Document:

Exhibit 10.6

 

ADOBE SYSTEMS INCORPORATED

Amended 1994 Performance and Restricted Stock Plan

 

2006 Performance Share Program

Performance Share Maximum Award Agreement

 

Pursuant to the Maximum Award
Grant Notice (“Grant Notice”) and this
Performance Share Maximum Award Agreement (“Award Agreement”),
Adobe Systems Incorporated (the “Company”)
has awarded you, pursuant to its 2006 Performance Share Program (the “Program”) under its Amended 1994
Performance and Restricted Stock Plan (the “Plan”),
the Maximum Award as indicated in the Grant Notice.  Unless otherwise defined herein, capitalized
terms shall have the meanings set forth in the Plan or the Program, as
applicable.

 

The details of your Maximum
Award are as follows.

 

1.             Entitlement to Shares.  Subject to the limitations contained herein
and to the provisions of the Program and the Plan, you shall be entitled to
receive an Actual Award equal to all or a portion (including none) of the
Maximum Award provided that (i) a specified level of applicable
Performance Goals is met during the Performance Period and (ii) you continue to render Service to the Company or
any other Participating Company in the position in effect on the date when you
became a Designated Participant (or a higher position) during the entire Performance
Period, and in accordance with (iii) the degree of achievement of
applicable Other Performance Goals.  If
the Committee does reduce the Actual Award on account of the degree of
achievement of applicable Other Performance Goals, you will be awarded a
portion (or none) of the shares of Stock subject to the Maximum Award; provided, however, that (i) if a specified
level of Performance Goals is not achieved during the Performance Period, you
will not receive any shares of Stock, and (ii) the maximum number of shares of
Stock that you may receive as an Actual Award will in no event exceed the
Maximum Award.  The applicable target and
maximum award levels for the applicable Performance Period are set forth in Exhibit A to the Program.

 

2.             Dividends.   Prior
to your receipt of any shares of Stock as an Award, you shall not receive any
payment or other adjustment in the number of shares subject to your Maximum
Award for dividends or other distributions that may be made in respect of the
shares of Stock to which your Maximum Award relates.  Notwithstanding the
foregoing, with respect to any election you may make for the deferred receipt
of shares of Stock as an Actual Award, any dividends or other distributions
that may be made in respect of such shares of Stock after the end of the
Performance Period will be paid in the same form issued to other stockholders
and will be subject to the terms of your deferral election.

 

3.             Delivery of Shares.  Provided
that you become entitled to an Actual Award in accordance with Section 1 of
this Award Agreement, certificates for the shares (the “Certificates”) subject to
your Actual Award shall be registered in your name (or your heirs in the
case of death) and subject to Section 13 of
this Award Agreement, the Certificates representing such shares of Stock will
be delivered to you (or your heirs in the case of death) within thirty
(30) days following the completion of an independent audit and certification,
as

 

1

 

described in Section 4(a)
of the Program.  Notwithstanding the foregoing, if you elect
to defer delivery of the shares of Stock as provided in Section 4 of this Award
Agreement, the shares of Stock will be delivered to you on the date or dates
that you elect on your Deferral Election Form. 
The form of delivery (e.g., a stock certificate or electronic entry
evidencing such shares) shall be determined by the Company.

 

4.             Deferral Election.  If permitted by the Company to do so, you may
elect to defer issuance of the shares of Stock that would otherwise be issued
pursuant to your Award.  If such deferral
election is made, it shall be made in accordance with the following
requirements:

 

(a)           No
deferral period shall exceed the maximum period permitted by the Company;

 

(b)           You
must complete a Deferral Election Form (in the form provided by the Company) at
such time as the Company shall require, which in no event shall be later than
six (6) months prior to the end of the applicable Performance Period; and

 

(c)           The
Board (or appropriate committee thereof) will, in its sole discretion,
establish the rules and procedures for such deferrals.

 

5.             Effect of Leaves of Absence.  Unless otherwise required by law, in the case
of a Participant who has taken in excess of thirty (30) days of leaves of
absence during a Performance Period, the shares of Stock otherwise deliverable
as an Actual Award shall be prorated on the basis of the number of days of the
Participant’s Service during the Performance Period during which the
Participant was not on a leave of absence.

 

6.             Number of Shares.  The
number of shares of Stock subject to your Maximum Award may be adjusted from
time to time for capitalization adjustments, as provided in Section 5 of the
Plan.

 

7.             Effect of Change in Control.  Upon a change in control (as
defined in the Company’s Executive Severance Plan in Event of Change in
Control), the Program shall terminate and an Actual Award will be deemed earned
by each Participant expressed as the product of the Actual Award at target
level for the entire Performance Period and the number of full or partial
months of the Performance Period that has elapsed as of the change in control,
divided by 24.  Shares of Stock in
respect of such Actual Award will be delivered to the Participant as soon as administratively
practical following the change in control; provided, however,
that the Company may delay delivery for six (6) months if required to avoid the
additional tax under Section 409A of the Code. 
You hereby acknowledge that Awards are considered “performance share
units” as such term is used in the Company’s Executive Severance Plan in Event
of Change in Control and any individual change in control agreements.

 

8.             Securities Law
Compliance.  The grant of your Maximum Award and
the issuance of any shares of Stock as an Actual Award shall be subject to
compliance with all applicable requirements of federal, state or foreign law
with respect to such securities.  You may not be issued any shares of Stock as an
Actual Award if the issuance of shares of Stock would constitute a
violation of any applicable federal, state or foreign securities laws or other
law or regulations or the requirements of any stock exchange or market system
upon which the Stock

 

2

 

may then be listed.  In addition, you may not be issued any shares of Stock as an Actual Award unless
(i) a registration statement under the Securities Act shall at the time of
issuance be in effect with respect to the shares or (ii) in the opinion of
legal counsel to the Company, the shares may be issued in accordance with the
terms of an applicable exemption from the registration requirements of the
Securities Act.  YOU ARE CAUTIONED THAT
THE SHARES MAY NOT BE ISSUED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.  The inability of the Company to obtain from
any regulatory body having jurisdiction the authority, if any, deemed by the
Company’s legal counsel to be necessary to the lawful issuance and sale of any
shares as an Actual Award shall relieve the Company of any liability in respect
of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. 
As a condition to the issuance of any shares as an Actual Award, the Company
may require you to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation and
to make any representation or warranty with respect thereto as may be requested
by the Company

 

9.             Restrictive Legends.  The shares of Stock issued as an Actual Award
shall be endorsed with appropriate legends, if any, determined by the Company.

 

10.          Transferability.  Your Maximum Award is not transferable,
except by will or by the laws of descent and distribution.  Notwithstanding the foregoing, by delivering
written notice to the Company, in a form satisfactory to the Company, you may
designate a third party who, in the event of your death, shall thereafter be
entitled to receive any distribution of shares of Stock pursuant to Section 3
of this Award Agreement.

 

11.          Award not a Service
Contract.  Your Maximum Award is not an employment or
service contract, and nothing in your Maximum Award shall be deemed to create
in any way whatsoever any obligation on your part to continue in the service of
the Participating Company Group, or on the part of the Participating Company
Group to continue such service.  In
addition, nothing in your Maximum Award shall obligate the Participating
Company Group, their respective stockholders, boards of directors, Officers or
Employees to continue any relationship that you might have as an Employee,
Director or Consultant for the Participating Company Group.

 

12.          Unsecured Obligation.  Your
Maximum Award is unfunded and you shall be considered an unsecured creditor of the
Company with respect to the Company’s obligation, if any, to issue shares of
Stock pursuant to this Maximum Award Agreement.

 

13.          Withholding
Obligations.  Regardless of
any action taken by the Participating
Company Group with respect to any or all income tax, social insurance,
payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”),
you acknowledge that the ultimate liability for all Tax-Related Items legally
due by you is and remains your responsibility and that the Participating Company Group (i) makes
no representations or undertakings regarding the treatment of any Tax-Related
Items in connection with any aspect of your Maximum Award, the subsequent sale
of shares acquired pursuant to an Actual Award, or the receipt of any dividends
and (ii) does not commit to structure the terms of the grant or any other
aspect of your Maximum Award to reduce or eliminate your liability for
Tax-Related Items.  At the time you receive a distribution of shares
of Stock pursuant to an Actual Award, or

 

3

 

at
any time thereafter as requested by the Participating Company Group, you
shall pay or make adequate arrangements satisfactory to the Participating Company Group to satisfy all
withholding obligations of the Participating
Company Group.  In this regard, at the time you receive a distribution of shares
of Stock pursuant to an Actual Award, or at any time thereafter as requested by
the Participating Company Group, you hereby authorize withholding of all
applicable Tax-Related Items from shares of Stock otherwise deliverable to you
as an Actual Award.  Finally, you shall
pay to the Participating Company Group
any amount of the Tax-Related Items that the Participating Company Group may be required to withhold as a
result of your participation in the Plan that cannot be satisfied by the means
previously described.  The Participating Company Group shall have no
obligation to deliver shares of Stock until you have satisfied the obligations
in connection with the Tax-Related Items as described in this section.

 

14.          Nature
of Award.  In accepting your
Maximum Award, you acknowledge that:

 

(a)           the
Plan is established voluntarily by the Company; it is discretionary in nature
and it may be modified, amended, suspended or terminated by the Company at any
time, unless otherwise provided in the Plan, Program and this Maximum Award
Agreement;

 

(b)           the
grant of your Maximum Award is voluntary and occasional and does not create any
contractual or other right to receive future grants of Maximum Awards, or
benefits in lieu of Maximum Awards, even if Maximum Awards have been granted
repeatedly in the past;

 

(c)           all
decisions with respect to future Maximum Award grants, if any, will be at the
sole discretion of the Committee;

 

(d)           your
participation in the Plan shall not create a right to further employment with
the Participating Company Group and shall not interfere with any ability of the
Participating Company Group to terminate your employment relationship at any time
with or without cause;

 

(e)           you
are voluntarily participating in the Plan;

 

(f)            an
Actual Award is not part of normal or expected compensation or salary for any
purpose, including, but not limited to, calculating any severance, resignation,
termination, redundancy, end-of-service payments, bonuses, long-service awards,
pension or retirement benefits or similar payments;

 

(g)           in
the event that you are not an employee of the Company, your Maximum Award will
not be interpreted to form an employment contract or relationship with the
Company; and furthermore, your Maximum Award will not be interpreted to form an
employment contract with the other members of the Participating Company Group;

 

(h)           the
future value of the shares subject to your Maximum Award is unknown and cannot
be predicted with certainty; and

 

(i)            no
claim or entitlement to compensation or damages arises from termination of your
Maximum Award or diminution in value of your Maximum Award or shares issued
pursuant to an Actual Award resulting from termination of your Service with the

 

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Participating Company
Group (for any reason whether or not in breach of applicable labor laws), and
you irrevocably release the Participating Company Group from any such claim
that may arise.  If, notwithstanding the
foregoing, any such claim is found by a court of competent jurisdiction to have
arisen then, by executing the Grant Notice, you shall be deemed irrevocably to
have waived your entitlement to pursue such a claim.

 

15.          Delivery
of Documents and Notices.  Any
document relating to participating in the Plan or Program and/or notice
required or permitted hereunder shall be given in writing and shall be deemed
effectively given (except to the extent that this Award Agreement provides for
effectiveness only upon actual receipt of such notice) upon personal delivery,
electronic delivery, or upon deposit in the U.S. Post Office or foreign postal
service, by registered or certified mail, with postage and fees prepaid,
addressed to the other party at the e-mail address, if any, provided for you by
a Participating Company or at such other address as such party may designate in
writing from time to time to the other party.

 

(a)           Description of Electronic
Delivery.  The Plan and
Program documents, which may include but do not necessarily include the Plan
prospectus, Grant Notice, Award Agreement and U.S. financial reports of the
Company, may be delivered to you electronically.  Such means of delivery may include but do not
necessarily include the delivery of a link to a Company intranet or the
internet site of a third party involved in administering the Plan, the delivery
of the document via e-mail or such other delivery determined at the Committee’s
discretion.

 

(b)           Consent to Electronic
Delivery.  You acknowledge that you have read Section 15
of this Award Agreement and consent to the electronic delivery of the Plan and
Program documents, as described in Section 15 of this Award Agreement.  You acknowledge that you may receive from the
Company a paper copy of any documents delivered electronically at no cost if
you contact the Company by telephone, through a postal service or electronic
mail at equity@adobe.com.  You further
acknowledge that you will be provided with a paper copy of any documents
delivered electronically if electronic delivery fails; similarly, you understand that you must provide the Company or any
designated third party with a paper copy of any documents delivered
electronically if electronic delivery fails. 
Also, you understand that your consent may be revoked or changed,
including any change in the electronic mail address to which documents are
delivered (if you have provided an electronic mail address), at any time by
notifying the Company of such revised or revoked consent by telephone, postal
service or electronic mail at equity@adobe.com. 
Finally, you understand that you are not required to consent to
electronic delivery.

 

16.          Data Privacy Consent.  You hereby explicitly and unambiguously consent to
the collection, use and transfer, in electronic or other form, of your personal
data as described in this document by and among the members of the
Participating Company Group for the exclusive purpose of implementing,
administering and managing your participation in the Plan and Program.

 

You understand that the
Company and the Participating Company Group hold certain personal information
about you, including, but not limited to, your name, home address and telephone
number, date of birth, social insurance number or other identification number,

 

5

 

salary, nationality, job title, any shares of Stock or
directorships held in the Company, details of all Awards or any other
entitlement to shares of Stock awarded, canceled, exercised, vested, unvested
or outstanding in your favor, for the purpose of implementing, administering
and managing the Plan and Program (“Data”). 
You understand that Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan or
Program, that these recipients may be located in your country or elsewhere, and
that the recipient’s country may have different data privacy laws and
protections than your country.  You
understand that you may request a list with the names and addresses of any
potential recipients of the Data by contacting your local human resources
representative.  You authorize the
recipients to receive, possess, use, retain and transfer the Data, in
electronic or other form, for the purposes of implementing, administering and
managing your participation in the Plan, including any requisite transfer of
such Data as may be required to a broker or other third party with whom you may
elect to deposit any shares of Stock pursuant to an Actual Award.  You understand that Data will be held only as long as is necessary to
implement, administer and manage your participation in the Plan.  You understand that you may, at any time,
view Data, request additional information about the storage and processing of
Data, require any necessary amendments to Data or refuse or withdraw the
consents herein, in any case without cost, by contacting in writing your local
human resources representative.  You
understand, however, that refusing or withdrawing your consent may affect your
ability to participate in the Plan or Program. 
For more information on the consequences of your refusal to consent or
withdrawal of consent, you understand that you may contact your local human
resources representative.

 

17.          Headings.  The headings of the Sections in this Award
Agreement are inserted for convenience only and shall not be deemed to
constitute a part of this Award Agreement or to affect the meaning of this
Award Agreement.

 

18.          Amendment.  The Committee may, without notice, amend,
suspend or terminate the Program; provided, however, that
no such action may adversely affect any then outstanding Maximum Award unless
(i) expressly provided by the Committee and (ii) with the consent of the
Participant, unless such action is necessary to comply with any applicable law,
regulation or rule.

 

19.          Miscellaneous.

 

(a)           The
rights and obligations of the Company under your Maximum Award shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company’s successors and assigns.

 

(b)           You
agree upon request to execute any further documents or instruments necessary or
desirable in the sole determination of the Company to carry out the purposes or
intent of your Award.

 

(c)           You
acknowledge and agree that you have reviewed your Maximum Award in its
entirety, have had an opportunity to obtain the advice of counsel prior to
executing and accepting your Award and fully understand all provisions of your
Maximum Award.

 

6

 

20.          Governing Plan Document.  Your
Maximum Award is subject to all the provisions of the Plan and Program, the
provisions of which are hereby made a part of your Maximum Award, and is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be promulgated and adopted pursuant to the Plan or
Program.  In the event of any conflict
between the provisions of your Maximum Award and those of the Plan or Program,
the provisions of the Plan or Program shall control.  In the event of any conflict between the
provisions of the Plan or Program, the provisions of the Plan shall control.

 

21.          Applicable Law. 
This Award Agreement shall be governed by the laws of the State of
California as such laws are applied to agreements between California residents
entered into and to be performed entirely within the State of California.

 

7Exhibit 10.1

 

January 30, 2006

 

IMS Health
Incorporated

1499 Post Road

Fairfield, Connecticut 06824

 

	
  Re:

  	
  Enhanced Overnight Share Repurchase

  
	
   

  	
  (Reference Number NY-20999)

  

 

Ladies and
Gentlemen:

 

SECTION 1.   Initial Shares.

 

(a)        Bank of America, N.A.
(the “Seller”) will sell to IMS Health
Incorporated, a Delaware corporation (the “Company”), and
the Company will purchase from the Seller for settlement on February 2, 2006
(the “Purchase Date”), 25,000,000 shares (the
“Initial Shares”) of common stock, par value
$0.01 per share, of the Company (the “Common Stock”)
at a purchase price consisting of (i) an amount (the “Initial
Purchase Price”) equal to the number of Initial Shares multiplied by
$25.03 and (ii) a supplemental purchase price paid in accordance with Section
1(c).  Such sale, and the payment of the
Initial Purchase Price, shall be effected in accordance with the Seller’s
customary procedures.

 

(b)        In connection with its
purchase of the Initial Shares, and in addition to the payment of the Purchase
Price, the Company will pay on the Purchase Date a brokerage fee of $0.02 per
Initial Share to Banc of America Securities LLC (“BAS”),
which is registered as a broker and a dealer under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”).

 

(c)        On each Supplemental
Purchase Price Payment Date (as defined in Section 2), the Company shall pay to
the Seller, by wire transfer of immediately available U.S. dollars, an amount
equal to the Supplemental Purchase Price Payment Amount (as defined in Section
2) for such Supplemental Purchase Price Payment Date

 

SECTION 2. 
Definitions.

 

As used in this Letter Agreement, the
following terms shall have the following meanings:

 

“Averaging Period”
means the period of consecutive Trading Days commencing on the first Trading
Day immediately following the Trade Date and ending on August 7, 2006; provided that the Seller may, in its absolute discretion,
accelerate the last day of the Averaging Period to any Trading Day on or after
May 5, 2006 upon written notice to the Company (it being understood that

 

 

such notice may be given on the
same date that the Seller elects to be the last day of the Averaging Period).

 

“Average Purchase Price”
means the arithmetic average of the Daily Average Prices for all Trading Days
during the Averaging Period.

 

“BAS” has the
meaning specified in Section 1(b).

 

“Business Day”
means any day, other than a Saturday or Sunday, that is neither a legal holiday
nor a day on which banking institutions are authorized or required by law or regulation
to close in The City of New York.

 

“Calculation Agent”
means BAS.

 

“Common Stock”
has the meaning specified in Section 1(a).

 

“Company” has
the meaning specified in Section 1(a).

 

“Daily Average Price”
means (i) for any Trading Day in the Averaging Period, the Reported VWAP for
such Trading Day minus $0.42 or (ii) for any
Trading Day in the Valuation Period, the dollar volume weighted average price
per share of Common Stock for that Trading Day based on transactions executed
by the Seller or its designated affiliate during that Trading Day in connection
with the settlement of this Letter Agreement.

 

“Default Supplemental
Purchase Price Payment Date” means each of March 30, June 9,
September 8 and December 8 of each year.

 

“Default Supplemental Purchase
Price Reference Date” means each February 23, April 28, July 28 and
October 27 of each year.

 

“Designee” has
the meaning specified in Section 15.

 

“Exchange”
means, at any time, the principal national securities exchange or automated
quotation system, if any, on which the Common Stock is listed or quoted at such
time.

 

“Exchange Act”
has the meaning specified in Section 1(b).

 

“Federal Funds Rate”
means, for any day, the rate on such day for Federal Funds, as published by
Bloomberg and found by pressing the following letters “FEDSOPEN” followed by
pressing the <Index> key and pressing the following letters “HP” followed
by pressing the <Go> key; provided that
if any such day is not a New York Banking Day, the Federal Funds Rate for such
day shall be the Federal Funds Rate for the immediately preceding New York
Banking Day.

 

“Initial Purchase Price”
has the meaning specified in Section 1(a).

 

“Initial Shares”
has the meaning specified in Section 1(a).

 

“ISDA Definitions”
means the 2002 ISDA Equity Derivatives Definitions, as published by the
International Swaps and Derivatives Association, Inc.

 

“Make-Whole Payment Shares”
has the meaning specified in Section 5(c).

 

2

 

“Maximum Deliverable Number”
means 75,000,000, subject to adjustment pursuant to Section 7(a).

 

“Merger Event”
has the meaning specified in the ISDA Definitions.  For purposes of the ISDA Definitions, the
Shares are shares of Common Stock, the Issuer is the Company, the Merger Date
shall be deemed to be the Announcement Date and the final Valuation Date shall
be deemed to be the last day of the Averaging Period.

 

“New York Banking Day”
means any day except for a Saturday, Sunday or a day on which the Federal
Reserve Bank of New York is closed.

 

“Payment Shares”
means Restricted Payment Shares or Make-Whole Payment Shares.

 

“Private Placement
Agreement” has the meaning specified in Section 6(a)(iii).

 

“Private Placement Costs” has the
meaning specified in Section 6(a)(iii).

 

“Purchase Date” has the meaning specified in Section 1(a).

 

“Refund Shares” has the meaning specified in Section
5(a)(i)(A).

 

“Regulation M” means Regulation M under the Exchange Act.

 

“Remaining Scheduled Days” means the scheduled number of
Trading Days remaining in the Averaging Period or the Valuation Period as of
the time of any suspension of the Averaging Period or the Valuation Period, as
the case may be.

 

“Reported VWAP” means, for any Trading Day, the dollar volume
weighted average price per share of Common Stock for that Trading Day based on
transactions executed during that Trading Day on the Exchange, excluding (i)
transactions that do not settle regular way, (ii) opening transactions (regular
way) reported in the consolidated system, (iii) transactions effected during
the 10 minutes before the scheduled close of trading on the Exchange and 10
minutes before the scheduled close of the primary trading session in the market
where the transaction is effected and (iv) transactions on such day that do not
satisfy the requirements of Rule 10b-18(b)(3) under the Exchange Act (in each
case as determined by the Calculation Agent), as reported on Bloomberg Page “RX.N
<Equity> AQR SEC” (or any successor thereto) or, in the event such price
is not so reported on such Trading Day for any reason, as reasonably determined
by the Calculation Agent.

 

“Repurchase Cost” means the product of (i) the Average
Purchase Price multiplied by (ii) the number of
Initial Shares.

 

“Requirements” has the meaning specified in Section 3(b).

 

“Restricted Payment Shares” has the meaning specified in
Section 5(a)(ii).

 

“Restricted Share Amount” means the quotient of (i) the
absolute value of the Settlement Amount divided by (ii)
the Restricted Share Value of a Restricted Payment Share.

 

“Restricted Share Value” means, with respect to any
Restricted Payment Shares or Make-Whole Payment Shares, 95% of the value
thereof per share to the Seller, determined by the Calculation Agent by
commercially reasonable means.

 

3

 

“Rule 10b-18” means Rule 10b-18 under the Exchange Act.

 

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

 

“Seller” has the meaning specified in Section 1(a).

 

“Seller’s Short Position” means, at any time, the number of
shares of Common Stock constituting the Seller’s theoretical net short position
in relation to the transactions contemplated by this Letter Agreement at such
time, as determined by the Calculation Agent.

 

“Settlement Amount” means an amount equal to (i) the Initial
Purchase Price minus (ii) the Repurchase Cost.

 

“Settlement Balance” has the meaning specified in Section
5(c).

 

“Settlement Day” means any day that is not a Saturday, a
Sunday or a day on which banking institutions or trust companies in The City of
New York are authorized or obligated by law or executive order to close.  A Settlement Day “corresponds” to a Trading
Day if it is the day for settlement of regular way transactions for equity
securities entered into on the Exchange on that Trading Day.

 

“Share Amount” means, for any Trading Day, the quotient of
(i) the product of (A) the Valuation Fraction multiplied
by (B) the absolute value of the Settlement Amount, divided by (ii) the Daily Average Price for that Trading
Day.

 

“Supplemental Purchase Price Payment Amount” means, for any
Supplemental Purchase Price Payment Date, the product of (i) $0.03 and (ii) the
Seller’s Short Position on the Supplemental Purchase Price Reference Date for
such Supplemental Purchase Price Payment Date.

 

“Supplemental Purchase Price Payment Date” means each date on
which the Company pays an ordinary cash dividend to holders of Common Stock for
which the ex-dividend date occurs during the Averaging Period; provided that if any Default Supplemental Purchase Price
Reference Date occurs during the Averaging Period and no ex-dividend date for
an ordinary cash dividend to holders of Common Stock for the corresponding
fiscal quarter occurs, then the immediately succeeding Default Supplemental
Purchase Price Payment Date shall be a Supplemental Purchase Price Payment
Date.

 

“Supplemental Purchase Price Reference Date” means, for any
Supplemental Purchase Price Payment Date, the ex-dividend date for the ordinary
cash dividend paid on such Supplemental Purchase Price Payment Date, or, in the
case of a Supplemental Purchase Price Payment Date occurring in accordance with
the proviso to the definition of Supplemental Purchase Price Payment Date, the
immediately preceding Default Supplemental Purchase Price Reference Date.

 

“Tender Offer” has the meaning specified in the ISDA
Definitions.  For purposes of the ISDA
Definitions, the Issuer is the Company.

 

“Trading Day” means any day (i) other than a Saturday, a
Sunday or a day on which the Exchange is not open for business, (ii) during
which trading of any securities of the Company on any national securities
exchange has not been suspended and (iii) during which there has not been, in
the Calculation Agent’s judgment, a material limitation in the trading of
Common Stock.

 

4

 

“Valuation Fraction” means a fraction, the numerator of which
is one and the denominator of which is the number of Trading Days in the
Valuation Period.

 

“Valuation Period” means, in the case of settlement pursuant
to Sections 5(a)(i)(A) or 5(a)(ii)(A), the period commencing on the first
Trading Day immediately following the final day of the Averaging Period.  The number of Trading Days in the Valuation
Period shall be determined by the Seller in its discretion and notified to the
Company by the Seller prior to the commencement of the Valuation Period.  Without limiting the generality of Section
3(b), in the case of settlement pursuant to Section 5(a)(i)(A), the number of
Trading Days in the Valuation Period shall be a number of Trading Days that the
Seller reasonably expects, based on information provided to the Seller by the
Company and readily available market information, will result in Share Amounts
for each Trading Day during the Valuation Period that will be less than or
equal to the maximum number of shares of Common Stock that the Company could
have purchased on such Trading Day in compliance with the conditions set forth
in Rule 10b-18.  For the avoidance of
doubt, if the Company elects either to receive a cash payment pursuant to
Section 5(a)(i)(B) or make a cash payment pursuant to Section 5(a)(ii)(B),
there will be no Valuation Period.

 

SECTION 3.  Seller Purchases.

 

(a)        The Initial Shares may be sold short to the Company.  It is understood that during the Averaging
Period the Seller may purchase shares of Common Stock in connection with this
Letter Agreement, which shares may be used to cover all or a portion of such
short sale and, if the Settlement Amount is greater than zero, during the
Valuation Period the Seller will purchase shares of Common Stock to fulfill its
obligations to deliver Refund Shares to the Company pursuant to Section 5.  Such purchases will be conducted
independently of the Company.  The timing
of such purchases by the Seller, the number of shares purchased by the Seller
on any day, the price paid per share of Common Stock pursuant to such purchases
and the manner in which such purchases are made, including without limitation
whether such purchases are made on any securities exchange or privately, shall
be within the absolute discretion of the Seller.  It is the intent of the parties that this
transaction comply with the requirements of Rule 10b5-1(c)(1)(i)(B) of the
Exchange Act, and the parties agree that (i) this Letter Agreement shall be
interpreted to comply with the requirements of Rule 10b5-1(c), and (ii) they
shall take no action that results in this transaction not so complying with
such requirements.  Without limiting the
generality of the preceding sentence, the Company acknowledges and agrees that (A)
the Company does not have, and shall not attempt to exercise, any influence
over how, when or whether the Seller effects any purchases of Common Stock in
connection with this Letter Agreement, (B) during the period beginning on (but
excluding) the date of this Letter Agreement and ending on the last day of the
Valuation Period, if any, neither the Company nor its officers or employees
shall, directly or indirectly, communicate any information regarding the
Company or the Common Stock to any employee of the Seller or its affiliates
responsible for trading the Common Stock in connection with the transactions
contemplated hereby, (C) the Company is entering into this Letter Agreement in
good faith and not as part of a plan or scheme to evade compliance with federal
securities laws including, without limitation, Rule 10b-5 promulgated
under the Exchange Act and (D) the Company will not enter into or alter a
corresponding hedging transaction with respect to the Common Stock.  The Company also acknowledges and agrees that
any amendment, modification, waiver or termination of this Letter Agreement
must be effected in accordance with the requirements for the amendment of a “plan”
as defined in Rule 10b5-1(c) under the Exchange Act.  Without limiting the generality of the
foregoing, any such amendment, modification, waiver or termination shall be
made in good faith and not as part of a plan or scheme to evade the
prohibitions of Rule 10b-5 under the Exchange Act, and no such amendment,
modification, waiver or termination shall be made at any time at which the
Company or any officer or director of the Company is aware of any material
nonpublic information regarding the Company or the Common Stock.

 

5

 

(b)        In the event that the Seller, in its discretion, determines
that it is appropriate with regard to any legal, regulatory or self-regulatory
requirements or related policies and procedures (whether or not such
requirements, policies or procedures are imposed by law or have been
voluntarily adopted by the Seller, and including without limitation Rule
10b-18, Rule 10b-5, Regulation 13D-G and Regulation 14E under the Exchange Act,
“Requirements”), for the Seller to
refrain from purchasing Common Stock or to purchase fewer than the number of
shares of Common Stock that the Seller would otherwise purchase on any Trading
Day during the Averaging Period or, if the Settlement Amount is greater than
zero, the Valuation Period, then the Seller may, in its discretion, elect that
the Averaging Period or the Valuation Period, as the case may be, be suspended
as appropriate with regard to any Requirements. 
The Seller shall notify the Company upon the exercise of the Seller’s
rights pursuant to this Section 3(b) and shall subsequently notify the Company
on the day the Seller believes that the circumstances giving rise to such
exercise have changed.  If the Averaging
Period or the Valuation Period is suspended by the Seller pursuant to this
Section 3(b), at the end of such suspension the Seller shall determine the
number of Trading Days remaining in the Averaging Period or the Valuation
Period, as the case may be, which number shall not exceed the Remaining
Scheduled Days as of the time of such suspension, and shall not result in the
Averaging Period ending prior to May 5, 2006.

 

(c)        The Company agrees that neither the Company nor any of its
affiliates or agents shall take any action that would cause Regulation M to be
applicable to any purchases of Common Stock, or any security for which the Common
Stock is a reference security (as defined in Regulation M), by the Company or
any of its affiliated purchasers (as defined in Regulation M) during the
Averaging Period or, if the Settlement Amount is greater than zero, the
Valuation Period.

 

(d)        The Company shall, at least one day prior to the first day of
the Averaging Period, notify the Seller of the total number of shares of Common
Stock purchased in Rule 10b-18 purchases of blocks pursuant to the once-a-week
block exception contained in Rule 10b-18(b)(4) by or for the Company or any of
its affiliated purchasers during each of the four calendar weeks preceding the
first day of the Averaging Period and during the calendar week in which the
first day of the Averaging Period occurs (“Rule 10b-18 purchase”, “blocks” and “affiliated
purchaser” each being used as defined in Rule 10b-18), which notice shall be
substantially in the form set forth as Appendix B hereto, it being understood
that purchases under a “plan” by an “agent independent of the issuer” (each as
defined in Rule 10b-18) are not required to be reported.

 

(e)        From the date hereof through the last day of the Averaging
Period or, if the Settlement Amount is greater than zero, through the last day
of the Valuation Period, the Company shall (i) notify the Seller prior to the
opening of trading in the Common Stock on any day on which the Company makes,
or expects to be made, any public announcement (as defined in Rule 165(f) under
the Securities Act) of any merger, acquisition, or similar transaction
involving a recapitalization relating to the Company (other than any such
transaction in which the consideration consists solely of cash and there is no
valuation period), (ii) promptly notify the Seller following any such
announcement that such announcement has been made, and (iii) promptly deliver
to the Seller following the making of any such announcement a certificate
indicating (A) the Company’s average daily Rule 10b-18 purchases (as defined in
Rule 10b-18) during the three full calendar months preceding the date of the
announcement of such transaction and (B) the Company’s block purchases (as
defined in Rule 10b-18) effected pursuant to paragraph (b)(4) of Rule 10b-18
during the three full calendar months preceding the date of the announcement of
such transaction.  In addition, the
Company shall promptly notify the Seller of the earlier to occur of the
completion of such transaction and the completion of the vote by target
shareholders.  The Company acknowledges
that any such public announcement may cause the Averaging Period or Valuation
Period, as the case may be, to be suspended pursuant to Section 3(b).  Accordingly, the Company acknowledges that
its

 

6

 

actions in relation to any such announcement or
transaction must comply with the standards set forth in Section 3(a).

 

SECTION 4.  Company Purchases.

 

Without
the prior written consent of the Seller, the Company shall not, and shall cause
its affiliates and affiliated purchasers (each as defined in Rule 10b-18) not
to, directly or indirectly (including, without limitation, by means of a
cash-settled or other derivative instrument) purchase, offer to purchase, place
any bid or limit order that would effect a purchase of, or commence any tender
offer relating to, any shares of Common Stock (or an equivalent interest,
including a unit of beneficial interest in a trust or limited partnership or a
depository share) or any security convertible into or exchangeable for shares
of Common Stock during the period beginning on, and including, the Purchase
Date and ending on, and including, the last day of the Averaging Period or, if
there is a Valuation Period, the last day of the Valuation Period; provided that purchases of shares of Common Stock effected
by or for a plan of the Company by an agent independent of the issuer that
satisfy the requirements of Section 10b-18(a)(13)(ii) (“plan” and “agent
independent of the issuer” each being used as defined in Rule 10b-18) shall not
be subject to the requirements of this sentence.  During such time, any purchases of Common
Stock (or any security convertible into or exchangeable for shares of Common
Stock) by the Company (other than purchases of shares of Common Stock effected
by or for a plan of the Company by an agent independent of the issuer that
satisfy the requirements of Section 10b-18(a)(13)(ii) (“plan” and “agent
independent of the issuer” each being used as defined in Rule 10b-18)) shall be
made through BAS, which is an affiliate of the Seller, pursuant to a letter
substantially in the form of Appendix A hereto and subject to such conditions
as the Seller shall impose, and shall be in compliance with Rule 10b-18 or
otherwise in a manner that the Company and the Seller believe is in compliance
with applicable requirements (including, without limitation, Rule 10b-5,
Regulation 13D-G and Regulation 14E under the Exchange Act).

 

SECTION 5.  Purchase Price Adjustment and Settlement.

 

(a)        After the expiration of the Averaging Period,

 

(i)    if the Settlement Amount is
greater than zero, as an adjustment to the Initial Purchase Price, the Company
shall elect either for

 

(A)     the Seller to transfer to
the Company, for no additional consideration, a number of shares of Common
Stock equal to the sum of the Share Amounts for each of the Trading Days in the
Valuation Period (the “Refund Shares”)
in the manner provided in Section 5(b), or

 

(B)      the Seller to make a cash
payment to the Company in immediately available funds in an amount equal to the
Settlement Amount on the Settlement Day corresponding to the last Trading Day
of the Averaging Period, and

 

(ii)   if the Settlement Amount is
less than zero, as an adjustment to the Initial Purchase Price, the Company
shall elect to

 

(A)     transfer to the Seller,
for no additional consideration, a number of shares of Common Stock, which will
not be registered for resale, equal to the Restricted Share Amount (the “Restricted Payment Shares”) on the Settlement Day
corresponding to the last Trading Day of the Averaging 

 

7

 

Period
in the manner provided in Section 5(b), and any Make-Whole Payment Shares as
provided in Section 5(c), or

 

(B)      make a cash payment to
the Seller in immediately available funds in an amount equal to the absolute
value of the Settlement Amount on the Settlement Day corresponding to the last
Trading Day of the Averaging Period.

 

The Company shall give
written notice to the Seller not later than 10 Trading Days prior to the then
scheduled last Trading Day of the Averaging Period of the Company’s election,
if the Settlement Amount is greater than zero, for the Seller to deliver Refund
Shares or make a cash payment or, if the Settlement Amount is less than zero,
for the Company to deliver Payment Shares or to make a cash payment.  Once made, such election will be
irrevocable.  If the Company fails to
make such an election by the election deadline, the Company shall have been
deemed to have elected to receive or deliver, as the case may be, a cash
payment.  If the Company elects to deliver
Payment Shares pursuant to this Section 5(a)(ii), the Calculation Agent shall
have the right to adjust the Settlement Amount to compensate the Seller for its
cost of funds at the Federal Funds Rate during the Valuation Period.

 

(b)        Delivery of Refund Shares or Restricted Payment Shares shall
be made as follows:

 

(i)    if Refund Shares are to be
transferred to the Company, the Seller shall deliver the shares to the Company
on the fourth Settlement Day following the last day of the Valuation Period,
and

 

(ii)   if Restricted Payment
Shares are to be transferred to the Seller, on the Settlement Day corresponding
to the last Trading Day in the Averaging Period, the Company shall deliver to
the Seller a number of Restricted Payment Shares equal to the Restricted Share
Amount, and the Company shall deliver any additional Make-Whole Payment Shares
as provided in Section 5(c).

 

(c)        If Restricted Payment Shares are delivered in accordance with
Section 5(b)(ii), on the last Trading Day of the Averaging Period a balance
(the “Settlement Balance”) shall be
established with an initial balance equal to the absolute value of the
Settlement Amount plus the Private Placement Costs,
if any.  Following the delivery of
Restricted Payment Shares or any Make-Whole Payment Shares, Seller shall sell
all such Restricted Payment Shares or Make-Whole Payment Shares in a
commercially reasonable manner.  At the
end of each Trading Day upon which sales have been made, the Settlement Balance
shall be reduced by an amount equal to 95% of the aggregate proceeds received
by Seller upon the sale of such Restricted Payment Shares or Make-Whole Payment
Shares.  If, on any Trading Day, all
Restricted Payment Shares and Make-Whole Payment Shares have been sold and the
Settlement Balance has not been reduced to zero, the Company shall (i) deliver
to Seller or as directed by Seller on the Settlement Day corresponding to such
Trading Day an additional number of Shares (the “Make-Whole
Payment Shares”) equal to (x) the Settlement Balance as of such Trading
Day divided by (y) the Restricted Share Value of the Make-Whole Payment Shares
or (ii) promptly deliver to Seller cash in an amount equal to the then
remaining Settlement Balance.  This
provision shall be applied successively until either the Settlement Balance is
reduced to zero or the aggregate number of Restricted Payment Shares and
Make-Whole Payment Shares equals the Maximum Deliverable Number.

 

8

 

SECTION 6.  Payment Shares.

 

(a)        The Company may only deliver Restricted Payment Shares
pursuant to Section 5(a)(ii)(A) and Make-Whole Payment Shares pursuant to
Section 5(c) subject to satisfaction of the following conditions:

 

(i)    all Restricted Payment
Shares and Make-Whole Payment Shares shall be delivered to the Seller (or any
affiliate of the Seller designated by the Seller) pursuant to the exemption
from the registration requirements of the Securities Act provided by Section
4(2) thereof;

 

(ii)   BAS, the Seller and any
potential purchaser of any such shares from the Seller (or any affiliate of the
Seller designated by the Seller) identified by BAS or the Seller shall have
been afforded a commercially reasonable opportunity to conduct a due diligence
investigation with respect to the Company customary in scope for private
placements of equity securities (including, without limitation, the right to
have made available to them for inspection all financial and other records,
pertinent corporate documents and other information reasonably requested by
them); and

 

(iii)  an agreement (a “Private Placement Agreement”) shall have been entered into
between the Company and the Seller (or any affiliate of the Seller designated
by the Seller) in connection with the private placement of such shares by the
Company to the Seller (or any such affiliate) and the private resale of such
shares by the Seller (or any such affiliate), substantially similar to private
placement purchase agreements customary for private placements of equity
securities, in form and substance commercially reasonably satisfactory to the
Seller, which Private Placement Agreement shall include, without limitation,
provisions substantially similar to those contained in such private placement
purchase agreements relating to the indemnification of, and contribution in
connection with the liability of, the Seller and its affiliates, and shall
provide for the payment by the Company of all fees and expenses incurred by the
Company in connection with such resale and for the reimbursement, in the manner
set forth in Section 5(c) above, (without duplication) of all fees and expenses
incurred by the Seller in connection with such resale, including all fees and
expenses of external counsel for the Seller (all such fees and expenses
incurred by the Seller, the “Private Placement Costs”),
and shall contain representations, warranties and agreements of the Company
reasonably necessary or advisable to establish and maintain the availability of
an exemption from the registration requirements of the Securities Act for such
resales.

 

If the Settlement Amount is less than zero
and the Company has elected to deliver Restricted Payment Shares and any of the
above conditions is not satisfied as of the last Trading Day of the Averaging
Period and on each date when any Make-Whole Payment Shares are to be delivered,
the Company shall, in lieu of delivery of the Restricted Payment Shares or such
Make-Whole Payment Shares, as the case may be, make a cash payment to the
Seller in immediately available funds in an amount equal to the absolute value
of the Settlement Amount or the then remaining Settlement Balance, as the case
may be, in either case on the second Settlement Day following the date when
such delivery would have otherwise been required and shall reimburse the Seller
for all reasonable out-of-pocket expenses it incurs in connection with the
anticipated delivery of the Restricted Payment Shares or the Make-Whole Payment
Shares, including, without limitation, the reasonable fees and expenses of
outside counsel to the Seller incurred in connection thereof.

 

(b)        If the Company elects to deliver Restricted Payment Shares
pursuant to Section 5(a)(ii)(A) above, the Company shall not take or cause to
be taken any action that would make

 

9

 

unavailable either (i) the exemption set forth in
Section 4(2) of the Securities Act for the sale of any Restricted Payment
Shares or Make-Whole Payment Shares by the Company to the Seller or (ii) an
exemption from the registration requirements of the Securities Act reasonably
acceptable to the Seller for resales of Restricted Payment Shares and
Make-Whole Payment Shares by the Seller.

 

(c)        If the Settlement Amount is less than zero and the Company
elects to deliver Restricted Payment Shares pursuant to Section 5(a)(ii)(A),
then, if necessary, the Company shall use its best efforts to cause the number
of authorized but unissued shares of Common Stock to be increased to an amount
sufficient to permit the Company to fulfill its obligations under Section 5 above.

 

(d)        The Company expressly agrees and acknowledges that the public
disclosure of all material information relating to the Company is within the
Company’s control.

 

(e)        Notwithstanding the provisions of Section 5(a) above, if the
Company has elected to deliver any Payment Shares hereunder, the Company shall
not be required to deliver more than the Maximum Deliverable Number of shares
of Common Stock as Payment Shares hereunder.

 

SECTION 7.  Adjustment of Terms.

 

(a)        In the event (i) of any stock split, stock dividend,
bankruptcy, insolvency, reorganization, Merger Event, Tender Offer, rights
offering, recapitalization, spin-off or issuance of any securities convertible
or exchangeable into shares of Common Stock, or the announcement of any of the
foregoing, or (ii) the Seller determines, in its reasonable discretion after
using commercially reasonable efforts to borrow Common Stock from third
parties, that it is unable to borrow Common Stock at a rebate rate greater than
or equal to the Federal Funds Rate minus 50 basis
points per annum, then, in each case, the terms of the transaction (including,
without limitation, the number of Trading Days in the Averaging Period, any
Daily Average Price and the Settlement Amount) described herein shall be
subject to adjustment by the Calculation Agent as in the exercise of its good
faith judgment it deems appropriate under the circumstances to adjust for the
effect of such announcement or corporate event.

 

(b)        Notwithstanding the authority provided to the Calculation Agent
in subsection (a) of this Section 7, in the event of a corporate event (such as
certain reorganizations, mergers, or other similar events) in which all holders
of Common Stock may receive consideration other than the common equity
securities of the continuing or surviving entity, the adjustments referred to
in such subsection shall permit the Company to satisfy its settlement
obligations hereunder by delivering the consideration received by holders of
Common Stock upon such corporate event, in such proportions as in the exercise
of its good faith judgment the Calculation Agent deems appropriate under the
circumstances.

 

SECTION 8.  Governing Law; Waiver of Jury Trial.

 

(a)        THIS LETTER AGREEMENT
SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.  The parties hereto irrevocably
submit to the non-exclusive jurisdiction of the Federal and state courts
located in the Borough of Manhattan, in the City of New York in any suit or
proceeding arising out of or relating to this Letter Agreement or the transactions
contemplated hereby.

 

(b)        EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY
LEGAL PROCEEDING

 

10

 

ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

 

SECTION 9.  Assignment and Transfer.

 

The
rights and duties under this Letter Agreement may not be assigned or
transferred by the Company or the Seller without the prior written consent of
the other party; provided that the Seller may
assign any of its rights or duties hereunder to any of its affiliates without
the prior written consent of the Company, but shall be released from its
obligations under Section 5 only with the prior written consent of the Company,
such consent not to be unreasonably withheld.

 

SECTION 10.  No Condition of Confidentiality.

 

The
Seller and the Company hereby acknowledge and agree that the Seller has
authorized the Company to disclose this Letter Agreement and the transactions
contemplated hereby to any and all persons, and there are no express or implied
agreements, arrangements or understandings to the contrary, and the Seller
hereby waives any and all claims to any proprietary rights with respect to this
Letter Agreement and the transactions contemplated hereby, and authorizes the
Company to use any information that the Company receives or has received with
respect to this Letter Agreement and the transactions contemplated hereby in
any manner.

 

SECTION 11.  Calculations.

 

The
Calculation Agent shall make all calculations in respect of this Letter
Agreement in an arms length manner.

 

SECTION 12.  Representations, Warranties and Agreements of
the Company.

 

The
Company represents and warrants to, and agrees with, the Seller as follows:

 

(a)        The Company acknowledges and agrees that it is not relying,
and has not relied, upon the Seller or any affiliate of the Seller with respect
to the legal, accounting, tax or other implications of this Letter Agreement
and that it has conducted its own analyses of the legal, accounting, tax and
other implications hereof.  The Company
further acknowledges and agrees that neither the Seller nor any affiliate of
the Seller has acted as its advisor in any capacity in connection with this
Letter Agreement or the transactions contemplated hereby.  The Company is entering into this Letter
Agreement with a full understanding of all of the terms and risks hereof
(economic and otherwise), has adequate expertise in financial matters to
evaluate those terms and risks and is capable of assuming (financially and
otherwise) those risks.

 

(b)        The Company has all corporate power and authority to enter
into this Letter Agreement and to consummate the transactions contemplated
hereby.  This Letter Agreement has been
duly authorized and validly executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company, enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors’ rights generally and to general equitable
principles.

 

(c)        If Payment Shares are delivered pursuant to Section 5(a)(ii),
such Payment Shares, when delivered, shall have been duly authorized and shall
be duly and validly issued, fully paid and nonassessable and free of preemptive
or similar rights, and such delivery shall pass title thereto free and clear of
any liens or encumbrances.

 

11

 

(d)        The Company is not entering into this Letter Agreement to
facilitate a distribution of the Common Stock (or any security convertible into
or exchangeable for Common Stock) or in connection with a future issuance of
securities.

 

(e)        The Company is not entering into this Letter Agreement to
create actual or apparent trading activity in the Common Stock (or any security
convertible into or exchangeable for Common Stock) or to raise or depress or
otherwise manipulate the price of the Common Stock (or any security convertible
into or exchangeable for Common Stock).

 

(f)         The execution and delivery by the Company of, and the
compliance by the Company with all of the provisions of, this Letter Agreement
and the consummation by the Company of the transactions herein contemplated
will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or any other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws or other constitutive
documents of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their respective properties.

 

(g)        On the Purchase Date and on each day to and including the
final day of the Valuation Period (i) the assets of the Company at their fair
valuation exceed the liabilities of the Company, including contingent
liabilities, (ii) the capital of the Company is adequate to conduct the
business of the Company and (iii) the Company has the ability to pay its debts
and obligations as such debts mature and does not intend to, or does not
believe that it will, incur debt beyond its ability to pay as such debts
mature.

 

(h)        Except as otherwise contemplated by (i) below, no consent, approval,
authorization, order, registration, qualification or filing of or with any
court or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their respective properties is required for
the execution and delivery by the Company of, and the compliance by the Company
with all the terms of, this Letter Agreement or the consummation by the Company
of the transactions contemplated hereby.

 

(i)         The Company has made, and shall use its best efforts during
the Averaging Period and the Valuation Period (if any) to make, all filings, if
any, required to be made by it with the Securities and Exchange Commission, any
securities exchange or any other regulatory body with respect to the
transactions contemplated hereby.

 

(j)         As of the date hereof and as of the date, if any, that the
Company elects to transfer any Payment Shares to the Seller or for the Seller
to transfer any Refund Shares to the Company, (i) none of the Company and its
officers and directors is, or will be, as the case may be, aware of any
material nonpublic information regarding the Company or the Common Stock and
(ii) all reports and other documents filed by the Company with the Securities
and Exchange Commission pursuant to the Exchange Act when considered as a whole
(with the more recent such reports and documents deemed to amend inconsistent
statements contained in any earlier such reports and documents), do not or will
not, as the case may be, contain any untrue statement of a material fact or any
omission of a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they were
made, not misleading.

 

12

 

(k)        The Company has publicly disclosed on November 17, 2005, and
will disclose prior to the market open on January 31, 2006, its intention to
institute a program for the acquisition of shares of Common Stock.

 

(l)         In the event that the Seller or the Calculation Agent or any
of their affiliates becomes involved in any capacity in any action, proceeding
or investigation brought by or against any person in connection with the
transactions by the Company contemplated by this Letter Agreement or any breach
by the Company of any representation, warranty, covenant or agreement included
herein, the Company shall reimburse the Seller or the Calculation Agent or such
affiliate for its reasonable legal and other out-of-pocket expenses (including
the cost of any investigation and preparation) incurred in connection therewith
within 30 days of receipt of notice of such expenses, and shall indemnify and
hold the Seller or the Calculation Agent or such affiliate harmless on an
after-tax basis against any losses, claims, damages or liabilities to which the
Seller or the Calculation Agent or such affiliate may become subject in
connection with any such action, proceeding or investigation, in each case
except to the extent such expenses, losses, claims, damages or liabilities
arise out of gross negligence, bad faith or willful misconduct of the Seller or
the Calculation Agent.  If for any reason
the foregoing indemnification is unavailable to the Seller or the Calculation
Agent or such affiliate or insufficient to hold it harmless, then the Company
shall contribute to the amount paid or payable by the Seller or the Calculation
Agent or such affiliate as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Seller or the
Calculation Agent or such affiliate on the other hand in the matters
contemplated by this Letter Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits received by the Company
on the one hand and the Seller or the Calculation Agent or such affiliate on
the other hand in the matters contemplated by this Letter Agreement but also
the relative fault of the Company and the Seller or the Calculation Agent or
such affiliate with respect to such losses, claims, damages or liabilities and
any other relevant equitable considerations. 
The relative benefits received by the Company, on the one hand, and the
Seller or the Calculation Agent or such affiliate, on the other hand, shall be
in the same proportion as the Initial Purchase Price bears to the brokerage fee
referred to in Section 1(b).  The
reimbursement, indemnity and contribution obligations of the Company under this
Section 12(l) shall be in addition to any liability that the Company may
otherwise have, shall extend upon the same terms and conditions to the
partners, directors, officers, agents, employees and controlling persons (if
any), as the case may be, of the Seller or the Calculation Agent and their
affiliates and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, the
Seller or the Calculation Agent, any such affiliate and any such person.  The Company also agrees that neither the
Seller, the Calculation Agent nor any of such affiliates, partners, directors,
officers, agents, employees or controlling persons shall have any liability to the
Company for or in connection with any matter referred to in this Letter
Agreement except to the extent that any losses, claims, damages, liabilities or
expenses incurred by the Company result from the gross negligence, bad faith or
willful misconduct of the Seller or the Calculation Agent or a breach by the
Seller or the Calculation Agent of any of its covenants or obligations
hereunder.  The foregoing provisions
shall survive any termination or completion of this Letter Agreement.

 

(m)       For the avoidance of doubt, the parties agree that the commissions
incorporated in the definitions of Share Amount and Restricted Share Value and
in Section 5(c) above are commercially reasonable fees for BAS’s activities in
connection with Settlement under Section 5.

 

(n)        The parties hereto agree and acknowledge that the Seller is a
“financial institution” within the meaning of Section 101(22) of Title 11 of
the United States Code (the “Bankruptcy Code”).  The parties hereto further agree and
acknowledge that this Letter Agreement is either (i) a

 

13

 

“securities contract,” as such term is defined in
Section 741(7) of the Bankruptcy Code, in which case each payment and delivery
pursuant to Section 5 is a “settlement payment,” as such term is defined in
Section 741(8) of the Bankruptcy Code, and that the Seller is entitled to the
protections afforded by, among other sections, Sections 362(b)(6), 546(e) and
555 of the Bankruptcy Code, or (ii) a “swap agreement,” as such term is defined
in Section 101(53B) of the Bankruptcy Code, in which case each party is a “swap
participant,” as such term is defined in Section 101(53C) of the Bankruptcy
Code, and that the Seller is entitled to the protections afforded by, among
other sections, Section 362(b)(17), 546(g) and 560 of the Bankruptcy Code.

 

(o)        The Company shall not (i) alter the amount per share or
frequency of its ordinary cash dividend on the Common Stock, or (ii) declare
any dividend other than an ordinary cash dividend on the Common Stock, in
either case that affects any dividend for which the ex-dividend date occurs
from and including the date of this Letter Agreement through and including the
last day of the Averaging Period.

 

SECTION 13.  Acknowledgments and Agreements With Respect
To Hedging and Market Activity.

 

(a)           The
Company acknowledges and agrees that:

 

(i)            During
the Averaging Period and, if applicable, the Valuation Period, the Seller and
its affiliates may buy or sell shares of Common Stock or other securities or
buy or sell options or futures contracts or enter into swaps or other
derivative securities in order to adjust its hedge position with respect to the
transactions contemplated by this Letter Agreement;

 

 (ii)          The Seller and its affiliates also may
be active in the market for the Common Stock other than in connection with
hedging activities in relation to the transactions contemplated by this Letter
Agreement;

 

 (iii)         The Seller shall make its own
determination as to whether, when or in what manner any hedging or market
activities in the Company’s securities shall be conducted and shall do so in a
manner that it deems appropriate to hedge its price and market risk with
respect to the Daily Average Price and Reported VWAP; and

 

 (iv)         Any market activities of the Seller and
its affiliates with respect to the Common Stock may affect the market price and
volatility of the Common Stock, as well as the Daily Average Price and Reported
VWAP, each in a manner that may be adverse to the Company.

 

(b)           Each
of the Company and the Seller agrees that Non-Reliance as set forth in Section
13.1 of the ISDA Definitions, Agreements and Acknowledgments Regarding Hedging
Activities as set forth in Section 13.2 of the ISDA Definitions and Additional
Acknowledgments as set forth in Section 13.4 of the ISDA Definitions shall be
deemed to be Applicable to the transactions contemplated by this Letter
Agreement as if this Letter Agreement were a confirmation that was governed by,
and incorporated, such Sections of the ISDA Definitions.

 

SECTION 14.  Notices.

 

Unless
otherwise specified, notices under this contract may be made by telephone, to
be confirmed in writing to the address below. 
Changes to the notice information below must be made in writing.

 

14

 

(a)           If to the Company:

 

IMS Health
Incorporated

1499 Post Road

Fairfield, Connecticut 06824

Attn:  Jeffrey J. Ford, Vice President
and Treasurer

Telephone: (203) 319-4700

Facsimile:  (203) 319-4552

 

With copies (which shall not constitute notice) to:

 

IMS Health
Incorporated

1499 Post Road

Fairfield, Connecticut 06824

Attn:  Robert H. Steinfeld, Senior Vice
President, General Counsel & Corporate

Secretary

Telephone: (203) 319-4700

Facsimile:  (203) 319-4527

 

 (b)          If to the Seller:

 

Bank of America, N.A.

Equity Derivatives Group

c/o Banc of America Securities LLC

9 W. 57th Street

New York, NY 10019

Attn:  Christopher Hutmaker

Telephone: (212) 583-8142

Facsimile: (212) 230-8343

 

SECTION 15.  Designation of Affiliate for Transactions in
Common Stock.

 

The
Seller may designate any of its affiliates (the “Designee”)
to deliver or take delivery, as the case may be, and otherwise perform its
obligations to deliver or take delivery of, as the case may be, any shares of
Common Stock in respect of the transactions contemplated by this Letter
Agreement, and the Designee may assume such obligations and the obligations of
the Seller under this Letter Agreement with respect to such shares of Common
Stock.  Such designation shall not
relieve the Seller of any of its obligations hereunder.  Notwithstanding the previous sentence, if the
Designee shall have performed the obligations of the Seller hereunder, then the
Seller shall be discharged of its obligations to the Company to the extent of
such performance.  In addition, the
parties acknowledge and agree that every time that the Seller is described in
this Letter Agreement as buying, selling or otherwise transacting with third
parties in the Common Stock, such buying, selling or transacting may be
conducted by the Seller or one or more of its affiliates.

 

SECTION 16.  Equity Rights.

 

The Seller acknowledges and agrees that this Letter Agreement is not
intended to convey to it rights with respect to this transaction that are
senior to the claims of common stockholders in the event of the Company’s
bankruptcy.  For the avoidance of doubt,
the parties agree that the preceding sentence shall not apply at any time other
than during the Company’s bankruptcy to any claim arising as a result of a
breach by the Company of any of its obligations under this Letter
Agreement.  For the avoidance of doubt,
the parties acknowledge that this Letter Agreement is not secured by any
collateral that would otherwise secure the obligations of the Company herein
under or pursuant to any other agreement.

 

15

 

Please
confirm your agreement to the foregoing by signing and returning to us the
enclosed duplicate of this Letter Agreement.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/       ERIC P. HAMBLETON

  
	
   

  	
   

  	
  Name: Eric P. Hambleton

  
	
   

  	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  	
   

  
	
  Acknowledged and agreed to
  as of

  	
   

  
	
  the date first above
  written,

  	
   

  
	
   

  	
   

  
	
  IMS HEALTH INCORPORATED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/       JEFFREY FORD

  	
   

  
	
   

  	
  Name: Jeffrey Ford

  	
   

  
	
   

  	
  Title: Vice President
  & Treasurer

  	
   

  
							

 

16

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