaration of acceleration of the Notes of such series shall be
automatically rescinded and annulled if the event of default or
payment default triggering such Event of Default pursuant to
clause (6) shall be remedied or cured by the Company or a
Restricted Subsidiary of the Company or waived by the holders of
the relevant Debt within 20 business days after the declaration
of acceleration and if the rescission and annulment of the
acceleration of the Notes of
41
such series would not conflict with any judgment or decree of a
court of competent jurisdiction obtained by the Trustee for the
payment of amounts due on the Notes of such series.
If an Event of Default described in clause (8) above occurs
with respect to the Company, the principal of and any accrued
interest on the Notes of both series then outstanding shall
ipso facto become immediately due and payable without any
declaration or other act on the part of the Trustee or any
Holder. For further information as to waiver of defaults, see
Amendment, Supplement and Waiver. The
Trustee may withhold from Holders notice of any Default (except
Default in payment of principal of, premium, if any, and
interest) if the Trustee determines that withholding notice is
in the interests of the Holders.
No Holder of any Note of either series will have any right to
institute any proceeding with respect to the Indenture or for
any remedy thereunder, unless such Holder shall have previously
given to the Trustee written notice of a continuing Event of
Default and unless also the Holders of at least 25% in aggregate
principal amount of the outstanding Notes of such series shall
have made written request to the Trustee, and provided security
or indemnity reasonably satisfactory to the Trustee, to
institute such proceeding as Trustee, and the Trustee shall not
have received from the Holders of a majority in aggregate
principal amount of the outstanding Notes of such series a
direction inconsistent with such request and shall have failed
to institute such proceeding within 60 days. Such
limitations do not apply, however, to a suit instituted by a
Holder of a Note of either series directly (as opposed to
through the Trustee) for enforcement of payment of the principal
of (and premium, if any) or interest on such Note on or after
the respective due dates expressed in such Note.
The Company will be required to furnish to the Trustee annually
a statement as to the performance of certain obligations under
the Indenture and as to any Default in such performance. The
Company also is required to provide written notice to the
Trustee if it becomes aware of the occurrence of any Default or
Event of Default.
Amendment,
Supplement and Waiver
Without the consent of any Holders, at any time and from time to
time, the Company, the Guarantors and the Trustee may enter into
one or more indentures supplemental to the Indenture and the
Guarantees for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the
covenants of the Company in the Indenture and the Guarantees and
in the Notes;
(2) to secure the Notes, to add to the covenants of the
Company for the benefit of the Holders of the Notes, or to
surrender any right or power conferred upon the Company in the
Indenture;
(3) to add additional Events of Default;
(4) to provide for uncertificated Notes in addition to or
in place of the certificated Notes;
(5) to evidence and provide for the acceptance of
appointment under the Indenture by a successor Trustee;
(6) to provide for or confirm the issuance of Additional
Notes in accordance with the terms of the Indenture;
(7) to add a Guarantor or to release a Guarantor in
accordance with the terms of the Indenture;
(8) to cure or reform any ambiguity, defect, omission,
mistake, manifest error or inconsistency or to conform the
Indenture or the Notes to this Description of Notes;
(9) to comply with any requirements of the Commission with
respect to the qualification of the Indenture under the Trustee
Indenture Act; or
(10) to provide additional rights or benefits to the
Holders or to make any change that does not adversely affect the
rights of any Holder.
42
With the consent of the Holders of not less than a majority in
aggregate principal amount of the outstanding Notes of a
particular series, the Company, the Guarantors and the Trustee
may enter into an indenture or indentures supplemental to the
Indenture for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of
the Indenture with respect to the Notes of such series or of
modifying in any manner the rights of the Holders of the Notes
of such series under the Indenture, including the definitions
therein; provided, however, that no such
supplemental indenture shall, without the consent of the Holder
of each outstanding Note of such series affected thereby:
(1) change the Stated Maturity of any Note of such series
or of any installment of interest on any Note of such series, or
reduce the amount payable in respect of the principal thereof or
the rate of interest thereon or any premium payable thereon, or
reduce the amount that would be due and payable on acceleration
of the maturity thereof, or change the place of payment where,
or the coin or currency in which, any Note of such series or any
premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof, or change the date on which
any Notes of such series may be subject to redemption or reduce
the Redemption Price therefor;
(2) reduce the percentage in aggregate principal amount of
the outstanding Notes of such series, the consent of whose
Holders is required for any such supplemental indenture, or the
consent of whose Holders is required for any waiver (of
compliance with certain provisions of the Indenture or certain
defaults thereunder and their consequences) with respect to the
Notes of such series provided for in the Indenture;
(3) modify the obligations of the Company to make a Change
of Control Offer or an Asset Sale Offer with respect to the
Notes of such series upon a Change of Control or Asset Sale, as
the case may be, if such modification was done after the
occurrence of such event;
(4) modify or change any provision of the Indenture
affecting the ranking of the Notes of such series or any Note
Guarantee of the Notes of such series in a manner adverse to the
Holders of the Notes of such series;
(5) modify any of the provisions of the Indenture described
in this paragraph or provisions relating to waiver of defaults
or certain covenants with respect to the Notes of such series,
except to increase any such percentage required for such actions
or to provide that certain other provisions of the Indenture
cannot be modified or waived without the consent of the Holder
of each outstanding Note affected thereby; or
(6) release any Guarantees with respect to the Notes of
such series required to be maintained under the Indenture (other
than in accordance with the terms of the Indenture).
The Holders of not less than a majority in aggregate principal
amount of the outstanding Notes of a particular series may on
behalf of the Holders of all the Notes of such series waive any
past Default with respect to the Notes of such series under the
Indenture and its consequences, except a Default:
(1) in any payment in respect of the principal of (or
premium, if any) or interest on any Notes of such series
(including any Note of such series which is required to have
been purchased pursuant to a Change of Control Offer or Asset
Sale Offer which has been made by the Company); or
(2) in respect of a covenant or provision of the Indenture
which under the Indenture cannot be modified or amended without
the consent of the Holder of each outstanding Note of such
series affected.
43
Satisfaction
and Discharge of the Indenture; Defeasance
Discharge
The Company may terminate its obligations and the obligations of
the Guarantors with respect to the outstanding Notes of either
series and the related Guarantees under the Indenture, except
for those which expressly survive by the terms of the Indenture,
when:
(1) either: (A) all Notes of such series theretofore
authenticated and delivered have been delivered to the Trustee
for cancellation, or (B) all such Notes not theretofore
delivered to the Trustee for cancellation (i) have become
due and payable or (ii) will become due and payable within
one year or are to be called for redemption within one year (a
Discharge) under irrevocable arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of
the Company, and the Company has irrevocably deposited or caused
to be deposited with the Trustee funds in an amount sufficient
to pay and discharge the entire indebtedness on the Notes of
such series, not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest to
the Stated Maturity or date of redemption;
(2) the Company has paid or caused to be paid all other
sums then due and payable under the Indenture by the Company;
(3) with respect to clause (1)(B) above, the deposit will
not result in a breach or violation of, or constitute a default
under, any other instrument to which the Company or any
Guarantor is a party or by which the Company or any Guarantor is
bound (other than a Default or Event of Default under the
Indenture or a default or event of default under any such other
instrument resulting from borrowing funds to be applied to make
such deposit (and any similar concurrent deposit relating to
other Debt) or the granting of Liens in connection therewith);
(4) with respect to clause (1)(B) above, the Company has
delivered irrevocable instructions to the Trustee under the
Indenture to apply the deposited money toward the payment of the
applicable series of Notes at maturity or on the redemption
date, as the case may be; and
(5) the Company has delivered to the Trustee an
Officers Certificate and an opinion of counsel
satisfactory to the Trustee, each stating that all conditions
precedent under the Indenture relating to the Discharge have
been complied with.
Defeasance
The Company may elect, at its option, to have its obligations
and the obligations of the Guarantors discharged with respect to
the outstanding Notes of either series and the related
Guarantees (legal defeasance). Legal
defeasance means that the Company will be deemed to have paid
and discharged the entire indebtedness represented by the
outstanding Notes of such series, except for:
(1) the rights of Holders of such Notes to receive payments
in respect of the principal of and any premium and interest on
such Notes when payments are due;
(2) the Companys obligations with respect to such
Notes concerning issuing temporary Notes, registration of Notes,
mutilated, destroyed, lost or stolen Notes and the maintenance
of an office or agency for payment and money for security
payments held in trust;
(3) the rights, powers, trusts, duties and immunities of
the Trustee; and
(4) the defeasance provisions of the Indenture.
In addition, the Company may elect, at its option, to have its
obligations released with respect to certain covenants as they
relate to either series of Notes, including, without limitation,
its obligation to make offers to purchase Notes of such series
in connection with any Change of Control or Asset Sale, in the
Indenture (covenant defeasance) and any
omission to comply with such obligation shall not constitute a
Default or an Event of Default with respect to the Notes of such
series. In the event covenant defeasance occurs, certain
44
events (not including non-payment, bankruptcy and insolvency
events) described under Events of Default will no
longer constitute an Event of Default with respect to the
applicable series of Notes and the Guarantors will be released
from their obligations with respect to the related Note
Guarantees related to such covenants.
In order to exercise either legal defeasance or covenant
defeasance with respect to outstanding Notes of either series:
(1) the Company must irrevocably have deposited or caused
to be deposited with the Trustee as trust funds in trust for the
purpose of making the following payments, specifically pledged
as security for, and dedicated solely to the benefits of the
Holders of such Notes: (A) money in an amount, or
(B) U.S. government obligations, which through the
scheduled payment of principal and interest in respect thereof
in accordance with their terms will provide, not later than the
due date of any payment, money in an amount or (C) a
combination thereof, in each case sufficient without
reinvestment, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee to pay and
discharge, the entire indebtedness in respect of the principal
of and premium, if any, and interest on the Notes of such series
on the Stated Maturity thereof or (if the Company has made
irrevocable arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name and at
the expense of the Company) the redemption date thereof, as the
case may be, in accordance with the terms of the Indenture and
the Notes of such series;
(2) in the case of legal defeasance, the Company shall have
delivered to the Trustee an opinion of counsel satisfactory to
the Trustee stating that (A) the Company has received from,
or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of the Indenture, there has
been a change in the applicable United States federal income tax
law, in either case (A) or (B) to the effect that, and
based thereon such opinion shall confirm that, the Holders of
the Notes of such series will not recognize gain or loss for
United States federal income tax purposes as a result of the
deposit and legal defeasance to be effected with respect to the
Notes of such series and will be subject to United States
federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit and legal
defeasance were not to occur;
(3) in the case of covenant defeasance, the Company shall
have delivered to the Trustee an opinion of counsel satisfactory
to the Trustee to the effect that the Holders of outstanding
Notes of such series will not recognize gain or loss for United
States federal income tax purposes as a result of the deposit
and covenant defeasance to be effected with respect to the Notes
of such series and will be subject to United States federal
income tax on the same amount, in the same manner and at the
same times as would be the case if such deposit and covenant
defeasance were not to occur;
(4) no Default or Event of Default with respect to the
outstanding Notes of such series shall have occurred and be
continuing at the time of such deposit after giving effect
thereto (other than a Default or Event of Default resulting from
the borrowing of funds to be applied to such deposit (and any
similar concurrent deposit relating to other Debt) and the grant
of any Lien to secure such borrowing);
(5) such legal defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a default
under, any material agreement or material instrument (other than
the Indenture) to which the Company is a party or by which the
Company is bound (other than a default or event of default under
any such other instrument resulting from borrowing funds to be
applied to make the deposit under the Indenture in connection
with the legal defeasance or covenant defeasance (and any
similar concurrent deposit relating to other Debt) or the
granting of Liens in connection therewith); and
(6) the Company shall have delivered to the Trustee an
Officers Certificate and an opinion of counsel
satisfactory to the Trustee, each stating that all conditions
precedent with respect to such legal defeasance or covenant
defeasance have been complied with.
In the event of a legal defeasance or a Discharge, a Holder
whose taxable year straddles the deposit of funds and the
distribution in redemption to such Holder would be subject to
tax on any gain (whether characterized as capital gain or market
discount) in the year of deposit rather than in the year of
receipt. In
45
connection with a Discharge, in the event the Company becomes
insolvent within the applicable preference period after the date
of deposit, monies held for the payment of the Notes may be part
of the bankruptcy estate of the Company, disbursement of such
monies may be subject to the automatic stay of the bankruptcy
code and monies disbursed to Holders may be subject to
disgorgement in favor of the Companys estate. Similar
results may apply upon the insolvency of the Company during the
applicable preference period following the deposit of monies in
connection with legal defeasance.
Notwithstanding the foregoing, the opinion of counsel required
by clause (2) above with respect to a legal defeasance in
respect of either series of Notes need not to be delivered if
all Notes of such series not theretofore delivered to the
Trustee for cancellation (x) have become due and payable,
or (y) will become due and payable within one year at
Stated Maturity 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 Company.
The
Trustee
The Bank of New York Mellon Trust Company, N.A., the
Trustee under the Indenture, will be the initial paying agent
and registrar for each series of the Notes. An affiliate of the
Trustee from time to time may extend credit to the Company in
the normal course of business. Except during the continuance of
an Event of Default, the Trustee is required to perform only
such duties as are specifically set forth in the Indenture.
During the continuance of an Event of Default that has not been
cured or waived, the Trustee will exercise such of the rights
and powers vested in it by the Indenture and use the same degree
of care and skill in their exercise or use under the
circumstances as would a prudent person in the conduct of its
own affairs.
The Indenture and the Trust Indenture Act contain certain
limitations on the rights of the Trustee, should it become a
creditor of the Company, to obtain payment of claims in certain
cases or to realize on certain property received in respect of
any such claim as security or otherwise. The Trustee will be
permitted to engage in other transactions; however, if it
acquires any conflicting interest (as defined in the
Trust Indenture Act) it must eliminate such conflict within
90 days, apply to the Commission for permission to continue
or resign.
The Holders of a majority in principal amount of the outstanding
Notes of each series will have the right to direct the time,
method and place of conducting any proceeding for any remedy
with respect to such series of Notes available to the Trustee or
exercising any trust or power conferred on the Trustee with
respect to such series of Notes, subject to receipt by the
Trustee of security or indemnity satisfactory to the Trustee and
subject to certain exceptions. However, the Trustee may refuse
to follow any direction that conflicts with law or the Indenture
that the Trustee determines may be unduly prejudicial to the
rights of other Holders of Notes or that may involve the Trustee
in personal liability. The Indenture provides that in case an
Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by the
Indenture, and use the same degree of care and skill in their
exercise or use under the circumstances, as would a prudent
person. Subject to such provisions, the Trustee shall be under
no obligation to exercise any of the rights or powers vested in
it by the Indenture at the request or direction of any of the
Holders pursuant to the Indenture, unless such Holders shall
have provided to the Trustee security or indemnity reasonably
satisfactory to the Trustee against the costs, expenses and
liabilities which might be incurred by it in compliance with
such request or direction.
No recourse may, to the full extent permitted by applicable law,
be taken, directly or indirectly, with respect to the
obligations of the Company or the Guarantors on the Notes or
under the Indenture or any related documents, any certificate or
other writing delivered in connection therewith, against
(i) the Trustee in its individual capacity, (ii) any
partner, owner, beneficiary, agent, officer, director, employee,
agent, successor or assign of the Trustee, each in its
individual capacity, or (iii) any holder of equity in the
Trustee.
No
Personal Liability of Stockholders, Partners, Officers or
Directors
No director, officer, employee, stockholder, general or limited
partner or incorporator, past, present or future, of the Company
or any of its Subsidiaries, as such or in such capacity, shall
have any personal liability
46
for any obligations of the Company under the Notes, any Note
Guarantee or the Indenture by reason of his, her or its status
as such director, officer, employee, stockholder, general or
limited partner or incorporator. Each Holder of Notes by
accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the
issuance of the Notes and Note Guarantees.
Governing
Law
The Indenture, the Notes and Note Guarantees are governed by,
and will be construed in accordance with, the laws of the State
of New York.
Certain
Definitions
Set forth below is a summary of certain of the defined terms
used in the Indenture. Reference is made to the Indenture for
the full definition of all such terms, as well as any
capitalized term used herein for which no definition is provided.
2017 Note Applicable Premium means, with
respect to any 2017 Note on any applicable redemption date, the
greater of:
(1) 1% of the then outstanding principal amount of the 2017
Note; and
(2) the excess of:
(a) the present value at such redemption date of
(i) the Redemption Price of the 2017 Note at July 15,
2013 (such Redemption Price being set forth in the table
appearing above under the caption Optional
Redemption 2017 Notes) plus (ii) all
required interest payments due on the 2017 Note through
July 15, 2013 (excluding accrued but unpaid interest),
computed using a discount rate equal to the applicable Treasury
Rate as of such redemption date plus 50 basis points; over
(b) the then outstanding principal amount of the 2017 Note.
2020 Note Applicable Premium means, with
respect to any 2020 Note on any applicable redemption date, the
greater of:
(1) 1% of the then outstanding principal amount of the 2020
Note; and
(2) the excess of:
(a) the present value at such redemption date of
(i) the Redemption Price of the 2020 Note at July 15,
2014 (such Redemption Price being set forth in the table
appearing above under the caption Optional
Redemption 2020 Notes) plus (ii) all
required interest payments due on the 2020 Note through
July 15, 2014 (excluding accrued but unpaid interest),
computed using a discount rate equal to the applicable Treasury
Rate as of such redemption date plus 50 basis points; over
(b) the then outstanding principal amount of the 2020 Note.
Acquired Debt means Debt (1) of a Person
(including an Unrestricted Subsidiary) existing at the time such
Person becomes a Restricted Subsidiary or (2) assumed in
connection with the acquisition of assets from such Person.
Acquired Debt shall be deemed to have been Incurred, with
respect to clause (1) of the preceding sentence, on the
date such Person becomes a Restricted Subsidiary and, with
respect to clause (2) of the preceding sentence, on the
date of consummation of such acquisition of assets;
provided, however, that Debt of such acquired
Person or assumed in connection with such acquisition of assets
that is redeemed, defeased, retired or otherwise repaid
substantially concurrently with the transactions by which
(x) such Person merges with or into or becomes a Restricted
Subsidiary of, such Person or (y) such assets are acquired
shall not be Acquired Debt.
Additional Interest means all additional
interest owing on the Original Notes pursuant to the
Registration Rights Agreement.
47
Affiliate means, with respect to any Person,
any other Person directly or indirectly controlling, directly or
indirectly controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition,
control (including, with correlative meanings, the
terms controlling, controlled by and
under common control with) with respect to any
Person, means the possession, directly or indirectly, 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. For the avoidance of
doubt, Fidelity National Financial, Inc., Lender Processing
Services, Inc., and each of their respective Subsidiaries, shall
not be deemed to be Affiliates of the Company or any of its
Restricted Subsidiaries solely due to overlapping officers or
directors.
Asset Acquisition means:
(a) an Investment by the Company or any Restricted
Subsidiary in any other Person pursuant to which such Person
shall become a Restricted Subsidiary, or shall be merged with or
into the Company or any Restricted Subsidiary; or
(b) the acquisition by the Company or any Restricted
Subsidiary of the assets of any Person which constitute all or
substantially all of the assets of such Person, or any division
or line of business of such Person.
Asset Sale means:
(i) the sale, conveyance, transfer or other disposition,
whether in a single transaction or a series of related
transactions, of property or assets (including by way of a Sale
and Leaseback Transaction) of the Company or any of its
Restricted Subsidiaries (each referred to in this definition as
a disposition); or
(ii) the issuance or sale of Capital Interests in any
Restricted Subsidiary, whether in a single transaction or a
series of related transactions (other than Preferred Interests
and Redeemable Capital Interests in Restricted Subsidiaries
issued in compliance with the covenant described under
Limitation on Incurrence of Debt);
in each case, other than:
(a) any disposition of Eligible Cash Equivalents or
Investment Grade Securities or obsolete, damaged, surplus or
worn out property in the ordinary course of business or any
disposition of inventory or goods (or other assets) no longer
used in the ordinary course of business (including dispositions
consisting of abandonment of intellectual property rights which,
in the good faith judgment of the Company, are not material to
the conduct of the business of the Company and its Restricted
Subsidiaries, taken as a whole);
(b) the disposition of all or substantially all of the
assets of the Company in a manner permitted pursuant to the
provisions described above under Certain
Covenants Consolidation, Merger, Conveyance,
Transfer or Lease or any disposition that constitutes a
Change of Control pursuant to the Indenture;
(c) the making of any Restricted Payment or Permitted
Investment that is permitted to be made, and is made, under the
covenant described above under Limitation on Restricted
Payments;
(d) any disposition of assets of the Company or any
Subsidiary or issuance or sale of Capital Interests in any
Restricted Subsidiary in any transaction or series of related
transactions with an aggregate Fair Market Value of less than
$75 million;
(e) any disposition of property or assets or issuance of
securities by a Restricted Subsidiary of the Company to the
Company or by the Company or a Restricted Subsidiary of the
Company to another Restricted Subsidiary of the Company;
(f) to the extent allowable under Section 1031 of the
Code or any comparable or successor provision, any exchange of
like property (excluding any boot thereon) in the ordinary
course of business;
(g) the lease, license, assignment or
sub-lease of
any property in the ordinary course of business;
48
(h) any issuance or sale of Capital Interests in, or Debt
or other securities of, or sale of assets of, an Unrestricted
Subsidiary;
(i) foreclosures, condemnation or any similar action on
assets (or exercise of termination rights under any lease,
license, assignment or sublease of any real or personal
property) or the granting of Liens not prohibited by the
Indenture;
(j) sales of Securitization Assets, or participations
therein, in connection with any Securitization Financing;
(k) the sale, discount or other disposition of inventory,
accounts receivable or notes receivable in the ordinary course
of business, or in connection with the collection or compromise
thereof, or the conversion of accounts receivable to notes
receivable;
(l) any financing transaction with respect to property
built or acquired by the Company or any Restricted Subsidiary
after the Issue Date, including dispositions in connection with
Sale and Leaseback Transactions and Securitization Financings
permitted by the Indenture;
(m) dispositions in the ordinary course of business,
including disposition in connection with any Settlement,
dispositions of Settlement Assets, and dispositions of
Investments in Joint Ventures to the extent required by, or made
pursuant to buy/sell arrangements between the joint venture
parties set forth in, joint venture arrangements and similar
binding arrangements;
(n) any issuance or sale of Capital Interests in any
Restricted Subsidiary to any Person for which such Restricted
Subsidiary provides shared purchasing, billing, collection or
similar services in the ordinary course of business;
(o) any disposition of assets to a governmental entity,
authority or agency that continue in use by the Company or any
Restricted Subsidiary, so long as the Company or any Restricted
Subsidiary may obtain title to such assets upon reasonable
notice by paying a nominal fee;
(p) voluntary terminations of Swap Contracts and Hedging
Obligations;
(q) dispositions in accordance with the Cash Management
Practices or in connection with the Vault Cash
Operations; and
(r) dispositions of real property and related assets in the
ordinary course of business in connection with relocation
activities for directors, officers, members of management,
employees or consultants of the Company or any Restricted
Subsidiary.
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) of the total obligations of the lessee for
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).
Average Life means, as of any date of
determination, with respect to any Debt, the quotient obtained
by dividing (i) the sum of the products of (x) the
number of years from the date of determination to the dates of
each successive scheduled principal payment (including any
sinking fund or mandatory redemption payment requirements) of
such Debt multiplied by (y) the amount of such principal
payment by (ii) the sum of all such principal payments.
Board of Directors means (i) with
respect to a corporation, the board of directors of such
corporation or any duly authorized committee thereof; and
(ii) with respect to any other entity, the board of
directors or similar body of the general partner or managers of
such entity or any duly authorized committee thereof.
Capital Interests in any Person means any and
all shares, interests (including Preferred Interests),
participations or other equivalents in the equity interest
(however designated) in such Person and any rights (other than
Debt securities convertible into an equity interest), warrants
or options to acquire an equity interest in such Person.
49
Capital Lease Obligations means any
obligation under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP; and the
amount of Debt represented by such obligation shall be the
capitalized amount of such obligations determined in accordance
with GAAP; and the Stated Maturity thereof shall be the date of
the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty.
Cash Management Practices means the cash,
Eligible Cash Equivalent, and short-term investment management
practices of the Company and its Subsidiaries as approved by the
Board of Directors or chief financial officer of the Company
from time to time, including Debt of the Company or any of its
Subsidiaries having a maturity of 92 days or less
representing the borrowings from any financial institution with
which the Company or any of its Subsidiaries has a depository or
other investment relationship in connection with such practices
(or any Affiliate of such financial institution), which
borrowings may be secured by the cash, Eligible Cash Equivalents
and other short-term investments purchased by the Company or any
of its Subsidiaries with the proceeds of such borrowings.
Change of Control means the occurrence of any
of the following:
(1) the sale, lease or transfer, in one or a series of
related transactions, of all or substantially all of the assets
of the Company and its Subsidiaries, taken as a whole, to any
Person (unless holders of a majority of the aggregate voting
power of the Voting Interests of the Company, immediately prior
to such transaction, hold securities of the surviving or
transferee Person that represent, immediately after such
transaction, at least a majority of the aggregate voting power
of the Voting Interests of the surviving Person);
(2) the Company becomes aware (by way of a report or any
other filing pursuant to Section 13(d) of the Exchange Act,
proxy, vote, written notice or otherwise) of the acquisition by
any Person or group (within the meaning of Section 13(d)(3)
or Section 14(d)(2) of the Exchange Act, or any successor
provision), including any group acting for the purpose of
acquiring, holding or disposing of securities (within the
meaning of
Rule 13d-5(b)(1)
under the Exchange Act or any successor provision), in a single
transaction or in a series of related transactions, by way of
merger, consolidation or other business combination or purchase
of beneficial ownership (within the meaning of
Rule 13d-3
under the Exchange Act, or any successor provision) of more than
50% of the total voting power of the Voting Interests in the
Company; or
(3) during any period of 12 consecutive months, individuals
who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose
election by the Board of Directors or whose nomination for
election by the equityholders of the Company was approved by a
vote of a majority of the directors of the Company then still in
office who were either directors at the beginning of such period
or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
Companys Board of Directors then in office.
Code means the Internal Revenue Code of 1986,
as amended from time to time and the regulations promulgated
thereunder.
Commission means the Securities and Exchange
Commission.
Common Interests of any Person means Capital
Interests in such Person that do not rank prior, as to the
payment of dividends or as to the distribution of assets upon
any voluntary or involuntary liquidation, dissolution or winding
up of such Person, to Capital Interests of any other class in
such Person.
Company means Fidelity National Information
Services, Inc. and any successor thereto.
50
Consolidated Cash Flow Available for Fixed
Charges means, with respect to any Person for any
period:
(i) Consolidated Net Income plus the sum of, without
duplication, the amounts for such period, taken as a single
accounting period, to the extent deducted in such period in
computing Consolidated Net Income, of:
(a) Consolidated Interest Expense;
(b) Consolidated Income Tax Expense;
(c) depreciation and amortization expense (including
amortization of intangibles, goodwill and organization costs);
(d) letter of credit fees;
(e) non-cash expenses resulting from any employee benefit
or management compensation plan or the grant of stock and stock
options to employees of the Company or any of its Restricted
Subsidiaries pursuant to a written plan or agreement or the
treatment of such options under variable plan accounting;
(f) all extraordinary charges;
(g) non-cash amortization (or write offs) of financing
costs (including debt discount, debt issuance costs and
commissions and other fees associated with Indebtedness) of such
Person and its Restricted Subsidiaries;
(h) cash expenses incurred in connection with these
offerings of Notes or, to the extent permitted hereunder, any
Permitted Investment or Incurrence of Debt permitted to be made
under the Indenture (in each case, whether or not consummated);
(i) any losses realized upon the disposition of property or
assets outside of the ordinary course of business;
(j) to the extent actually reimbursed, expenses incurred to
the extent covered by indemnification provisions in any
agreement in connection with an acquisition;
(k) to the extent covered by insurance, expenses with
respect to liability or casualty events or business interruption;
(l) any non-cash purchase accounting adjustment and any
non-cash
write-up,
write-down or write-off with respect to re-valuing assets and
liabilities in connection with any Permitted Investment;
(m) non-cash losses from Joint Ventures and non-cash
minority interest reductions;
(n) fees and expenses in connection with Refinancing Debt;
(o) (i) non-cash, non-recurring charges with respect
to employee severance, (ii) other non-cash, non-recurring
charges so long as such charges described in this
clause (ii) do not result in a cash charge in a future
period (except as permitted under clause (o)(iii)) and
(iii) non-recurring charges other than those referred to in
clauses (i) and (ii); and
(p) other expenses and charges of such Person and its
Restricted Subsidiaries reducing Consolidated Net Income which
do not represent a cash item in such period or any future
period; minus
(ii) an amount which, in the determination of Consolidated
Net Income, has been included for (a) (I) non-cash gains
(other than with respect to cash actually received) and
(II) all extraordinary gains, and (b) any gains
realized upon the disposition of property outside of the
ordinary course of business.
51
Consolidated Fixed Charge Coverage Ratio
means, with respect to any Person, the ratio of the aggregate
amount of Consolidated Cash Flow Available for Fixed Charges of
such Person for the four full fiscal quarters, treated as one
period, for which financial information in respect thereof is
available immediately preceding the date of the transaction (the
Transaction Date) giving rise to the need to
calculate the Consolidated Fixed Charge Coverage Ratio (such
four full fiscal quarter period being referred to herein as the
Four Quarter Period) to the aggregate amount
of Consolidated Fixed Charges of such Person for the Four
Quarter Period. In addition to and without limitation of the
foregoing, for purposes of this definition, Consolidated
Cash Flow Available for Fixed Charges and
Consolidated Fixed Charges shall be calculated after
giving effect (i) to the cost of any compensation,
remuneration or other benefit paid or provided to any employee,
consultant, Affiliate or equity owner of the entity involved in
any Asset Acquisition to the extent such costs are eliminated or
reduced (or public announcement has been made of the intent to
eliminate or reduce such costs) prior to the date of such
calculation and not replaced; and (ii) on a pro forma
basis for the period of such calculation, to any Asset Sales
or other dispositions or Asset Acquisitions, investments,
mergers, consolidations and discontinued operations (as
determined in accordance with GAAP) occurring during the Four
Quarter Period or any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as
if such Asset Sale or other disposition or Asset Acquisition
(including the incurrence or assumption of any such Acquired
Debt), investment, merger, consolidation or disposed operation
occurred on the first day of the Four Quarter Period. For
purposes of this definition, pro forma calculations shall
be made in accordance with Article 11 of
Regulation S-X
promulgated under the Securities Act.
Furthermore, in calculating Consolidated Fixed
Charges for purposes of determining the denominator (but
not the numerator) of this Consolidated Fixed Charge
Coverage Ratio:
(i) interest on outstanding Debt determined on a
fluctuating basis as of the Transaction Date and which will
continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest
on such Debt in effect on the Transaction Date (taking into
account any Swap Contracts and Hedging Obligations applicable to
such Debt); and
(ii) if interest on any Debt actually incurred on the
Transaction Date may optionally be determined at an interest
rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the
interest rate in effect on the Transaction Date will be deemed
to have been in effect during the Four Quarter Period.
If such Person or any of its Restricted Subsidiaries directly or
indirectly Guarantees Debt of a third Person, the above clause
shall give effect to the incurrence of such Guaranteed Debt as
if such Person or such Subsidiary had directly incurred or
otherwise assumed such Guaranteed Debt.
Consolidated Fixed Charges means, with
respect to any Person for any period, the sum of, without
duplication, the amounts for such period of:
(i) Consolidated Interest Expense; and
(ii) the product of (a) all dividends and other
distributions paid or accrued during such period in respect of
Redeemable Capital Interests of such Person and its Restricted
Subsidiaries (other than dividends paid in Qualified Capital
Interests), times (b) a fraction, the numerator of which is
one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of such
Person, expressed as a decimal.
Consolidated Income Tax Expense means, with
respect to any Person for any period, the provision for federal,
state, local and foreign income or franchise taxes, or other
similar taxes, of such Person and its Restricted Subsidiaries
for such period as determined on a consolidated basis in
accordance with GAAP 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 in computing Consolidated Net Income.
52
Consolidated Interest Expense means, with
respect to any Person for any period, without duplication, the
sum of:
(i) the total interest expense of such Person and its
Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP, including, without
limitation:
(a) any amortization of Debt discount;
(b) the net cost under any Hedging Obligation or Swap
Contract in respect of interest rate protection (including any
amortization of discounts);
(c) the interest portion of any deferred payment obligation;
(d) all commissions, discounts and other fees and charges
owed with respect to letters of credit, bankers
acceptances, financing activities or similar activities; and
(e) all accrued interest;
(ii) the interest component of Capital Lease Obligations
paid, accrued
and/or
scheduled to be paid or accrued by such Person and its
Restricted Subsidiaries during such period determined on a
consolidated basis in accordance with GAAP; and
(iii) all capitalized interest of such Person and its
Restricted Subsidiaries for such period;
less interest income of such Person and its Restricted
Subsidiaries for such period; provided, however,
that Consolidated Interest Expense will exclude (I) the
amortization or write off of Debt issuance costs and deferred
financing fees, commissions, fees and expenses and (II) any
expensing of interim loan commitment and other financing fees.
Consolidated Net Income means, with respect
to any Person, for any period, the consolidated net income (or
loss) of such Person and its Restricted Subsidiaries for such
period as determined in accordance with GAAP, adjusted, to the
extent included in calculating such net income, by:
(A) excluding, without duplication
(i) all extraordinary gains or losses (net of fees and
expense relating to the transaction giving rise thereto),
income, expenses or charges;
(ii) the portion of net income of such Person and its
Restricted Subsidiaries allocable to minority interest in
unconsolidated Persons or Investments in Unrestricted
Subsidiaries to the extent that cash dividends or distributions
have not actually been received by such Person or one of its
Restricted Subsidiaries; provided that for the avoidance
of doubt, Consolidated Net Income shall be increased in amounts
equal to the amounts of cash actually received;
(iii) gains or losses in respect of any Asset Sales by such
Person or one of its Restricted Subsidiaries (net of fees and
expenses relating to the transaction giving rise thereto), on an
after-tax basis;
(iv) the net income (loss) from any disposed or
discontinued operations or any net gains or losses on disposed
or discontinued operations, on an after-tax basis;
(v) solely for purposes of determining the amount available
for Restricted Payments under clause (c) of the first
paragraph of Certain Covenants Limitation on
Restricted Payments, the net income of any Restricted
Subsidiary (other than a Guarantor) or such Person to the extent
that the declaration of dividends or similar distributions by
that Restricted Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulations applicable to
that Restricted Subsidiary or its stockholders; provided
that for the avoidance of doubt, Consolidated Net Income
shall be increased in amounts equal to the amounts of cash
actually received;
53
(vi) any gain or loss realized as a result of the
cumulative effect of a change in accounting principles;
(vii) any fees and expenses paid in connection with the
issuance of the Notes;
(viii) non-cash compensation expense incurred with any
issuance of equity interests to an employee of such Person or
any Restricted Subsidiary;
(ix) any net after-tax gains or losses attributable to the
early extinguishment or conversion of Debt;
(x) any non-cash impairment charges or asset write-off or
write-down resulting from the application of Accounting
Standards Codification 350, Intangibles Goodwill and
Other, Accounting Standards Codification 360, Property, Plant,
and Equipment, and Accounting Standards Codification 805,
Business Combinations;
(xi) non-cash gains, losses, income and expenses resulting
from fair value accounting required by Accounting Standards
Codification 815, Derivatives and Hedging, or any related
subsequent Statement of Financial Accounting Standards;
(xii) accruals and reserves that are established within
12 months after the closing of any acquisition that are so
required to be established as a result of such acquisition in
accordance with GAAP;
(xiii) any fees, expenses, charges or Integration Costs
incurred during such period, or any amortization thereof for
such period, in connection with any acquisition, Investment,
Asset Sale, disposition, Incurrence or repayment of Debt
(including such fees, expenses or charges related to any Credit
Facility), issuance of Capital Interests, refinancing
transaction or amendment or modification of any Debt instrument,
and including, in each case, any such transaction undertaken but
not completed, and any charges or non-recurring merger or
acquisition costs incurred during such period as a result of any
such transaction, in each case whether or not successful;
(xiv) any net unrealized gain or loss (after any offset)
resulting from currency translation gains or losses related to
currency remeasurements of Debt (including any net gain or loss
resulting from obligations under Swap Contracts or Hedging
Obligations for currency exchange risk) and any foreign currency
translation gains or losses;
(xv) any accruals and reserves that are established for
expenses and losses, in respect of equity-based awards
compensation expense (provided that if any such non-cash
charges represent an accrual or reserve for potential cash items
in any future period, the cash payment in respect thereof in
such future period shall reduce Consolidated Net Income to such
extent, and excluding amortization of a prepaid cash item that
was paid in a prior period);
(xvi) any expenses, charges or losses that are covered by
indemnification or other reimbursement provisions in connection
with any Permitted Investment or any sale, conveyance, transfer
or other disposition of assets permitted under the Indenture, to
the extent actually reimbursed, or, so long as the Issuer has
made a determination that a reasonable basis exists for
indemnification or reimbursement and only to the extent that
such amount is in fact indemnified or reimbursed within
365 days of such determination (with a deduction in the
applicable future period for any amount so added back to the
extent not so indemnified or reimbursed within such
365 days); and
(xvii) to the extent covered by insurance and actually
reimbursed, or, so long as the Company has made a determination
that there exists reasonable evidence that such amount will in
fact be reimbursed by the insurer and only to the extent that
such amount is in fact reimbursed within 365 days of the
date of such determination (with a deduction in the applicable
future period for any amount so added back to the extent not so
reimbursed within such 365 days), expenses, charges or
losses with respect to liability or casualty events or business
interruption; and
54
(B) including, without duplication, dividends and
distributions from Joint Ventures actually received in cash by
the Company.
Consolidated Total Leverage Ratio means, with
respect to any Person, the ratio of the aggregate amount of all
Debt of such Person and its Restricted Subsidiaries at the end
of the most recent fiscal period for which financial information
in respect thereof is available immediately preceding the date
of the transaction (the Transaction Date)
giving rise to the need to calculate the Consolidated Total
Leverage Ratio to the aggregate amount of Consolidated Cash Flow
Available for Fixed Charges of such Person for the Four Quarter
Period preceding the Transaction Date. In addition to and
without limitation of the foregoing, for purposes of this
definition, this ratio shall be calculated after giving effect
(i) to the cost of any compensation, remuneration or other
benefit paid or provided to any employee, consultant, Affiliate
or equity owner of the entity involved in any Asset Acquisition
to the extent such costs are eliminated or reduced (or public
announcement has been made of the intent to eliminate or reduce
such costs) prior to the date of such calculation and not
replaced; and (ii) on a pro forma basis for the
period of such calculation, to any Asset Sales or other
dispositions or Asset Acquisitions, investments, mergers,
consolidations and discontinued operations (as determined in
accordance with GAAP) occurring during the Four Quarter Period
or any time subsequent to the last day of the Four Quarter
Period and on or prior to the Transaction Date, as if such Asset
Sale or other disposition or Asset Acquisition (including the
incurrence or assumption of any such Acquired Debt), investment,
merger, consolidation or disposed operation occurred on the
first day of the Four Quarter Period. For purposes of this
definition, pro forma calculations shall be made in
accordance with Article 11 of
Regulation S-X
promulgated under the Securities Act.
If such Person or any of its Restricted Subsidiaries directly or
indirectly Guarantees Debt of a third Person, the above clause
shall give effect to the incurrence of such Guaranteed Debt as
if such Person or such Subsidiary had directly incurred or
otherwise assumed such Guaranteed Debt.
Credit Agreement means that certain Credit
Agreement, dated as of January 18, 2007, by and among
Fidelity National Information Services, Inc., and certain of its
subsidiaries party thereto, each lender from time to time party
thereto, JPMorgan Chase Bank, N.A., as Administrative Agent,
Swing Line Lender and
L/C Issuer,
and Bank of America, N.A., as Swing Line Lender, together with
all related notes, letters of credit, collateral documents,
guarantees, and any other related agreements and instruments
executed and delivered in connection therewith, in each case as
amended, modified, supplemented, restated, refinanced, refunded
or replaced in whole or in part from time to time including by
or pursuant to any agreement or instrument that extends the
maturity of any Debt thereunder, or increases the amount of
available borrowings thereunder (provided that such
increase in borrowings is permitted under the definition of the
term Permitted Debt), or adds Subsidiaries of
the Company as additional borrowers or guarantors thereunder, in
each case with respect to such agreement or any successor or
replacement agreement and whether by the same or any other
agent, lender, group of lenders, purchasers or Debt holders.
Credit Facilities means one or more credit
facilities (including the Credit Agreement) with banks or other
lenders providing for revolving loans or term loans or the
issuance of letters of credit or bankers acceptances or
the like.
Debt means at any time (without duplication),
with respect to any Person, the following: (i) all
indebtedness of such Person for money borrowed or for the
deferred and unpaid purchase price of property, excluding any
trade payables or other current liabilities incurred in the
normal course of business; (ii) all obligations of such
Person evidenced by bonds, debentures, notes, or other similar
instruments; (iii) all reimbursement obligations of such
Person with respect to letters of credit (other than letters of
credit that are secured by cash or Eligible Cash Equivalents),
bankers acceptances or similar facilities (excluding
obligations in respect of letters of credit or bankers
acceptances issued in respect of trade payables) issued for the
account of such Person; provided that such obligations
shall not constitute Debt except to the extent drawn and not
repaid within five business days; (iv) all indebtedness
created or arising under any conditional sale or other title
retention agreement with respect to property or assets acquired
by such Person; (v) all Capital Lease Obligations of such
Person; (vi) the maximum fixed redemption or repurchase
price of Redeemable Capital Interests in such Person at the time
of determination; (vii) any Swap Contracts and Hedging
Obligations of
55
such Person at the time of determination;
(viii) Attributable Debt with respect to any Sale and
Leaseback Transaction to which such Person is a party; and
(ix) all obligations of the types referred to in
clauses (i) through (viii) of this definition of
another Person, the payment of which, in either case,
(A) such Person has Guaranteed or (B) is secured by
(or the holder of such Debt or the recipient of such dividends
or other distributions has an existing right, whether contingent
or otherwise, to be secured by) any Lien upon the property or
other assets of such Person, even though such Person has not
assumed or become liable for the payment of such Debt.
For purposes of the foregoing: (a) the maximum fixed
repurchase price of any Redeemable Capital Interests that do not
have a fixed repurchase price shall be calculated in accordance
with the terms of such Redeemable Capital Interests as if such
Redeemable Capital Interests were repurchased on any date on
which Debt shall be required to be determined pursuant to the
Indenture; provided, however, that, if such
Redeemable Capital Interests are not then permitted to be
repurchased, the repurchase price shall be the book value of
such Redeemable Capital Interests; (b) the amount
outstanding at any time of any Debt issued with original issue
discount is the principal amount of such Debt less the remaining
unamortized portion of the original issue discount of such Debt
at such time as determined in conformity with GAAP, but such
Debt shall be deemed Incurred only as of the date of original
issuance thereof; (c) the amount of any Debt described in
clause (vii) is the net amount payable (after giving effect
to permitted set off) if such Swap Contracts or Hedging
Obligations are terminated at that time due to default of such
Person; (d) the amount of any Debt described in clause
(ix)(A) above shall be the maximum liability under any such
Guarantee; (e) the amount of any Debt described in clause
(ix)(B) above shall be the lesser of (I) the maximum amount
of the obligations so secured and (II) the Fair Market
Value of such property or other assets; and (f) interest,
fees, premium, expenses, additional payments, and charges on
obligations described in this definition of Debt, if
any, will not constitute Debt.
Notwithstanding the foregoing, in connection with the purchase
by the Company or any Restricted Subsidiary of any business, the
term Debt will exclude (x) customary
indemnification obligations, (y) post-closing payment
adjustments to which the seller may become entitled to the
extent such payment is determined by a final closing balance
sheet or such payment is otherwise contingent (provided,
however, that, at the time of closing, the amount of any
such payment is not determinable and, to the extent such payment
thereafter becomes fixed and finally determined, the amount is
paid within 60 days thereafter), and (z) any earn-out
obligation until such obligation appears in the liabilities
section of the balance sheet of such Person (provided
that any such obligation appearing as such a liability shall
continue to be excluded from Debt to the extent (A) such
Person is indemnified for the payment thereof by a solvent
Person or (B) amounts to be applied to the payment therefor
are in escrow).
The amount of Debt of any Person at any date shall be the
outstanding balance at such date of all unconditional
obligations as described above and the maximum liability, only
upon the occurrence of the contingency giving rise to the
obligations, of any contingent obligations at such date;
provided, however, that in the case of Debt sold
at a discount, the amount of such Debt at any time will be the
accreted value thereof at such time.
Default means any event that is, or after
notice or passage of time, or both, would be, an Event of
Default.
Designated Non-Cash Consideration means the
Fair Market Value of non-cash consideration received by the
Company or a Restricted Subsidiary in connection with an Asset
Sale that is so designated as Designated Non-Cash Consideration
pursuant to an Officers Certificate, setting forth the
basis of such valuation, executed by the principal financial
officer of the Company, less the amount of cash or Eligible Cash
Equivalents received in connection with a subsequent sale of or
collection on such Designated Non-Cash Consideration.
Domestic Restricted Subsidiary means any
Restricted Subsidiary that is formed or otherwise incorporated
in the United States or a State thereof or the District of
Columbia.
56
Eligible Bank means a bank or trust company
(i) that is organized and existing under the laws of the
United States of America or Canada, or any state, territory,
province or possession thereof and (ii) the senior Debt of
which is rated at least A3 by Moodys or at
least A- by Standard & Poors.
Eligible Cash Equivalents means any of the
following: (i) securities issued or directly and fully
guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof)
maturing not more than one year after the date of acquisition
(or such other maturities if not prohibited by the Credit
Agreement); (ii) time deposits in and certificates of
deposit of any Eligible Bank (or in any other financial
institution to the extent the amount of such deposit is within
the limits insured by the Federal Deposit Insurance
Corporation), provided that such Investments have a
maturity date not more than two years after date of acquisition
and that the Average Life of all such Investments is one year or
less from the respective dates of acquisition;
(iii) repurchase obligations with a term of not more than
180 days for underlying securities of the types described
in clause (i) above or clause (iv) below entered into
with any Eligible Bank or securities dealers of recognized
national standing; (iv) direct obligations issued by any
state of the United States or any political subdivision or
public instrumentality thereof, provided that such
Investments mature, or are subject to tender at the option of
the holder thereof, within 365 days after the date of
acquisition (or such other maturities if not prohibited by the
Credit Agreement) and, at the time of acquisition, have a rating
of at least
A-2
or
P-2
(or long-term ratings of at least A3 or
A-) from either S&P or Moodys, or, with
respect to municipal bonds, a rating of at least MIG 2 or VMIG 2
from Moodys (or equivalent ratings by any other nationally
recognized rating agency); (v) commercial paper of any
Person other than an Affiliate of the Company and other than
structured investment vehicles, provided that such
Investments have a rating of at least
A-2 or
P-2 from
either S&P or Moodys and mature within 180 days
after the date of acquisition (or such other maturities if not
prohibited by the Credit Agreement); (vi) overnight and
demand deposits in and bankers acceptances of any Eligible
Bank and demand deposits in any bank or trust company to the
extent insured by the Federal Deposit Insurance Corporation
against the Bank Insurance Fund; (vii) money market funds
(and shares of investment companies that are registered under
the Investment Company Act of 1940) substantially all of
the assets of which comprise Investments of the types described
in clauses (i) through (vi); (viii) United States
dollars, or money in other currencies received in the ordinary
course of business; (ix) asset-backed securities and
corporate securities that are eligible for inclusion in money
market funds; (x) fixed maturity securities which are rated
BBB- and above by S&P or Baa3 and above by Moodys;
provided that the aggregate amount of Investments by any
Person in fixed maturity securities which are rated BBB+, BBB or
BBB- by S&P or Baa1, Baa2 or Baa3 by Moodys shall not
exceed 20% of the aggregate amount of Investments in fixed
maturity securities by such Person; and (xi) instruments
equivalent to those referred to in clauses (i) through
(vi) above or funds equivalent to those referred to in
clause (vii) above denominated in Euros or any other
foreign currency customarily used by corporations for cash
management purposes in jurisdictions outside the United States
to the extent advisable in connection with any business
conducted by the Company or any Restricted Subsidiary, all as
determined in good faith by the Company.
Exchange Act means the Securities Exchange
Act of 1934, as amended.
Fair Market Value means, with respect to the
consideration received or paid in any transaction or series of
transactions, the fair market value thereof as determined in
good faith by the Company. In the case of a transaction between
the Company or a Restricted Subsidiary, on the one hand, and a
Securitization Vehicle, on the other hand, if the Board of
Directors of the Company determines in its sole discretion that
such determination is appropriate, a determination as to Fair
Market Value may be made at the commencement of the transaction
and be applicable to all dealings between the Securitization
Vehicle and the Company or such Restricted Subsidiary during the
course of such transaction.
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 or the District of Columbia and any Restricted
Subsidiary of such Foreign Subsidiary.
Four Quarter Period has the meaning set forth
in the definition of Consolidated Fixed Charge Coverage
Ratio.
57
GAAP means generally accepted accounting
principles in the United States, consistently applied, as set
forth in the Financial Accounting Standards Board
(FASB) Accounting Standards Codification and
the rules and interpretations of the Commission under the
authority of the federal securities laws, or in such other
statements by such other entity as may be approved by a
significant segment of the accounting profession of the United
States, which are in effect as of the Issue Date irrespective of
any subsequent change in such Accounting Standards Codification
or other statements or any subsequent adoption of International
Financial Reporting Standards.
Guarantee means, as applied to any Debt of
another Person, (i) a guarantee (other than by endorsement
of negotiable instruments for collection in the normal course of
business), direct or indirect, in any manner, of any part or all
of such Debt, (ii) any direct or indirect obligation,
contingent or otherwise, of a Person guaranteeing or having the
effect of guaranteeing the Debt of any other Person in any
manner and (iii) an agreement of a Person, direct or
indirect, contingent or otherwise, the practical effect of which
is to assure in any way the payment (or payment of damages in
the event of non-payment) of all or any part of such Debt of
another Person (and Guaranteed and
Guaranteeing shall have meanings that correspond to
the foregoing).
Guarantor means any Person that executes a
Note Guarantee in accordance with the provisions of the
Indenture and their respective successors and assigns.
Hedging Obligations of any Person means the
obligations of such Person pursuant to any interest rate
agreement, currency agreement or commodity agreement, excluding
commodity agreements relating to raw materials used in the
ordinary course of the Companys or any Restricted
Subsidiarys business.
Holder means a Person in whose name a Note is
registered in the security register. In connection with Notes
issued in global book-entry form, DTC shall be treated for all
purposes as the only registered holder of such Notes.
Incur means, with respect to any Debt or
other obligation of any Person, to create, issue, incur (by
conversion, exchange or otherwise), assume, Guarantee or
otherwise become liable in respect of such Debt or other
obligation or the recording, as required pursuant to GAAP or
otherwise, of any such Debt or other obligation on the balance
sheet of such Person; provided, however, that a
change in GAAP or an interpretation thereunder that results in
an obligation of such Person that exists at such time becoming
Debt shall not be deemed an Incurrence of such Debt. Debt
otherwise Incurred by a Person before it becomes a Subsidiary of
the Company shall be deemed to be Incurred at the time at which
such Person becomes a Subsidiary of the Company.
Incurrence, Incurred,
Incurrable and Incurring
shall have meanings that correspond to the foregoing. A
Guarantee by the Company or a Restricted Subsidiary of Debt
Incurred by the Company or a Restricted Subsidiary, as
applicable, shall not be a separate Incurrence of Debt. In
addition, the following shall not be deemed a separate
Incurrence of Debt:
(1) amortization of debt discount or accretion of principal
with respect to a non-interest bearing or other discount
security;
(2) the payment of regularly scheduled interest in the form
of additional Debt of the same instrument or the payment of
regularly scheduled dividends on Capital Interests in the form
of additional Capital Interests of the same class and with the
same terms;
(3) the obligation to pay a premium in respect of Debt
arising in connection with the issuance of a notice of
redemption or making of a mandatory Change of Control Offer or
Asset Sale Offer for such Debt; and
(4) unrealized losses or charges in respect of Swap
Contracts or Hedging Obligations.
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 Company, qualified to perform the task for which
it has been engaged.
Initial Purchasers means Banc of America
Securities LLC, J.P. Morgan Securities Inc., Goldman,
Sachs & Co., Wells Fargo Securities, LLC, BNP Paribas
Securities Corp., RBS Securities Inc., SunTrust
58
Robinson Humphrey, Inc., U.S. Bancorp Investments, Inc.,
Credit Agricole Securities (USA) Inc., ING Financial Markets
LLC, Mitsubishi UFJ Securities (USA), Inc., Mizuho Securities
USA Inc., PNC Capital Markets LLC, Scotia Capital (USA) Inc.,
and TD Securities (USA) LLC, as applicable, and such other
initial purchasers party to any purchase agreement entered into
in connection with the offer and sale of any Additional Note.
Integration Costs means, with respect to any
acquisition, all costs relating to the acquisition and
integration of the acquired business or operations into the
Company, including labor costs, legal fees, consulting fees,
travel costs and any other expenses relating to the integration
process.
Investment by any Person means any direct or
indirect loan, advance (or other extension of credit) or capital
contribution to (by means of any transfer of cash or other
property or assets to another Person or any other payments for
property or services for the account or use of another Person)
another Person (including an Affiliate), including, without
limitation, the following: (i) the purchase or acquisition
of any Capital Interest or other evidence of beneficial
ownership in another Person; (ii) the purchase, acquisition
or Guarantee of the Debt of another Person; and (iii) the
purchase or acquisition of the business or assets of another
Person substantially as an entirety, but shall exclude accounts
receivable and other extensions of trade credit, advances to
customers, commissions, travel and similar advances to officers
and employees, in each case made in the ordinary course of
business.
Investment Grade Rating means a rating equal
to or higher than Baa3 (or the equivalent) by Moodys and
BBB- (or the equivalent) by S&P, or an equivalent rating by
any other Rating Agency.
Investment Grade Securities means:
(1) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or
instrumentality thereof (other than Eligible Cash Equivalents);
(2) debt securities or debt instruments with an Investment
Grade Rating, but excluding any debt securities or instruments
constituting loans or advances among the Company and its
Subsidiaries;
(3) investments in any fund that invests exclusively in
investments of the type described in clauses (1) and
(2) and investments described in clause (i) of the
definition of Eligible Cash Equivalents, 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.
Issue Date means July 16, 2010.
Lien means, with respect to any property or
other asset, any mortgage, deed of trust, deed to secure Debt,
pledge, hypothecation, assignment, deposit arrangement, security
interest, lien (statutory or otherwise), charge, easement,
encumbrance, preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever on or
with respect to such property or other asset (including, without
limitation, any conditional sale or other title retention
agreement having substantially the same economic effect as any
of the foregoing).
Joint Venture means (a) any Person which
would constitute an equity method investee (as
defined under GAAP) of the Company or any of its Subsidiaries,
(b) any other Person designated by the Company in writing
to the Trustee (which designation shall be irrevocable) as a
Joint Venture for purposes of the Indenture and at
least 50% but less than 100% of whose Equity Interests are
directly owned by the Company or any of its Subsidiaries, and
(c) any Person in whom the Company or any of its
Subsidiaries beneficially owns any Equity Interest that is not a
Subsidiary.
Moodys means Moodys Investors Service,
Inc. and any successor to its rating agency business.
Net Proceeds means the aggregate cash
proceeds received by the Company or any of its Restricted
Subsidiaries in respect of any Asset Sale, including any cash
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
59
and the sale or disposition of such Designated Non-Cash
Consideration (including, without limitation, legal, accounting
and investment banking fees, brokerage and sales commissions,
survey costs, title insurance premiums, and related search and
recording charges, transfer taxes, deed or mortgage recording
taxes, other customary expenses and consultant and other
customary fees), any relocation expenses incurred as a result
thereof, taxes paid or payable as a result thereof (including,
in respect of any proceeds received in connection with any Asset
Sale of any Foreign Subsidiary, deductions in respect of
withholding taxes that are or would be payable in cash if such
funds were repatriated to the United States), payments required
to be made to holders of minority interests in Restricted
Subsidiaries as a result of such Asset Sale, amounts required to
be applied to the repayment of principal, premium, if any, and
interest on senior Debt required (other than required by
clause (a) of the second paragraph of Repurchase at
the Option of Holders Asset Sales) to be paid
as a result of such transaction, and any deduction of
appropriate amounts to be provided by the Company 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 Company 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).
obligations means any principal, premium,
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, fees, indemnifications, reimbursements (including
reimbursement obligations with respect to letters of credit and
bankers 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 Debt.
Officers Certificate means a
certificate signed by two officers of the Company or a
Guarantor, as applicable, one of whom must be the principal
executive officer, the principal financial officer, the
principal accounting officer, any corporate executive vice
president or the treasurer of the Company or such Guarantor, as
applicable.
Permitted Asset Swap means the concurrent
purchase and sale or exchange of Related Business Assets or a
combination of Related Business Assets and cash or Eligible Cash
Equivalents between the Company or any of its Restricted
Subsidiaries and another Person; provided that any cash
or Eligible Cash Equivalents received must be applied in
accordance with the covenant described under Repurchase at
the Option of Holders Asset Sales.
Permitted Debt means:
(i) Debt Incurred pursuant to any Credit Facilities in an
aggregate principal amount at any one time outstanding not to
exceed an amount equal to the greater of (x) an amount that
equals the sum of all outstanding term loans and revolving
credit commitments (whether or not funded) under the Credit
Agreement as of July 9, 2010 plus $750 million and
(y) 3.0 times the aggregate amount of Consolidated
Cash Flow Available for Fixed Charges for the Four Quarter
Period immediately preceding the date of the Incurrence;
(ii) Debt under the Notes issued on the Issue Date (and any
Exchange Notes pursuant to the Registration Rights Agreement)
and contribution, indemnification and reimbursement obligations
(including without limitation those to the Trustee) owed by the
Company or any Guarantor to any of the other of them in respect
of amounts paid or payable on such Notes;
(iii) Guarantees of the Notes (and any Exchange Notes
pursuant to the Registration Rights Agreement);
(iv) Debt of the Company or any Restricted Subsidiary
outstanding on the Issue Date (other than clauses (i),
(ii) or (iii) above);
(v) Debt owed to and held by the Company or a Restricted
Subsidiary;
60
(vi) Guarantees Incurred by the Company of Debt of a
Restricted Subsidiary otherwise permitted to be incurred under
the Indenture;
(vii) Guarantees of Debt among the Company and the
Restricted Subsidiaries, including Guarantees by any Restricted
Subsidiary of Debt under the Credit Agreement, provided
that (a) such Debt is Permitted Debt or is otherwise
Incurred in accordance with the Limitation on Incurrence
of Debt covenant and (b) such Guarantees are
subordinated to the Notes to the same extent as the Debt being
guaranteed;
(viii) Debt incurred in respect of workers
compensation claims, health, disability or other employee
benefits, property casualty or liability insurance, and
self-insurance obligations, and, for the avoidance of doubt,
indemnity, bid, performance, warranty, stay, release, appeal,
surety, customs and similar bonds, letters of credit for trade
payables or other operating purposes and completion guarantees
provided or incurred (including Guarantees thereof) by the
Company or a Restricted Subsidiary in the ordinary course of
business;
(ix) Debt under Swap Contracts and Hedging Obligations
(excluding Swap Contracts and Hedging Obligations entered into
for speculative purposes);
(x) Debt owed by the Company or a Restricted Subsidiary to
the Company or any Restricted Subsidiary, provided that
if for any reason such Debt ceases to be held by the Company or
a Restricted Subsidiary, as applicable, such Debt shall cease to
be Permitted Debt and shall be deemed Incurred as Debt of the
Company for purposes of the Indenture;
(xi) Debt of the Company or any Restricted Subsidiary
pursuant to Capital Lease Obligations and Purchase Money Debt,
provided that the aggregate principal amount of such Debt
outstanding at any time may not exceed $500 million in the
aggregate;
(xii) Debt arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification,
contribution, earnout, adjustment of purchase price, deferred
compensation or similar obligations, in each case, incurred or
assumed in connection with the acquisition or disposition of any
business, assets or Capital Interests of a Restricted Subsidiary
otherwise permitted under the Indenture;
(xiii) the issuance by any of the Companys Restricted
Subsidiaries to the Company or to any of its Restricted
Subsidiaries of shares of Preferred Interests; provided,
however, that:
(a) any subsequent issuance or transfer of Capital
Interests that results in any such Preferred Interests being
held by a Person other than the Company or a Restricted
Subsidiary; and
(b) any sale or other transfer of any such Preferred
Interests to a Person that is not either the Company or a
Restricted Subsidiary;
shall be deemed, in each case, to constitute an issuance of such
Preferred Interests by such Restricted Subsidiary that was not
permitted by this clause (xiii);
(xiv) Debt 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, however, that such Debt is
extinguished within five business days of Incurrence;
(xv) Debt of the Company or any Restricted Subsidiary not
otherwise permitted pursuant to this definition, in an aggregate
principal amount not to exceed $500 million at any time
outstanding;
(xvi) Debt Incurred by any Securitization Vehicle in a
Securitization Financing (which may include unsecured Guarantees
by the Company or any of its Restricted Subsidiaries of the
obligations of the Securitization Vehicle under such
Securitization Financing);
(xvii) 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;
61
(xviii) Debt of (a) the Company or a Restricted
Subsidiary Incurred to finance an acquisition or
(b) Persons that are acquired by the Company or any
Restricted Subsidiary or merged into the Company or a Restricted
Subsidiary in accordance with the terms of the covenant
described under Consolidation, Merger,
Conveyance, Transfer or Lease; provided that after
giving effect to such acquisition or merger, either (y) the
Company would be permitted to Incur at least $1.00 of additional
Debt pursuant to the Consolidated Fixed Charge Coverage Ratio,
or (z) the Consolidated Fixed Charge Coverage Ratio of the
Company and its Restricted Subsidiaries is greater than
immediately prior to such acquisition or merger;
(xix) obligations of the Company and its Restricted
Subsidiaries with respect to liabilities arising from the Vault
Cash Operations;
(xx) Debt consisting of (i) the financing of insurance
premiums or
(ii) take-or-pay
obligations of the Company or any Restricted Subsidiary
contained in supply arrangements, in each case, in the ordinary
course of business;
(xxi) Debt (including intercompany Debt among the Company
and its Subsidiaries) in respect of the Cash Management
Practices;
(xxii) Refinancing Debt;
(xxiii) Debt incurred by any Restricted Company
representing deferred compensation to employees of a Restricted
Company incurred in the ordinary course of business (including
those incurred in connection with any acquisitions);
(xxiv) Debt consisting of promissory notes issued by any
Restricted Company to future, present or former directors,
officers, members of management, employees or consultants of the
Company or any of its Subsidiaries or their respective estates,
heirs, family members, spouses or former spouses to finance the
purchase or redemption of Capital Interests of the Company
permitted by the Indenture; and
(xxv) Debt incurred in the ordinary course of business in
connection with relocation service transactions and secured by
the properties which are the subject of such transactions.
Notwithstanding anything herein to the contrary, Debt permitted
under clauses (i), (ii), (xi) and (xv) of this
definition of Permitted Debt shall not constitute
Refinancing Debt under clause (xxii) of this
definition of Permitted Debt.
Permitted Investments means:
(a) Investments in existence on the Issue Date;
(b) Investments required pursuant to any agreement or
obligation of the Company or a Restricted Subsidiary, in effect
on the Issue Date, to make such Investments;
(c) Investments in cash and Eligible Cash Equivalents;
(d) Investments in property and other assets, owned or used
by the Company or any Restricted Subsidiary in the normal course
of business;
(e) Investments by the Company or any of its Restricted
Subsidiaries in the Company or any Restricted Subsidiary;
(f) Investments by the Company or any Restricted Subsidiary
in a Person, if as a result of such Investment (A) such
Person becomes a Restricted Subsidiary or (B) such Person
is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is
liquidated or
wound-up
into, the Company or a Restricted Subsidiary;
(g) Swap Contracts and Hedging Obligations;
62
(h) receivables owing to the Company or any of its
subsidiaries and advances to suppliers, in each case if created,
acquired or made in the ordinary course of business and payable
or dischargeable in accordance with customary trade terms;
(i) Investments received in settlement of obligations owed
to the Company or any Restricted Subsidiary and as a result of
bankruptcy or insolvency proceedings or upon the foreclosure or
enforcement of any Lien in favor of the Company or any
Restricted Subsidiary;
(j) Investments by the Company or any Restricted Subsidiary
not otherwise permitted under this definition, in an aggregate
amount not to exceed $500 million at any one time
outstanding (provided, however, that if any
Investment made pursuant to this clause is made in any Person
that is not a Restricted Subsidiary and such Person thereafter
becomes a Restricted Subsidiary, such Investment shall
thereafter be deemed to have been made pursuant to
clause (e) above and not this clause for so long as such
Person continues to be a Restricted Subsidiary);
(k) loans and advances (including for travel and
relocation) to directors, officers, members of management,
employees and consultants (or Guarantees issued to support the
obligations of such Persons) in an amount not to exceed
$25 million in the aggregate at any one time outstanding;
(l) Investments the payment for which consists solely of
Capital Interests of the Company;
(m) payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in
the ordinary course of business;
(n) guarantees by the Company or any Restricted Subsidiary
of Debt of the Company or a Restricted Subsidiary (including any
Securitization Vehicle) of Debt otherwise permitted by the
covenant described under Certain
Covenants Limitation on Incurrence of Debt;
(o) any Investment by the Company or any Restricted
Subsidiary in a Securitization Vehicle or any Investment by a
Securitization Vehicle in any other Person in connection with a
Securitization Financing, including Investments of funds held in
accounts permitted or required by the arrangements governing the
Securitization Financing or any related Debt; provided
that any Investment in a Securitization Vehicle is in the
form of a purchase money note or contribution of additional
Securitization Assets or, to the extent determined in good faith
by the Company to be necessary to maintain adequate
capitalization of such Securitization Vehicle, equity
investments;
(p) Investments in Joint Ventures;
(q) Investments in securities or other assets not
constituting cash, Eligible Cash Equivalents or Investment Grade
Securities and received in connection with an Asset Sale made
pursuant to the provision described under Repurchase at
the Option of Holder Asset Sales or any other
disposition of assets not constituting an Asset Sale;
(r) Investments arising in the ordinary course of business
as a result of any Settlement, including Investments in and of
Settlement Assets;
(s) Investments and transfers of funds among the Company
and its Restricted Subsidiaries that are made in accordance with
the Cash Management Practices;
(t) any transaction to the extent it constitutes an
Investment that is permitted and made in accordance with the
provisions of the second paragraph of the covenant described
under Certain Covenants Transactions with
Affiliates (except transactions described in clauses (b),
(d) and (g) of such paragraph);
(u) Guarantees by the Company or any Restricted Subsidiary
of leases (other than Capital Lease Obligations) entered into in
the ordinary course of business;
(v) any pledges or deposits permitted under the definition
of Permitted Liens; and
63
(w) any Investment that replaces, refinances or refunds any
other Investment permitted under the Indenture; provided,
that the new Investment is in an amount that does not exceed the
amount replaced, refinanced or refunded, and is made in the same
Person as the Investment replaced, refinanced or refunded.
Permitted Liens means:
(a) Liens existing on the Issue Date;
(b) Liens that secure Credit Facilities incurred pursuant
to clause (i) of the definition of Permitted
Debt (and any related Hedging Obligations and Swap
Contracts permitted under the agreement related thereto);
(c) any Lien for taxes or assessments or other governmental
charges or levies not overdue for more than 30 days (or
which, if due and payable, are being contested in good faith and
for which adequate reserves are being maintained, to the extent
required by GAAP) or the nonpayment of which in the aggregate
would not reasonably be expected to have a material adverse
effect on the Company and its Restricted Subsidiaries taken as a
whole;
(d) any warehousemens, materialmens,
landlords or other similar Liens arising by law for sums
not overdue for more than 30 days (or which, if due and
payable, are being contested in good faith and with respect to
which adequate reserves are being maintained, to the extent
required by GAAP) or the nonpayment of which in the aggregate
would not reasonably be expected to have a material adverse
effect on the Company and its Restricted Subsidiaries taken as a
whole;
(e) survey exceptions, encumbrances, easements or
reservations of, or rights of others for, licenses,
rights-of-way,
sewers, electric lines, telephone lines and other similar
purposes, or zoning or other similar restrictions 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 do not individually or in the aggregate materially
adversely affect the value of the Company and its Restricted
Subsidiaries (taken as a whole) or materially impair the
operation of the business of the Company and its Restricted
Subsidiaries (taken as a whole);
(f) pledges or deposits (i) in connection with
workers compensation, unemployment insurance and other
types of statutory obligations or the requirements of any
official body; (ii) to secure the performance of tenders,
bids, surety, stay, customs, appeals, or performance bonds,
leases, purchase, construction, sales or servicing contracts
(including utility contracts) and other similar obligations
Incurred in the normal course of business consistent with
industry practice (including, without limitation, those to
secure health, safety and environmental obligations);
(iii) to obtain or secure obligations with respect to
letters of credit, Guarantees, bonds or other sureties or
assurances given in connection with the activities described in
clauses (i) and (ii) above, in each case not Incurred
or made in connection with the borrowing of money, the obtaining
of advances or credit or the payment of the deferred purchase
price of property or services or imposed by ERISA or the Code in
connection with a plan (as defined in ERISA); or
(iv) arising in connection with any attachment unless such
Liens shall not be satisfied or discharged or stayed pending
appeal within 60 days after the entry thereof or the
expiration of any such stay;
(g) Liens on property or assets of a Person existing at the
time such Person is acquired or merged with or into or
consolidated with the Company or a Restricted Subsidiary, or
becomes a Restricted Subsidiary (and not created or Incurred in
anticipation of such transaction), provided that such
Liens are not extended to the property and assets of the Company
and its Restricted Subsidiaries other than the property or
assets acquired;
(h) Liens securing Debt of a Restricted Subsidiary owed to
and held by the Company or a Restricted Subsidiary thereof;
(i) for the avoidance of doubt, other Liens (not securing
Debt) incidental to the conduct of the business of the Company
or any of its Restricted Subsidiaries, as the case may be, or
the ownership of their assets which do not individually or in
the aggregate materially adversely affect the value of the
64
Company and its Restricted Subsidiaries (taken as a whole) or
materially impair the operation of the business of the Company
and its Restricted Subsidiaries (taken as a whole);
(j) Liens to secure any permitted extension, renewal,
refinancing or refunding (or successive extensions, renewals,
refinancings or refundings), in whole or in part, of any Debt
secured by Liens referred to in clauses (a), (b), (g),
(q) and (w) hereof; provided that such Liens do
not extend to any other property or assets (other than
improvements, accessions, or proceeds in respect thereof) and
the principal amount of the obligations secured by such Liens is
not increased;
(k) Liens in favor of customs or revenue authorities
arising as a matter of law to secure payment of custom duties in
connection with the importation of goods incurred in the
ordinary course of business;
(l) licenses of intellectual property granted in the
ordinary course of business;
(m) Liens to secure Capital Lease Obligations and Purchase
Money Debt permitted to be incurred pursuant to clause (xi)
of the definition of Permitted Debt; provided
that such Liens do not extend to or cover any assets other than
such assets acquired or constructed after the Issue Date with
the proceeds of such Capital Lease Obligation or Purchase Money
Debt;
(n) Liens in favor of the Company or any Guarantor;
(o) Liens upon specific items of inventory or other goods
and proceeds of any Person securing such Persons
obligation in respect of bankers acceptances issued or
created in the ordinary course of business for the account of
such Person to facilitate the purchase, shipment, or storage of
such inventory or other goods;
(p) Liens securing Debt Incurred to finance the
construction, purchase or lease of, or repairs, improvements or
additions to, property, plant or equipment of such Person;
provided, however, that the Lien may not extend to
any property owned by such Person or any of its Restricted
Subsidiaries at the time the Lien is Incurred (other than assets
and property affixed or appurtenant thereto and proceeds
thereof), and the Debt (other than any interest thereon) secured
by the Lien may not be Incurred more than 270 days after
the later of the acquisition, completion of construction,
repair, improvement, addition or commencement of full operation
of the property subject to the Lien;
(q) Liens on property or shares of Capital Interests of
another Person at the time such other Person becomes a
Subsidiary of such Person (including Liens that secure Debt of
such Subsidiary); provided, however, that
(i) the Liens may not extend to any other property owned by
such Person or any of its Restricted Subsidiaries (other than
assets and property affixed or appurtenant thereto and proceeds
thereof) and (ii) such Liens are not created or incurred in
connection with, or in contemplation of, such other Person
becoming such a Restricted Subsidiary;
(r) Liens (i) that are contractual rights of set-off
(A) relating to the establishment of depository relations
with banks not given in connection with the issuance of Debt,
(B) relating to pooled deposit or sweep accounts of the
Company or any of its Restricted Subsidiaries to permit
satisfaction of overdraft or similar obligations and other cash
management activities incurred in the ordinary course of
business of the Company and or any of its Restricted
Subsidiaries or (C) relating to purchase orders and other
agreements entered into with customers of the Company or any of
its Restricted Subsidiaries in the ordinary course of business
and (ii) (W) of a collection bank arising under
Section 4-210
of the Uniform Commercial Code on items in the course of
collection, (X) encumbering reasonable customary initial
deposits and margin deposits and attaching to commodity trading
accounts or other brokerage accounts incurred in the ordinary
course of business, (Y) in favor of banking institutions
arising as a matter of law or pursuant to customary account
agreements encumbering deposits (including the right of set-off)
and which are within the general parameters customary in the
banking industry, and (Z) of financial institutions funding
the Vault Cash Operations in the cash provided by such
institutions for such Vault Cash Operations;
(s) Liens securing judgments for the payment of money not
constituting an Event of Default under clause (7) under the
caption Events of Default;
65
(t) leases, subleases, licenses or sublicenses granted to
others in the ordinary course of business which do not
materially interfere with the ordinary conduct of the business
of the Company or any Restricted Subsidiaries and do not secure
any Debt;
(u) any interest of title of an owner of equipment or
inventory on loan or consignment to the Company or any of its
Restricted Subsidiaries and Liens arising from Uniform
Commercial Code financing statement filings regarding operating
leases entered into by the Company or any Restricted Subsidiary
in the ordinary course of business;
(v) deposits in the ordinary course of business to secure
liability to insurance carriers;
(w) Liens securing the Notes and the Note Guarantees;
(x) Liens on the Capital Interests of a Securitization
Vehicle and Securitization Assets , in each case, incurred in
connection with a Securitization Financing;
(y) Liens securing Hedging Obligations and Swap Contracts
so long as any related Debt is permitted to be Incurred under
the Indenture;
(z) options, put and call arrangements, rights of first
refusal and similar rights relating to Investments in Joint
Ventures, partnerships and the like permitted to be made under
the Indenture;
(aa) Liens pursuant to the terms and conditions of any
contracts between the Company or any Restricted Subsidiary and
the U.S. government;
(bb) Liens arising in connection with the Cash Management
Practices, including Liens securing borrowings from financial
institutions and their Affiliates permitted under
clause (xxi) of the definition of Permitted
Debt;
(cc) Settlement Liens;
(dd) any pledge of the Capital Interests of an Unrestricted
Subsidiary to secure Debt of such Unrestricted Subsidiary;
(ee) Liens (i) on advances of cash or Eligible Cash
Equivalents in favor of the seller of any property to be
acquired by the Company or any Restricted Subsidiary under
clause (f) of the definition of Permitted
Investment to be applied against the purchase price for
such Investment, (ii) consisting of an agreement to dispose
of any property in a disposition permitted under the covenant
described under Asset Sales and (iii) on cash
earnest money deposits made by the Company or any Restricted
Subsidiary in connection with any letter of intent or purchase
agreement permitted under the Indenture; and
(ff) Liens not otherwise permitted under the Indenture in
an aggregate amount not to exceed the greater of (i) 5% of
Total Assets of the Company and its Restricted Subsidiaries and
(ii) $750 million.
Person means any individual, corporation,
limited liability company, partnership, Joint Venture, trust,
unincorporated organization or government or any agency or
political subdivision thereof.
Preferred Interests, as applied to the
Capital Interests in any Person, means Capital Interests in such
Person of any class or classes (however designated) that rank
prior, as to the payment of dividends or as to the distribution
of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Common
Interests in such Person.
Purchase Money Debt means Debt
(i) Incurred to finance the purchase or construction
(including additions and improvements thereto) of any assets
(other than Capital Interests) of such Person or any Restricted
Subsidiary; and
(ii) that is secured by a Lien on such assets where the
lenders sole security is to the assets so purchased or
constructed (and proceeds thereof); and in either case that does
not exceed 100% of the cost
66
and to the extent the purchase or construction prices for such
assets are or should be included in addition to property,
plant or equipment in accordance with GAAP.
Qualified Capital Interests in any Person
means a class of Capital Interests other than Redeemable Capital
Interests.
Qualified Equity Offering means (i) an
underwritten public equity offering of Qualified Capital
Interests pursuant to an effective registration statement under
the Securities Act yielding gross proceeds to either of the
Company, or any direct or indirect parent company of the
Company, of at least $200 million or (ii) a private
equity offering of Qualified Capital Interests of the Company,
or any direct or indirect parent company of the Company other
than (x) any such public or private sale to an entity that
is an Affiliate of the Company and (y) any public offerings
registered on
Form S-8;
provided that, in the case of an offering or sale by a
direct or indirect parent company of the Company, such parent
company contributes to the capital of the Company the portion of
the net cash proceeds of such offering or sale necessary to pay
the aggregate Redemption Price (plus accrued interest to
the redemption date) of the Notes to be redeemed pursuant to the
provisions described under the third paragraph of
Optional Redemption.
Rating Agency means (1) each of
Moodys and S&P and (2) if Moodys or
S&P ceases to rate the Notes for reasons outside of the
Companys control, a nationally recognized
statistical rating organization as defined in
Section 3 of the Exchange Act selected by the Company or
any parent of the Company as a replacement agency for
Moodys or S&P, as the case may be.
Redeemable Capital Interests in any Person
means any equity security of such Person that by its terms (or
by terms of any security into which it is convertible or for
which it is exchangeable), or otherwise (including the passage
of time or the happening of an event), is required to be
redeemed, is redeemable at the option of the holder thereof in
whole or in part (including by operation of a sinking fund), or
is convertible or exchangeable for Debt of such Person at the
option of the holder thereof, in whole or in part, at any time
prior to the Stated Maturity of the applicable series of
outstanding Notes; provided that only the portion of such
equity security which is required to be redeemed, is so
convertible or exchangeable or is so redeemable at the option of
the holder thereof before such date will be deemed to be
Redeemable Capital Interests. Notwithstanding the preceding
sentence, any equity security that would constitute Redeemable
Capital Interests solely because the holders of the equity
security have the right to require the Company to repurchase
such equity security upon the occurrence of a change of control
or an asset sale will not constitute Redeemable Capital
Interests if the terms of such equity security provide that the
Company may not repurchase or redeem any such equity security
pursuant to such provisions unless such repurchase or redemption
complies with the covenant described above under the caption
Certain Covenants Limitation on
Restricted Payments. The amount of Redeemable Capital
Interests deemed to be outstanding at any time for purposes of
the Indenture will be the maximum amount that the Company and
its Restricted Subsidiaries may become obligated to pay upon the
maturity of, or pursuant to any mandatory redemption provisions
of, such Redeemable Capital Interests or portion thereof,
exclusive of accrued dividends.
Redemption Price, when used with respect
to any Note to be redeemed, means the price at which it is to be
redeemed pursuant to the Indenture.
Refinancing Debt means Debt that refunds,
refinances, renews, replaces, extends or defeases any Debt
permitted to be Incurred by the Company or any Restricted
Subsidiary pursuant to the terms of the Indenture, whether
involving the same or any other lender or creditor or group of
lenders or creditors, but only to the extent that
(i) such Refinancing Debt is subordinated to the Notes or
any Note Guarantee thereof to at least the same extent as the
Debt being refunded, refinanced, renewed, replaced, extended or
defeased, if such Debt was subordinated to the Notes or any Note
Guarantee thereof;
(ii) the Refinancing Debt is scheduled to mature either
(a) no earlier than the Debt being refunded, refinanced or
extended or (b) at least 91 days after the maturity
date of the Notes;
67
(iii) the Refinancing Debt has an Average Life at the time
such Refinancing Debt is Incurred that is equal to or greater
than the Average Life of the Debt being refunded, refinanced,
renewed, replaced, extended or defeased;
(iv) such Refinancing Debt is in an aggregate principal
amount that is less than or equal to the sum of (a) the
aggregate principal or accreted amount (in the case of any Debt
issued with original issue discount, as such) then outstanding
(plus the amount of any unexpired unfunded commitments) under
the Debt being refunded, refinanced, renewed, replaced or
extended, (b) the amount of accrued and unpaid interest, if
any, and premiums owed, if any, not in excess of preexisting
prepayment provisions on such Debt being refunded, refinanced,
renewed, replaced or extended and (c) the amount of
reasonable and customary fees, expenses and costs related to the
Incurrence of such Refinancing Debt; and
(v) such Refinancing Debt is Incurred by the same Person
(or its successor) that initially Incurred the Debt being
refunded, refinanced, renewed, replaced, extended or defeased,
except that the Company may Incur Refinancing Debt to refund,
refinance, renew, replace, extend or defease Debt of any
Restricted Subsidiary.
Registration Rights Agreement means the
Registration Rights Agreement, to be dated as of the Issue Date,
among the Company, the Guarantors and Banc of America Securities
LLC, Goldman Sachs & Co., J.P. Morgan Securities
Inc., and Wells Fargo Securities, LLC, as representatives of the
Initial Purchasers, as amended or supplemental from time to time
in accordance with its terms, and any similar agreement entered
into in connection with any Additional Notes.
Related Business Assets means assets (other
than cash or Eligible Cash Equivalents) used or useful in the
business of the Company or any of its Restricted Subsidiaries;
provided that any assets received by the Company or a
Restricted Subsidiary in exchange for assets transferred by the
Company or a Restricted Subsidiary will not be deemed to be
Related Business Assets if they consist of securities of a
Person, unless upon receipt of the securities of such Person,
such Person would become a Restricted Subsidiary.
Restricted Payment is defined to mean any of
the following:
(a) any dividend or other distribution declared and paid on
the Capital Interests in the Company or on the Capital Interests
in any Restricted Subsidiary of the Company that are held by, or
declared and paid to, any Person other than the Company or a
Restricted Subsidiary of the Company, other than
(i) dividends, distributions or payments made solely in
Qualified Capital Interests in the Company; and
(ii) dividends or distributions payable to the Company or a
Restricted Subsidiary of the Company or to other holders of
Capital Interests of a Restricted Subsidiary on a pro rata
basis);
(b) any payment made by the Company or any of its
Restricted Subsidiaries to purchase, redeem, defease or
otherwise acquire or retire any Capital Interests in the Company
(including the conversion into, or exchange for, Debt, of any
Capital Interests) other than any such Capital Interests owned
by the Company or any Restricted Subsidiary (other than a
payment made solely in Qualified Capital Interests in the
Company);
(c) any payment made by the Company or any of its
Restricted Subsidiaries (other than a payment made solely in
Qualified Capital Interests in the Company) to redeem,
repurchase, defease (including in substance or legal defeasance)
or otherwise acquire or retire for value (including pursuant to
mandatory repurchase covenants), prior to any scheduled
maturity, scheduled sinking fund or mandatory redemption
payment, Debt of the Company or any Guarantor that is
subordinate in right of payment to the Notes or Note Guarantees
(excluding any Debt owed to the Company or any Restricted
Subsidiary); except payments of principal and interest in
anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case, within one year of
the due date thereof; and
(d) any Investment by the Company or a Restricted
Subsidiary in any Person, other than a Permitted Investment.
68
Restricted Subsidiary means any Subsidiary
(including any Foreign Subsidiary) that has not been designated
as an Unrestricted Subsidiary in accordance with the
Indenture.
Sale and Leaseback Transaction means any
direct or indirect arrangement pursuant to which property is
sold or transferred by the Company or a Restricted Subsidiary
and is thereafter leased back as a capital lease by the Company
or a Restricted Subsidiary.
Securitization Assets means any accounts
receivable, royalty or revenue streams, other financial assets,
proceeds and books, records and other related assets incidental
to the foregoing subject to a Securitization Financing.
Securitization Financing means Debt Incurred
in connection with a receivables securitization transaction
involving the Company or any of its Restricted Subsidiaries and
a Securitization Vehicle; provided that (i) such
Debt when Incurred shall not exceed 100% of the cost or Fair
Market Value, whichever is lower, of the property being acquired
on the date of acquisition, (ii) such Debt is created and
any Lien attaches to such property concurrently with or within
forty-five (45) days of the acquisition thereof, and
(iii) such Lien does not at any time encumber any property
other than the property financed by such Debt.
Securitization Vehicle means one or more
special purpose vehicles that are, directly or indirectly,
wholly owned Subsidiaries of the Company and are Persons
organized for the limited purpose of entering into a
Securitization Financing by purchasing, or receiving by way of
capital contributions, sale or other transfer, assets from the
Company and its Subsidiaries and obtaining financing for such
assets from third parties, and whose structure is designed to
insulate such vehicle from the credit risk of the Company.
Settlement means the transfer of cash or
other property with respect to any credit, charge or debit card
charge, check or other instrument, electronic funds transfer, or
other type of paper-based or electronic payment, transfer, or
charge transaction for which a Person acts as a processor,
remitter, funds recipient or funds transmitter in the ordinary
course of its business.
Settlement Asset means any cash, receivable
or other property, including a Settlement Receivable, due or
conveyed to a Person in consideration for a Settlement made or
arranged, or to be made or arranged, by such Person or an
Affiliate of such Person.
Settlement Debt means any payment or
reimbursement obligation in respect of a Settlement Payment.
Settlement Liens means any Lien relating to
any Settlement or Settlement Debt (and may include, for the
avoidance of doubt, the grant of a Lien in or other assignment
of a Settlement Asset in consideration of a Settlement Payment,
Liens securing intraday and overnight overdraft and automated
clearing house exposure, and similar Liens).
Settlement Payment means the transfer, or
contractual undertaking (including by automated clearing house
transaction) to effect a transfer, of cash or other property to
effect a Settlement.
Settlement Receivable means any general
intangible, payment intangible, or instrument representing or
reflecting an obligation to make payments to or for the benefit
of a Person in consideration for and in the amount of a
Settlement made or arranged, or to be made or arranged, by such
Person.
Significant Subsidiary has the meaning set
forth in
Rule 1-02
of
Regulation S-X
promulgated under the Securities Act, but shall not include any
Unrestricted Subsidiary.
Similar Business means any business conducted
or proposed to be conducted by the Company and its Restricted
Subsidiaries on the Issue Date or any business that is similar,
reasonably related, incidental, complimentary, or ancillary
thereto, or expansions or developments thereof; and any other
business approved from time to time by the Board of Directors of
the Company.
S&P means Standard &
Poors, a division of The McGraw-Hill Companies, Inc., and
any successor to its rating agency business.
Stated Maturity when used with respect to
(i) any Note or any installment of interest thereon, means
the date specified in such Note as the fixed date on which the
principal amount of such Note or such
69
installment of interest is due and payable and (ii) any
other Debt or any installment of interest thereon, means the
date specified in the instrument governing such Debt as the
fixed date on which the principal of such Debt or such
installment of interest is due and payable.
Subsidiary of a Person means a corporation,
limited or general partnership, joint venture, limited liability
company or other business entity of which a majority of Voting
Interests are at the time beneficially owned, or the management
of which is otherwise controlled, directly or indirectly,
through one or more intermediaries, or both, by such Person.
Swap Contract means (a) any and all rate
swap transactions, basis swaps, credit derivative transactions,
forward rate transactions, commodity swaps, commodity options,
forward contracts, futures contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or
options or forward bond or forward bond price or forward bond
index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts,
repurchase agreements, reverse repurchase agreements, sell buy
backs and buy sell back agreements, and securities lending and
borrowing agreements, or any other similar transactions or any
combination of any of the foregoing (including any option to
enter into any of the foregoing), whether or not any such
transaction is governed by or subject to any master agreement,
and (b) any and all transactions of any kind, and the
related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives
Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a
Master Agreement), including any such
obligations or liabilities under any Master Agreement.
Tender Offer means the plan announced by the
Company on May 25, 2010 to purchase on the open market up
to $2,500,000,000 worth of shares of its common stock, par value
$0.01 per share, at a price range between $29.00 and $31.00 per
share of common stock through a modified Dutch
auction tender offer, or through such other means as may
be elected by the Company.
Total Assets means, with respect to any
Persons, the total assets of such Persons on a consolidated
basis, as shown on the most recent consolidated balance sheet of
such Persons as may be expressly stated (excluding Settlement
Assets, as shown on such balance sheet).
Transactions means (i) the offerings of
the Notes and the use of proceeds therefrom, (ii) the
amendment and extension of (and increase of the Debt available
under) the Credit Agreement and the use of proceeds therefrom
and (iii) the payment of all fees and expenses related
thereto, and the transactions related thereto.
Treasury Rate means (x) with respect to
the 2017 Notes, as of the applicable 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 such 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 such redemption date to July 15, 2013;
provided, however, that if the period from such
redemption date to July 15, 2013 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 and (y) with respect to the 2020 Notes, as of the
applicable 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
such 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 such
redemption date to July 15, 2014; provided,
however, that if the period from such redemption date to
July 15, 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.
70
Unrestricted Subsidiary means:
(1) any Subsidiary (other than a Securitization Vehicle)
designated as such by an Officers Certificate as set forth
in the Indenture where neither the Company nor any of its
Restricted Subsidiaries (i) provides credit support for, or
Guarantee of, any Debt of such Subsidiary or any Subsidiary of
such Subsidiary (including any undertaking, agreement or
instrument evidencing such Debt) or (ii) is directly or
indirectly liable for any Debt of such Subsidiary or any
Subsidiary of such Subsidiary;
(2) any Securitization Vehicle, if designated as an
Unrestricted Subsidiary by an Officers Certificate as set
forth in the Indenture; and
(3) any Subsidiary of an Unrestricted Subsidiary.
Vault Cash Operations means the vault cash or
other arrangements pursuant to which various financial
institutions fund the cash requirements of automated teller
machines and cash access facilities operated by the Company and
its Subsidiaries at customer locations.
Voting Interests means, with respect to any
Person, securities of any class or classes of Capital Interests
in such Person, taking into account the voting power of such
securities, entitling the holders thereof generally to vote on
the election of members of the Board of Directors or comparable
body of such Person (other than securities or interests having
such power only by reason of the happening of a contingency).
71
EXCHANGE
OFFERS
In connection with the issuance of the Original Notes on
July 16, 2010, we entered into a registration rights
agreement with the initial purchasers, which provides for the
exchange offers. The exchange offers will permit eligible
holders of notes to exchange the Original Notes for Exchange
Notes that are identical in all material respects with the
applicable series of Original Notes for which they have been
exchanged, except that:
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the Exchange Notes have been registered under the
U.S. federal securities laws and will not bear any legend
restricting their transfer;
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the Exchange Notes bear a different CUSIP number from the
Original Notes;
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the Exchange Notes generally will not be subject to transfer
restrictions and will not be entitled to registration
rights; and
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the holders of the Exchange Notes will not be entitled to earn
additional interest under circumstances relating to our
registration obligations under the registration rights agreement.
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The Exchange Notes will evidence the same debt as the Original
Notes. Holders of Exchange Notes will be entitled to the
benefits of the indenture.
The following summary of certain provisions of the registration
rights agreement does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, all the
provisions of the registration rights agreement. You should
refer to the exhibits that are a part of the registration
statement (of which this prospectus is a part) for a copy of the
registration rights agreement. See Where You Can Find More
Information.
General
We are making the exchange offers to comply with our contractual
obligations under the registration rights agreement. Except
under limited circumstances, upon completion of the exchange
offers, our obligations with respect to the registration of the
Original Notes will terminate.
We agreed, pursuant to the registration rights agreement, to use
commercially reasonable efforts to:
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cause to be filed as soon as practicable after the date of
issuance of the Original Notes, but in no event later than
April 12, 2011, an exchange offer registration statement
with the SEC,
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cause the exchange offer registration statement to become
effective on or before July 11, 2011, and
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have the exchange offer registration statement remain effective
for use by one or more participating broker-dealers until the
earlier of 90 days after the date the exchange offer
registration statement becomes effective and the date on which a
broker-dealer is no longer required to deliver a prospectus in
connection with market-making or other trading activities.
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We will use commercially reasonable efforts to consummate the
exchange offers on or before the 30th business day after
the exchange offer registration statement is declared effective
by the SEC.
We will keep the exchange offers open for not less than 20
business days (or longer if required by law) after the date
notice of the exchange offers is mailed to the respective
holders of the Original Notes. For each Original Note
surrendered to us pursuant to the exchange offers, the holder of
such Original Note will receive an Exchange Note of the
respective series having a principal amount equal to that of the
surrendered Original Note. Interest on each Exchange Note will
accrue from the last interest payment date on which interest was
paid on the Original Note surrendered in exchange thereof or, if
no interest has been paid on the Original Note, from the date of
its original issue.
In connection with the issuance of the Original Notes, we
arranged for the Original Notes to be issued in the form of
global notes through the facilities of DTC acting as depositary.
The Exchange Notes will also be
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issued in the form of global notes registered in the name of DTC
or its nominee and each beneficial owners interest in
Exchange Notes will be transferable in book-entry form through
DTC.
Holders of Original Notes do not have any appraisal or
dissenters rights in connection with the exchange offers.
Original Notes which are not tendered for exchange or are
tendered but not accepted in connection with the exchange offers
will remain outstanding and be entitled to the benefits of the
Indenture, including accrual of interest, but, subject to
limited exceptions, will not be entitled to any registration
rights under the applicable registration rights agreement. See
Consequences of Failure to Tender.
We will be deemed to have accepted validly tendered Original
Notes when and if we have given oral or written notice to the
exchange agent of our acceptance. Subject to the terms and
conditions of these exchange offers, delivery of Exchange Notes
will be made by the exchange agent on the settlement date upon
receipt of such notice. The exchange agent will act as agent for
the tendering holders for the purpose of receiving the Exchange
Notes from us. If any tendered Original Notes are not accepted
for exchange because of an invalid tender, the occurrence of
other events described in this prospectus or otherwise, we will
return the certificates for any unaccepted Original Notes, at
our expense, to the tendering holder promptly after the
expiration of the applicable exchange offer.
The exchange offers are not being made to, nor will we accept
tenders for exchange from, holders of the Original Notes in any
jurisdiction in which the applicable exchange offer or the
acceptance of it would not be in compliance with the securities
or blue sky laws of that jurisdiction.
Eligibility;
Transferability
We are making the exchange offers in reliance on interpretations
of the staff of the SEC set forth in several no-action letters.
However, we have not sought our own no-action letter. Based upon
these interpretations, we believe that you, or any other person
receiving Exchange Notes, may offer for resale, resell or
otherwise transfer such Exchange Notes without complying with
the registration and prospectus delivery requirements of the
U.S. federal securities laws, if:
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you are, or the person or entity receiving such Exchange Notes
is, acquiring such Exchange Notes in the ordinary course of
business;
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you are not, nor is any such person or entity, engaged in, or
intends to engage in, a distribution (within the meaning of such
term under the Securities Act) of the Exchange Notes;
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you do not, nor does any such person or entity, have an
arrangement or understanding with any person or entity to
participate in any distribution (within the meaning of such term
under the Securities Act) of the Exchange Notes;
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you are not, nor is any such person or entity, our affiliate as
such term is defined under Rule 405 under the Securities
Act; and
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you are not acting on behalf of any person or entity who could
not truthfully make these statements.
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To participate in the exchange offers, you must represent as the
holder of Original Notes that each of these statements is true.
In addition, each broker-dealer registered under the Exchange
Act must also (i) represent that it is participating in the
applicable exchange offer for its own account and is exchanging
Original Notes acquired as a result of market-making activities
or other trading activities, (ii) confirm that it has not
entered into any arrangement or understanding with the Company
or any affiliate of the Company to distribute the Exchange Notes
and (iii) acknowledge that it will deliver a prospectus in
connection with any resale of the Exchange Notes. The letter of
transmittal states that by acknowledging that it will deliver,
and by delivering, a prospectus, a broker-dealer will not be
deemed to admit that it is an underwriter within the meaning of
the Securities Act. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer
in connection with resale of the Exchange Notes received in
exchange for the Original Notes where such Original Notes were
acquired by such broker-dealer as a result of market-making
activities or
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other trading activities. We have agreed that, until the earlier
of 90 days after the date the exchange offers registration
statement becomes effective and the date on which a
broker-dealer is no longer required to deliver a prospectus in
connection with market-making or other trading activities, we
will amend or supplement this prospectus in order to expedite or
facilitate the disposition of any Exchange Notes by such
broker-dealers.
Any holder of Original Notes who is our affiliate, who does not
acquire the Exchange Notes in the ordinary course of business,
who intends to participate in the exchange offers for the
purpose of distributing the Exchange Notes or is a broker-dealer
who purchased the Original Notes directly from us:
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will not be able to rely on the interpretation of the staff of
the SEC set forth in the no-action letters described
above; and
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must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale
or transfer of the Notes, unless the sale or transfer is made
pursuant to an exemption from those requirements.
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Expiration
of the Exchange Offers; Extensions; Amendments
The exchange offers will expire at 5:00 p.m., New York City
time, on January 6, 2011, or the expiration date, unless we
extend either or both of the exchange offers. To extend either
of the exchange offers, we will notify the exchange agent and
each registered holder of any extension before 9:00 a.m.,
New York City time, on the next business day after the
previously scheduled expiration date. We reserve the right to
extend either or both of the exchange offers, delay accepting
any tendered Original Notes or, if any of the conditions
described below under the heading
Conditions have not been satisfied, to
terminate such exchange offer. We also reserve the right to
amend the terms of the exchange offers in any manner. We will
give oral or written notice of such delay, extension,
termination or amendment to the exchange agent.
If we amend either exchange offer in a manner that we consider
material, we will disclose such amendment by means of a
prospectus supplement, and we will extend the applicable
exchange offer, if necessary, so that at least five business
days remain in the offer following notice of the material change.
If we determine to make a public announcement of any delay,
extension, amendment or termination of either exchange offer, we
will do so by making a timely release through an appropriate
news agency.
Conditions
Notwithstanding any other term of either exchange offer, we will
not be required to accept for exchange, or issue any Exchange
Notes for the respective series of, any Original Notes, and may
terminate or amend such exchange offer before the expiration of
such exchange offer, if:
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we determine that such exchange offer violates any law, statute,
rule, regulation or any interpretation by the staff of the SEC
or any order of any governmental agency or court of competent
jurisdiction; or
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any action or proceeding is instituted or threatened in any
court or by or before any governmental agency relating to such
exchange offer which, in our judgment, could reasonably be
expected to impair our ability to proceed with the exchange
offer.
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The conditions listed above are for our sole benefit and may be
asserted by us regardless of the circumstances giving rise to
any of these conditions. We may waive these conditions in our
reasonable discretion in whole or in part at any time and from
time to time prior to the expiration date. The failure by us at
any time to exercise any of the above rights shall not be
considered a waiver of such right, and such right shall be
considered an ongoing right which may be asserted at any time
and from time to time.
In addition, we will not accept for exchange any Original Notes
tendered, and no Exchange Notes will be issued in exchange for
those Original Notes, if at any time any stop order is
threatened or issued with respect to the registration statement
for the exchange offers and the Exchange Notes or the
qualification of the indenture under the Trust Indenture
Act of 1939. In any such event, we must use commercially
reasonable efforts to obtain the withdrawal of any stop order as
soon as practicable.
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In addition, we will not be obligated to accept for exchange the
Original Notes of any holder that has not made to us the
representations described under Eligibility;
Transferability and Plan of Distribution.
Procedures
for Tendering
A holder of Original Notes who wishes to accept the applicable
exchange offer, and whose Original Notes are held by a custodial
entity such as a bank, broker, dealer, trust company or other
nominee, must instruct the custodial entity to tender and
consent with respect to that holders Original Notes on the
holders behalf pursuant to the procedures of the custodial
entity.
To tender in the applicable exchange offer, a holder of Original
Notes must:
(i) complete, sign and date the letter of transmittal (or a
facsimile thereof) in accordance with its instructions,
including guaranteeing the signature(s) to the letter of
transmittal, if required, and mail or otherwise deliver such
letter of transmittal or such facsimile, together with the
certificates representing the Original Notes specified therein,
to the exchange agent at the address set forth in the letter of
transmittal for receipt on or prior to the expiration date;
(ii) comply with DTCs Automated Tender Offer Program,
or ATOP, procedures for book-entry transfer described below on
or prior to the expiration date; or
(iii) comply with the guaranteed delivery procedures
described below.
The exchange agent and DTC have confirmed that the exchange
offers are eligible for ATOP. The letter of transmittal (or
facsimile thereof), with any required signature guarantees, or
(in the case of book-entry transfer) an agents message in
lieu of the letter of transmittal, and any other required
documents, must be transmitted to and received by the exchange
agent on or prior to the expiration date of the applicable
exchange offer at one of its addresses set forth under
Exchange Agent in this prospectus or as
set forth in the letter of transmittal. Original Notes will not
be deemed surrendered until the letter of transmittal and
signature guarantees, if any, or agents message, are
received by the exchange agent.
The method of delivery of Original Notes, the letter of
transmittal, and all other required documents to the exchange
agent is at the election and risk of the holder. Instead of
delivery by mail, holders should use an overnight or hand
delivery service, properly insured. In all cases, sufficient
time should be allowed to assure delivery to and receipt by the
exchange agent on or before the expiration date, or, if the
guaranteed delivery procedures described below are complied
with, within the time period provided under those procedures. Do
not send the letter of transmittal or any Original Notes to
anyone other than the exchange agent.
All Exchange Notes will be delivered only in book-entry form
through DTC. Accordingly, if you anticipate tendering other than
through DTC, you are urged to contact promptly a bank, broker or
other intermediary (that has the capability to hold securities
custodially through DTC) to arrange for receipt of any Exchange
Notes to be delivered to you pursuant to the exchange offers and
to obtain the information necessary to provide the required DTC
participant with account information for the letter of
transmittal.
Book-Entry
Delivery Procedures for Tendering Original Notes Held with
DTC
If you wish to tender Original Notes held on your behalf by a
custodial entity with DTC, you must:
(i) inform your custodial entity of your interest in
tendering your Original Notes pursuant to the applicable
exchange offer; and
(ii) instruct your custodial entity to tender all Original
Notes you wish to be tendered in the applicable exchange offer
into the exchange agents account at DTC on or prior to the
expiration date. Any financial institution that is a nominee in
DTC, including Euroclear and Clearstream, must tender Original
Notes by effecting a book-entry transfer of the Original Notes
to be tendered in the applicable exchange offer into the account
of the exchange agent at DTC by electronically transmitting its
acceptance of such exchange offer through the ATOP procedures
for transfer. DTC will then verify the acceptance, execute a
book-entry delivery to the exchange agents account at DTC,
and send an agents
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message to the exchange agent. An agents
message is a message, transmitted by DTC to and received
by the exchange agent and forming part of a book-entry
confirmation, which states that DTC has received an express
acknowledgement from an organization that participates in DTC (a
participant) tendering Original Notes that
the participant has received and agrees to be bound by the terms
of the letter of transmittal and that we may enforce the
agreement against the participant. A letter of transmittal need
not accompany tenders effected through ATOP.
Proper
Execution and Delivery of Letter of Transmittal
Signatures on a letter of transmittal or notice of withdrawal
described below (see Withdrawal of
Tenders), as the case may be, must be guaranteed by an
eligible guarantor institution within the meaning of
Rule 17Ad-15
under the Exchange Act unless the Original Notes tendered
pursuant to the letter of transmittal are tendered (i) by a
holder who has not completed the box entitled Special
Delivery Instructions or Special Issuance and
Payment Instructions on the letter of transmittal or
(ii) for the account of an eligible guarantor institution.
If the letter of transmittal is signed by the holder(s) of
Original Notes tendered thereby, the signature(s) must
correspond with the name(s) as written on the face of the
Original Notes without alteration, enlargement or any change
whatsoever. If any of the Original Notes tendered thereby are
held by two or more holders, all such holders must sign the
letter of transmittal. If any of the Original Notes tendered
thereby are registered in different names on different Original
Notes, it will be necessary to complete, sign and submit as many
separate letters of transmittal, and any accompanying documents,
as there are different registrations of certificates.
If Original Notes that are not tendered for exchange pursuant to
the exchange offers are to be returned to a person other than
the holder thereof, certificates for such Original Notes must be
endorsed or accompanied by an appropriate instrument of
transfer, signed exactly as the name of the registered owner
appears on the certificates, with the signatures on the
certificates or instruments of transfer guaranteed by an
eligible guarantor institution.
If the letter of transmittal is signed by a person other than
the holder of any Original Notes listed therein, such Original
Notes must be properly endorsed or accompanied by a properly
completed bond power, signed by such holder exactly as such
holders name appears on such Original Notes. If the letter
of transmittal or any Original Notes, bond powers or other
instruments of transfer are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and,
unless waived by us, evidence satisfactory to us of their
authority to so act must be submitted with the letter of
transmittal.
No alternative, conditional, irregular or contingent tenders
will be accepted. By executing the letter of transmittal (or
facsimile thereof), the tendering holders of Original Notes
waive any right to receive any notice of the acceptance for
exchange of their Original Notes. Tendering holders should
indicate in the applicable box in the letter of transmittal the
name and address to which Exchange Notes
and/or
substitute certificates evidencing Original Notes for amounts
not tendered or not exchanged are to be issued or sent, if
different from the name and address of the person signing the
letter of transmittal. If no such instructions are given,
Original Notes not tendered or exchanged will be returned to
such tendering holder.
All questions as to the validity, form, eligibility (including
time of receipt), and acceptance and withdrawal of tendered
Original Notes will be determined by us in our absolute
discretion, which determination will be final and binding. We
reserve the absolute right to reject any and all tendered
Original Notes determined by us not to be in proper form or not
to be properly tendered or any tendered Original Notes our
acceptance of which would, in the opinion of our counsel, be
unlawful. We also reserve the right to waive, in our absolute
discretion, any defects, irregularities or conditions of tender
as to particular Original Notes, whether or not waived in the
case of other Original Notes. Our interpretation of the terms
and conditions of the exchange offers (including the
instructions in the letter of transmittal) will be final and
binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Original Notes must
be cured within such time as we shall determine. Although we
intend to notify holders of defects or irregularities with
respect to tenders of Original Notes, neither we, the exchange
agent nor any other person will be under any
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duty to give such notification or shall incur any liability for
failure to give any such notification. Tenders of Original Notes
will not be deemed to have been made until such defects or
irregularities have been cured or waived.
Any holder whose Original Notes have been mutilated, lost,
stolen or destroyed will be responsible for obtaining
replacement securities or for arranging for indemnification with
the trustee of the Original Notes. Holders may contact the
exchange agent for assistance with such matters.
Guaranteed
Delivery Procedures
Holders wishing to tender their Original Notes but whose
Original Notes are not immediately available or who cannot
deliver their Original Notes, the letter of transmittal or any
other required documents to the exchange agent or cannot comply
with the applicable procedures described above before expiration
of the exchange offers may tender if:
(i) the tender is made through an eligible guarantor
institution, as defined above under Proper
Execution and Delivery of Letter of Transmittal,
(ii) before expiration of the exchange offers, the exchange
agent receives from the eligible guarantor institution either a
properly completed and duly executed notice of guaranteed
delivery, by facsimile transmission, mail or hand delivery, or a
properly transmitted agents message and notice of
guaranteed delivery, in each case:
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setting forth the name and address of the holder and the
registered number(s) and the principal amount of Original Notes
tendered, and
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stating that the tender is being made by guaranteed delivery,
and guaranteeing that, within three New York Stock Exchange
trading days after expiration of the exchange offer, the letter
of transmittal, or facsimile thereof, together with the Original
Notes or a book-entry transfer confirmation, and any other
documents required by the letter of transmittal will be
deposited by the eligible guarantor institution with the
exchange agent, and
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(iii) the exchange agent receives the properly completed
and executed letter of transmittal, or facsimile thereof, as
well as all tendered Original Notes in proper form for transfer
or a book-entry transfer confirmation, and all other documents
required by the letter of transmittal, within three New York
Stock Exchange trading days after expiration of the exchange
offers.
Upon request to the exchange agent, a notice of guaranteed
delivery will be sent to holders who wish to tender their
Original Notes according to the guaranteed delivery procedures
set forth above.
Withdrawal
of Tenders
You may withdraw tenders of Original Notes at any time prior to
the expiration date.
For a withdrawal of a tender to be effective, a written or
facsimile transmission notice of withdrawal must be received by
the exchange agent prior to the deadline described above at its
address set forth under Exchange Agent
in this prospectus. The withdrawal notice must:
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specify the name of the person who tendered the Original Notes
to be withdrawn;
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contain a description of the Original Notes to be withdrawn, the
certificate numbers shown on the particular certificates
evidencing such Original Notes and the aggregate principal
amount represented by such Original Notes; and
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be signed by the holder of those Original Notes in the same
manner as the original signature on the letter of transmittal,
including any required signature guarantees, or be accompanied
by evidence satisfactory to us that the person withdrawing the
tender has succeeded to the beneficial ownership of the Original
Notes. In addition, the notice of withdrawal must specify, in
the case of Original Notes tendered by delivery of certificates
for such Original Notes, the name of the registered holder, if
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different from that of the tendering holder or, in the case of
Original Notes tendered by book-entry transfer, the name and
number of the account at DTC to be credited with the withdrawn
Original Notes. The signature on the notice of withdrawal must
be guaranteed by an eligible institution unless the Original
Notes have been tendered for the account of an eligible
institution.
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Withdrawal of tenders of Original Notes may not be rescinded,
and any Original Notes properly withdrawn will be deemed not
validly tendered for purposes of these exchange offers. Properly
withdrawn Original Notes may, however, be retendered by again
following one of the procedures described in
Procedures for Tendering prior to the
expiration date.
Exchange
Agent
The Bank of New York Mellon Trust Company, N.A. has been
appointed the exchange agent for these exchange offers. Letters
of transmittal, notices of guaranteed delivery and all
correspondence in connection with these exchange offers should
be sent or delivered by each holder of Original Notes, or a
beneficial owners commercial bank, broker, dealer, trust
company or other nominee, to the exchange agent as follows:
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By Mail or Hand Delivery:
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The Bank of New York Mellon Corporation
Corporate Trust Operations
Reorganization Unit
101 Barclay Street 7 East
New York, New York 10286
Attn: Mr. David Mauer
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By Facsimile:
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(212) 298-1915
Corporate Trust Operations
Reorganization Unit
Attn: Mr. David Mauer
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To Confirm by Telephone:
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(212) 815-3687
Corporate Trust Operations
Reorganization Unit
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We will pay the exchange agent reasonable and customary fees for
its services and will reimburse it for its reasonable,
out-of-pocket
expenses in connection with the exchange offers.
Fees and
Expenses
We will bear the expenses of soliciting tenders. The principal
solicitation is being made by mail. However, we may make
additional solicitations by telegraph, telephone or in person by
our officers and regular employees and those of our affiliates.
We have not retained any dealer-manager in connection with the
exchange offers and will not make any payments to broker-dealers
or others soliciting acceptances of the exchange offers. We may,
however, pay the exchange agent reasonable and customary fees
for its services and reimburse it for its related reasonable
out-of-pocket
expenses. We will pay the other cash expenses incurred in
connection with the exchange offers.
Transfer
Taxes
We will pay all transfer taxes, if any, applicable to the
exchange of Original Notes under the exchange offers. The
tendering holder, however, will be required to pay any transfer
taxes, whether imposed on the registered holder or any other
person, if:
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Exchange Notes are to be delivered to, or issued in the name of,
any person other than the registered holder of the Original
Notes so exchanged,
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tendered Original Notes are registered in the name of any person
other than the person signing the letter of transmittal, or
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a transfer tax is imposed for any reason other than the exchange
of Original Notes under the respective exchange offer.
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If satisfactory evidence of payment of transfer taxes is not
submitted with the letter of transmittal, the amount of any
transfer taxes will be billed to the tendering holder.
Accounting
Treatment
We will record the Exchange Notes at the same carrying value as
the Original Notes as reflected in our accounting records on the
date of the exchange. Accordingly, we will not recognize any
gain or loss for accounting purposes upon completion of the
exchange offers.
Consequences
of Failure to Tender
All untendered Original Notes will remain subject to the
restrictions on transfer provided for in the Original Notes and
in the indenture. The Original Notes that are not exchanged for
Exchange Notes pursuant to the exchange offers will remain
restricted securities. Accordingly, such Original Notes may be
resold only:
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to us (upon redemption thereof or otherwise),
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pursuant to a registration statement which has been declared
effective under the Securities Act,
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for so long as the Original Notes are eligible for resale
pursuant to Rule l44A, to a person the holder of the Original
Notes and any person acting on its behalf reasonably believes is
a qualified institutional buyer as defined in Rule
l44A, that purchases for its own account or for the account of
another qualified institutional buyer, in each case to whom
notice is given that the transfer is being made in reliance on
Rule l44A, or
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pursuant to any other available exemption from the registration
requirements of the Securities Act (in which case we and the
trustee shall have the right to require the delivery of an
opinion of counsel, certifications
and/or other
information satisfactory to us and the trustee),
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in each case subject to compliance with any applicable foreign,
state or other securities laws.
Upon completion of the exchange offers, due to the restrictions
on transfer of the Original Notes and the absence of such
restrictions applicable to the Exchange Notes, it is likely that
the market, if any, for Original Notes will be relatively less
liquid than the market for Exchange Notes. Consequently, holders
of Original Notes who do not participate in the respective
exchange offer could experience significant diminution in the
value of their Original Notes, compared to the value of the
Exchange Notes. The holders of Original Notes not tendered will
have no further registration rights, except that, under limited
circumstances, we may be required to file a shelf registration
statement with respect to the Original Notes.
Information
Regarding the Registration Rights Agreement
As noted above, we are effecting the exchange offers to comply
with the registration rights agreement. The registration rights
agreement requires us to:
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use commercially reasonable efforts to cause to be filed as soon
as practicable (and in no event later than 270 days) after
July 16, 2010 an exchange offer registration statement with
the SEC;
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use commercially reasonable efforts to cause the exchange offer
registration statement to become effective within 360 days
after July 16, 2010 (the Effectiveness
Deadline);
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use commercially reasonable efforts to consummate the exchange
offers as soon as practicable (and in no event later than 30
business days) after the exchange offer registration statement
becomes effective; and
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cause to be filed a shelf registration statement for the resale
of the Original Notes under certain circumstances and to use
commercially reasonable efforts to cause such registration
statement to become effective under the Securities Act.
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The requirements under the registration rights agreement
described in the first three bullets above will be satisfied
when we complete the exchange offer.
If we have not exchanged the Exchange Notes of either series for
all Original Notes of such series validly tendered in accordance
with the terms of the applicable exchange offer on or before the
30th business day after the Effectiveness Deadline or, if
applicable, a shelf registration statement covering resales of
the Original Notes of such series has not been declared
effective within the time period required by the registration
rights agreement or such shelf registration statement ceases to
be effective at any time during the shelf registration period
(subject to certain exceptions), then additional interest shall
accrue on the principal amount of the Original Notes of such
series at a rate of 0.25% per annum for the first
90-day
period immediately following the occurrence of such event and by
an additional 0.25% per annum with respect to each subsequent
90-day
period, up to a maximum additional rate of 0.75% per annum
thereafter, until such exchange offer is completed, the shelf
registration statement is declared effective or, if such shelf
registration statement ceased to be effective, again becomes
effective, as described in the registration rights agreement.
Under the registration rights agreement, we have also agreed to
keep the registration statement for the exchange offers
effective for not less than 20 business days (or longer, if
required by applicable law) after the date on which notice of
the exchange offers is mailed to holders.
Our obligations to register the notes will terminate upon the
completion of the exchange offers. However, under certain
circumstances specified in the registration rights agreement, we
may be required to file a shelf registration statement with
respect to the Original Notes.
This summary includes only the material terms of the
registration rights agreement. For a full description, you
should refer to the complete copy of the registration rights
agreement, which has been filed as an exhibit to the
registration statement relating to the exchange offers and the
Exchange Notes. See Where You Can Find More
Information.
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CERTAIN
U.S. FEDERAL INCOME TAX CONSIDERATIONS
General
The following is a summary of material U.S. federal income
tax consequences of the exchange of Original Notes for Exchange
Notes pursuant to the exchange offers, but does not address any
other aspects of U.S. federal income tax consequences to
holders of Original Notes or Exchange Notes. This summary is
based upon the Internal Revenue Code of 1986, as amended (the
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, possibly on a retroactive basis.
This summary is not binding on the Internal Revenue Service (the
Service) or on the courts, and no ruling will
be sought from the Service with respect to the statements made
and the conclusions reached in this summary. There can be no
assurance that the Service will agree with such statements and
conclusions.
This summary is limited to the U.S. federal income tax
consequences of those persons who are the original beneficial
owner of the Original Notes, who exchange Original Notes for
Exchange Notes in these exchange offers and who hold the
Original Notes as capital assets within the meaning of
Section 1221 of the Code, which we refer to in this section
as Holders. This summary does not address
specific tax consequences that may be relevant to particular
persons, including banks, financial institutions,
broker-dealers, insurance companies, real estate investment
trusts, regulated investment companies, partnerships or other
pass-through entities, expatriates, tax-exempt organizations and
persons that have a functional currency other than the
U.S. dollar or persons in special situations, such as those
who have elected to mark securities to market or those who hold
the notes as part of a straddle, hedge, conversion transaction
or other integrated investment. In addition, this summary does
not address tax consequences arising under the unearned income
Medicare contribution tax pursuant to the Health Care and
Education Reconciliation Act of 2010, nor does it address
U.S. federal alternative minimum tax consequences, estate
and gift tax consequences, consequences under the tax laws of
any state, local or foreign jurisdiction, or consequences under
any U.S. federal tax laws other than income tax law.
If a partnership or other entity taxable as a partnership holds
Original Notes, the tax treatment of a partner in the
partnership generally will depend upon the status of the partner
and the activities of the partnership. If you are a partner of a
partnership holding Original Notes, you should consult your tax
advisor regarding the tax consequences of the exchange of
Original Notes for Exchange Notes pursuant to the exchange
offers.
THIS SUMMARY IS FOR GENERAL INFORMATION ONLY. PERSONS
CONSIDERING THE EXCHANGE OF ORIGINAL NOTES FOR EXCHANGE
NOTES ARE URGED TO CONSULT THEIR OWN TAX ADVISORS
CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM
OF EXCHANGING THE ORIGINAL NOTES, AS WELL AS THE APPLICATION OF
STATE, LOCAL AND FOREIGN TAX LAWS AND U.S. FEDERAL TAX LAWS
OTHER THAN INCOME TAX LAW.
Exchange
of an Original Note for an Exchange Note Pursuant to these
Exchange Offers
The exchange of the Original Notes for the Exchange Notes in the
exchange offers described herein should not constitute a
significant modification of the terms of the Original Notes and
thus should not constitute a taxable exchange for
U.S. federal income tax purposes. Rather, the Exchange
Notes should be treated as a continuation of the Original Notes.
Consequently, a Holder should not recognize gain or loss upon
receipt of the Exchange Notes in the exchange offers, the
Holders basis in the Exchange Notes should be the same as
its basis in the Original Notes immediately before the exchange,
and the Holders holding period in the Exchange Notes
should include its holding period in the Original Notes.
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PLAN OF
DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own
account pursuant to the exchange offers must acknowledge that it
will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such Exchange
Notes. This prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Original
Notes where such Original Notes were acquired as a result of
market-making activities or other trading activities. We have
agreed that we will make this prospectus, as amended or
supplemented, available to any broker-dealer for use in
connection with any such resale until the earlier of
90 days after the date the exchange offer registration
statement becomes effective and the date on which a
broker-dealer is no longer required to deliver a prospectus in
connection with market-making or other trading activities.
We will not receive any proceeds from any sale of Exchange Notes
by broker-dealers. Exchange Notes received by broker-dealers for
their own account pursuant to the applicable exchange offer may
be sold from time to time in one or more transactions in the
over-the-counter
market, in negotiated transactions, through the writing of
options on the Exchange Notes or a combination of such methods
of resale, at market prices prevailing at the time of resale, at
prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to
or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such
broker-dealer
and/or the
purchasers of any Exchange Notes. Any broker-dealer that resells
Exchange Notes that were received by it for its own account
pursuant to the exchange offers and any broker or dealer that
participates in a distribution of such Exchange Notes may be
deemed to be an underwriter within the meaning of
the Securities Act and any profit on any such resale of Exchange
Notes and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the
Securities Act. The letter of transmittal states that, by
acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it
is an underwriter within the meaning of the
Securities Act.
Until the earlier of 90 days after the date the exchange
offer registration statement becomes effective and the date on
which a broker-dealer is no longer required to deliver a
prospectus in connection with market-making or other trading
activities, we will promptly send additional copies of this
prospectus and any amendment or supplement to this prospectus to
any broker-dealer that requests such documents in the letter of
transmittal. Pursuant to the registration rights agreement, we
have agreed to pay all expenses incident to the exchange offers
(including the expenses of one counsel for the holders of the
notes), other than underwriting discounts and commissions, and
will indemnify the holders of the notes (including any
broker-dealers) against certain liabilities, including
liabilities under the Securities Act.
LEGAL
MATTERS
The validity of the Exchange Notes and guarantees offered hereby
will be passed upon by Nelson Mullins Riley &
Scarborough, LLP, Charlotte, North Carolina. In rendering its
opinion, Nelson Mullins Riley & Scarborough, LLP will rely
upon the opinion of Moss & Barnett, P.A., with respect to
such of the subsidiary guarantors as are organized under the
laws of Minnesota; Baxter & Jewell, P.A., with respect to
such of the subsidiary guarantors as are organized under the
laws of Arkansas; and Quarles & Brady, LLP, with respect to
such of the subsidiary guarantors as are organized under the
laws of Arizona, Michigan, Nevada, Oklahoma, Pennsylvania,
Tennessee, Texas or Wisconsin.
EXPERTS
The consolidated financial statements of Fidelity National
Information Services, Inc. and subsidiaries as of
December 31, 2009 and 2008 and for each of the years in the
three-year period ended December 31, 2009, and
managements assessment of the effectiveness of internal
control over financial reporting as of December 31, 2009,
have been incorporated by reference herein in reliance upon the
reports of KPMG LLP, independent registered public accounting
firm, incorporated by reference herein, and upon the authority
of said firm as experts in accounting and auditing. As discussed
in note 6 to the consolidated financial statements
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contained in our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009, the Company
completed the Metavante Acquisition on October 1, 2009.
The consolidated financial statements, and the related financial
statement schedule, incorporated in this Prospectus by reference
from the Metavante Technologies, Inc.s Annual Report on
Form 10-K
for the year ended December 31, 2008, and the effectiveness
of Metavante Technologies, Inc.s internal control over
financial reporting, have been audited by Deloitte &
Touche LLP, an independent registered public accounting firm, as
stated in their report, which is incorporated herein by
reference. Such consolidated financial statements and financial
statement schedule have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in
accounting and auditing.
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