exv10w5






Exhibit 10.5





TAX RECEIVABLE AGREEMENT (MANAGEMENT)




among




EMDEON INC.




and




THE PERSONS NAMED HEREIN




DATED AS OF ______, 2009




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE I DEFINITIONS

	 	 	1	 
	 
	 	 	 	 	 	 
	Section 1.1

	 	Definitions
	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II DETERMINATION OF CERTAIN REALIZED TAX BENEFIT

	 	 	9	 
	 
	 	 	 	 	 	 
	Section 2.1

	 	Basis Adjustment.
	 	 	9	 
	Section 2.2

	 	Tax Benefit Schedule
	 	 	9	 
	Section 2.3

	 	Procedures, Amendments
	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE III TAX BENEFIT PAYMENTS

	 	 	11	 
	 
	 	 	 	 	 	 
	Section 3.1

	 	Payments
	 	 	11	 
	Section 3.2

	 	No Duplicative Payments
	 	 	11	 
	Section 3.3

	 	Pro Rata Payments; Coordination of Benefits With Other Tax
Receivable Agreements
	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE IV TERMINATION

	 	 	12	 
	 
	 	 	 	 	 	 
	Section 4.1

	 	Early Termination and Breach of Agreement
	 	 	12	 
	Section 4.2

	 	Early Termination Notice
	 	 	13	 
	Section 4.3

	 	Payment upon Early Termination
	 	 	14	 
	 
	 	 	 	 	 	 
	ARTICLE V SUBORDINATION AND LATE PAYMENTS

	 	 	14	 
	 
	 	 	 	 	 	 
	Section 5.1

	 	Subordination
	 	 	14	 
	Section 5.2

	 	Late Payments by the Corporate Taxpayer
	 	 	14	 
	 
	 	 	 	 	 	 
	ARTICLE VI NO DISPUTES; CONSISTENCY; COOPERATION

	 	 	15	 
	 
	 	 	 	 	 	 
	Section 6.1

	 	Participation in the Corporate Taxpayer’s and EBS’s Tax Matters
	 	 	15	 
	Section 6.2

	 	Consistency
	 	 	15	 
	Section 6.3

	 	Cooperation
	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE VII MISCELLANEOUS

	 	 	15	 
	 
	 	 	 	 	 	 
	Section 7.1

	 	Notices
	 	 	15	 
	Section 7.2

	 	Counterparts
	 	 	16	 
	Section 7.3

	 	Entire Agreement; No Third Party Beneficiaries
	 	 	16	 
	Section 7.4

	 	Governing Law
	 	 	16	 
	Section 7.5

	 	Severability
	 	 	17	 
	Section 7.6

	 	Successors; Assignment; Amendments; Waivers
	 	 	17	 
	Section 7.7

	 	Titles and Subtitles
	 	 	17	 
	Section 7.8

	 	Resolution of Disputes
	 	 	17	 
	Section 7.9

	 	Reconciliation
	 	 	18	 






i









 







	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	Section 7.10

	 	Withholding
	 	 	19	 
	Section 7.11

	 	Admission of the Corporate Taxpayer into a Consolidated
Group; Transfers of Corporate Assets
	 	 	19	 
	Section 7.12

	 	Confidentiality
	 	 	20	 
	Section 7.13

	 	Change in Law
	 	 	20	 







ii









 





TAX RECEIVABLE AGREEMENT (MANAGEMENT)




          This TAX RECEIVABLE AGREEMENT (MANAGEMENT) (this “Agreement”), dated as of                     ,
2009, is hereby entered into by and among Emdeon Inc., a Delaware corporation (the “Corporate
Taxpayer”), and each of the persons from time to time party hereto.




RECITALS




          WHEREAS, the Equity Plan Members (as defined below) hold member interests (the
“Units”) in EBS Master LLC, a Delaware limited liability company (“EBS”), which is
classified as a partnership for United States federal income tax purposes;




          WHEREAS, the Corporate Taxpayer is the managing member of EBS, and holds and will hold,
directly and/or indirectly, Units;




          WHEREAS, the Units held by the Equity Plan Members may be exchanged for cash or Class A common
stock (the “Class A Shares”) of the Corporate Taxpayer, subject to the provisions of the
LLC Agreement (as defined below);




          WHEREAS, EBS and each of its direct and indirect subsidiaries treated as a partnership for
United States federal income tax purposes currently have and will have in effect an election under
Section 754 of the United States Internal Revenue Code of 1986, as amended (the “Code”),
for each Taxable Year in which a taxable acquisition of Units by the Corporate Taxpayer or EBS from
an Equity Plan Member for cash or Class A Shares (an “Exchange”) occurs;




          WHEREAS, the income, gain, loss, expense and other Tax (as defined below) items of the
Corporate Taxpayer may be affected by (i) the Basis Adjustments (as defined below) and (ii) the
Imputed Interest (as defined below); and




          WHEREAS, the parties to this Agreement desire to make certain arrangements with respect to the
effect of the Basis Adjustments and Imputed Interest on the liability for Taxes of the Corporate
Taxpayer.




          NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements
set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:




ARTICLE I




DEFINITIONS




          Section 1.1 Definitions. As used in this Agreement, the terms set forth in this
Article I shall have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined).




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          “Affiliate” means, with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common
Control with, such first Person.




          “Agreed Rate” means LIBOR plus 100 basis points.




          “Agreement” is defined in the Recitals of this Agreement.




          “Amended Schedule” is defined in Section 2.3(b) of this Agreement.




          “Basis Adjustment” means the adjustment to the tax basis of a Reference Asset under
Sections 732, 734(b) and 1012 of the Code (in situations where, as a result of one or more
Exchanges, EBS becomes an entity that is disregarded as separate from its owner for tax purposes)
or under Sections 734(b), 743(b) and 754 of the Code (in situations where, following an Exchange,
EBS remains in existence as an entity for U.S. federal income tax purposes) and, in each case,
comparable sections of state and local tax laws, as a result of an Exchange with respect to Units
held by the Equity Plan Members and the payments made to the Equity Plan Members pursuant to this
Agreement. For the avoidance of doubt, the amount of any Basis Adjustment resulting from an
Exchange of one or more Units shall be determined without regard to any Pre-Exchange Transfer of
such Units and as if any such Pre-Exchange Transfer had not occurred.




          A “Beneficial Owner” of a security is a Person who directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise, has or shares: (i) voting power,
which includes the power to vote, or to direct the voting of, such security and/or (ii) investment
power, which includes the power to dispose of, or to direct the disposition of, such security. The
terms “Beneficially Own” and “Beneficial Ownership” shall have correlative
meanings.




          “Board” means the Board of Directors of the Corporate Taxpayer.




          “Business Day” means Monday through Friday of each week, except that a legal holiday
recognized as such by the government of the United States of America or the State of New York shall
not be regarded as a Business Day.




          “Change in Tax Law” is defined in Section 7.13 of this Agreement.




          “Change of Control” means the occurrence of any of the following events:





	 	(i)	 	any Person or any group of Persons acting together which would
constitute a “group” for purposes of Section 13(d) of the Securities and
Exchange Act of 1934, or any successor provisions thereto, excluding a group of
Persons which includes one or more Affiliates of Hellman & Friedman LLC and one
or more Affiliates of GA LLC, is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Corporate Taxpayer representing more than 50%
of the combined voting power of the Corporate Taxpayer’s then outstanding
voting securities; or




2









 












	 	(ii)	 	the following individuals cease for any reason to constitute
a majority of the number of directors of the Corporate Taxpayer then serving:
individuals who, on the IPO Date, constitute the Board and any new director
whose appointment or election by the Board or nomination for election by the
Corporate Taxpayer’s shareholders was approved or recommended by a vote of at
least two-thirds (2/3) of the directors then still in office who either were
directors on the IPO Date or whose appointment, election or nomination for
election was previously so approved or recommended by the directors referred
to in this clause (ii); or
	 
	 	(iii)	 	there is consummated a merger or consolidation of the
Corporate Taxpayer with any other corporation or other entity, and, immediately
after the consummation of such merger or consolidation, either (x) the Board
immediately prior to the merger or consolidation does not constitute at least a
majority of the board of directors of the company surviving the merger or, if
the surviving company is a Subsidiary, the ultimate parent thereof, or (y) the
voting securities of the Corporate Taxpayer immediately prior to such merger or
consolidation do not continue to represent or are not converted into more than
50% of the combined voting power of the then outstanding voting securities of
the Person resulting from such merger or consolidation or, if the surviving
company is a Subsidiary, the ultimate parent thereof; or
	 
	 	(iv)	 	the shareholders of the Corporate Taxpayer approve a plan
of complete liquidation or dissolution of the Corporate Taxpayer or there is
consummated an agreement or series of related agreements for the sale or other
disposition, directly or indirectly, by the Corporate Taxpayer of all or
substantially all of the Corporate Taxpayer’s assets, other than such sale or
other disposition by the Corporate Taxpayer of all or substantially all of the
Corporate Taxpayer’s assets to an entity, at least 50% of the combined voting
power of the voting securities of which are owned by shareholders of the
Corporate Taxpayer in substantially the same proportions as their ownership of
the Corporate Taxpayer immediately prior to such sale.




Notwithstanding the foregoing, except with respect to clause (ii) and clause (iii)(x) above, a
“Change of Control” shall not be deemed to have occurred by virtue of the consummation of any
transaction or series of integrated transactions immediately following which the record holders of
the shares of the Corporate Taxpayer immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in, and own
substantially all of the shares of, an entity which owns all or substantially all of the assets of
the Corporate Taxpayer immediately following such transaction or series of transactions.




          “Class A Shares” is defined in the Recitals of this Agreement.




          “Code” is defined in the Recitals of this Agreement.




3









 








          “Control” means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.




          “Corporate Taxpayer” is defined in the Recitals of this Agreement.




          “Corporate Taxpayer Return” means the federal and/or state and/or local Tax Return, as
applicable, of the Corporate Taxpayer filed with respect to Taxes of any Taxable Year.




          “Cumulative Net Realized Tax Benefit” for a Taxable Year means the cumulative amount
of Realized Tax Benefits for all Taxable Years of the Corporate Taxpayer, up to and including such
Taxable Year, net of the cumulative amount of Realized Tax Detriments for the same period. The
Realized Tax Benefit and Realized Tax Detriment for each Taxable Year shall be determined based on
the most recent Tax Benefit Schedule or Amended Schedule, if any, in existence at the time of such
determination.




          “Default Rate” means LIBOR plus 500 basis points.




          “Determination” shall have the meaning ascribed to such term in Section 1313(a) of the
Code or similar provision of state and local tax law, as applicable, or any other event (including
the execution of IRS Form 870-AD) that finally and conclusively establishes the amount of any
liability for Tax.




          “Dispute” has the meaning set forth in Section 7.8(a) of this Agreement.




          “Early Termination Date” means the date of an Early Termination Notice for purposes of
determining the Early Termination Payment.




          “Early Termination Effective Date” is defined in Section 4.2 of this Agreement.




          “Early Termination Notice” is defined in Section 4.2 of this Agreement.




          “Early Termination Schedule” is defined in Section 4.2 of this Agreement.




          “Early Termination Payment” is defined in Section 4.3(b) of this Agreement.




          “Early Termination Rate” means the lesser of (i) 6.5% per annum, compounded annually,
and (ii) LIBOR plus 100 basis points.




          “Equity Plan Members” means the parties hereto other than the Corporate Taxpayer and
each other individual who from time to time executes a joinder agreement in accordance with Section
7.6 of this Agreement.




          “Exchange” is defined in the Recitals of this Agreement.




          “Exchange Basis Schedule” is defined in Section 2.1 of this Agreement.




          “Exchange Date” means the date of any Exchange.




4









 








          “Expert” is defined in Section 7.9 of this Agreement.




          “Hypothetical Tax Liability” means, with respect to any Taxable Year, the liability
for Taxes of (i) the Corporate Taxpayer and (ii) without duplication, EBS, but only with respect to
Taxes imposed on EBS and allocable to the Corporate Taxpayer or to the other members of the
consolidated group of which the Corporate Taxpayer is the parent, in each case using the same
methods, elections, conventions and similar practices used on the relevant Corporate Taxpayer
Return, but (i) using the Non-Stepped Up Tax Basis as reflected on the Exchange Basis Schedule
including amendments thereto for the Taxable Year and (ii) excluding any deduction attributable to
Imputed Interest for the Taxable Year. For the avoidance of doubt, Hypothetical Tax Liability
shall be determined without taking into account the carryover or carryback of any Tax item (or
portions thereof) that is attributable to the Basis Adjustment or Imputed Interest.




          “Imputed Interest” shall mean any interest imputed under Section 1272, 1274 or 483 or
other provision of the Code and any similar provision of state and local tax law with respect to
the Corporate Taxpayer’s payment obligations under this Agreement.




          “Independent Director” means Dinyar S. Devitre, Jim D. Kever, Philip M. Pead and any
other member of the Board who is not affiliated with any of the principal stockholders of the
Corporate Taxpayer and who is neither a current officer nor a former officer of the Corporate
Taxpayer or any of its Subsidiaries.




          “Investors Tax Receivable Agreement (Reorganizations)” means the Tax Receivable
Agreement (Reorganizations), dated as of                     , 2009, by and among the Corporate Taxpayer, H&F ITR
Holdco, L.P., GA ITR Holdco, L.P. and GA-H&F ITR Holdco, L.P.




          “Investors Tax Receivable Agreement (Exchanges)” means the Tax Receivable Agreement
(Exchanges), dated as of                     , 2009, by and among the Corporate Taxpayer, H&F ITR Holdco, L.P.,
GA ITR Holdco, L.P. and GA-H&F ITR Holdco, L.P.




          “IPO” means the initial public offering of Class A Shares by the Corporate Taxpayer.




          “IPO Date” means the closing date of the IPO.




          “IRS” means the United States Internal Revenue Service.




          “LIBOR” means during any period, an interest rate per annum equal to the one-year
LIBOR reported, on the date two days prior to the first day of such period, on the Telerate Page
3750 (or if such screen shall cease to be publicly available, as reported on Reuters Screen page
“LIBOR01” or by any other publicly available source of such market rate) for London interbank
offered rates for United States dollar deposits for such period.




          “LLC Agreement” means, with respect to EBS, the Sixth Amended and Restated Limited
Liability Company Agreement of EBS.




5









 








          “Market Value” shall mean the closing price of the Class A Shares on the applicable
Exchange Date on the national securities exchange or interdealer quotation system on which such
Class A Shares are then traded or listed, as reported by the Wall Street Journal; provided,
that if the closing price is not reported by the Wall Street Journal for the applicable Exchange
Date, then the Market Value shall mean the closing price of the Class A Shares on the Business Day
immediately preceding such Exchange Date on the national securities exchange or interdealer
quotation system on which such Class A Shares are then traded or listed, as reported by the Wall
Street Journal; provided, further, that if the Class A Shares are not then listed
on a national securities exchange or interdealer quotation system, “Market Value” shall mean the
cash consideration paid for Class A Shares, or the fair market value of the other property
delivered for Class A Shares, as determined by the Board in good faith.




          “Material Objection Notice” has the meaning set forth in Section 4.2 of this
Agreement.




          “Non-Stepped Up Tax Basis” means, with respect to any Reference Asset at any time, the
Tax basis that such asset would have had at such time if no Basis Adjustments had been made.




          “Objection Notice” has the meaning set forth in Section 2.3(a) of this Agreement.




          “Original Members” means the members of EBS on the date of, but immediately preceding,
the IPO.




          “Payment Date” means any date on which a payment is required to be made pursuant to
this Agreement.




          “Person” means any individual, corporation, firm, partnership, joint venture, limited
liability company, estate, trust, business association, organization, governmental entity or other
entity.




          “Pre-Exchange Transfer” means any transfer (including upon the death of an Equity Plan
Member) or distribution in respect of one or more Units (i) that occurs prior to an Exchange of
such Units, and (ii) to which Section 743(b) or 734(b) of the Code applies.




          “Qualified Tax Advisor” means Paul, Weiss, Rifkind, Wharton & Garrison LLP, Simpson
Thacher & Bartlett LLP, Deloitte Tax LLP, or any other law or accounting firm that is nationally
recognized as being expert in Tax matters and that is reasonably acceptable to the Corporate
Taxpayer.




          “Realized Tax Benefit” means, for a Taxable Year, the excess, if any, of the
Hypothetical Tax Liability over the actual liability for Taxes of (i) the Corporate Taxpayer and
(ii) without duplication, EBS, but only with respect to Taxes imposed on EBS and allocable to the
Corporate Taxpayer or to the other members of the consolidated group of which the Corporate
Taxpayer is the parent for such Taxable Year. If all or a portion of the actual liability for such
Taxes for the Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable
Year, such liability shall not be included in determining the Realized Tax Benefit unless and until
there has been a Determination.




6









 








          “Realized Tax Detriment” means, for a Taxable Year, the excess, if any, of the actual
liability for Taxes of (i) the Corporate Taxpayer and (ii) without duplication, EBS, but only with
respect to Taxes imposed on EBS and allocable to the Corporate Taxpayer or to the other members of
the consolidated group of which the Corporate Taxpayer is the parent for such Taxable Year, over
the Hypothetical Tax Liability for such Taxable Year. If all or a portion of the actual liability
for such Taxes for the Taxable Year arises as a result of an audit by a Taxing Authority of any
Taxable Year, such liability shall not be included in determining the Realized Tax Detriment unless
and until there has been a Determination.




          “Reconciliation Dispute” has the meaning set forth in Section 7.9 of this Agreement.




          “Reconciliation Procedures” has the meaning set forth in Section 2.3(a) of this
Agreement.




          “Reference Asset” means an asset that is held by EBS, or by any of its direct or
indirect subsidiaries treated as a partnership or disregarded entity for purposes of the applicable
Tax, at the time of an Exchange. A Reference Asset also includes any asset that is “substituted
basis property” under Section 7701(a)(42) of the Code with respect to a Reference Asset.




          “Schedule” means any of the following: (i) an Exchange Basis Schedule, (ii) a Tax
Benefit Schedule, or (iii) the Early Termination Schedule.




          “Senior Obligations” is defined in Section 5.1 of this Agreement.




          “Subsidiaries” means, with respect to any Person, as of any date of determination, any
other Person as to which such Person, owns, directly or indirectly, or otherwise controls more than
50% of the voting power or other similar interests or the sole general partner interest or managing
member or similar interest of such Person.




          “Subsidiary Stock” means any stock or other equity interest in any subsidiary entity
of EBS that is treated as a corporation for United States federal income tax purposes.




          “Tax Benefit Payment” is defined in Section 3.1(b) of this Agreement.




          “Tax Benefit Schedule” is defined in Section 2.2 of this Agreement.




          “Tax Receivable Agreements” shall mean this Agreement, the Investors Tax Receivable
Agreement (Reorganizations) and the Investors Tax Receivable Agreement (Exchanges).




          “Tax Return” means any return, declaration, report or similar statement required to be
filed with respect to Taxes (including any attached schedules), including, without limitation, any
information return, claim for refund, amended return and declaration of estimated Tax.




          “Taxable Year” means a taxable year of the Corporate Taxpayer as defined in Section
441(b) of the Code or comparable section of state or local tax law, as applicable (and,




7









 








therefore, for the avoidance of doubt, may include a period of less than 12 months for which a
Tax Return is made), ending on or after the IPO Date.




          “Taxes” means any and all United States federal, state and local taxes, assessments or
similar charges that are based on or measured with respect to net income or profits, and any
interest related to such Tax.




          “Taxing Authority” shall mean any domestic, federal, national, state, county or
municipal or other local government, any subdivision, agency, commission or authority thereof, or
any quasi-governmental body exercising any taxing authority or any other authority exercising Tax
regulatory authority.




          “Treasury Regulations” means the final, temporary and proposed regulations under the
Code promulgated from time to time (including corresponding provisions and succeeding provisions)
as in effect for the relevant taxable period.




          “Units” is defined in the Recitals of this Agreement.




          “Valuation Assumptions” shall mean, as of an Early Termination Date, the assumptions
that (1) in each Taxable Year ending on or after such Early Termination Date, the Corporate
Taxpayer will have taxable income sufficient to fully utilize the deductions arising from the Basis
Adjustments and the Imputed Interest during such Taxable Year or future Taxable Years (including,
for the avoidance of doubt, Basis Adjustments and Imputed Interest that would result from future
Tax Benefit Payments that would be paid in accordance with the Valuation Assumptions) in which such
deductions would become available, (2) the United States federal income tax rates and state and
local income tax rates that will be in effect for each such Taxable Year will be those specified
for each such Taxable Year by the Code and other law as in effect on the Early Termination Date,
(3) any loss carryovers generated by any Basis Adjustment or Imputed Interest and available as of
the date of the Early Termination Schedule will be utilized by the Corporate Taxpayer on a pro rata
basis from the date of the Early Termination Schedule through the scheduled expiration date of such
loss carryovers, (4) any non-amortizable assets (other than any Subsidiary Stock) will be disposed
of on the fifteenth anniversary of the applicable Basis Adjustment; provided, that in the
event of a Change of Control, such non-amortizable assets shall be deemed disposed of at the time
of sale of the relevant asset (if earlier than such fifteenth anniversary), (5) any Subsidiary
Stock will be deemed never to be disposed of; provided, that, except in respect of a
termination payment pursuant to Section 7.13(b), if (i) the ITR Entity delivers to the Corporate
Taxpayer a written opinion of a Qualified Tax Advisor to the effect that as a result of a certain
transaction (or series of transactions), it is more likely than not that the tax basis in the
amortizable or depreciable assets of the Corporate Taxpayer will be increased by reference to the
tax basis in such Subsidiary Stock and the tax basis in such Subsidiary Stock will decrease
accordingly, and (ii) the Corporate Taxpayer determines that it is commercially reasonable to
effectuate such transaction (or series of transactions), then the Valuation Assumptions will take
into account such increased tax basis in the amortizable or depreciable assets of the Corporate
Taxpayer, and (6) if, at the Early Termination Date, there are Units that have not been Exchanged,
then each such Unit shall be deemed to be Exchanged for the Market Value of the Class A Shares and
the amount of cash that would be transferred if the Exchange occurred on the Early Termination
Date.




8









 








ARTICLE II




DETERMINATION OF CERTAIN REALIZED TAX BENEFIT




          Section 2.1 Basis Adjustment. Within 90 calendar days after the filing of the United States federal income tax return of the
Corporate Taxpayer for each Taxable Year in which any Exchange has been effected, the Corporate
Taxpayer shall deliver to each applicable Equity Plan Member a schedule (the “Exchange Basis
Schedule”) that shows, in reasonable detail necessary to perform the calculations required by
this Agreement, including with respect to each Exchanging party, for purposes of Taxes, (i) the
Non-Stepped Up Tax Basis of the Reference Assets as of each applicable Exchange Date, (ii) the
Basis Adjustment with respect to the Reference Assets as a result of the Exchanges effected by such
Equity Plan Member in such Taxable Year, calculated in the aggregate, (iii) the period (or periods)
over which the Reference Assets are amortizable and/or depreciable and (iv) the period (or periods)
over which each Basis Adjustment is amortizable and/or depreciable.




          Section 2.2 Tax Benefit Schedule.




          (a) Tax Benefit Schedule. Within 90 calendar days after the filing of the United
States federal income tax return of the Corporate Taxpayer for any Taxable Year in which there is a
Realized Tax Benefit or Realized Tax Detriment, the Corporate Taxpayer shall provide to each
applicable Equity Plan Member a schedule showing, in reasonable detail and, at the request of the
applicable Equity Plan Member, with respect to each separate Exchange, the calculation of the
Realized Tax Benefit or Realized Tax Detriment attributable to such Equity Plan Member for such
Taxable Year (a “Tax Benefit Schedule”). The Tax Benefit Schedule will become final as
provided in Section 2.3(a) and may be amended as provided in Section 2.3(b) (subject to the
procedures set forth in Section 2.3(b)).




          (b) Applicable Principles. Subject to Section 3.3(a), the Realized Tax Benefit or
Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the
actual liability for Taxes of the Corporate Taxpayer for such Taxable Year attributable to the
Basis Adjustments and Imputed Interest, determined using a “with and without” methodology. For the
avoidance of doubt, the actual liability for Taxes will take into account the deduction of the
portion of the Tax Benefit Payment that must be accounted for as interest under the Code based upon
the characterization of Tax Benefit Payments as additional consideration payable by the Corporate
Taxpayer for the Units acquired in an Exchange. Carryovers or carrybacks of any Tax item
attributable to the Basis Adjustment and Imputed Interest shall be considered to be subject to the
rules of the Code and the Treasury Regulations or the appropriate provisions of U.S. state and
local income and franchise tax law, as applicable, governing the use, limitation and expiration of
carryovers or carrybacks of the relevant type. If a carryover or carryback of any Tax item
includes a portion that is attributable to the Basis Adjustment or
Imputed Interest and another portion that is not, such portions shall be considered to be used
in accordance with the “with and without” methodology. The parties agree that (i) all Tax Benefit
Payments attributable to the Basis Adjustments (other than amounts accounted for as interest under
the Code) will (A) be treated as subsequent upward purchase price adjustments that give






9









 








rise to
further Basis Adjustments to Reference Assets for the Corporate Taxpayer and (B) have the effect of
creating additional Basis Adjustments to Reference Assets for the Corporate Taxpayer in the year of
payment, and (ii) as a result, such additional Basis Adjustments will be incorporated into the
current year calculation and into future year calculations, as appropriate.




          Section 2.3 Procedures, Amendments.




          (a) Procedure. Every time the Corporate Taxpayer delivers to an Equity Plan Member an
applicable Schedule under this Agreement, including any Amended Schedule delivered pursuant to
Section 2.3(b), but excluding any Early Termination Schedule or amended Early Termination Schedule,
the Corporate Taxpayer shall also (x) deliver to the Equity Plan Member schedules and work papers,
as determined by the Corporate Taxpayer or requested by the Equity Plan Member, providing
reasonable detail regarding the preparation of the Schedule and (y) allow the Equity Plan Member
reasonable access at no cost to the appropriate representatives at the Corporate Taxpayer, as
determined by the Corporate Taxpayer or requested by the Equity Plan Member, in connection with a
review of such Schedule. Without limiting the application of the preceding sentence, each time the
Corporate Taxpayer delivers to an Equity Plan Member a Tax Benefit Schedule, in addition to the Tax
Benefit Schedule duly completed, the Corporate Taxpayer shall deliver to the Equity Plan Member the
Corporate Taxpayer Return, the reasonably detailed calculation by the Corporate Taxpayer of the
Hypothetical Tax Liability, the reasonably detailed calculation by the Corporate Taxpayer of the
actual Tax liability, as well as any other work papers as determined by the Corporate Taxpayer or
requested by the Equity Plan Member. An applicable Schedule or amendment thereto shall become
final and binding on all parties 30 calendar days from the first date on which the Equity Plan
Member has received the applicable Schedule or amendment thereto unless the Equity Plan Member (i)
within 30 calendar days after receiving an applicable Schedule or amendment thereto, provides the
Corporate Taxpayer with notice of a material objection to such Schedule (“Objection
Notice”) made in good faith or (ii) provides a written waiver of such right of any Objection
Notice within the period described in clause (i) above, in which case such Schedule or amendment
thereto becomes binding on the date the waiver is received by the Corporate Taxpayer. If the
parties, for any reason, are unable to successfully resolve the issues raised in the Objection
Notice within 30 calendar days after receipt by the Corporate Taxpayer of an Objection Notice, the
Corporate Taxpayer and the Equity Plan Member shall employ the reconciliation procedures as
described in Section 7.9 of this Agreement (the “Reconciliation Procedures”).




          (b) Amended Schedule. The applicable Schedule for any Taxable Year may be amended from
time to time by the Corporate Taxpayer (i) in connection with a Determination affecting such
Schedule, (ii) to correct inaccuracies in the Schedule identified as a result of the receipt of
additional factual information relating to a Taxable Year after the date the Schedule was provided
to the Equity Plan Member, (iii) to comply with the Expert’s determination under the Reconciliation
Procedures, (iv) to reflect a change in the Realized Tax Benefit or Realized
Tax Detriment for such Taxable Year attributable to a carryback or carryforward of a loss or
other tax item to such Taxable Year, (v) to reflect a change in the Realized Tax Benefit or
Realized Tax Detriment for such Taxable Year attributable to an amended Tax Return filed for such
Taxable Year, or (vi) to adjust the Exchange Basis Schedule to take into account payments made
pursuant to this Agreement (any such Schedule, an “Amended Schedule”).




10









 








ARTICLE III




TAX BENEFIT PAYMENTS




          Section 3.1 Payments.




          (a) Payments. Within five (5) calendar days after a Tax Benefit Schedule delivered to
an Equity Plan Member becomes final in accordance with Section 2.3(a), the Corporate Taxpayer shall
pay to the Equity Plan Member for such Taxable Year the Tax Benefit Payment for such Equity Plan
Member determined pursuant to Section 3.1(b). Each such Tax Benefit Payment shall be made by wire
transfer of immediately available funds to the bank account previously designated by the Equity
Plan Member to the Corporate Taxpayer or as otherwise agreed by the Corporate Taxpayer and the
Equity Plan Member. For the avoidance of doubt, no Tax Benefit Payment shall be made in respect of
estimated tax payments, including, without limitation, federal estimated income tax payments.
Notwithstanding anything herein to the contrary, in no event shall the aggregate Tax Benefit
Payments in respect of any Exchange (other than amounts accounted for as interest under the Code)
exceed 50% of the purchase price for the Units exchanged.




          (b) A “Tax Benefit Payment” for an Equity Plan Member means an amount, not less than
zero, equal to the sum of the Net Tax Benefit attributable to the Exchanges by such Equity Plan
Member and the corresponding Interest Amount. For the avoidance of doubt, for Tax purposes, the
Interest Amount shall not be treated as interest but instead shall be treated as additional
consideration for the acquisition of Units in Exchanges, unless otherwise required by law. Subject
to Section 3.3(a), the “Net Tax Benefit” for a Taxable Year shall be an amount
equal to the excess, if any, of 85% of the Cumulative Net Realized Tax Benefit as of the end of
such Taxable Year over the total amount of payments previously made under this Section 3.1 to such
Equity Plan Member (excluding payments attributable to Interest Amounts); provided, for the
avoidance of doubt, that no Equity Plan Member shall be required to return any portion of any
previously made Tax Benefit Payment. The “Interest Amount” shall equal the interest on the
Net Tax Benefit attributable to Exchanges by such Equity Plan Member calculated at the Agreed Rate
from the due date (without extensions) for filing the Corporate Taxpayer Return with respect to
Taxes for such Taxable Year until the Payment Date. Notwithstanding the foregoing, for each
Taxable Year ending on or after the date of a Change of Control, all Tax Benefit Payments, whether
paid with respect to the Units that were Exchanged (i) prior to the date of such Change of Control
or (ii) on or after the date of such Change of Control, shall be calculated
by utilizing Valuation Assumptions (1), (3), (4) and (5), substituting in each case the terms
“the closing date of a Change of Control” for an “Early Termination Date.”




          Section 3.2
No Duplicative Payments. It is intended that the provisions of this Agreement will not result in duplicative payment of
any amount (including interest) required under this Agreement. It is also intended that the
provisions of this Agreement provide that Tax Benefit Payments are paid to the Equity Plan Members
pursuant to this Agreement. The provisions of this Agreement shall be construed in the appropriate
manner to ensure such intentions are realized.





11









 








          Section 3.3 Pro Rata Payments; Coordination of Benefits With Other Tax Receivable
Agreements.




          (a) Notwithstanding anything in Section 3.1 to the contrary, to the extent that the aggregate
tax benefit of the Corporate Taxpayer’s deduction with respect to the NOLs, the Pre-IPO Basis
Adjustments, the Basis Adjustments or Imputed Interest under the Tax Receivable Agreements (as such
terms are defined in each Tax Receivable Agreement) is limited in a particular Taxable Year because
the Corporate Taxpayer does not have sufficient taxable income, the limitation on the tax benefit
for the Corporate Taxpayer shall be allocated among the Tax Receivable Agreements (and among all
parties eligible for payments thereunder) in proportion to the respective amounts of Realized Tax
Benefits that would have been determined under the Tax Receivable Agreements if the Corporate
Taxpayer had sufficient taxable income so that there were no such limitation.




          (b) If for any reason the Corporate Taxpayer does not fully satisfy its payment obligations to
make all Tax Benefit Payments due under the Tax Receivable Agreements in respect of a particular
Taxable Year, then the Corporate Taxpayer and the Equity Plan Members agree that (i) the Corporate
Taxpayer shall pay the same proportion of each Tax Benefit Payment due under each of the Tax
Receivable Agreements in respect of such Taxable Year, without favoring one obligation over the
other, and (ii) no Tax Benefit Payment shall be made in respect of any Taxable Year until all Tax
Benefit Payments in respect of prior Taxable Years have been made in full.




          (c) To the extent that the Corporate Taxpayer makes payments to any Equity Plan Member in
respect of a particular Taxable Year in an amount greater than the payments that should have been
made in accordance with Section 3.3(b), then such Equity Plan Member shall be obligated to make
payments to the ITR Entity (as defined in the Investors Tax Receivable Agreement (Reorganizations)
and the Investors Tax Receivable Agreement (Exchanges)) in the amounts necessary so that each party
to the Tax Receivable Agreements (other than the Corporate Taxpayer) shall have received the amount
that it would have received if all payments by the Corporate Taxpayer had been in accordance with
Section 3.3(b); provided that an Equity Plan Member’s obligation to pay over to the parties
to the other Tax Receivable Agreements amounts received from the Corporate Taxpayer pursuant to
this Section 3.3(c) shall terminate on the one year anniversary of the receipt by the Equity Plan
Member of such amounts.




          (d) The parties hereto agree that the parties to the Investors Tax Receivable Agreement
(Reorganizations) and the Investors Tax Receivable Agreement (Exchanges) are expressly made third
party beneficiaries of the provisions of this Section 3.3.




ARTICLE IV




TERMINATION




          Section 4.1 Early Termination and Breach of Agreement.




          (a) With the written approval of a majority of the Independent Directors, the Corporate
Taxpayer may terminate this Agreement with respect to all amounts payable to the





12









 







Equity Plan
Members and with respect to all of the Units held by all Equity Plan Members at any time by paying
to all of the Equity Plan Members the Early Termination Payment; provided, however,
that this Agreement shall only terminate upon the receipt of the Early Termination Payment by the
Equity Plan Members, and provided, further, that the Corporate Taxpayer may
withdraw any notice to execute its termination rights under this Section 4.1(a) prior to the time
at which any Early Termination Payment has been paid. Upon payment of the Early Termination
Payments by the Corporate Taxpayer, neither the Equity Plan Member nor the Corporate Taxpayer shall
have any further payment obligations under this Agreement, other than for any (a) Tax Benefit
Payment agreed to by the Corporate Taxpayer and the Equity Plan Member as due and payable but
unpaid as of the Early Termination Notice and (b) Tax Benefit Payment due for the Taxable Year
ending with or including the date of the Early Termination Notice (except to the extent that the
amount described in clause (b) is included in the Early Termination Payment). If an Exchange
occurs after the Corporate Taxpayer exercises its termination rights under this Section 4.1(a), the
Corporate Taxpayer shall have no obligations under this Agreement with respect to such Exchange.




          (b) In the event that the Corporate Taxpayer breaches any of its material obligations under
this Agreement, whether as a result of failure to make any payment when due, failure to honor any
other material obligation required hereunder or by operation of law as a result of the rejection of
this Agreement in a case commenced under the Bankruptcy Code or otherwise, then all obligations
hereunder shall be accelerated and such obligations shall be calculated as if an Early Termination
Notice had been delivered on the date of such breach and shall include, but not be limited to, (1)
the Early Termination Payment calculated as if an Early Termination Notice had been delivered on
the date of a breach, (2) any Tax Benefit Payment agreed to by the Corporate Taxpayer and the
Equity Plan Member as due and payable but unpaid as of the date of a breach, and (3) any Tax
Benefit Payment due for the Taxable Year ending with or including the date of a breach.
Notwithstanding the foregoing, in the event that the Corporate Taxpayer breaches this Agreement,
the Equity Plan Members shall be entitled to elect to receive the amounts set forth in clauses (1),
(2) and (3) above or to seek specific performance of the terms hereof. The parties agree that the
failure to make any payment due pursuant to this Agreement within three months of the date such
payment is due shall be deemed to be a breach of a material obligation under this Agreement for all
purposes of this Agreement, and that it will not be considered to be a breach of a material
obligation under this Agreement to make a
payment due pursuant to this Agreement within three months of the date such payment is due.
Notwithstanding anything in this Agreement to the contrary, it shall not be a breach of this
Agreement if the Corporate Taxpayer fails to make any Tax Benefit Payment when due to the extent
that the Corporate Taxpayer has insufficient funds to make such payment; provided that the
interest provisions of Section 5.2 shall apply to such late payment (unless the Corporate Taxpayer
does not have sufficient cash to make such payment as a result of limitations imposed by existing
credit agreements to which EBS is a party, in which case Section 5.2 shall apply, but the Default
Rate shall be replaced by the Agreed Rate).




          Section 4.2
Early Termination Notice. If the Corporate Taxpayer chooses to exercise its right of early termination under Section 4.1
above, the Corporate Taxpayer shall deliver to the Equity Plan Member notice of such intention to
exercise such right (“Early Termination Notice”) and a schedule (the “Early Termination
Schedule”) specifying the Corporate Taxpayer’s intention to exercise such right and showing in
reasonable detail the




13









 







calculation of the Early Termination Payment for the Equity Plan Member. The
Early Termination Schedule shall become final and binding on all parties 30 calendar days from the
first date on which the Equity Plan Member has received such Schedule or amendment thereto unless
the Equity Plan Member (i) within 30 calendar days after receiving the Early Termination Schedule,
provides the Corporate Taxpayer with notice of a material objection to such Schedule made in good
faith (“Material Objection Notice”) or (ii) provides a written waiver of such right of a
Material Objection Notice within the period described in clause (i) above, in which case such
Schedule becomes binding on the date the waiver is received by the Corporate Taxpayer (the
“Early Termination Effective Date”). If the parties, for any reason, are unable to
successfully resolve the issues raised in such notice within 30 calendar days after receipt by the
Corporate Taxpayer of the Material Objection Notice, the Corporate Taxpayer and the Equity Plan
Member shall employ the Reconciliation Procedures.




          Section 4.3 Payment upon Early Termination.




          (a) Within three calendar days after the Early Termination Effective Date, the Corporate
Taxpayer shall pay to the Equity Plan Member an amount equal to the Early Termination Payment. Such
payment shall be made by wire transfer of immediately available funds to a bank account or accounts
designated by the Equity Plan Member or as otherwise agreed by the Corporate Taxpayer and the
Equity Plan Member.




          (b) “Early Termination Payment” shall equal, with respect to the applicable Equity
Plan Member, the present value, discounted at the Early Termination Rate as of the Early
Termination Effective Date, of all Tax Benefit Payments that would be required to be paid by the
Corporate Taxpayer to such Equity Plan Member beginning from the Early Termination Date and
assuming that the Valuation Assumptions are applied.




ARTICLE V




SUBORDINATION AND LATE PAYMENTS




          Section 5.1
Subordination. Notwithstanding any other provision of this Agreement to the contrary, any Tax Benefit Payment
or Early Termination Payment required to be made by the Corporate Taxpayer to the Equity Plan
Member under this Agreement shall rank subordinate and junior in right of payment to any principal,
interest or other amounts due and payable in respect of any obligations in respect of indebtedness
for borrowed money of the Corporate Taxpayer and its Subsidiaries (“Senior Obligations”)
and shall rank pari passu with all current or future unsecured obligations of the Corporate
Taxpayer that are not Senior Obligations.




          Section 5.2
Late Payments by the Corporate Taxpayer. The amount of all or any portion of any Tax Benefit Payment or Early Termination Payment not
made to the applicable Equity Plan Member when due under the terms of this Agreement shall be
payable together with any interest thereon, computed at the Default Rate and commencing from the
date on which such Tax Benefit Payment or Early Termination Payment was due and payable.




14









 








ARTICLE VI




NO DISPUTES; CONSISTENCY; COOPERATION




          Section 6.1 Participation in the Corporate Taxpayer’s and EBS’s Tax Matters. Except as otherwise provided herein, the Corporate Taxpayer shall have full responsibility
for, and sole discretion over, all Tax matters concerning the Corporate Taxpayer and EBS, including
without limitation the preparation, filing or amending of any Tax Return and defending, contesting
or settling any issue pertaining to Taxes. Notwithstanding the foregoing, the Corporate Taxpayer
shall notify the Equity Plan Members of, and keep the Equity Plan Members reasonably informed with
respect to, the portion of any audit of the Corporate Taxpayer and EBS by a Taxing Authority the
outcome of which is reasonably expected to affect the rights and obligations of the Equity Plan
Members under this Agreement, and shall provide to the Equity Plan Members reasonable opportunity
to provide information and other input to the Corporate Taxpayer, EBS and their respective advisors
concerning the conduct of any such portion of such audit; provided, however, that
the Corporate Taxpayer and EBS shall not be required to take any action that is inconsistent with
any provision of the LLC Agreement.




          Section 6.2 Consistency. The Corporate Taxpayer and the applicable Equity Plan Member agree to report and cause to be
reported for all purposes, including federal, state and local Tax purposes and financial reporting
purposes, all Tax-related items (including without limitation the Basis Adjustments and each Tax
Benefit Payment) in a manner consistent with that specified by
the Corporate Taxpayer in any Schedule required to be provided by or on behalf of the
Corporate Taxpayer under this Agreement unless otherwise required by law.




          Section 6.3
Cooperation. The applicable Equity Plan Members shall (a) furnish to the Corporate Taxpayer in a timely
manner such information, documents and other materials as the Corporate Taxpayer may reasonably
request for purposes of making any determination or computation necessary or appropriate under this
Agreement, preparing any Tax Return or contesting or defending any audit, examination or
controversy with any Taxing Authority, (b) make itself available to the Corporate Taxpayer and its
representatives to provide explanations of documents and materials and such other information as
the Corporate Taxpayer or its representatives may reasonably request in connection with any of the
matters described in clause (a) above, and (c) reasonably cooperate in connection with any such
matter, and the Corporate Taxpayer shall reimburse the applicable Equity Plan Member for any
reasonable third-party costs and expenses incurred pursuant to this Section.




ARTICLE VII




MISCELLANEOUS




          Section 7.1 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing
and shall be deemed duly given and received (a) on the date of delivery if delivered personally, or
by facsimile upon confirmation of transmission by the sender’s fax machine if sent on a Business
Day (or otherwise on the next Business Day) or




15









 







(b) on the first Business Day following the date of
dispatch if delivered by a recognized next-day courier service. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice:



If to the Corporate Taxpayer, to:



3055 Lebanon Pike, Suite 1000

Nashville, TN 37214

Telephone: (615) 932-3000

Facsimile: (615) 340-6153

Attention: General Counsel



with a copy (which shall not constitute notice to the Corporate Taxpayer)
to:



Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

Telephone: (212) 373-3000

Facsimile: (212) 757-3990

Attention: John C. Kennedy, Esq.




               If to the Equity Plan Members, to:



               The address and facsimile number set forth in the records of EBS.


Any party may change its address or fax number by giving the other party written notice of its new
address or fax number in the manner set forth above.




          Section 7.2 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered
one and the same agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.




          Section 7.3
Entire Agreement; No Third Party Beneficiaries. This Agreement constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the subject matter hereof.
Except to the extent provided under Section 3.3, this Agreement shall be binding upon and inure
solely to the benefit of each party hereto and their respective successors and permitted assigns,
and nothing in this Agreement, express or implied, is intended to or shall confer upon any other
Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.




          Section 7.4 Governing Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of
New York, without regard to the conflicts of laws principles thereof that would mandate the
application of the laws of another jurisdiction.




16









 








          Section 7.5 Severability.
If any term or other provision of this Agreement is invalid, illegal or incapable of being
enforced by any law or public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially adverse to any party.
Upon such determination that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to the greatest extent
possible.




          Section 7.6 Successors; Assignment; Amendments; Waivers.



          (a) An Equity Plan Member may assign any of his or her or its rights under this Agreement to
any Person as long as such transferee has executed and delivered, or, in connection with such
transfer, executes and delivers, a joinder to this Agreement, in form and substance reasonably
satisfactory to the Corporate Taxpayer, agreeing to become an Equity Plan Member for all purposes
of this Agreement, except as otherwise provided in such joinder.




          (b) No provision of this Agreement may be amended unless such amendment is approved in writing
by the Corporate Taxpayer and all Equity Plan Members; provided, that, the definition of
Change of Control cannot be amended without the written approval of a majority of the Independent
Directors. No provision of this Agreement may be waived unless such waiver is in writing and
signed by the party against whom the waiver is to be effective.




          (c) All of the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the parties hereto and their respective successors,
assigns, heirs, executors, administrators and legal representatives. The Corporate Taxpayer shall
require and cause any direct or indirect successor (whether by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the Corporate Taxpayer, by
written agreement, expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that the Corporate Taxpayer would be required to perform if no such succession
had taken place.




          Section 7.7 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference
only and are not to be considered in construing this Agreement.



          Section 7.8 Resolution of Disputes.



          (a) Any and all disputes which cannot be settled amicably, including any ancillary claims of
any party, arising out of, relating to or in connection with the validity, negotiation, execution,
interpretation, performance or non-performance of this Agreement (including the validity, scope and
enforceability of this arbitration provision) (each a “Dispute”) shall be finally settled
by arbitration conducted by a single arbitrator in New York in accordance with the then-existing
Rules of Arbitration of the International Chamber of Commerce. If the parties to the Dispute fail
to agree on the selection of an arbitrator within ten (10) days of the receipt of the request for
arbitration, the International Chamber of Commerce shall make the



17









 







appointment. The arbitrator shall
be a lawyer admitted to the practice of law in the State of New York and shall conduct the
proceedings in the English language. Performance under this Agreement shall continue if reasonably
possible during any arbitration proceedings.




          (b) Notwithstanding the provisions of paragraph (a), the Corporate Taxpayer may bring an
action or special proceeding in any court of competent jurisdiction for the purpose
of compelling a party to arbitrate, seeking temporary or preliminary relief in aid of an
arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this
paragraph (b), each Equity Plan Member (i) expressly consents to the application of paragraph (c)
of this Section 7.8 to any such action or proceeding, (ii) agrees that proof shall not be required
that monetary damages for breach of the provisions of this Agreement would be difficult to
calculate and that remedies at law would be inadequate, and (iii) irrevocably appoints the
Corporate Taxpayer as agent of such Equity Plan Member for service of process in connection with
any such action or proceeding and agrees that service of process upon such agent, who shall
promptly advise such Equity Plan Member of any such service of process, shall be deemed in every
respect effective service of process upon the Equity Plan Member in any such action or proceeding.




          (c) (i) EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW
YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS
OF THIS SECTION 7.8, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED
ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial
proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or
preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties
acknowledge that the fora designated by this paragraph (c) have a reasonable relation to this
Agreement, and to the parties’ relationship with one another; and




               (ii) The parties hereby waive, to the fullest extent permitted by applicable law, any
objection which they now or hereafter may have to personal jurisdiction or to the laying of venue
of any such ancillary suit, action or proceeding brought in any court referred to in the preceding
paragraph of this Section 7.8 and such parties agree not to plead or claim the same.




          Section 7.9 Reconciliation. In the event that the Corporate Taxpayer and an Equity Plan Member are unable to resolve a
disagreement with respect to the matters governed by Sections 2.3, 4.2 and 6.2 within the relevant
period designated in this Agreement (“Reconciliation Dispute”), the Reconciliation Dispute
shall be submitted for determination to a nationally recognized expert (the “Expert”) in
the particular area of disagreement mutually acceptable to both parties. The Expert shall be a
partner or principal in a nationally recognized accounting or law firm, and unless the Corporate
Taxpayer and the Equity Plan Member agree otherwise, the Expert shall not, and the firm that
employs the Expert shall not, have any material relationship with the Corporate Taxpayer or the
Equity Plan Member or other actual or potential conflict of interest. If the parties are unable to
agree on an Expert within fifteen (15) days of receipt by the respondent(s) of written notice of a
Reconciliation Dispute, the Expert shall be appointed by the International Chamber of Commerce
Centre for Expertise. The Expert shall resolve any matter relating to the Exchange Basis Schedule
or an amendment thereto or the Early Termination Schedule or an amendment thereto within 30
calendar days and shall resolve any




18









 








matter relating to a Tax Benefit Schedule or an amendment
thereto within 15 calendar days or as soon thereafter as is reasonably practicable, in each case
after the matter has been submitted to the Expert for resolution. Notwithstanding the preceding
sentence, if the matter is not resolved before any payment that is the subject of a disagreement
would be due (in the absence of such disagreement)
or any Tax Return reflecting the subject of a disagreement is due, the undisputed amount shall
be paid on the date prescribed by this Agreement and such Tax Return may be filed as prepared by
the Corporate Taxpayer, subject to adjustment or amendment upon resolution. The costs and expenses
relating to the engagement of such Expert or amending any Tax Return shall be borne by the
Corporate Taxpayer except as provided in the next sentence. The Corporate Taxpayer and the Equity
Plan Member shall bear their own costs and expenses of such proceeding, unless (i) the Expert
adopts the Equity Plan Member’s position, in which case the Corporate Taxpayer shall reimburse the
Equity Plan Member for any reasonable out-of-pocket costs and expenses in such proceeding, or (ii)
the Expert adopts the Corporate Taxpayer’s position, in which case the Equity Plan Member shall
reimburse the Corporate Taxpayer for any reasonable out-of-pocket costs and expenses in such
proceeding. Any dispute as to whether a dispute is a Reconciliation Dispute within the meaning of
this Section 7.9 shall be decided by the Expert. The Expert shall finally determine any
Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.9 shall be
binding on the Corporate Taxpayer and the Equity Plan Member and may be entered and enforced in any
court having jurisdiction.




          Section 7.10 Withholding. The Corporate Taxpayer shall be entitled to deduct and withhold from any payment payable
pursuant to this Agreement such amounts as the Corporate Taxpayer is required to deduct and
withhold with respect to the making of such payment under the Code or any provision of state, local
or foreign tax law. To the extent that amounts are so withheld and paid over to the appropriate
Taxing Authority by the Corporate Taxpayer, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the applicable Equity Plan Member.




          Section 7.11 Admission of the Corporate Taxpayer into a Consolidated Group; Transfers of
Corporate Assets.




          (a) If the Corporate Taxpayer is or becomes a member of an affiliated or consolidated group of
corporations that files a consolidated income tax return pursuant to Sections 1501 et seq. of the
Code or any corresponding provisions of state or local law, then: (i) the provisions of this
Agreement shall be applied with respect to the group as a whole; and (ii) Tax Benefit Payments,
Early Termination Payments and other applicable items hereunder shall be computed with reference to
the consolidated taxable income of the group as a whole.




          (b) If any entity that is obligated to make a Tax Benefit Payment or Early Termination Payment
hereunder transfers one or more assets to a corporation (or a Person classified as a corporation
for U.S. income tax purposes) with which such entity does not file a consolidated tax return
pursuant to Section 1501 of the Code, such entity, for purposes of calculating the amount of any
Tax Benefit Payment or Early Termination Payment (e.g., calculating the gross income of the entity
and determining the Realized Tax Benefit of such entity) due hereunder, shall be treated as having
disposed of such asset in a fully taxable transaction on the date of such contribution. The
consideration deemed to be received by such entity shall be equal to the fair market value of the
contributed asset. For purposes of this



19









 






Section 7.11, a transfer of a partnership interest shall be treated as a transfer of the
transferring partner’s share of each of the assets and liabilities of that partnership.




          Section 7.12 Confidentiality. Each Equity Plan Member and each assignee acknowledge and agree that the information of the
Corporate Taxpayer is confidential and, except in the course of performing any duties as necessary
for the Corporate Taxpayer and its Affiliates, as required by law or legal process or to enforce
the terms of this Agreement, such person shall keep and retain in the strictest confidence and not
disclose to any Person any confidential matters, acquired pursuant to this Agreement, of the
Corporate Taxpayer and its Affiliates and successors, concerning EBS and its Affiliates and
successors, the Original Members, or the other Equity Plan Members, learned by the Equity Plan
Member heretofore or hereafter. This Section 7.12 shall not apply to (i) any information that has
been made publicly available by the Corporate Taxpayer or any of its Affiliates, becomes public
knowledge (except as a result of an act of such Equity Plan Member in violation of this Agreement)
or is generally known to the business community and (ii) the disclosure of information to the
extent necessary for an Equity Plan Member to prepare and file his or her or its Tax Returns, to
respond to any inquiries regarding the same from any taxing authority or to prosecute or defend any
action, proceeding or audit by any taxing authority with respect to such returns. Notwithstanding
anything to the contrary herein, each Equity Plan Member and each assignee (and each employee,
representative or other agent of such Equity Plan Member or assignee, as applicable) may disclose
to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the
Corporate Taxpayer, EBS, the Original Members, the Equity Plan Members and their Affiliates, and
any of their transactions, and all materials of any kind (including opinions or other tax analyses)
that are provided to the Equity Plan Members relating to such tax treatment and tax structure.



If an Equity Plan Member or an assignee commits a breach, or threatens to commit a breach, of any
of the provisions of this Section 7.12, the Corporate Taxpayer shall have the right and remedy to
have the provisions of this Section 7.12 specifically enforced by injunctive relief or otherwise by
any court of competent jurisdiction without the need to post any bond or other security, it being
acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to
the Corporate Taxpayer or any of its Subsidiaries, the Original Members, or the other Equity Plan
Members and the accounts and funds managed by the Corporate Taxpayer and that money damages alone
shall not provide an adequate remedy to such Persons. Such rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available at law or in equity.




          Section 7.13 Change in Law.




          (a) Notwithstanding anything herein to the contrary, if, in connection with an actual or
proposed change in law, an Equity Plan Member reasonably believes that the existence of this
Agreement could cause income (other than income arising from receipt of a payment under this
Agreement) recognized by such Equity Plan Member upon any Exchange to be treated as ordinary income
rather than capital gain (or otherwise taxed at ordinary income rates) for
United States federal income tax purposes or would have other material adverse tax
consequences to the Equity Plan Member (a “Change in Tax Law”), then at the election of
such Equity Plan Member and to the extent specified by such Equity Plan Member, this Agreement (i)





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shall cease to have further effect, (ii) shall not apply to an Exchange occurring after a date
specified by the Equity Plan Member, or (iii) shall otherwise be amended in a manner determined by
the Equity Plan Member provided that such amendment shall not result in an increase in payments
under this Agreement at any time as compared to the amounts and times of payments that would have
been due in the absence of such amendment (assuming that no payment is due under Section 7.13(b)).




          (b) If an Equity Plan Member delivers to the Corporate Taxpayer a notice of acceleration
accompanied by an opinion of a Qualified Tax Advisor to the effect that based upon such Change in
Tax Law (taking into account any applicable administrative pronouncements or rulings, formal or
informal Congressional actions or statements, or otherwise) (i) the existence of this Agreement
will more likely than not cause income (other than income arising from receipt of a payment under
this Agreement) recognized by such Equity Plan Member upon any Exchange to be treated as ordinary
income rather than capital gain (or otherwise taxed at ordinary income rates) for United States
federal income tax purposes or would have other material adverse tax consequences to such Equity
Plan Member, and (ii) substantially all of such income described in Section 7.13(b)(i) above would
be more likely than not taxable at capital gain rates or such other material adverse tax
consequences would be avoided as a result of making the election described in this Section 7.13(b),
then such Equity Plan Member may elect to cause the Corporate Taxpayer to make a lump sum payment
in lieu of the Tax Benefit Payments otherwise provided in this Agreement in accordance with the
procedures described in Article IV, in an amount equal to the sum of the present values of all such
Tax Benefits Payments, substituting in each case “70%” for “85%” in the calculation of Net Tax
Benefit, discounted at the Early Termination Rate as of the effective date specified in the notice
of acceleration, and assuming the Valuation Assumptions (1) through (5) are applied;
provided, that no amount shall be payable under this Section 7.13(b) unless, with respect
to at least 50% of the Units held by such Equity Plan Member at the time of execution of this
Agreement, all rights to payments under this Agreement shall have been terminated pursuant to
Section 7.13(a) (and for the avoidance of doubt, no payments pursuant to this Section 7.13(b) shall
be made in respect of such Units); provided, further, that if such payment would be
due on or after the effective date of the applicable Change in Tax Law, at the election of the
Equity Plan Member, such payment shall to the extent reasonably practicable instead be made no
later than the date prior to the effective date of the applicable Change in Tax Law (using the best
available estimates and information at such time).




          (c) The Corporate Taxpayer shall have the right to satisfy its obligation to make a lump sum
payment under Section 7.13(b) by issuing a subordinated debt instrument of the Corporate Taxpayer,
with a maturity date seven years after issuance, with interest payment required to be made
quarterly, and bearing interest at a rate equal to the lesser of (i) 6% per annum and (ii) LIBOR
plus 200 basis points.




          (d) Notwithstanding anything herein to the contrary, Section 3.3(b) and Section 3.3(c) of the
Tax Receivable Agreements shall not apply to payments made by the Corporate Taxpayer pursuant to
this Section 7.13.





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          IN WITNESS WHEREOF, the Corporate Taxpayer and each Equity Plan Member have duly executed this
Agreement as of the date first written above.




	 	 	 	 	 
	 	EMDEON INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Its: 	 



Signature Page to Tax Receivable Agreement (Management)



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	EQUITY PLAN MEMBERS:





 	 
	 	
Name: George Lazenby

 	 
	 
	 	
Name: Sajid A. Khan

 	 
	 
	 	
Name: Gary D. Stuart

 	 
	 
	 	
Name: Patrick Couglin

 	 
	 
	 	
Name: Bob Newport, Jr.

 	 
	 
	 	
Name: Damien Creavin

 	 
	 
	 	
Name: J. Philip Hardin

 	 
	 
	 	
Name: Edward Caldwell

 	 
	 
	 	
Name: Ben Scully


 	 


Signature Page to Tax Receivable Agreement (Management)



 









 




	 	
 	 
	 	 	 
	 	 	 
	 



	 	 	 	 	 
	 	
Name: Ryan L. Smith

 	 
	 
	 	
Name: Tracy Bahl

 	 
	 
	 	
Name: Gregory Stevens

 	 
	 
	 	
Name: Frank J. Manzella

 	 
	 
	 	
Name: Philip M. Pead

 	 
	 
	 	
Name: Jim D. Kever

 	 
	 
	 	
Name: Dinyar S. Devitre

 	 
	 
	 	
Name: Allen R. Thorpe

 	 
	 



Signature Page to Tax Receivable Agreement (Management)