EX-2.2 3 eh1900627_ex0202.htm EXHIBIT 2.2
EXHIBIT 2.2
 
EXECUTION VERSION


SEPARATION AND DISTRIBUTION AGREEMENT
DATED AS OF APRIL 30, 2019
by and between
INGERSOLL-RAND PLC
and
INGERSOLL-RAND U.S. HOLDCO, INC.






TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
2
Section 1.1
Certain Definitions
2
Section 1.2
Other Terms
13
ARTICLE II THE REORGANIZATION
15
Section 2.1
Transfer of Assets and Assumption of Liabilities Prior to the Distribution
15
Section 2.2
Allocation of Assets
18
Section 2.3
Allocation of Liabilities
21
Section 2.4
Transfer of Excluded Assets and Assumption of Excluded Liabilities Not Effected at or Prior to the Distribution Time
23
Section 2.5
Transfer of SpinCo Assets and Assumption of SpinCo Liabilities Not Effected at or Prior to the Distribution Time
25
Section 2.6
Termination of Intercompany Contracts; Settlement of Intercompany Payables and Receivables
28
Section 2.7
Shared Assets; Shared Contracts
29
Section 2.8
Certain Adjustment
30
Section 2.9
Bank Accounts
35
Section 2.10
Disclaimer of Representations and Warranties
36
Section 2.11
Post-Distribution Communications
36
Section 2.12
Cooperation
37
Section 2.13
Certain IT Matters
37
Section 2.14
FX and Hedging Arrangements
37
Section 2.15
Specified Asbestos Liabilities
37
ARTICLE III THE DISTRIBUTION
38
Section 3.1
Actions at or Prior to the Distribution Time
38
Section 3.2
Conditions Precedent to the Distribution
39
Section 3.3
The Distribution
40
Section 3.4
Authorization of SpinCo Common Stock to Accomplish the Distribution
41
ARTICLE IV ACCESS TO INFORMATION
41
Section 4.1
Access to Information
41
Section 4.2
Ownership of Information
43
Section 4.3
Expense Reimbursement for Providing Information
43
 
 
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Section 4.4
Record Retention
43
Section 4.5
Liability for Information Provided
44
Section 4.6
Other Agreements Providing for Exchange of Information
44
Section 4.7
Production of Witnesses and Records in Connection with an Action
44
Section 4.8
Counsel; Privileges; Legal Materials
45
ARTICLE V RELEASES
47
Section 5.1
Release of Pre-Distribution Claims
47
ARTICLE VI INDEMNIFICATION, GUARANTEES AND LITIGATION
50
Section 6.1
General Indemnification by SpinCo
50
Section 6.2
General Indemnification by Moon
51
Section 6.3
Contribution
51
Section 6.4
Indemnification Obligations Net of Insurance Proceeds and Other Amounts
52
Section 6.5
Certain Matters Relating to Indemnification of Third-Party Claims
52
Section 6.6
Additional Matters
54
Section 6.7
Exclusive Remedy
55
Section 6.8
Survival of Indemnities
56
Section 6.9
Guarantees
56
Section 6.10
Management of Actions
57
Section 6.11
Settlement of Actions
59
ARTICLE VII OTHER AGREEMENTS
59
Section 7.1
Further Assurances
59
Section 7.2
Confidentiality
60
Section 7.3
Insurance Matters
62
Section 7.4
Separation Expenses
64
Section 7.5
Transaction Documents
64
Section 7.6
Permits
65
ARTICLE VIII
66
Section 8.1
Dispute Resolution Procedures
66
ARTICLE IX MISCELLANEOUS
66
Section 9.1
Corporate Power; Facsimile Signatures
66
Section 9.2
Governing Law; Submission to Jurisdiction; Waiver of Trial
67
Section 9.3
Survival of Covenants
68
 
 
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Section 9.4
Waivers of Default
68
Section 9.5
Notices
68
Section 9.6
Termination
69
Section 9.7
Severability
70
Section 9.8
Entire Agreement
70
Section 9.9
Assignment; No Third-Party Beneficiaries
70
Section 9.10
Specific Performance
70
Section 9.11
Amendment
71
Section 9.12
Rules of Construction
71
Section 9.13
Captions; Counterparts
72
Section 9.14
Performance
72
 
 
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EXHIBITS
   
A
Form of Transition Services Agreement
B
Form of Tax Matters Agreement
C
Form of Employee Matters Agreement
D
Form of Real Estate Matters Agreement
E
Form of Intellectual Property Matters Agreement
F
Form of Trademark License Agreement

SCHEDULES
Schedule 1.1(59)
 
PFS Group
Schedule 2.1(a)
 
Plan of Reorganization
Schedule 2.2(a)(i)
 
SpinCo Assets
Schedule 2.2(a)(ii)
 
SpinCo Group
Schedule 2.2(a)(ix)
 
Excluded items on SpinCo Sites
Schedule 2.2(b)(i)
 
Excluded Assets
Schedule 2.3(b)(i)
 
Excluded Liabilities
Schedule 2.6(b)(iv)
 
Intercompany Contracts which are not being terminated
Schedule 2.8(a)(i)
 
Closing Working Capital
Schedule 2.13
 
IT Matters
Schedule 6.9(a)(ii)
 
Guarantees
 

 
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SEPARATION AND DISTRIBUTION AGREEMENT
This SEPARATION AND DISTRIBUTION AGREEMENT, dated as of April 30, 2019 (this Agreement), is by and between Ingersoll-Rand plc, a public limited company incorporated in Ireland (“Moon”), and Ingersoll-Rand U.S. HoldCo, Inc., a Delaware corporation (SpinCo). Certain terms used in this Agreement are defined in Section 1.1.
W I T N E S S E T H:
WHEREAS, Moon, acting through itself and its direct and indirect Subsidiaries, currently conducts the SpinCo Business;
WHEREAS, SpinCo is a newly formed, wholly owned Subsidiary of Moon;
WHEREAS, Moon intends to separate the SpinCo Business from the Moon Business and to cause the SpinCo Assets to be transferred to SpinCo and other members of the SpinCo Group and to cause the SpinCo Liabilities to be assumed by SpinCo and other members of the SpinCo Group, upon the terms and subject to the conditions set forth in this Agreement;
WHEREAS, Moon will either (a) cause the holders of the outstanding ordinary shares, $1.00 par value, of Moon (the Moon Ordinary Shares) as of the close of business on the Record Date to receive on a pro rata basis for no consideration all of the issued and outstanding shares of common stock, $0.01 par value, of SpinCo (the SpinCo Common Stock) in accordance with a distribution ratio to be determined by the Board of Directors of Moon or a committee thereof (the One-Step Spin-Off) or (b) consummate an offer to exchange shares of SpinCo Common Stock for outstanding shares of Moon Ordinary Shares (the Exchange Offer) (followed by a Clean-Up Spin-Off) (in each case, the Distribution);
WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of the date hereof (the Merger Agreement), by and among Moon, SpinCo, Gardner Denver Holdings, Inc., a Delaware corporation (Clover), and Charm Merger Sub Inc., a Delaware corporation and newly formed direct wholly owned Subsidiary of Clover (Merger Sub), immediately following the Distribution, Merger Sub will merge with and into SpinCo (the Merger) and all shares of SpinCo Common Stock will be converted into the right to receive common stock, $0.01 par value, of Clover, (“Clover Common Stock”) upon the terms and subject to the conditions set forth in the Merger Agreement;
WHEREAS, the Board of Directors of Moon, or a duly authorized committee thereof, and the Board of Directors of SpinCo have approved the Reorganization, the Distribution, the Merger Agreement and the Merger;
WHEREAS, for U.S. federal income tax purposes, (i) the Contribution and Distribution are intended to qualify as tax-free under Sections 368(a), 361 and 355 of the Code; (ii) each of the transactions described on Schedule 7.3(b) of the Merger Agreement are intended to qualify either as a “distribution” under Section 355 of the Code or as a “reorganization” under Sections 368(a), 361 and 355 of the Code; and (iii) this Agreement is intended to constitute, and is hereby adopted as, a plan of reorganization within the meaning of Section 368 of the Code; and
 

WHEREAS, it is appropriate and desirable to set forth the principal corporate transactions required to effect the Reorganization and the Distribution and certain other agreements that will govern certain matters relating to the Reorganization, the Distribution and the ongoing relationship of Moon, SpinCo and their respective Subsidiaries.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1            Certain Definitions. For purposes of this Agreement, the following terms shall have the meanings specified in this Section 1.1:
(1)           Accounting Principles” means GAAP, applied using the same accounting principles and standards, methods, policies, practices, procedures, classifications and estimation methodologies used by SpinCo in preparing the Audited Financial Statements, and modified with respect to the calculation of Closing Working Capital, by any change in such principles, methods, policies, practices, procedures, classifications and estimation methodologies that are used by SpinCo in the preparation of the example calculation of Closing Working Capital set forth on Schedule 2.8(a)(i) (including with respect to the categories of Assets which are classified as “Current Assets” and categories of Liabilities which are classified as “Current Liabilities” which shall be as set forth therein).  In the event of any conflict between GAAP and this Agreement (except, solely with respect the calculation of Closing Working Capital, the example calculation of Closing Working Capital set forth on Schedule 2.8(a)(i)), including the defined terms herein, GAAP shall apply. For the avoidance of doubt, past methods, policies, practices, procedures, classifications and estimation methodologies shall not include errors, unreconciled accounts or misuse of facts.
(2)           Action means any claim, action, suit, arbitration, investigation or other Proceeding, in each case, by any Person or Governmental Authority before any Governmental Authority.
(3)           Adversarial Action” means (i) an Action by a member of the Moon Group, on the one hand, against a member of the SpinCo Group or the Clover Group, on the other hand, or (ii) an Action by a member of the SpinCo Group or the Clover Group, on the one hand, against a member of the Moon Group, on the other hand.
(4)           Affiliate means, when used with respect to a specified Person, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. For the purpose of this definition, control (including with correlative meanings, controlled by and under common control with), when used with respect to any specified Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether
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through the ownership of voting securities or other interests, by Contract or otherwise. It is expressly agreed that, for purposes of this Agreement, the other Transaction Documents and the Merger Agreement, no member of the SpinCo Group shall be deemed to be an Affiliate of any member of the Moon Group, and no member of the Moon Group shall be deemed to be an Affiliate of any member of the SpinCo Group, from and after the Distribution Time.
(5)           Approvals or Notifications means any consents, waivers, approvals, permits or authorizations to be obtained from, notices, registrations, information or reports to be submitted to, or other filings or consultations to be made with, any third Person, including employee representatives, unions, works councils, health and safety committees, or any Governmental Authority.
(6)           Asbestos Liabilities” means all Liabilities to the extent relating to, arising out of or resulting from the actual or alleged exposure of any Person to asbestos in any form, including all Liabilities to the extent relating to, arising out of or resulting from any Action brought by (or on behalf of) such Person in respect of such Liabilities.
(7)           Assets means any and all assets, properties, claims and rights (including goodwill), wherever located (including in the possession of vendors or other third Persons or elsewhere), of every kind, character and description, whether real, personal or mixed, tangible, intangible or contingent, in each case whether or not recorded or reflected, or required to be recorded or reflected, on the books and records or financial statements of the applicable Person, including the following:
(a)          all Information, cost information, sales and pricing data, customer prospect lists, supplier records, customer and supplier lists, customer and vendor data and drawings, correspondence and lists, product data and literature, artwork, design, development, manufacturing and business process files and data, formulations and specifications, quality records and reports and accounting and other books, records, studies, surveys, reports, plans, documents, advertising and promotional materials, and other printed or written materials; artwork; design; development, manufacturing and quality control records, procedures and files; vendor and customer drawings, formulations and specifications; quality records and reports and other books, records, ledgers, files, documents, plats, photographs, studies, surveys, reports, plans and documents, operating, production and other manuals, corporate minute books and related stock records, financial records, separate entity Tax Returns and associated Tax records of SpinCo and its Subsidiaries (including of any entity that is treated as a predecessor of SpinCo or any of its Subsidiaries for U.S. federal income tax purposes), and files whether in paper, microfilm, microfiche, computer tape or disc, magnetic tape, electronic or any other form (“Books and Records”);
(b)          all apparatus, computers and other electronic data processing and communications equipment, telecommunications equipment and data, electronic storage equipment, fixtures, machinery, marketing and transportation systems and related facilities, equipment, furniture, office equipment, automobiles, trucks, vessels, motor vehicles and other transportation equipment, tools, apparatus, cables, test devices, prototypes and models and other tangible personal property of any kind;
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(c)          all inventories of materials, parts, raw materials, components, supplies, work-in-process, goods in transit, consigned goods and finished goods and products;
(d)          all interests in real property of whatever nature, including easements, whether as owner, mortgagee or holder of a Lien in real property, lessor, sublessor, lessee, sublessee or otherwise;
(e)          (i) all interests in any capital stock or other equity or ownership interests of any Subsidiary or any other Person, (ii) all bonds, notes, debentures, puts, call, straddles, options or other securities issued by any Subsidiary or any other Person, (iii) all loans, advances or other extensions of credit or capital contributions to any Subsidiary or any other Person and (iv) all other investments in securities of any Person;
(f)          all rights under Contracts, distribution and supplier arrangements, sale and purchase agreements, joint operating agreements, unfilled orders for the manufacture and sale of products and all other Contracts and business arrangements, license agreements, leases of personal property, open purchase orders for raw materials, supplies, parts or services and other Contracts, all claims or rights against any Person, all rights in connection with any bids or offers and all claims, choses in action or similar rights, whether accrued or contingent;
(g)          all deposits, prepaid expenses, letters of credit and performance and surety bonds;
(h)          all written (including in electronic form) technical information, data, specifications, research and development information, engineering drawings and specifications, operating and maintenance manuals, and materials and analyses prepared by consultants and other third Persons;
(i)          all Intellectual Property Rights and all physical and tangible materials embodying same;
(j)          all IT Assets;
(k)          all prepaid expenses, trade accounts and other accounts and notes receivable (whether current or non- current);
(l)          all interests, rights to causes of action, lawsuits, judgments, claims, counterclaims, rights under express or implied warranties, rights of recovery and rights of setoff of any kind, demands and benefits of any Person, including all claims or rights against any Person arising from the ownership of any Asset, all rights in connection with any bids or offers, causes of action or similar rights, whether accrued or contingent;
(m)          all licenses, Permits, approvals and authorizations which have been issued by any Governmental Authority or other third Person;
(n)          all cash or cash equivalents, bank accounts, lock boxes and other deposit arrangements; and
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(o)          all interest rate, currency, commodity or other swap, collar, cap or other hedging or similar agreements or arrangements.
(8)           Audited Financial Statements has the meaning set forth in the Merger Agreement.
(9)           Business Day has the meaning set forth in the Merger Agreement.
(10)          Closing” has the meaning set forth in the Merger Agreement.
(11)          Clover Group” means Clover and each Person that is a direct or indirect Subsidiary of Clover.
(12)          Club Car” means the Club Car strategic business unit of Ingersoll Rand that today is in the business of manufacturing, production, assembly, sale, offering and service of golf, utility and consumer low-speed vehicles, brakes related to the foregoing, and related parts and service offerings.
(13)          Code means the Internal Revenue Code of 1986, as amended.
(14)          Contract means any written or oral legally binding contract, agreement, understanding, arrangement, subcontract, loan or credit agreement, note, bond, indenture, mortgage, purchase order, insurance policy, benefit plan, deed of trust, lease, sublease, franchise, permit, authorization, license, instrument, binding commitment, obligation or other undertaking.
(15)          Contribution means the transfer of the SpinCo Assets and SpinCo Liabilities to SpinCo pursuant to the Reorganization.
(16)          CTS” means the Compression Technology and Services strategic business unit of Ingersoll Rand that today is in the business of manufacturing, production, assembly, sale, offering and service of air compressors (including reciprocating air compressors, oil-flooded rotary air compressors, oil-free compressors, oil-free rotary compressors and centrifugal compressors), air compressor dryers, air compressor filters, controls and automation, the Ingersoll Rand integrated compression/OEM solutions business, low pressure blowers and machining and testing, and related parts and accessories (including those related to condensate management, filtration solutions, installation solutions, lubricants and power management), which services include maintenance plans, rentals services, performance services, remanufacturing, installations and product training, machining services, testing services and other service offerings.
(17)         Disclosure Documents means (a) any registration statement to be filed by SpinCo with the SEC to effect the registration of shares of SpinCo Common Stock in connection with the Distribution, and also includes any amendment or supplement thereto, information statement, prospectus, offering memorandum, offering circular, periodic report or similar disclosure document, whether or not filed with the SEC or any other Governmental Authority, and (b) if the Distribution is effected in whole or in part as an Exchange Offer, a Schedule TO and other filings pursuant to Rule 13e-4 under the Exchange Act; in each case,
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which describes the Reorganization or the SpinCo Group or primarily relates to the transactions contemplated hereby.
(18)          Distribution Agent means Computershare Shareholder Services.
(19)          Distribution Date means the date on which Moon distributes all of the issued and outstanding shares of SpinCo Common Stock to the holders of Moon Ordinary Shares.
(20)          Distribution Time means the time at which the Distribution occurs on the Distribution Date, which shall be deemed to be 12:01 a.m., New York City time.
(21)          Effective Time has the meaning set forth in the Merger Agreement.
(22)          Employee Matters Agreement means the Employee Matters Agreement in the form attached hereto as Exhibit C, entered into by and among Clover, Moon and SpinCo on or immediately prior to the Closing Date.
(23)          Environmental Condition means the presence of Hazardous Materials in the environment, including soil, groundwater, surface water, ambient air or indoor air.
(24)          Environmental Law means any and all applicable Laws, including the common law, relating to the protection of the environment, natural resources or human health and safety (to the extent related to exposure to harmful or deleterious substances).
(25)          Exchange Act means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time that reference is made.
(26)          Excluded SpinCo Records” means (a) any and all Tax Returns and associated Tax records of SpinCo and its Subsidiaries other than separate entity Tax Returns and associated Tax records of SpinCo and its Subsidiaries, including, for the avoidance of doubt, any Tax Returns filed on an affiliated, consolidated, combined, unitary, fiscal unity or other group basis with any member of the Moon Group and associated Tax records; (b) any personnel records that do not constitute Benefit Management Records (as defined in the Employee Matters Agreement); (c) any Books and Records not related in any material respect to the SpinCo Business (it being understood that to the extent that such Books and Records relate in part to the SpinCo Business, SpinCo shall be provided access to redacted copies of such records showing only the information that relates to the SpinCo Business); (d) any Books and Records the transfer of which is prohibited by applicable Law; and (e) any Books and Records (including any minutes or summaries of executive meetings and strategy papers) relating to the transactions contemplated by this Agreement, the Merger Agreement or the other Transaction Documents or any alternatives to such transactions considered by Moon.
(27)          Fluid Management” means the Fluid Management portion of FMT that today is in the business of manufacturing, production, assembly, sale, offering and service of diaphragm pumps, piston pumps and packages, filters regulators, lubricators, lubrication
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equipment, pneumatic valves and cylinders, other products sold under the “Aro” brand, and related parts and accessories and service offerings.
(28)          FMT” means the Fluid Management, Material Handling and Power Tools strategic business unit of Ingersoll Rand.
(29)          Former SpinCo Employees” has the meaning set forth in the Employee Matters Agreement.
(30)          GAAP means generally accepted accounting principles in the United States.
(31)          Governmental Authority means any federal, state, local, foreign or supranational government, any entity exercising executive, legislative, judicial, regulatory or administrative function of or pertaining to government, and any arbitral body or tribunal of competent jurisdiction.
(32)          Group means the Moon Group or the SpinCo Group, as the context requires.
(33)          Hazardous Materials means (a) any substance that is listed, classified or regulated pursuant to any Environmental Law; (b) any petroleum product or by-product, asbestos-containing material, lead-containing paint or plumbing, polychlorinated biphenyls, toxic mold, radioactive material or radon; and (c) any other substance or waste which may be the subject of regulatory action by any Governmental Authority in connection with any Environmental Law.
(34)          Headquarters Lease” has the meaning set forth in the Merger Agreement.
(35)          Information means information, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, accountants work papers, contracts, instruments, surveys, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memoranda and other materials prepared by attorneys and accountants or under their direction (including attorney work product), and all other technical, financial, employee or business information or data.
(36)          Insurance Policies means insurance policies and insurance Contracts of any kind, including primary, excess and umbrella policies, comprehensive general liability policies, director and officer liability, fiduciary liability, automobile, aircraft, property and casualty, workers compensation and employee dishonesty insurance policies, bonds and self-insurance and captive insurance company arrangements, together with the rights, benefits and privileges thereunder.
(37)          Insurance Proceeds means those monies (a) received by an insured from an insurance carrier, (b) paid by an insurance carrier on behalf of the insured or (c) received (including by way of setoff) from any third Person in the nature of insurance, contribution or
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indemnification in respect of any Liability; in any such case net of any applicable premium adjustments (including reserves and retrospectively-rated premium adjustments) and net of any costs or expenses, including Taxes, incurred in connection with the receipt thereof.
(38)          Intellectual Property Matters Agreement means the Intellectual Property Matters Agreement in substantially the form attached hereto as Exhibit E, entered into or to be entered into by and among Moon and SpinCo on or immediately prior to the Distribution Date.
(39)          Intellectual Property Rights has the meaning set forth in the Intellectual Property Matters Agreement.
(40)          Interim Financial Period” has the meaning set forth in the Merger Agreement.
(41)          Interim Financial Statements” has the meaning set forth in the Merger Agreement.
(42)          IT Assets has the meaning set forth in the Merger Agreement.
(43)          Law means, with respect to any Person, any United States or foreign federal, state or local law, constitution, treaty, convention, ordinance, code, rule, regulation, statute, order, executive order, writ, injunction, judgment, decree, ruling, award or other similar requirement enacted, issued, adopted or promulgated by a Governmental Authority that is binding upon or applicable to such Person. 
(44)          Liabilities means any and all debts, guarantees, liabilities, costs, expenses, interest and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, reserved or unreserved, or determined or determinable, and whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of the applicable Person, including those arising under any Law, claim, demand, Action, whether asserted or unasserted, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority and those arising under any Contract, release or warranty, or any fines, damages or equitable relief which may be imposed.
(45)          Lien” means any mortgage, deed of trust, pledge, hypothecation, encumbrance, security interest, adverse ownership interest or other lien of any kind.
(46)          Material Handling” means the Material Handling portion of FMT that today is in the business of manufacturing, production, assembly, sale, offering and service of hoists, winches, tuggers, BOP handling systems, balancers, handling devices/end effectors, support structures, custom lifting solutions, ergonomic custom solutions, service solutions, and related parts and accessories and service offerings.
(47)          Minimum Cash Amount” means $25,000,000.
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(48)          Moon Business means the businesses and operations conducted prior to the Distribution Time by any member of the Moon Group that are not included in the SpinCo Business.
(49)          Moon Group means Moon and each Person (other than any member of the SpinCo Group) that is a direct or indirect Subsidiary of Moon immediately after the Distribution Time, and each Person that becomes a Subsidiary of Moon after the Distribution Time (including as a result of transactions that occur following the Distribution Time in accordance with the Plan of Reorganization).
(50)          Moon IP has the meaning set forth in the Intellectual Property Matters Agreement.
(51)          Moon LuxCo” means Ingersoll-Rand Lux International Co. S.à r.l., a Luxembourg société à responsibilité limitée.
(52)          Moon Trademarks” has the meaning set forth in the Intellectual Property Matters Agreement.
(53)          Party means Moon or SpinCo, as appropriate, and Parties means Moon and SpinCo.
(54)          Permits” has the meaning set forth in the Merger Agreement.
(55)          Person means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind.
(56)          PFS Acquisition” means the acquisition of the PFS Business contemplated by the PFS Acquisition Agreement.
(57)          PFS Acquisition Agreement” means the Securities Purchase Agreement dated as of Feburary 6, 2019, by and among Silver II GP Holdings S.C.A., Accudyne Industries Acquisition S.à.r.l., Sundyne, LLC and Moon.
(58)          PFS Business” has the meaning set forth in the PFS Acquisition Agreement.
(59)          PFS Group” means each of the legal entities listed on Schedule 1.1(59).
(60)          Power Tools” means the Power Tools portion of FMT that today is in the business of manufacturing, production, assembly, sale, offering and service of cordless tools, pneumatic tools, impact wrenches, ratchets, grinders, sanders, polishers and buffers, cutting tools, needle and chisel scalers, drills, hammers, construction tools, torque multipliers, DC electric fastening systems, cordless precision fasteners, pulse tools, screwdrivers, nutrunners, riveters, calibration equipment, drills, engine starting systems (including engine barring motors and air starters) and air motors, and related parts and accessories and service offerings.
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(61)          Proceeding” means any action, cause of action, claim, demand, litigation, suit, investigation, grievance, citation, summons, subpoena, inquiry, audit, hearing, originating application to a tribunal, arbitration or other similar proceeding of any nature, civil, criminal, regulatory, administrative or otherwise, whether in equity or at law, in contract, in tort or otherwise.
(62)          Real Estate Matters Agreement means the Real Estate Matters Agreement, in substantially the form attached hereto as Exhibit D, entered into or to be entered into by and between Moon and SpinCo on or prior to the Distribution Date.
(63)          Record Date means the close of business on the date determined by the Board of Directors of Moon (or a committee thereof) as the record date for the Distribution, to the extent the Distribution is effected through a One-Step Spin-Off, or in connection with a Clean-Up Spin-Off.
(64)          Release means any release, spill, emission, discharge, leaking, pumping, pouring, dumping, injection, deposit, disposal, dispersal, leaching or migration of Hazardous Materials into the environment (including ambient air, surface water, groundwater and surface or subsurface strata) or within any building or facility.
(65)          Reorganization means the transfer of the SpinCo Assets that are not already owned by members of the SpinCo Group to members of the SpinCo Group and the assumption of the SpinCo Liabilities that are not already owned by members of the SpinCo Group by members of the SpinCo Group, and the transfer of Excluded Assets that are not already owned by members of the Moon Group to members of the Moon Group and the assumption of the Excluded Liabilities that are not already owned by members of the Moon Group by the Moon Group, all as more fully described in this Agreement and the other Transaction Documents and including the steps set forth in the Plan of Reorganization.
(66)          SEC means the United States Securities and Exchange Commission.
(67)          Service Provider means, with respect to any Person, any current, former or future employee, officer, consultant, independent contractor or director of such Person.
(68)          Shared Assets means the Assets identified on Schedule 2.7(a).
(69)          Shared Contracts means all contracts, commitments and other agreements to which Moon or any of its Subsidiaries is a party as of immediately prior to the Distribution Time that relate both to the SpinCo Business and the Moon Business (other than (i) Intercompany Obligations and (ii) any Contracts with respect to Intellectual Property Rights or IT Assets that are the subject of Transition Services under the Transition Services Agreement, which shall be treated as set forth therein).
(70)          Specified Asbestos Liabilities” means Asbestos Liabilities of any member of the Moon Group, whether such claim is made before or after the Distribution Time, in each case to the extent relating to, arising out of or resulting from Club Car, Material Handling, Power Tools or the PFS Business (in each case, including former products or business
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lines of similar application or end use made, sold or serviced by any such business, or former locations of any such business that made, sold or serviced such products or business lines).
(71)          SpinCo Balance Sheet means the balance sheet as of December 31, 2018 included in the SpinCo Financial Statements (as defined in the Merger Agreement).
(72)          SpinCo Business means the business conducted by the Industrial segment of Moon as such business is conducted as of the date hereof and will be conducted in accordance with the Merger Agreement immediately prior to the Distribution Time, including, if the PFS Acquisition has been consummated prior to the Distribution Time, as conducted after giving effect to the PFS Acquisition.
(73)          SpinCo Business Records” means Books and Records of Moon and its Subsidiaries as of immediately prior to the Distribution Time, excluding Excluded SpinCo Records.
(74)          SpinCo Contracts means the following Contracts to which Moon or any of its Subsidiaries is a party or by which Moon or any of its Subsidiaries or any of their respective Assets is bound, in each case, as of immediately prior to the Distribution Time (except for any such Contract or part thereof that is expressly contemplated to be retained by or transferred to Moon or any member of the Moon Group pursuant to any provision of this Agreement or any other Transaction Document):
(a)          any Contract that is primarily related to the SpinCo Business;
(b)          any Contract or part thereof that is otherwise expressly contemplated pursuant to this Agreement (including Shared Contracts, subject to Section 2.7) or any of the other Transaction Documents to be assigned to SpinCo or any member of the SpinCo Group; and
(c)          the PFS Acquisition Agreement and any other Transaction Document (as defined in the PFS Acquisition Agreement).
(75)          SpinCo Group means SpinCo, those Persons set forth on Schedule 2.2(a)(ii), if the PFS Acquisition is consummated prior to the Distribution Time, each member of the PFS Group, each Subsidiary of SpinCo immediately after the Distribution Time and each other Person that becomes a Subsidiary of SpinCo after the Distribution Time (including as a result of transactions that occur following the Distribution Time in accordance with the Plan of Reorganization); provided that Schedule 2.2(a)(ii) may be updated in accordance with the Plan of Reorganization to add or remove Persons on such schedule.
(76)          SpinCo Indebtedness means, without duplication, and including the principal of and any accrued and unpaid interest and accrued and unpaid commitment fees thereon, premiums, penalties, costs payable in connection with payment or prepayment (including any breakage costs, prepayment or early termination penalties, foreign currency charges or conversion expenses), fees or other amounts owing in respect of the aggregate amount outstanding as of immediately prior to the Distribution Time with respect to any of the following of any member of the SpinCo Group: (a) obligations for borrowed money; (b) obligations
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evidenced by bonds, debentures, notes, debt securities or other similar instruments, (c) obligations under any letters of credit, performance bonds, surety bonds, bankers acceptances or similar instruments to the extent drawn and not reimbursed (reduced by any SpinCo Cash held as collateral in respect thereof), (d) obligations under leases which have been, or should be in accordance with GAAP, capitalized leases, (e) obligations pursuant to, or under, any interest rate, currency, commodity or other swap, collar, cap, derivative or other hedging or similar agreements or arrangements, (f) obligations for the deferred purchase price of property, goods, assets or services or for earn-outs or similar obligations (calculated at the full amount of payments outstanding), (g) accrued severance obligations with respect to Former SpinCo Employees and (h) guaranties of any obligations of the types described in the preceding clauses (a) through (g), inclusive, of any other Person. For the avoidance of doubt, the term “SpinCo Indebtedness” shall not include (A) any amounts available under any debt instrument to the extent undrawn or uncalled, (B) any Liabilities to the extent such items are included in the calculation of Closing Working Capital, (C) any indebtedness between wholly-owned members of the SpinCo Group, or (D) Total SpinCo Debt.
(77)          SpinCo IP has the meaning set forth in the Intellectual Property Matters Agreement.
(78)          Subsidiary means, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities of such Person, (ii) the total combined equity interests or (iii) the capital or profit interests, in the case of a partnership, or (b) otherwise has the power to vote or direct the vote of, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.
(79)          Supply Agreements” has the meaning set forth in the Merger Agreement.
(80)          Tax has the meaning set forth in the Tax Matters Agreement.
(81)          Tax Matters Agreement means the Tax Matters Agreement, in substantially the form attached hereto as Exhibit B, entered into or to be entered into by and between Clover, Moon and SpinCo on or prior to the Distribution Date.
(82)          Tax Return has the meaning set forth in the Tax Matters Agreement.
(83)          Tender Agreement” has the meaning set forth in the Merger Agreement.
(84)          Total SpinCo Debt means, collectively, any debt incurred by SpinCo or any of its Subsidiaries to finance the SpinCo Payment.
(85)          Trademark License Agreement means the Trademark License Agreement in substantially the form attached hereto as Exhibit E, entered into or to be entered into by and among Moon and SpinCo on or immediately prior to the Distribution Date.
(86)          Trademarks” has the meaning set forth in the Intellectual Property Matters Agreement.
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(87)          Transaction Documents means this Agreement, the Transition Services Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Real Estate Matters Agreement, the Intellectual Property Matters Agreement, the Trademark License Agreement, the Tender Agreement, the Supply Agreements, the Headquarters Lease and the Transfer Documents, in each case including all annexes, exhibits, schedules, attachments and appendices thereto.
(88)          Transfer Documents means the Pre-Distribution Transfer Documents, the Post-Distribution Moon Transfer Documents and the Post-Distribution SpinCo Transfer Documents.
(89)          Transition Services Agreement means the Transition Services Agreement in substantially the form attached hereto as Exhibit A, entered into or to be entered into by and between Moon and SpinCo on or immediately prior to the Distribution Date.
(90)          Transition Services has the meaning set forth in the Transition Services Agreement.
Section 1.2             Other Terms. For purposes of this Agreement, the following terms have the meanings set forth in the sections indicated:
Definition
 
Section
Adjustment Amount
 
2.8(a)(i)
Agreement
 
Preamble
Appointed Representative
 
8.1(a)
Arbitration Act
 
8.1
Chosen Courts
 
9.2(b)
Clean-Up Spin-Off
 
3.3(c)
Closing Statement
 
2.8(c)(i)
Closing Working Capital
 
2.8(a)(i)
Clover
 
Recitals
Clover Common Stock
 
Recitals
Counsel
 
4.8(e)
Dispute
 
8.1
Disputed Items
 
2.8(d)(ii)
Distribution
 
Recitals
Estimated Adjustment Amount
 
2.8(c)(i)
Estimated Closing Statement
 
2.8(c)(i)
Exchange Offer
 
Recitals
Excluded Asbestos Liabilities
 
2.3(b)(v)
Excluded Assets
 
2.2(b)
Excluded Liabilities
 
2.3(b)
Existing Moon Counsel
 
4.8(a)
Final Adjustment Amount
 
2.8(e)
General SpinCo Business Information
 
4.8(b)
Guarantee Release
 
6.9(b)
Hedging Contracts
 
2.15
 
 
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Definition
  Section 
Hedging Transactions
 
2.15
Indemnified Party
 
6.5(a)
Indemnifying Party
 
6.5(a)
Indemnity Payment
 
6.5(a)
Intercompany Obligations
 
2.8(a)
linked
 
2.9(a)
Merger
 
Recitals
Merger Agreement
 
Recitals
Merger Sub
 
Recitals
Mixed Action
 
6.10(d)
Moon
 
Preamble
Moon Accounts
 
2.9(a)
Moon Confidential Information
 
7.2(b)
Moon Controlled Actions
 
6.10(b)
Moon Counsel
 
4.8(a)
Moon Indemnification Obligations
 
6.2
Moon Indemnified Parties
 
6.1
Moon Ordinary Shares
 
Recitals
Moon Released Persons
 
5.1(a)
Notice of Objection
 
2.8(d)(i)
One-Step Spin-Off
 
Recitals
Permitted Amendment
 
2.1(c)
Plan of Reorganization
 
2.1(a)
Post-Closing Claims
 
7.3(b)
Post-Distribution Moon Transfer Documents
 
2.5(b)
Post-Distribution SpinCo Transfer Documents
 
2.4(b)
Pre-Closing Occurrence-Based Policies
 
2.2(a)(vii)
Pre-Distribution Transfer Documents
 
2.1(c)
Preliminary Working Capital Statement
 
2.8(b)(i)
Reimbursable Expense
 
7.4(a)
Reorganization Amendment
 
2.1(c)
Representatives
 
7.2(a)
Resolution Period
 
2.8(d)(ii)
Separation Expenses
 
7.4(a)
Separation Agreement Disputes
 
8.1(b)
Separate Action
 
6.10(c)
Solvency Opinion
 
3.2(c)
SpinCo
 
Preamble
SpinCo Accounts
 
2.9(a)
SpinCo Assets
 
2.2(a)
SpinCo Borrower
 
3.1(b)
SpinCo Cash
 
2.8(a)(iii)
SpinCo Cash Amount
 
2.8(a)(iii)
SpinCo Common Stock
 
Recitals
SpinCo Confidential Information
 
7.2(a)
 
 
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Definition
  Section 
SpinCo Controlled Actions
 
6.10(a)
SpinCo Counsel
 
4.8(a)
SpinCo Debt
 
3.1(b)
SpinCo Indemnification Obligations
 
6.1
SpinCo Indemnified Parties
 
6.2
SpinCo Liabilities
 
2.3(a)
SpinCo Payment
 
3.1(c)
SpinCo Released Persons
 
5.1(b)
SpinCo Site
 
2.2(a)(ix)
Target Working Capital
 
2.8(b)(ii)(B)
Third-Party Claim
 
6.5(a)
Unaffiliated Accounting Firm
 
2.8(d)(iii)
Working Capital
 
2.8(a)(i)

ARTICLE II
THE REORGANIZATION
Section 2.1            Transfer of Assets and Assumption of Liabilities Prior to the Distribution.
(a)           In accordance with the plan and structure set forth on Schedule 2.1(a) (such plan and structure, as it may be revised in accordance with Section 2.1(d), being referred to herein as the Plan of Reorganization) and to the extent not previously effected pursuant to the steps of the Plan of Reorganization that have been completed prior to the date of this Agreement, prior to the Distribution Time:
(i)          SpinCo Assets. Moon shall, and shall cause its applicable Subsidiaries to, assign, transfer, convey and deliver to SpinCo or one or more of SpinCos Subsidiaries designated by SpinCo, and SpinCo or such Subsidiaries shall accept from Moon and Moons applicable Subsidiaries, all of Moons and such Subsidiaries respective direct or indirect right, title and interest in and to all SpinCo Assets (in the case of the Moon Trademarks and all other SpinCo IP, subject to, and in accordance with, the terms and conditions of the Intellectual Property Matters Agreement and Trademark License Agreement);
(ii)          SpinCo Liabilities. SpinCo and/or one or more of its Subsidiaries designated by SpinCo shall accept, assume and agree faithfully to perform, discharge and fulfill the SpinCo Liabilities in accordance with their respective terms (and, for the avoidance of doubt, shall not assume the Excluded Liabilities). SpinCo and such Subsidiaries shall be responsible for all SpinCo Liabilities, regardless of when or where such SpinCo Liabilities arose or arise, or the legal entity that incurred or holds the SpinCo Liability (provided, however, that nothing contained herein shall preclude or inhibit SpinCo from asserting against third parties any defenses available to the legal entity that incurred or holds such SpinCo Liability), or whether the facts on which they are based occurred prior to, at or subsequent to the Distribution Time, regardless of where or against whom such SpinCo Liabilities are asserted or determined or whether asserted or determined prior to the date of this Agreement;
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(iii)          Excluded Assets. Moon shall cause the members of the SpinCo Group to assign, transfer, convey and deliver to Moon or one or more of its other Subsidiaries designated by Moon (other than any member of the SpinCo Group), and Moon or such other Subsidiaries shall accept from such applicable members of the SpinCo Group, such applicable Person’s respective direct or indirect right, title and interest in and to any Excluded Assets; and
(iv)          Excluded Liabilities. Moon and/or its Subsidiaries designated by Moon (other than any member of the SpinCo Group) shall accept and assume from the members of the SpinCo Group and agree faithfully to perform, discharge and fulfill the Excluded Liabilities of such Persons, and Moon and/or its applicable Subsidiaries shall be responsible for all Excluded Liabilities, regardless of when or where such Excluded Liabilities arose or arise, or the legal entity that incurred or holds the Excluded Liability (provided, however, that nothing contained herein shall preclude or inhibit Moon from asserting against third parties any defenses available to the legal entity that incurred or holds such Excluded Liability), or whether the facts on which they are based occurred prior to, at or subsequent to the Distribution Time, regardless of where or against whom such Excluded Liabilities are asserted or determined or whether asserted or determined prior to the date of this Agreement.
(b)           In furtherance of the assignment, transfer, conveyance and delivery of the SpinCo Assets and the assumption of the SpinCo Liabilities in accordance with Section 2.1(a)(i) and Section 2.1(a)(ii), on the date that such SpinCo Assets are assigned, transferred, conveyed or delivered or such SpinCo Liabilities are assumed, and except with respect to matters addressed by the Intellectual Property Matters Agreement: (i) Moon shall execute and deliver, and shall cause its Subsidiaries to execute and deliver, such bills of sale, deeds, stock powers, certificates of title, assignments of Contracts and other instruments of transfer, conveyance and assignment as and to the extent reasonably necessary to evidence the transfer, conveyance and assignment of all of Moons and its Subsidiaries (other than the members of the SpinCo Group) right, title and interest in and to such SpinCo Assets and (ii) SpinCo shall execute and deliver, and shall cause its Subsidiaries to execute and deliver, such assumptions of Contracts and other instruments of assumption as and to the extent reasonably necessary to evidence the valid and effective assumption of the SpinCo Liabilities by SpinCo and its Subsidiaries.
(c)           In furtherance of the assignment, transfer, conveyance and delivery of the Excluded Assets and the assumption of the Excluded Liabilities in accordance with Section 2.1(a)(iii) and Section 2.1(a)(iv), on the date that such Excluded Assets are assigned, transferred, conveyed or delivered or such Excluded Liabilities are assumed, (i) SpinCo shall execute and deliver, and shall cause the members of the SpinCo Group to execute and deliver, such bills of sale, deeds, stock powers, certificates of title, assignments of Contracts and other instruments of transfer, conveyance and assignment as and to the extent reasonably necessary to evidence the transfer, conveyance and assignment of all of SpinCos and such Person’s right, title and interest in and to such Excluded Assets and (ii) Moon shall execute and deliver, and shall cause its Subsidiaries (other than the members of the SpinCo Group) to execute and deliver, such assumptions of Contracts and other instruments of assumption as and to the extent reasonably necessary to evidence the valid and effective assumption of the Excluded Liabilities by Moon and its Subsidiaries. All of the foregoing documents contemplated by Section 2.1(b) and this Section 2.1(c) shall be referred to collectively herein as the Pre-Distribution Transfer Documents.
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(d)           Without limiting any other provision hereof, in connection with the reorganization contemplated by Section 2.1(a), each of Moon and SpinCo will take, and will cause each member of its respective Group to take, such actions as are reasonably necessary to consummate the transactions contemplated by the Plan of Reorganization (whether prior to, at or after the Distribution Time). Prior to the Distribution Time, Moon shall be permitted to update, modify or supplement the then-current Plan of Reorganization (including by making conforming amendments to Schedule 2.1(a)) if such update, modification or supplement (which, for the avoidance of doubt, would include any additional step or additional description of a step currently included on the Plan of Reorganization) (i) is consistent in all respects with the allocation of SpinCo Assets, SpinCo Liabilities, Excluded Assets and Excluded Liabilities in accordance with the definitions of such terms and otherwise consistent in all respects with allocations of assets and liabilities in the other Transaction Documents, (ii) would not reasonably be expected to delay the Distribution Date by more than sixty (60) days past the then-expected Distribution Date and, in any event, not beyond the Outside Date (as defined the Merger Agreement), (iii) in the case of any update, modification or supplement with respect to SpinCo Assets and SpinCo Liabilities (whether in corporate form or otherwise) that are already specifically reflected in the Plan of Reorganization at the time of such proposed further update, modification, or supplement, would not reasonably be expected to result in a material incremental Liability (other than any Asbestos Liability) (including, for the avoidance of doubt, Tax Liability) to SpinCo or any of its Subsidiaries unless and only to the extent such incremental Liability is expressly subject to reimbursement or indemnification by Moon pursuant to this Agreement or any other Transaction Document or is offset by savings otherwise obtained pursuant to any update, modification or supplement to the Plan of Reorganization, (iv) would not reasonably be expected (in light of the terms of this Agreement and the other Transaction Documents) to impede the operations of or otherwise adversely affect the SpinCo Business in any respect material to the SpinCo Business and (v) would not restrict the disposition of any of the businesses listed on Schedule I of the Tax Matters Agreement (any update, modification or supplement described in this sentence, a “Permitted Reorganization Amendment”). Moon shall regularly consult in good faith with Clover in the course of the further development of the Plan of Reorganization, provide any information reasonably requested by Clover related thereto, and consider in good faith comments from Clover in respect of such further development of the Plan of Reorganization. At such time as Moon notifies Clover in writing that it proposes to make an amendment to the Plan of Reorganization, Moon shall consider in good faith any further comments from Clover, but the determination as to whether a proposed amendment constitutes a Permitted Reorganization Amendment shall ultimately be reasonably determined in good faith by Moon. Other than any Permitted Reorganization Amendment (and subject to compliance with the notification and consultation obligations described in the preceding two sentences) no update, modification or supplement to the then-current Plan of Reorganization may be made by Moon without the prior written consent of Clover (such consent not to be unreasonably withheld, delayed or conditioned).  In addition, and notwithstanding anything to the contrary contained herein, Moon hereby acknowledges that it intends to seek a ruling with respect to Steps 11A through 11C (“Alternative A”) of the Plan of Reorganization.  In connection therewith, Moon shall keep Clover reasonably informed regarding the filing of any ruling request and discussions relating thereto, shall notify Clover of any representations made in such ruling request that would be binding on the SpinCo Group if the ruling is obtained, and shall notify Clover if the ruling is obtained.  If it is determined that a ruling cannot be obtained or it is no longer desirable to obtain
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such ruling, Moon shall implement Steps 12A through 12D (“Alternative B”) of the Plan of Reorganization, unless Moon determines to pursue another alternative with respect to the distribution of SpinCo by Moon, in which case unless Moon (i) provides Clover with a statement from Moon’s Irish tax counsel that is reasonably acceptable to Clover, based on advice of Clover’s Irish tax counsel, that Moon’s Irish tax counsel expects to deliver the opinion described in Section 7.3(b)(ii) of the Merger Agreement relating to clause (b) of the definition of Tax-Free Status of the External Transactions (as defined in the Merger Agreement) and provides Clover with sufficient detail of such alternative such that Clover’s Irish tax counsel may make such determination and (ii) such alternative otherwise satisfies the criteria for a Permitted Reorganization Amendment, such other alternative shall not be implemented without the prior written consent of Clover (such consent not to be unreasonably withheld, delayed or conditioned).
(e)           SpinCo hereby waives compliance by each and every member of the Moon Group with the requirements and provisions of any bulk-sale or bulk-transfer Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the SpinCo Assets to any member of the SpinCo Group.
(f)            Moon hereby waives compliance by each and every member of the SpinCo Group with the requirements and provisions of any bulk-sale or bulk-transfer Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the Excluded Assets to any member of the Moon Group.
(g)           The Parties acknowledge and agree that as between the Moon Group and the SpinCo Group, on the one hand, and any third Person asserting a Liability against a member of the Moon Group or the SpinCo Group, on the other hand, nothing in this Agreement shall be interpreted to grant such third Person rights to assert such Liability against any legal entity within the Moon Group or the SpinCo Group that would not be subject to such Liability absent this Agreement.
Section 2.2            Allocation of Assets.
(a)           For purposes of this Agreement, SpinCo Assets shall mean the following Assets (without duplication and excluding any Intellectual Property Rights from each clause below other than clause (vi)), except for Excluded Assets:
(i)          the Assets listed or described on Schedule 2.2(a)(i);
(ii)          the shares of capital stock of, or any other equity or ownership interests in, the Subsidiaries held, directly or indirectly, by Moon, listed in Schedule 2.2(a)(ii) (provided that Schedule 2.2(a)(ii) may be updated in accordance with the Plan of Reorganization to add or remove Persons on such schedule) or otherwise contemplated to be part of SpinCo Group pursuant to the Reorganization (which, for the avoidance of doubt, following the consummation of the PFS Acquisition, shall include the PFS Group);
(iii)          (A) the SpinCo Contracts and (B) any Shared Contracts to the extent allocated to SpinCo pursuant to Section 2.7;
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(iv)          the Assets reflected on the SpinCo Balance Sheet or the accounting records supporting such balance sheet and any Assets acquired by or for the SpinCo Business or any member of the SpinCo Group or the Moon Group subsequent to the date of the SpinCo Balance Sheet which, had they been so acquired on or before such date and owned as of such date, would have been reflected on the SpinCo Balance Sheet or the accounting records supporting such balance sheet if prepared on a consistent basis, subject to any acquisitions or dispositions of Assets subsequent to the date of the SpinCo Balance Sheet as may be expressly permitted under or consented to by Clover in accordance with the Merger Agreement and this Agreement, but in all events excluding all cash and cash equivalents (except for SpinCo Cash in excess of the Minimum Cash Amount or as expressly otherwise provided in the Transaction Documents); provided, that upon delivery of the Audited Financial Statements pursuant to the Merger Agreement, each reference to the SpinCo Balance Sheet in this Section 2.2(a)(iv) shall be deemed to instead refer to the balance sheet as of December 31, 2018 included in the Audited Financial Statements;
(v)          the SpinCo Cash up to the Minimum Cash Amount (to the extent taken into account in the determination of SpinCo Cash Amount in the Final Adjustment Amount pursuant to Section 2.9) and all bank accounts, lock boxes and other deposit arrangements exclusively used in, held for use in or related to the SpinCo Business;
(vi)          the SpinCo IP, including all Moon Trademarks, together with any and all rights to sue and recover for past, present and future infringement, misappropriation or other violation thereof and all remedies associated therewith;
(vii)          subject to Section 7.3 (including any limitations or obligations of any member of the SpinCo Group thereunder), to the terms of the applicable Insurance Policies and the Tender Agreement, the rights of any member of the SpinCo Group under any occurrence-based Insurance Policies of Moon or its Subsidiaries (as applicable) in place prior to the Distribution Date under which SpinCo or any other member of the SpinCo Group is insured (the Pre-Closing Occurrence-Based Policies) (it being understood that any retrospective premiums, deductibles or other similar obligations arising from any claim(s) by or on behalf of any SpinCo Group member under such Pre-Closing Occurrence-Based Policies shall be borne by the SpinCo Group); provided further that nothing in this clause shall be deemed to constitute (or to reflect) an assignment of any or all of such Pre-Closing Occurrence-Based Insurance Policies themselves (as distinguished from a grant of a right to access coverage under such Pre-Closing Occurrence Based Policies for the Assumed Liabilities, as provided in Section 7.3), to SpinCo or any member of the SpinCo Group;
(viii)          (A) the offices, manufacturing facilities and other owned real property allocated to a member of the SpinCo Group pursuant to the Real Estate Matters Agreement and (B) the leases, subleases, licenses or other agreements governing the leased real property allocated to a member of the SpinCo Group pursuant to the Real Estate Matters Agreement, in each case, subject to the terms and conditions of the Real Estate Matters Agreement;
(ix)          fixtures, machinery, equipment, tools, automobiles, trucks and other transportation equipment, office equipment, tangible IT Assets, furnishings and other tangible
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property located at a physical site of which the ownership or a leasehold or subleasehold interest is being transferred to or retained by a member of the SpinCo Group pursuant to the Real Estate Matters Agreement, and which is not subject to a site division, a lease or sublease back to a member of the Moon Group as of the Distribution Time (a “SpinCo Site”), but excluding the items listed on Schedule 2.2(a)(ix) (in each case excluding any such tangible property owned by Persons other than Moon and its Subsidiaries as of immediately prior to the Distribution Time; provided that personal computers and other personal equipment shall be retained by the Party who, following the Distribution Time, retains the services of the applicable Service Provider who, prior to the Distribution Time, used such personal computer);
(x)          originals or, to the extent originals are not available by reason other than that such originals are Excluded SpinCo Business Records, copies of all SpinCo Business Records that are located at a SpinCo Site and copies of all other SpinCo Business Records (but not, for the avoidance of doubt, such SpinCo Business Records themselves);
(xi)          all other Assets that are expressly provided by this Agreement or any other Transaction Document as Assets to be transferred to SpinCo or any other member of the SpinCo Group; and
(xii)          all Assets owned or held immediately prior to the Distribution Time by Moon or any of its Subsidiaries primarily used in, held for use in or related to the SpinCo Business provided that no Asset shall be deemed to be a SpinCo Asset solely as a result of this clause (xiii) if such Asset is within the category or type of Asset expressly covered by (1) another subsection of this Section 2.2(a), (2) a subsection of Section 2.2(b) or (3)  by the terms of another Transaction Document.
(b)           For the purposes of this Agreement, Excluded Assets shall mean the following Assets that are owned, leased or licensed, at or prior to the Distribution Time, by Moon or any of its Subsidiaries (without duplication):
(i)          the Assets listed or described on Schedule 2.2(b)(i);
(ii)          all cash and cash equivalents (except for SpinCo Cash up to the Minimum Cash Amount or as expressly otherwise provided in the Transaction Documents);
(iii)          (A) the shares of capital stock of, or any other equity or ownership interests in, the Subsidiaries held, directly or indirectly, by Moon that are not members of the SpinCo Group and (B) the shares of capital stock of, or any other equity or ownership interests in, the entities held by Moon that are not members of the SpinCo Group;
(iv)          (A) except as provided in clause (B), other Contracts that are not primarily related to the SpinCo Business and (B) any Shared Contracts, to the extent not allocated to SpinCo pursuant to Section 2.7;
(v)          all Moon IP;
(vi)          (A) the offices, manufacturing facilities and other owned real property allocated to a member of the Moon Group pursuant to the Real Estate Matters
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Agreement and (B) the leases, subleases, licenses or other agreements governing the leased real property allocated to a member of the Moon Group pursuant to the Real Estate Matters Agreement in each case, subject to the terms and conditions of the Real Estate Matters Agreement;
(vii)          the Excluded SpinCo Records;
(viii)          all Permits that by their terms are not transferable; and
(ix)          all other Assets (A) that are not included as SpinCo Assets pursuant to Section 2.2(a) or (B) that are expressly contemplated by this Agreement or any other Transaction Document as Assets to be retained by Moon or any other member of the Moon Group.
Section 2.3            Allocation of Liabilities.
(a)           For the purposes of this Agreement, SpinCo Liabilities shall mean the following Liabilities (without duplication):
(i)          [reserved];
(ii)          all Liabilities to the extent relating to, arising out of or resulting from:
(A)          the operation of the SpinCo Business, as conducted at any time before, at or after the Distribution Time;
(B)          the operation of any business conducted by any member of the SpinCo Group at any time after the Distribution Time (including any Liability relating to, arising out of or resulting from any act or failure to act by any Person, whether or not such act or failure to act is or was within such Persons authority, with respect to such business);
(C)          the SpinCo Assets; or
(D)          any Environmental Condition or any matter subject to or regulated by Environmental Law, in each case whether before, at or after the Distribution Time and in each case to the extent relating to, arising out of or resulting from (i) any properties (or the portion thereof if shared with the Moon Group) owned, leased or occupied by any member of the SpinCo Group from and after the Distribution Time; (ii) the ownership, occupancy or use of any property included in the SpinCo Assets; or (iii) the presence on or Release of Hazardous Materials on or from any property included in the SpinCo Assets; (iv) the conduct or operation of the SpinCo Business (other than at a property of any member of the Moon Group following the Distribution Time); or (v) the use, treatment, Release, handling, transportation or disposal of Hazardous Materials by the SpinCo Business or by or on behalf of any member of the SpinCo Group (other than at a property of any member of the Moon Group following the Distribution Time);
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(iii)          the Liabilities reflected as liabilities or obligations of the SpinCo Business in the SpinCo Balance Sheet or the accounting records supporting such balance sheet (including, for the avoidance of doubt, all accounts payable and deferred revenue reflected therein), and all Liabilities arising or assumed after the date of the SpinCo Balance Sheet which, had they arisen or been assumed on or before such date and been retained as of such date, would have been reflected on the SpinCo Balance Sheet or the accounting records supporting such balance sheet if prepared on a consistent basis (including, in any event, all Liabilities of SpinCo under the Total SpinCo Debt), subject, in each case, to any discharge of such Liabilities subsequent to the date of the SpinCo Balance Sheet; provided, that upon delivery of the Audited Financial Statements pursuant to the Merger Agreement, each reference to the SpinCo Balance Sheet in this Section 2.3(a)(iii) shall be deemed to instead refer to the balance sheet as of December 31, 2018 included in the Audited Financial Statements;
(iv)          the Liabilities arising out of or resulting from (A) the Total SpinCo Debt, (B) capitalized and operating lease obligations related to the SpinCo Business as of the Distribution Date to the extent such capitalized and operating leases are SpinCo Assets or (C) the SpinCo Indebtedness (to the extent taken into account in the determination of SpinCo Indebtedness in the Final Adjustment Amount pursuant to Section 2.9); and
(v)          all other Liabilities that are expressly provided by this Agreement or any other Transaction Document as Liabilities to be assumed by SpinCo or any other member of the SpinCo Group, and all agreements, obligations and Liabilities of SpinCo or any other member of the SpinCo Group under this Agreement or any of the other Transaction Documents.
(b)           For the purposes of this Agreement, Excluded Liabilities shall mean (without duplication):
(i)          the Liabilities listed or described on Schedule 2.3(b)(i);
(ii)          all Liabilities of Moon or its Subsidiaries to the extent (A) such Liabilities are not SpinCo Liabilities or (B) relating to, arising out of or resulting from any disposed or discontinued business or operations of Moon and its Subsidiaries as of the Distribution Time, other than disposed or discontinued business or operations that were part of CTS, Club Car, FMT or the PFS Business, including any divested assets, operations or discontinued product lines of those strategic business units;
(iii)          all Liabilities, whether presently in existence or arising after the date of this Agreement, relating to fees, commissions or expenses owed to any broker, finder, investment banker, accountant, attorney or other intermediary or advisor engaged by any member of the Moon Group or, to the extent the relevant engagement was entered into prior to the Distribution Time, any member of the SpinCo Group, in each case in connection with the transactions contemplated by this Agreement or the Transaction Documents (other than, for the avoidance of doubt, to the extent otherwise provided in the Merger Agreement or any Transaction Document); provided that the foregoing shall not include any fees, commissions or expenses with respect to the Total SpinCo Debt;
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(iv)          all Liabilities to the extent relating to, arising out of or resulting from the indemnification of any director, officer, manager, agent or employee of Moon or any of its Affiliates who was a director, officer, manager, agent or employee of Moon or any of its Affiliates (including the SpinCo Group) on or prior to the Distribution Time to the extent such director, officer, manager, agent or employee is or becomes a named defendant in any shareholder derivative suit brought by shareholders of Moon against Moon arising from the transactions contemplated by this Agreement or the Merger Agreement, including the One-Step Spin-Off, the Exchange Offer or the Clean-Up Spin-Off, with respect to which he or she was entitled to such indemnification pursuant to then-existing obligations;
(v)          all Asbestos Liabilities, whether arising before or after the Distribution Time, including those relating to, arising out of or resulting from CTS, Fluid Management or any former products or business lines of similar application or end use made, sold or serviced by any such business, or former locations of any such business that made, sold or serviced such products or business lines (“Excluded Asbestos Liabilities”), but not including the Specified Asbestos Liabilities;
(vi)          all Liabilities to the extent relating to, arising out or resulting from any Environmental Condition or any matter subject to or regulated by Environmental Law, in each case whether before, at or after the Distribution Time and in each case to the extent relating to, arising out of or resulting from; (A) the ownership, occupancy or use of any property of Moon Group; or (B) the use, treatment, Release, handling, transportation or disposal of Hazardous Materials on or from any property of the Moon Group; and
(vii)          all other Liabilities of Moon and its Subsidiaries that are expressly contemplated by this Agreement or any other Transaction Document as Liabilities to be retained or assumed by Moon or any other member of the Moon Group, and all agreements, obligations and other Liabilities of Moon or any member of the Moon Group under this Agreement or any of the other Transaction Documents.
Section 2.4            Transfer of Excluded Assets and Assumption of Excluded Liabilities Not Effected at or Prior to the Distribution Time.
(a)           Subject to Section 2.4(d), to the extent any Excluded Asset is transferred or assigned to, or any Excluded Liability is assumed by, a member of the SpinCo Group at or prior to the Distribution Time, or is owned or held by a member of the SpinCo Group after the Distribution Time, from and after the Distribution Time:
(i)          SpinCo shall, and shall cause its applicable Subsidiaries to, promptly assign, transfer, convey and deliver to Moon or certain of its Subsidiaries designated by Moon, and Moon or such Subsidiaries shall accept from SpinCo and its applicable Subsidiaries, all of SpinCos and such Subsidiaries respective right, title and interest in and to such Excluded Assets (in the case of the Moon IP, subject to, and in accordance with, the terms and conditions of the Intellectual Property Matters Agreement); and
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(ii)          Moon and/or its Subsidiaries designated by Moon shall promptly accept, assume and agree faithfully to perform, discharge and fulfill all such Excluded Liabilities in accordance with their respective terms.
(b)           In furtherance of the assignment, transfer, conveyance and delivery of Excluded Assets and the assumption of Excluded Liabilities provided for in Section 2.4(a)(i) and Section 2.4(a)(ii) and the other Transaction Documents and without any additional consideration therefor: (i) SpinCo shall execute and deliver, and shall cause its Subsidiaries to execute and deliver, such bills of sale, deeds, stock powers, certificates of title, assignments of Contracts and other instruments of transfer, conveyance and assignment as and to the extent reasonably necessary to evidence the transfer, conveyance and assignment of all of SpinCos and its Subsidiaries right, title and interest in and to the Excluded Assets to Moon and its Subsidiaries, and (ii) Moon shall execute and deliver, and shall cause its Subsidiaries to execute and deliver, such assumptions of Contracts and other instruments of assumption as and to the extent reasonably necessary to evidence the valid and effective assumption of the Excluded Liabilities by Moon or its Subsidiaries. All of the foregoing documents contemplated by this Section 2.4(b) shall be referred to collectively herein as the Post-Distribution SpinCo Transfer Documents.
(c)           To the extent that the transfer or assignment of any Excluded Asset or the assumption of any Excluded Liability requires any Approvals or Notifications, the Parties shall use their reasonable best efforts to obtain or make such Approvals or Notifications as soon as reasonably practicable; provided, however, that except to the extent expressly provided in Section 7.4 or in any of the other Transaction Documents, neither Moon nor SpinCo shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial or commercial accommodation) to any Person in order to obtain or make such Approvals or Notifications; provided, further, that the obligation to obtain or make such Approvals or Notifications shall terminate on the date that is twenty-four (24) months after the Distribution.
(d)           If and to the extent that the valid, complete and perfected transfer or assignment to the Moon Group of any Excluded Assets or the assumption by the Moon Group of any Excluded Liabilities would be a violation of applicable Law or require any Approval or Notification that has not been made or obtained at or prior to the Distribution Time, then, unless the Parties shall mutually otherwise determine, the transfer or assignment to the Moon Group of such Excluded Assets or the assumption by the Moon Group of such Excluded Liabilities, as the case may be, shall be automatically deemed deferred and any such purported transfer, assignment or assumption shall be null and void until such time as all legal impediments are removed or such Approvals or Notifications have been obtained or made. Notwithstanding the foregoing, any such Excluded Assets or Excluded Liabilities shall continue to constitute Excluded Assets and Excluded Liabilities for all other purposes of this Agreement.
(e)           If any transfer or assignment of any Excluded Asset or any assumption of any Excluded Liability intended to be transferred, assigned or assumed under this Agreement or other Transaction Documents is not consummated at or prior to the Distribution Time, whether as a result of the provisions of Section 2.4(d) or for any other reason, then the Parties shall cooperate to effect such transfers as promptly following the Distribution Time as practicable and, prior to the effectiveness of such transfer of Assets or assumption of Liabilities, the member of
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the SpinCo Group retaining such Excluded Asset or such Excluded Liability, as the case may be, shall thereafter hold such Excluded Asset in trust for the use and benefit of the member of the Moon Group entitled thereto (at the expense of the member of the Moon Group entitled thereto) and retain such Excluded Liability for the account of the member of the Moon Group and otherwise enter into mutually acceptable arrangements, including subcontracting, sublicensing, subleasing, back-to-back agreement, or other similar arrangement, to convey the economic rights and obligations relating to such Excluded Assets or Excluded Liability to the Moon Group. In addition, the member of the SpinCo Group retaining such Excluded Asset or such Excluded Liability shall, insofar as reasonably possible and to the extent permitted by applicable Law, treat such Excluded Asset or Excluded Liability in the ordinary course of business in accordance with past practice and take such other actions as may be reasonably requested by the member of the Moon Group to whom such Excluded Asset is to be transferred or assigned, or which will assume such Excluded Liability, as the case may be, in order to place such member of the Moon Group in the same position as if such Excluded Asset or Excluded Liability had been transferred, assigned or assumed as contemplated hereby and so that all the benefits and burdens relating to such Excluded Asset or Excluded Liability, as the case may be, including use, risk of loss, potential for gain and dominion, control and command over such Excluded Asset or Excluded Liability, as the case may be, are to inure from and after the Distribution Time to the Moon Group. Except to the extent otherwise required by applicable Law, each of Moon and SpinCo shall, and shall cause its Affiliates to, (i) for all U.S. federal (and applicable state, local and foreign) income tax purposes, treat any Excluded Asset and any Excluded Liability transferred, assigned or assumed after the Distribution Time pursuant to this Section 2.4(e) as having been so transferred, assigned or assumed prior to the Distribution Time pursuant to the Reorganization and (ii) subject to the terms and conditions of the Tax Matters Agreement, file all Tax Returns in a manner consistent with such treatment and not take any Tax position inconsistent therewith.
(f)            If and when the Approvals or Notifications, the absence of which caused the deferral of transfer or assignment of any Excluded Asset or the deferral of assumption of any Excluded Liability pursuant to Section 2.4(d), are obtained or made, and, if and when any other legal impediments for the transfer or assignment of any Excluded Assets or the assumption of any Excluded Liabilities have been removed, the transfer or assignment of the applicable Excluded Asset or the assumption of the applicable Excluded Liability, as the case may be, shall be effected in accordance with the terms of this Agreement and/or the applicable other Transaction Document.
(g)           Any member of the SpinCo Group retaining an Excluded Asset or Excluded Liability due to the deferral of the transfer or assignment of such Excluded Asset or the deferral of the assumption of such Excluded Liability, as the case may be, shall not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced (or otherwise made available or agreed in advance to be reimbursed) by Moon or the member of the Moon Group entitled to the Excluded Asset or Excluded Liability, as the case may be, other than reasonable out-of-pocket expenses, attorneys fees and recording or similar fees, all of which shall be promptly reimbursed by Moon or the member of the Moon Group entitled to such Excluded Asset or Excluded Liability.
Section 2.5            Transfer of SpinCo Assets and Assumption of SpinCo Liabilities Not Effected at or Prior to the Distribution Time.
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(a)           Subject to Section 2.5(d), to the extent any SpinCo Asset is transferred or assigned to, or any SpinCo Liability is assumed by, a member of the Moon Group at or prior to the Distribution Time, or is owned or held by a member of the Moon Group after the Distribution Time, from and after the Distribution Time:
(i)          Moon shall, and shall cause its applicable Subsidiaries to, promptly assign, transfer, convey and deliver to SpinCo or certain of its Subsidiaries designated by SpinCo, and SpinCo or such Subsidiaries shall accept from Moon and its applicable Subsidiaries, all of Moons and such Subsidiaries respective right, title and interest in and to such SpinCo Assets (in the case of the SpinCo IP, subject to, and in accordance with, the terms and conditions of the Intellectual Property Matters Agreement and Trademark License Agreement); and
(ii)          SpinCo and/or its Subsidiaries designated by SpinCo shall promptly accept, assume and agree faithfully to perform, discharge and fulfill all such SpinCo Liabilities in accordance with their respective terms.
(b)           In furtherance of the assignment, transfer, conveyance and delivery of SpinCo Assets and the assumption of SpinCo Liabilities provided for in Section 2.5(a)(i) and Section 2.5(a)(ii) and the other Transaction Documents and without any additional consideration therefor, and except with respect to matters addressed by the Intellectual Property Matters Agreement: (i) Moon shall execute and deliver, and shall cause its Subsidiaries to execute and deliver, such bills of sale, deeds, stock powers, certificates of title, assignments of Contracts and other instruments of transfer, conveyance and assignment as and to the extent reasonably necessary to evidence the transfer, conveyance and assignment of all of Moons and its Subsidiaries right, title and interest in and to the SpinCo Assets to SpinCo and its Subsidiaries, and (ii) SpinCo shall execute and deliver, and shall cause its Subsidiaries to execute and deliver, such assumptions of Contracts and other instruments of assumption as and to the extent reasonably necessary to evidence the valid and effective assumption of the SpinCo Liabilities by SpinCo or its Subsidiaries. All of the foregoing documents contemplated by this Section 2.5(b) shall be referred to collectively herein as the Post-Distribution Moon Transfer Documents.
(c)           To the extent that the transfer or assignment of any SpinCo Asset or the assumption of any SpinCo Liability requires any Approvals or Notifications, the Parties shall use their reasonable best efforts to obtain or make such Approvals or Notifications as soon as reasonably practicable; provided, however, that except to the extent expressly provided in Section 7.4 or in any of the other Transaction Documents, neither Moon nor SpinCo shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial or commercial accommodation) to any Person in order to obtain or make such Approvals or Notifications; provided, further, that the obligation to obtain or make such Approvals or Notifications shall terminate on the date that is twenty-four (24) months after the Distribution.
(d)           If and to the extent that the valid, complete and perfected transfer or assignment to the SpinCo Group of any SpinCo Assets or assumption by the SpinCo Group of any SpinCo Liabilities would be a violation of applicable Law or require any Approval or Notification that has not been made or obtained at or prior to the Distribution Time then, unless the Parties shall mutually otherwise determine, the transfer or assignment to the SpinCo Group
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of such SpinCo Assets or the assumption by the SpinCo Group of such SpinCo Liabilities, as the case may be, shall be automatically deemed deferred and any such purported transfer, assignment or assumption shall be null and void until such time as all legal impediments are removed or such Approvals or Notifications have been obtained or made. Notwithstanding the foregoing, any such SpinCo Assets or SpinCo Liabilities shall continue to constitute SpinCo Assets and SpinCo Liabilities for all other purposes of this Agreement.
(e)           If any transfer or assignment of any SpinCo Asset or any assumption of any SpinCo Liability intended to be transferred, assigned or assumed under this Agreement or the other Transaction Documents is not consummated at or prior to the Distribution Time, whether as a result of the provisions of Section 2.5(d) or for any other reason, then the Parties shall cooperate to effect such transfers as promptly following the Distribution Time as practicable and, prior to the effectiveness of such transfer of Assets or assumption of Liabilities, the member of the Moon Group retaining such SpinCo Asset or such SpinCo Liability, as the case may be, shall thereafter hold such SpinCo Asset in trust for the use and benefit of the member of the SpinCo Group entitled thereto (at the expense of the member of the SpinCo Group entitled thereto) and retain such SpinCo Liability for the account of the member of the SpinCo Group and otherwise enter into mutually acceptable arrangements, including subcontracting, sublicensing, subleasing, back-to-back agreement, or other similar arrangement, to convey the economic rights and obligations relating to such SpinCo Assets or SpinCo Liability to the SpinCo Group. In addition, the member of the Moon Group retaining such SpinCo Asset or such SpinCo Liability shall, insofar as reasonably possible and to the extent permitted by applicable Law, treat such SpinCo Asset or SpinCo Liability in the ordinary course of business in accordance with past practice and take such other actions as may be reasonably requested by the member of the SpinCo Group to whom such SpinCo Asset is to be transferred or assigned, or which will assume such SpinCo Liability, as the case may be, in order to place such member of the SpinCo Group in the same position as if such SpinCo Asset or SpinCo Liability had been transferred, assigned or assumed as contemplated hereby and so that all the benefits and burdens relating to such SpinCo Asset or SpinCo Liability, as the case may be, including use, risk of loss, potential for gain and dominion, control and command over such SpinCo Asset or SpinCo Liability, as the case may be, are to inure from and after the Distribution Time to the SpinCo Group. Except to the extent otherwise required by applicable Law, each of Moon and SpinCo shall, and shall cause its Affiliates to, (i) for all U.S. federal (and applicable state, local and foreign) income tax purposes, treat any SpinCo Asset and any SpinCo Liability transferred, assigned or assumed after the Distribution Time pursuant to this Section 2.5(e) as having been so transferred, assigned or assumed prior to the Distribution Time pursuant to the Reorganization and (ii) subject to the terms and conditions of the Tax Matters Agreement, file all Tax Returns in a manner consistent with such treatment and not take any Tax position inconsistent therewith.
(f)            If and when the Approvals or Notifications, the absence of which caused the deferral of transfer or assignment of any SpinCo Asset or the deferral of assumption of any SpinCo Liability pursuant to Section 2.5(d), are obtained or made, and, if and when any other legal impediments for the transfer or assignment of any SpinCo Asset or the assumption of any SpinCo Liability have been removed, the transfer or assignment of the applicable SpinCo Asset or the assumption of the applicable SpinCo Liability, as the case may be, shall be effected in accordance with the terms of this Agreement and/or the applicable other Transaction Document.
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(g)           Any member of the Moon Group retaining a SpinCo Asset or SpinCo Liability due to the deferral of the transfer or assignment of such SpinCo Asset or the deferral of the assumption of such SpinCo Liability, as the case may be, shall not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced (or otherwise made available or agreed in advance to be reimbursed) by SpinCo or the member of the SpinCo Group entitled to the SpinCo Asset or SpinCo Liability, as the case may be, other than reasonable out-of-pocket expenses, attorneys fees and recording or similar fees, all of which shall be promptly reimbursed by SpinCo or the member of the SpinCo Group entitled to such SpinCo Asset or SpinCo Liability.
Section 2.6            Termination of Intercompany Contracts; Settlement of Intercompany Payables and Receivables.
(a)           Except as set forth in Section 2.6(b), in furtherance of the releases and other provisions of Section 5.1, SpinCo and each member of the SpinCo Group, on the one hand, and Moon and each member of the Moon Group, on the other hand, hereby terminate, effective as of the Distribution Time and in accordance with applicable Law, any and all Contracts and intercompany Liabilities (subject to Section 2.6(c) below), whether or not in writing, and whether or not such subject Contract constitutes a SpinCo Material Contract, between or among SpinCo and/or any member of the SpinCo Group, on the one hand, and Moon and/or any member of the Moon Group, on the other hand, that are effective or outstanding as of immediately prior to the Distribution Time (collectively, the Intercompany Obligations). No such terminated Contract (including any provision thereof that purports to survive termination) or intercompany Liability shall be of any further force or effect from and after the Distribution Time, no member of either the Moon Group or SpinCo Group shall have any rights or obligations thereunder and all parties shall be released from all Liabilities thereunder other than the Liability to settle any Intercompany Obligations as provided in Section 2.6(c). Each Party shall, at the reasonable request of any other Party, take, or cause to be taken, such other actions as may be necessary to effect the foregoing.
(b)          The provisions of Section 2.6(a) shall not apply to any of the following Contracts (or to any of the provisions thereof):
(i)          this Agreement, the other Transaction Documents and the Merger Agreement (and each other Contract expressly contemplated by this Agreement, any other Transaction Document or the Merger Agreement to be entered into or continued by the Parties or any of the members of their respective Groups after the Distribution Time);
(ii)          any Contracts to which any Person, other than the Parties and their respective wholly owned Subsidiaries, is a party;
(iii)          any confidentiality or non-disclosure agreements among any members of the SpinCo Group, any members of the Moon Group and any of their respective employees, including any obligation not to disclose privileged information; and
(iv)          any Contract listed on Schedule 2.6(b)(iv).
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(c)           Any intercompany payables or receivables between the SpinCo Business and the Moon Business shall be eliminated, by discharge or otherwise, cancelled in their entirety, effective immediately prior to the Distribution Time by the member owing such amount (except for any such intercompany payables or receivables arising pursuant to a Transaction Document, which shall instead be settled in accordance with the terms of such Transaction Document).
Section 2.7             Shared Assets; Shared Contracts.
(a)           The Parties shall use their reasonable best efforts to separate, as soon as practicable and to the extent practicable prior to the Distribution Time, the Shared Assets into separate Assets so that the SpinCo Business will remain entitled to the rights and benefits, and shall be subject to the Liabilities, with respect to or arising from each Shared Asset to the extent related to the SpinCo Business on substantially the same terms and conditions applicable to the SpinCo Business immediately prior to the Distribution Time with respect to such Shared Asset, and Moon will retain the rights and benefits, and shall be subject to the Liabilities, with respect to or arising from each Shared Asset to the extent related to the Moon Business on substantially the same terms and conditions applicable to the Moon Business immediately prior to the Distribution Time with respect to such Shared Assets; provided, however, that except to the extent expressly provided in Section 7.4 or in any of the other Transaction Documents, neither Moon nor SpinCo shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial or commercial accommodation) to any Person in order to obtain or make any Approvals or Notifications necessary to effect such separation of Shared Assets. If any third party that is entitled to consent to the separation of the Shared Asset has not provided such consent or if the separation of a Shared Asset has not been completed as of the Distribution Date for any other reason, then the Parties shall use their reasonable best efforts to develop and implement mutually agreed arrangements (including subcontracting, sublicensing, subleasing or back-to-back agreement) to pass along to, and make available for use by, the SpinCo Group the benefit and the Liabilities (including any Tax Liabilities) of the portion of any such Shared Asset related to the SpinCo Business and to pass along to, and make available for use by, the Moon Group the benefit and the Liabilities (including any Tax Liabilities) of the portion of the Shared Asset related to the Moon Business, as the case may be. No member of the Moon Group shall claim depreciation, amortization or any other tax benefit with respect to the portion of any such Shared Asset related to the SpinCo Business and no member of the SpinCo Group shall claim depreciation, amortization or any other tax benefit with respect to the portion of any such Shared Asset related to the Moon Business. If and when any such consent is obtained, the Shared Asset will be separated in accordance with this Section 2.7. The obligations set forth in this Section 2.7 shall terminate on the date that is twenty-four (24) months after the Distribution Date.
(b)           The Parties shall use their reasonable best efforts to identify and partially assign or otherwise separate, as soon as practicable and to the extent practicable prior to the Distribution Time, the Shared Contracts into separate contracts so that the SpinCo Business will remain entitled to the rights and benefits, and shall be subject to the Liabilities, with respect to or arising from each Shared Contract to the extent related to the SpinCo Business on substantially the same terms and conditions applicable to the SpinCo Business immediately prior to the Distribution Time under such Shared Contract, and Moon will retain the rights and benefits, and shall be subject to the Liabilities, with respect to or arising from each Shared Contract to the
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extent related to the Moon Business on substantially the same terms and conditions applicable to the Moon Business immediately prior to the Distribution Time with respect to such Shared Contracts (it being understood that Shared Contracts may include volume-based pricing or other incentive mechanisms or pricing benefits that will not be retained); provided, however, that except to the extent expressly provided in Section 7.4 or in any of the other Transaction Documents, neither Moon nor SpinCo shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial or commercial accommodation) to any Person in order to obtain or make any Approvals or Notifications necessary to effect such separation of Shared Contracts. If a counterparty to any Shared Contract that is entitled under the terms of the Shared Contract to consent to the separation of the Shared Contract has not provided such consent or if the separation of a Shared Contract has not been completed as of the Distribution Date for any other reason, then the Parties shall use their reasonable best efforts to promptly develop and implement mutually agreed arrangements (including subcontracting, sublicensing, subleasing or back-to-back agreement) to pass along to, and make available for use by, the SpinCo Group the benefit and the Liabilities (including any Tax Liabilities) of the portion of any such Shared Contract related to the SpinCo Business and to pass along to, and make available for use by, the Moon Group the benefit and the Liabilities (including any Tax Liabilities) of the portion of the Shared Contract related to the Moon Business, as the case may be. No member of the Moon Group shall claim depreciation, amortization or any other tax benefit with respect to the portion of any such Shared Contract related to the SpinCo Business and no member of the SpinCo Group shall claim depreciation, amortization or any other tax benefit with respect to the portion of any such Shared Contract related to the Moon Business. If and when any such consent is obtained, the Shared Contract will be separated in accordance with this Section 2.7. With respect to each Shared Contract, the obligations set forth in this Section 2.7 shall terminate upon the date that is twenty four (24) months after the Distribution Date.
(c)           Without limiting the foregoing, pending the separation of each Shared Asset or Shared Contract, the Parties shall (and shall cause their respective Subsidiaries to) use their reasonable best efforts to maintain good relations with any obligees or other counterparties in connection with such Shared Asset or Shared Contract, keep such Shared Asset in good condition (ordinary course wear and tear excepted) and, in the case of Shared Contracts, comply in all material respects with the terms thereof and refrain from voluntarily terminating such Shared Contract.
(d)           Except to the extent otherwise required by applicable Law, each of Moon and SpinCo shall, and shall cause its Affiliates to, (i) for all U.S. federal (and applicable state, local and foreign) income tax purposes, treat the portion of each Shared Asset and each Shared Contract the rights and benefits of which inure to it or a member of its Group as Assets owned by, and/or Liabilities of, as applicable, it or the members of its Group, as applicable, as of no later than immediately prior to the Effective Time, and (ii) subject to the terms and conditions of the Tax Matters Agreement, file all Tax Returns in a manner consistent with such treatment and not take any Tax position inconsistent therewith.
Section 2.8             Certain Adjustment.
(a)            Certain Definitions.
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(i)          Closing Working Capital” means, as of immediately prior to the Distribution Time, (A) all SpinCo Assets constituting “current” assets, in each case, as set forth in the applicable line items identified and adjusted in the example calculation of Closing Working Capital set forth on Schedule 2.8(a)(i), but excluding any SpinCo Cash, minus (B) all SpinCo Liabilities constituting “current” liabilities, in each case, as set forth in the applicable line items identified and adjusted in the example calculation of Closing Working Capital set forth on Schedule 2.8(a)(i), in each of the foregoing cases, prepared in accordance with the Accounting Principles (it being understood that (1) the working capital of the PFS Business shall be included if, and only if, the PFS Acquisition is consummated prior to the Distribution Time, (2) the working capital of the PFS Business shall be calculated separately (as set forth on Schedule 2.8(a)(i)) and (3) the applicable line items identified under the heading “Conforming Adjustments for PFS Business” on Schedule 2.8(a)(i) shall be adjustments solely with respect to the PFS Business).
(ii)          Monthly Working Capital” means Closing Working Capital, except (1) the reference in the definition of Closing Working Capital to “immediately prior to the Distribution Time” shall be deemed to be references to “the end of such calendar month”.
(iii)          SpinCo Cash Amount means the aggregate amount of cash and cash equivalents, determined in accordance with the Accounting Principles, in accounts held by a member of the SpinCo Group as of immediately prior to the Distribution Time (the “SpinCo Cash”), reduced by (A) Insurance Proceeds received after the date of the SpinCo Balance Sheet that were generated by Assets that, had the event giving rise to such Insurance Proceeds not occurred, would have been SpinCo Assets (to the extent not previously applied to replace or repair a SpinCo Asset), (B) any cash and cash equivalents received as proceeds of any capital asset divestiture by the SpinCo Business outside the ordinary course of business after the date hereof, (C) any cash deposits, cash or cash equivalents held in escrow accounts and any other cash or cash equivalents that is not immediately available on an unrestricted basis to be used for the payment of obligations and (D) overdrafts and outstanding checks, wire transfers and drafts issued by a member of the SpinCo Group but not yet cleared.
(iv)          Adjustment Amount means the amount, which may be positive or negative, equal to the sum of:
(A)          if the Closing Working Capital is greater than the Final Target Working Capital, the absolute value of the amount of the difference between Closing Working Capital and the Final Target Working Capital,
(B)          if the Closing Working Capital is less than the Final Target Working Capital, minus the absolute value of the amount, by which Closing Working Capital is less than the Final Target Working Capital,
(C)          minus SpinCo Indebtedness as of immediately prior to the Distribution Time,
(D)          minus the absolute value of the amount by which the SpinCo Cash Amount is less than the Minimum Cash Amount.
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(v)          Final Target Working Capital” means the Target Working Capital as finally determined pursuant to this Section 2.8 (whether by failure of SpinCo to deliver a Target Working Capital Notice of Objection, by agreement of Moon and SpinCo or by determination of the Unaffiliated Accounting Firm).
(b)           Determination of Target Working Capital.
(i)          No later than fifteen (15) days following the completion of the Audited Financial Statements, Moon shall deliver to SpinCo and Clover a written statement, prepared in good faith, setting forth the Monthly Working Capital for each calendar month during the twelve (12) full calendar month period ended immediately prior to such time (the “Preliminary Monthly Working Capital Statement) (provided that the working capital of the PFS Business shall be included in the Preliminary Monthly Working Capital Statement if, and only if, the PFS Acquisition is consummated prior to its preparation).  The Preliminary Monthly Working Capital Statement (including each month presented) shall be prepared in accordance with the Accounting Principles (except the references therein to “Closing Working Capital” shall be deemed to be references to “Monthly Working Capital for each such calendar month”).  The Parties acknowledge that the Preliminary Monthly Working Capital Statement is for informational purposes only.
(ii)          No later than ninety (90) days after the Effective Time, Moon shall deliver to SpinCo a written statement setting forth the following calculations and information:
(A)          a schedule of the Monthly Working Capital for each calendar month during the twelve (12) full calendar month period ended with the last completed month for the last completed quarter immediately prior to the Effective Time (or if the Effective Time occurs on a date that is a quarter end, such quarter end), which shall be prepared (including each month presented) in accordance with the Accounting Principles (except the references therein to “Closing Working Capital” shall be deemed to be references to “Monthly Working Capital for each such calendar month”); and
(B)          a calculation of an average equal to (i) the sum of the Monthly Working Capital for the each of the twelve (12) full calendar months ended with the last completed month for the last completed quarter immediately prior to the Effective Time (or if the Effective Time occurs on a date that is a quarter end, such quarter end), divided by (ii) 12 (the “Target Working Capital”).
(c)           Closing Statement.
(i)          At least ten (10) Business Days in advance of the Distribution Date, Moon shall prepare and deliver to SpinCo and Clover a written statement for their review, prepared in accordance with Schedule 2.8(a)(i) and otherwise calculated in accordance with the Accounting Principles (the Estimated Closing Statement), setting forth Moon’s good-faith calculations of an estimate of the Closing Working Capital, SpinCo Cash Amount and SpinCo Indebtedness, together with reasonable supporting detail.  During the period after delivery of such Estimated Closing Statement and prior to the Effective Time, Moon and SpinCo shall
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cooperate in good faith with Clover in connection with its review.  The Parties acknowledge that the Estimated Closing Statement will be for information purposes only.
(ii)          No later than one-hundred (100) days after the Effective Time, Moon shall prepare and deliver to SpinCo (A) the combined unaudited balance sheet of the SpinCo Business as of immediately prior to the Distribution Time, prepared in accordance with the Accounting Principles and (B) a written statement for SpinCo’s and Clover’s review, prepared in accordance with Schedule 2.8(a)(i) and otherwise calculated in accordance with the Accounting Principles (the Closing Statement), setting forth Moons good-faith calculations of the Closing Working Capital, the SpinCo Cash Amount, the SpinCo Indebtedness, the Target Working Capital, together with reasonable supporting detail.
(iii)          Each Party shall make available to the other Party, Clover and, if applicable, to the Unaffiliated Accounting Firm, all books, records, documents, personnel and work papers (subject to, in the case of independent accountant work papers, the other Party or the Unaffiliated Accounting Firm, as applicable, entering into a customary release agreement with respect thereto) in the possession of such Party and reasonably requested by such other Party in connection with the preparation and review of the Closing Statement, the determination of the Disputed Items, the preparation of the Notice of Objection and the other matters contemplated by this Section 2.8.
(d)           Disputes.
(i)          In the event SpinCo disputes the correctness of the Closing Working Capital, the SpinCo Cash Amount, the SpinCo Indebtedness and the Target Working Capital (or any component thereof) as set forth in the Closing Statement, SpinCo shall deliver to Moon a reasonably detailed written statement describing each objection (with reference to the applicable account description) and specifying the amount that SpinCo reasonably believes is the correct amount for each disputed item (such statement, the Notice of Objection) within ninety (90) days after receipt of the Closing Statement, and shall set forth, in writing and in reasonable detail, the reasons for SpinCos objections.
(ii)          If SpinCo timely delivers a Notice of Objection in accordance with Section 2.8(d)(i), only those matters specified in such Notice of Objection shall be deemed to be in dispute (the Disputed Items), and all other matters included in the Closing Statement, shall be final, conclusive and binding upon the Parties. If SpinCo does not deliver a Notice of Objection before the conclusion of the ninety (90)-day period referred to in Section 2.8(d)(i), the Closing Statement shall be final, conclusive and binding upon the Parties and SpinCo shall be deemed to have agreed with all items and amounts contained in the Closing Statement. Moon and SpinCo shall endeavor in good faith to resolve any Disputed Items within sixty (60) days after Moon’s receipt of the Notice of Objection (the Resolution Period).
(iii)          If Moon and SpinCo are unable to resolve any Disputed Item during the Resolution Period, Moon and SpinCo jointly shall, as soon as practicable and in any event within twenty (20) Business Days after the expiration of the Resolution Period, engage KPMG (or, if KPMG is not available or unwilling to serve in such capacity, an internationally recognized independent accounting firm, which firm shall not be the then regular auditors of
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Moon, SpinCo or Clover) (the firm so engaged, the Unaffiliated Accounting Firm), to resolve the Disputed Items in a manner consistent with this Section 2.8. Promptly after joint engagement of the Unaffiliated Accounting Firm, Moon and SpinCo shall provide the Unaffiliated Accounting Firm with a copy of this Agreement, the Closing Statement and the Notice of Objection and all other documentary materials and analyses that SpinCo or Moon, as applicable, believes may be relevant to resolution of the Disputed Items. Each of Moon and SpinCo shall deliver to the Unaffiliated Accounting Firm and to the other Party simultaneously a written submission of its final position with respect to each of the Disputed Items (which position may not be outside of the range between the respective amounts set forth in the Closing Statement and the Notice of Objection) within ten (10) Business Days of the engagement of such Unaffiliated Accounting Firm. Each of Moon and SpinCo shall thereafter be entitled to submit a rebuttal to the others submission, which rebuttals shall be delivered to the Unaffiliated Accounting Firm and to the other Party simultaneously within ten (10) Business Days of the delivery of the Parties initial submissions to the Unaffiliated Accounting Firm and to each other. Neither Party may make (nor permit any of its Affiliates or Representatives to make) any additional submission to the Unaffiliated Accounting Firm or otherwise communicate with the Unaffiliated Accounting Firm. In no event shall either Party (i) communicate (or permit any of its Affiliates or Representatives to communicate) with the Unaffiliated Accounting Firm without providing the other Party a reasonable opportunity to participate in such communication or (ii) make (or permit any of its Affiliates or Representatives to make) a written submission to the Unaffiliated Accounting Firm unless a copy of such submission is simultaneously provided to the other Party. The Unaffiliated Accounting Firm shall have thirty (30) days following submission of the Parties rebuttals to review the documents provided to it pursuant to this Section 2.8 and to deliver its reasoned written determination with respect to each of the Disputed Items submitted to it for resolution, as well as its determination of each component of the Adjustment Amount that was a Disputed Item. The Unaffiliated Accounting Firm shall resolve Disputed Items submitted to it based solely on the information provided to the Unaffiliated Accounting Firm by the Parties pursuant to the terms of this Agreement and not by independent review. The Unaffiliated Accounting Firms authority shall be limited to resolving disputes with respect to whether the individual Disputed Items were prepared in accordance with Schedule 2.8(a)(i) and otherwise in accordance with the Accounting Principles.  The resolution of such Disputed Items by the Unaffiliated Accounting Firm (i) shall be set forth in writing, (ii) shall be within the range of dispute between Moon and SpinCo and (iii) shall constitute an arbitral award.  The determination of the Unaffiliated Accounting Firm in respect of each Disputed Item shall be final, conclusive and binding on Moon and SpinCo and not subject to appeal by either of the Parties, and judgment thereof may be entered or enforced in any court of competent jurisdiction.
(iv)          The fees and expenses, if any, of the Unaffiliated Accounting Firm incurred in connection with this Agreement shall be allocated between the Parties based upon the ratio which the aggregate amount of the Disputed Items (other than the Target Working Capital) awarded to SpinCo bears to the aggregate amount of the Disputed Items contested by SpinCo. For example, if SpinCo claims that the SpinCo Indebtedness is $1,000 greater (in SpinCo’s favor) than the SpinCo Indebtedness determined by Moon, and if the Unaffiliated Accounting Firm ultimately resolves the Disputed Items by awarding to SpinCo $300 of the $1,000 contested, then the fees, costs and expenses of the Unaffiliated Accounting Firm will be allocated 30% (i.e., $300 ÷ $1,000) to Moon and 70% (i.e., $700 ÷ $1,000) to SpinCo.
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(e)           Final Adjustment.  The Adjustment Amount, as finally determined pursuant to this Section 2.8 (whether by failure of SpinCo to deliver a Notice of Objection, by agreement of Moon and SpinCo or by determination of the Unaffiliated Accounting Firm), is referred to herein as the Final Adjustment Amount.
(f)            Not later than five (5) Business Days after the determination of the Final Adjustment Amount, a payment by wire transfer in respect thereof shall be made as follows:
(i)          If the Final Adjustment Amount is a positive number, then such amount shall be paid by the SpinCo Borrower to Moon LuxCo or, with the agreement of Moon, another entity in the Moon Group; and
(ii)          If the Final Adjustment Amount is a negative number, then such amount shall be paid by Moon LuxCo to the SpinCo Borrower.
Any payment pursuant to this Section 2.8(f) shall be treated as an adjustment to the SpinCo Payment for all U.S. federal (and applicable state, local and foreign) income Tax purposes and shall be made in immediately available funds in United States dollars by wire transfer to a bank account designated in writing by the Party entitled to receive the payment.
(g)           If the SpinCo Cash Amount is greater than the SpinCo Minimum Cash Amount, SpinCo shall, following the Closing and as requested by Moon, assign, transfer, convey and deliver cash in an aggregate amount equal to such excess to Moon LuxCo or as otherwise directed by Moon; provided that, to the extent any member of the SpinCo Group would incur costs (including any Taxes) in transferring such cash as instructed by Moon, SpinCo shall inform Moon of the amount of such costs and, if Moon elects to proceed with the requested transfer, Moon shall bear such cost.
Section 2.9            Bank Accounts.
(a)           Moon and SpinCo each agrees to take, or cause the respective members of their respective Groups to take, prior to the Distribution Time (or as soon as possible thereafter), all actions necessary to amend all Contracts governing each bank and brokerage account owned by SpinCo or any other member of the SpinCo Group (collectively, the SpinCo Accounts), so that such SpinCo Accounts, if currently linked (whether by automatic withdrawal, automatic deposit or any other authorization to transfer funds from or to, hereinafter linked) to any bank or brokerage account owned by Moon or any other member of the Moon Group (collectively, the Moon Accounts) are de-linked from such Moon Accounts.
(b)           Moon and SpinCo each agrees to take, or cause the respective members of their respective Groups to take, prior to the Distribution Time (or as soon as possible thereafter), all actions necessary to amend all Contracts governing the Moon Accounts so that such Moon Accounts, if currently linked to any SpinCo Account, are de-linked from such SpinCo Accounts.
(c)           With respect to any outstanding checks issued by Moon, SpinCo or any of their respective Subsidiaries prior to the Distribution Time, such outstanding checks shall be honored from and after the Distribution Time by the Person or Group owning the account on
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which the check is drawn, without limiting the ultimate allocation of Liability for such amounts under this Agreement or any other Transaction Document.
(d)           As between Moon and SpinCo (and the members of their respective Groups), except to the extent prohibited by applicable Law, all payments and reimbursements received after the Distribution Time by either Party (or member of its Group) to which the other Party (or member of its Group) is entitled under this Agreement shall be held by such receiving Party in trust for the use and benefit of the Party entitled thereto and, within sixty (60) days of receipt by such receiving Party of any such payment or reimbursement, such receiving Party shall pay over, or shall cause the applicable member of its Group to pay over to the other Party or the applicable member of the other Partys Group, the amount of such payment or reimbursement without right of setoff.
Section 2.10           Disclaimer of Representations and Warranties. EACH OF MOON (ON BEHALF OF ITSELF AND EACH MEMBER OF THE MOON GROUP) AND SPINCO (ON BEHALF OF ITSELF AND EACH MEMBER OF THE SPINCO GROUP AND THE CLOVER GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, THE MERGER AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED HEREBY OR THEREBY, NO PARTY TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR THE MERGER AGREEMENT IS REPRESENTING OR WARRANTING TO ANY OTHER PARTY HERETO OR THERETO IN ANY WAY AS TO THE ASSETS, BUSINESSES OR LIABILITIES TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY; AS TO ANY APPROVALS OR NOTIFICATIONS REQUIRED IN CONNECTION HEREWITH OR THEREWITH; AS TO THE VALUE OR FREEDOM FROM ANY LIENS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY; AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM COUNTERCLAIMS WITH RESPECT TO ANY ACTION OR OTHER ASSET, INCLUDING ANY ACCOUNTS RECEIVABLE, OF ANY PARTY; OR AS TO THE LEGAL SUFFICIENCY OF ANY ASSIGNMENT, DOCUMENT, CERTIFICATE OR INSTRUMENT DELIVERED UNDER THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR THE MERGER AGREEMENT TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, THE MERGER AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED HEREBY OR THEREBY, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN AS IS, WHERE IS BASIS, AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE SHALL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD OR MARKETABLE TITLE, FREE AND CLEAR OF ANY LIEN, AND (II) ANY NECESSARY APPROVALS OR NOTIFICATIONS ARE NOT OBTAINED OR MADE OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED WITH.
Section 2.11           Post-Distribution Communications. After the Distribution Time, each Party or any member of its Group may receive mail, packages and other communications properly belonging to the other Party or any member of its Group. At all times after the
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Distribution Time, each Party and the members of its Group are hereby authorized to receive and open all mail, packages and other communications received by such Party or member that belongs to the other Party or any members of its Group, and to the extent that such mail, packages or other communications do not relate to the business of the receiving Party or member, the receiving Party or member shall promptly deliver such mail, packages or other communications (or, in case the same also relates to the business of the receiving Party or member, copies thereof) to the other Party as provided for in Section 9.5. The provisions of this Section 2.11 are not intended to, and shall not, be deemed to, constitute an authorization by any Party to permit the other to accept service of process on its behalf, and no Party is or shall be deemed to be the agent of any other Party for service of process purposes.
Section 2.12           Cooperation. Except as expressly provided by this Agreement, the Merger Agreement or the other Transaction Documents, including Section 2.1(d), (a) prior to the Distribution Date, Moon shall keep Clover reasonably informed on a current basis and furnish Clover with information relating to the determination of the Assets that are proposed to be transferred to, and Liabilities that are proposed to be assumed by, the SpinCo Group under any Transaction Document, and (b) to the extent any Transaction Documents or exhibits or schedules thereto are to be completed following the date hereof, Moon and SpinCo shall consult with Clover in good faith regarding the terms and conditions to be included in such documents, exhibits or schedules, give Clover a reasonable opportunity to comment on such documents, exhibits or schedules including on any additions or modifications to such documents, take such comments into account in good faith in finalizing such documents, exhibits or schedules; provided that Moon and SpinCo shall not finalize such documents, exhibits or schedules without the prior written consent of Clover (such consent not to be unreasonably withheld, conditioned or delayed), except if a different standard for consent is specified elsewhere in this Agreement or in the Merger Agreement or the other Transaction Documents, in which case, such standard shall apply in respect of such consent.
Section 2.13           Certain IT Matters. Moon and SpinCo will, and will cause their respective Groups to, use their reasonable best efforts to take the actions and shall pay, or will cause their respective Groups to pay, the costs to be borne by their respective Groups, as set forth in Schedule 2.13.

Section 2.14           FX and Hedging Arrangements. Moon shall use reasonable best efforts to ensure that, as of immediately prior to the Distribution Time, no member of the SpinCo Group is a party to any hedging-related transaction (including any swap, exchange, derivative, rate, forward, hedge or other similar transactions or any combination of any of the foregoing or any  options to enter into any of the foregoing) (“Hedging Transactions”) or any Contracts or confirmations related thereto (“Hedging Contracts”) and that, as of immediately prior to the Distribution Time, all such Hedging Transactions and Hedging Contracts shall have been terminated, with no further force or effect.  For the avoidance of doubt, any Liabilities of SpinCo or any member of the SpinCo Group as a result of such termination shall constitute SpinCo Indebtedness.
Section 2.15           Specified Asbestos Liabilities. The Parties agree that the Specified Asbestos Liabilities shall not constitute SpinCo Liabilities and shall not be assumed by any member of the SpinCo Group.
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ARTICLE III
THE DISTRIBUTION
Section 3.1            Actions at or Prior to the Distribution Time. Prior to the Distribution Time and subject to the terms and conditions set forth herein, the following shall occur:
(a)           Securities Law Matters.
(i)          SpinCo shall cooperate with Moon to accomplish the Distribution, including in connection with the preparation of all documents and the making of all filings required in connection with the Distribution. Moon shall be permitted to reasonably direct and control the efforts of the Parties in connection with the Distribution, and SpinCo shall use reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all other things reasonably necessary to facilitate the Distribution as reasonably directed by Moon in good faith and in accordance with the applicable terms and subject to the conditions of this Agreement and the other Transaction Documents.
(ii)          SpinCo shall file the Disclosure Documents and any amendments or supplements thereto as may be necessary or advisable in order to cause the Disclosure Documents to become and remain effective as required by the SEC or federal, state, foreign or other applicable securities Laws. Moon and SpinCo shall prepare and mail or otherwise make available, prior to the Distribution Date, to the holders of Moon Ordinary Shares, such information concerning SpinCo, Clover, their respective businesses, operations and management, the Distribution and such other matters as Moon shall reasonably determine and as may be required by applicable Law. Moon and SpinCo will prepare, and SpinCo will, to the extent required by applicable Law, file with the SEC, any such documentation and any requisite no-action letters which Moon determines are necessary or desirable to effectuate the Distribution, and Moon and SpinCo shall use their respective reasonable best efforts to obtain all necessary approvals from the SEC with respect thereto as soon as practicable. Moon and SpinCo shall take all such actions as may be necessary or appropriate under the securities or blue sky Laws of states or other political subdivisions of the United States and shall use their reasonable best efforts to comply with all applicable foreign securities Laws in connection with the transactions contemplated by this Agreement and the other Transaction Documents.
(b)           Financing. On or before the Distribution Date, subject to the terms and conditions of Section 7.7 of the Merger Agreement, SpinCo or a member of the SpinCo Group (such Person, the “SpinCo Borrower”) shall enter into a definitive agreement or agreements providing for indebtedness in an aggregate available principal amount equal to $1,900,000,000, which indebtedness shall consist of borrowings on the terms and conditions contemplated by the Financing Commitment Letter (as defined in the Merger Agreement) (collectively, the SpinCo Debt). Between the date of this Agreement and prior to the Distribution Time, subject to the terms and conditions of Section 7.7 of the Merger Agreement, the SpinCo Borrower shall incur the SpinCo Debt and receive the proceeds thereof in order to fund the SpinCo Payment.
(c)           Contribution.  Prior to the Distribution, in consideration of the transfer of the SpinCo Assets contemplated by the Reorganization, (A) SpinCo shall issue to Moon or a
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member of the Moon Group additional shares of SpinCo Common Stock such that the number of shares of SpinCo Common Stock then outstanding shall be equal to the number of shares of SpinCo Common Stock necessary to effect the Distribution, and (B) the SpinCo Borrower shall pay to Moon LuxCo cash in an aggregate amount equal to $1,900,000,000 (the SpinCo Payment), in immediately available funds to one or more accounts designated by Moon; provided that if the PFS Acquisition has not been consummated prior to the Distribution Time (whether or not the PFS Acquisition Agreement has been terminated), the SpinCo Payment shall be decreased by $1,450,000,000.
(d)           Distribution Agent. Moon shall enter into a distribution agent agreement with the Distribution Agent or otherwise provide instructions to the Distribution Agent regarding the Distribution.
(e)           Satisfying Conditions to the Distribution. Moon and SpinCo shall cooperate to cause the conditions to the Distribution set forth in Section 3.2 to be satisfied and to effect the Distribution at the Distribution Time upon such satisfaction (or waiver). In addition, and without limiting the generality of the foregoing, Moon shall use its reasonable best efforts to obtain an opinion from an independent appraisal firm to the Board of Directors of Moon (or a designated committee thereof) as to the solvency of SpinCo after giving effect to the SpinCo Payment and the consummation of the Contribution and the Distribution (the “Solvency Opinion”).
Section 3.2             Conditions Precedent to the Distribution. In no event shall the Distribution occur unless each of the following conditions shall have been satisfied or waived by Moon, in whole or in part, in its sole discretion (other than the condition set forth in Section 3.2(a), which prior to the termination of the Merger Agreement may not be waived without Clovers written consent, which consent shall not be unreasonably withheld, conditioned or delayed):
(a)           the Reorganization (including the SpinCo Payment) shall have been completed substantially in accordance with the Plan of Reorganization (other than those steps that are expressly contemplated to occur at or after the Distribution);
(b)           the consummation or satisfaction of the actions set forth in Section 3.1(c); and
(c)           the satisfaction or waiver of the conditions set forth in Article VIII of the Merger Agreement, in each case other than those conditions that, by their nature, are to be satisfied contemporaneously with the Distribution or the Merger.
Each of the foregoing conditions is for the sole benefit of Moon and shall not give rise to or create any duty on the part of Moon or its Board of Directors (or any committee thereof) to waive or not to waive any such condition in this Agreement or the Merger Agreement, or in any way limit Moons rights of termination set forth in this Agreement or the Merger Agreement, provided, however, that the foregoing shall not limit the Parties rights under Section 7.6 of the Merger Agreement.
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Section 3.3            The Distribution.
(a)           Moon may elect, in its sole discretion, to effect the Distribution in the form of (i) a One-Step Spin-Off; or (ii) an Exchange Offer (including any Clean-Up Spin-Off), provided that (A) the economic value of the Merger to each of Moon and Clover is preserved, (B) the Exchange Offer (including any Clean-Up Spin-Off) does not create any material and adverse Tax consequences to Clover and (C) the Exchange Offer (including any Clean-Up Spin-Off) does not materially delay the consummation of the Distribution and the Merger.
(b)           If Moon elects to effect the Distribution in the form of a One-Step Spin-Off, then the Board of Directors of Moon (or a committee thereof), in accordance with applicable Law, shall establish (or designate Persons to establish) a Record Date and the Distribution Date, and Moon shall establish appropriate procedures in connection with, and to effectuate in accordance with applicable Law, the Distribution. All shares of SpinCo Common Stock held by Moon on the Distribution Date shall be distributed to the holders of record of Moon Ordinary Shares in the manner determined by Moon and in accordance with Section 3.3(f). To the extent the Distribution is effected as a One-Step Spin-Off, subject to the terms thereof, in accordance with Section 3.3(f), each holder of Moon Ordinary Shares on the Record Date shall be entitled to receive for each Moon Ordinary Share held by such holder on the Record Date a number of shares of SpinCo Common Stock equal to (i) the total number of shares of SpinCo Common Stock held by Moon on the Distribution Date, multiplied by (ii) a fraction, the numerator of which is the number of shares of Moon Ordinary Shares held by such holder on the Record Date and the denominator of which is the total number of shares of Moon Ordinary Shares outstanding on the Record Date.
(c)           If Moon elects to effect the Distribution as an Exchange Offer, Moon shall determine the terms of such Exchange Offer, including the number of shares of SpinCo Common Stock that will be offered for each validly tendered share of Moon Ordinary Shares, the period during which such Exchange Offer shall remain open and any extensions thereto, the procedures for the tender and exchange of shares and all other terms and conditions of such Exchange Offer, which terms and conditions shall comply with the terms of the Merger Agreement and all securities Law requirements applicable to such Exchange Offer. In the event that Moons stockholders subscribe for less than all of the SpinCo Common Stock in the Exchange Offer, all shares of SpinCo Common Stock held by Moon that are not exchanged pursuant to the Exchange Offer will be distributed as a dividend to Moon stockholders on a pro rata basis on the Distribution Date and immediately following the consummation of the Exchange Offer (the “Clean-Up Spin-Off”), so that Moon will be treated for U.S. federal income tax purposes as having distributed all of the shares of SpinCo Common Stock to the Moon stockholders. To the extent the Distribution is effected as an Exchange Offer, subject to the terms thereof, in accordance with Section 3.3(f), each Moon stockholder may elect in the Exchange Offer to exchange a number of Moon Ordinary Shares held by such Moon stockholder for shares of SpinCo Common Stock. The terms and conditions of any Clean-Up Spin-Off will be as determined by Moon, subject to the provisions of Section 3.3(b), mutatis mutandis.
(d)          None of the Parties, nor any of their Affiliates hereto shall be liable to any Person in respect of any shares of SpinCo Common Stock (or dividends or distributions
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with respect thereto) that are properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.
(e)          Moon, SpinCo, or the Distribution Agent, as applicable, shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement such amounts as are required to be deducted and withheld with respect to the making of such payments under the Code or any provision of local or foreign Tax Law. Any withheld amounts will be treated for all purposes as having been paid to the Persons otherwise entitled thereto.
(f)          Upon the consummation of the One-Step Spin-Off or the Exchange Offer, Moon shall deliver to the Distribution Agent, a global certificate representing the SpinCo Common Stock being distributed in the One-Step Spin-Off or exchanged in the Exchange Offer, as the case may be, for the account of the Moon stockholders that are entitled thereto and shall take all such other actions (including delivering any other instruments of transfer required by applicable law) as may be necessary to effect the Distribution. Upon a Clean-Up Spin-Off, if any, Moon shall deliver to the Distribution Agent an additional global certificate representing the SpinCo Common Stock being distributed in the Clean-Up Spin-Off for the account of the Moon stockholders that are entitled thereto and shall take all such other actions (including delivering any other instruments of transfer required by applicable law) as may be necessary to effect the Distribution. The Distribution Agent shall hold such certificate or certificates, as the case may be, for the account of the Moon stockholders pending the Merger, as provided in Section 3.2 of the Merger Agreement.
Immediately after the Distribution Time and prior to the Effective Time, the shares of SpinCo Common Stock shall not be transferable and the transfer agent for the SpinCo Common Stock shall not transfer any shares of SpinCo Common Stock; provided, for the avoidance of doubt, that the exchange of such shares of SpinCo Common Stock for shares of Clover Common Stock pursuant to the Merger shall not be deemed a transfer subject to the foregoing restrictions. The Distribution shall be deemed to be effective upon written authorization from Moon to the Distribution Agent to proceed.
Section 3.4            Authorization of SpinCo Common Stock to Accomplish the Distribution. Prior to the Distribution, Moon and SpinCo shall take all necessary action required to increase the number of authorized shares of SpinCo Common Stock so that the SpinCo Common Stock then issued and outstanding shall equal the number of shares of SpinCo Common Stock necessary to effect the Distribution.
ARTICLE IV
ACCESS TO INFORMATION
Section 4.1            Access to Information.
(a)           Other than for matters related to the provision of Tax records (in which event the provision of the Tax Matters Agreement shall govern) until the sixth (6th) anniversary of the Distribution Date (or such longer period as such access by a Party is required under
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applicable Law), subject to Section 7.2, each of Moon and SpinCo, on behalf of its respective Group, agrees to provide, or cause to be provided, to the other Group and its Representatives, as soon as reasonably practicable after written request therefor, any Information in the possession or under the control of such respective Group which the requesting Party reasonably needs to (i) comply with reporting, disclosure, filing or other requirements imposed on the requesting Party (including under applicable securities Laws) by a Governmental Authority having jurisdiction over the requesting Party, (ii) carry out its human resources functions or to establish, assume or administer its benefit plans or payroll functions, (iii) use in any judicial, regulatory, administrative or other Proceeding, in each case other than Adversarial Actions, (iv) satisfy financial or statutory audit, accounting or other similar requirements or (v) comply with its obligations (or confirm compliance by the other Parties with their obligations) under this Agreement, the Merger Agreement or any other Transaction Document (including with respect to the completion of the Reorganization after the date of this Agreement); provided that in the case of Information reasonably requested by a Party to satisfy its financial and statutory audit requirements, the access contemplated by this Section 4.1(a) shall extend until the tenth (10th) anniversary of the Distribution Date; provided, further, that in the event that any Party determines that any such provision of Information includes trade secrets or other commercially sensitive Information or could violate any Law, or breach any written Contract or waive any attorney-client privilege, attorney work-product protection or other applicable privilege or immunity, the Parties shall take all reasonable measures to permit the compliance with such obligations in a manner that avoids any such detriment or consequence.
(b)           Other than for matters related to the provision of Tax records (in which event the provision of the Tax Matters Agreement shall govern) until the sixth (6th) anniversary of the Distribution Date (or such longer period as such access by SpinCo is required under applicable Law), subject to Section 7.2, (i) SpinCo and its Representatives shall have access during regular business hours (as in effect from time to time) to any Information that relates to the SpinCo Business retained by or in the possession of any member of the Moon Group and (ii) SpinCo may obtain copies (but not originals unless it is a SpinCo Asset) of documents for bona fide business purposes. Nothing herein shall be deemed to restrict the access of any member of the Moon Group to any such documents or to impose any liability on any member of the Moon Group if any such documents are not maintained or preserved by Moon.
(c)           Other than for matters related to the provision of Tax records (in which event the provision of the Tax Matters Agreement shall govern), until the sixth (6th) anniversary of the Distribution Date (or such longer period as such access by Moon is required under applicable Law), subject to Section 7.2, (i) Moon and its Representatives shall have access during regular business hours (as in effect from time to time) to any Information that relates to the Moon Business retained by or in the possession of any member of the SpinCo Group and (ii) Moon may obtain copies (but not originals unless it is not a SpinCo Asset) of documents for bona fide business purposes. Nothing herein shall be deemed to restrict the access of any member of the SpinCo Group to any such documents or to impose any liability on any member of the SpinCo Group if any such documents are not maintained or preserved by SpinCo.
(d)           Without limiting the generality of the foregoing, until the second (2nd) Moon fiscal year-end occurring after the Distribution Date, each of Moon and SpinCo shall use its commercially reasonable efforts to cooperate with the other Partys Information requests to
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enable (i) the other Party (and in the case of SpinCo, Clover) to meet its timetable for dissemination of its earnings releases, financial statements and managements assessment of the effectiveness of its disclosure controls and procedures and its internal control over financial reporting in accordance with Items 307 and 308, respectively, of Regulation S-K; (ii) the other Partys (and in the case of SpinCo, Clover’s) accountants to timely complete their review of the quarterly financial statements and audit of the annual financial statements of the other Party (and in the case of SpinCo, Clover), including, to the extent applicable to such Party (and in the case of SpinCo, Clover), its auditors audit of its internal control over financial reporting and managements assessment thereof in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 and the SECs and Public Company Accounting Oversight Boards rules and auditing standards thereunder; and (iii) such other Party (and in the case of SpinCo, Clover) to respond to any request or official comment from a Governmental Authority, including in connection with responding to a comment letter from, or investigation by, the SEC; provided that in connection with this clause (iii), each Party shall provide reasonable access on the terms set forth in this Section 4.1(d) only until the matter relating to such comment letter or investigation is resolved.
Section 4.2             Ownership of Information. Any Information owned by one Group that is provided to a requesting Party pursuant to Section 4.1 shall be deemed to remain the property of the providing Party, except where such Information is an Asset of the requesting Party pursuant to the provisions of this Agreement, the Merger Agreement or any other Transaction Document. Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any Information requested or provided pursuant to Section 4.1.
Section 4.3             Expense Reimbursement for Providing Information. The Party requesting Information pursuant to Section 4.1 agrees to reimburse the other Party for the reasonable out-of-pocket costs and expenses incurred by such other Party in connection with the provision of Information in response to the requesting Party.
Section 4.4             Record Retention.
(a)           To facilitate the possible exchange of Information pursuant to this Article IV and other provisions of this Agreement, from and after the Distribution Time, the Parties agree to use their commercially reasonable efforts to retain all Information in their respective possession or control in accordance with the document retention policies of Moon or, in the case of SpinCo, Clover in effect as of the Distribution Time (including any Information that is subject to a Litigation Hold issued by either Party prior to the Distribution Time) or such other document retention policies as may be reasonably adopted by the applicable Party (and in the case of SpinCo, Clover) from and after the Distribution Time (provided that such other document retention policies at least provide for the retention of documents until the expiration of any applicable statute of limitations and as otherwise required by applicable Law).
(b)           Notwithstanding anything to the contrary herein, no Party will destroy, or permit any of its Subsidiaries to destroy, any Information contemplated by Section 4.1(a) without first offering to deliver such Information to the other Party, at the other Partys cost and expense; provided that (i) in the case of any Information relating to a pending or threatened Action that is known to a member of the Group in possession of such Information, the Parties shall comply
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with the requirements of the applicable Litigation Hold (provided that with respect to any pending or threatened Action arising after the Distribution Time, the requirements of this clause (i) shall apply only to the extent that the member of the Moon Group or the SpinCo Group that is in possession of such Information has been notified in writing pursuant to a Litigation Hold of such pending or threatened Action); and (ii) in no event shall a Party destroy, or permit any of its Subsidiaries to destroy, any Information required to be retained by applicable Law.
(c)           In the event of either Partys or any of its Subsidiaries inadvertent failure to comply with its applicable document retention policies as required under this Section 4.4, such Party shall be liable to the other Party solely for the amount of any monetary fines or penalties imposed or levied against such other Party by a Governmental Authority (which fines or penalties shall not include any Liabilities asserted in connection with the claims underlying the applicable Action, other than fines or penalties resulting from any claim of spoliation) as a result of such other Partys inability to produce Information caused by such inadvertent failure and, notwithstanding Section 6.1 and Section 6.2, shall not be liable to such other Party for any other Liabilities in connection therewith. Notwithstanding the foregoing, no Party shall have any Liability to any other Party if any Information is destroyed, provided that such Party has used its reasonable best efforts to comply with Section 4.4(a) and Section 4.4(b).
Section 4.5            Liability for Information Provided. No Party shall have any Liability to any other Party in the event that any Information exchanged or provided pursuant to this Agreement is found to be inaccurate, in the absence of fraud or willful misconduct by the Party providing such Information.
Section 4.6            Other Agreements Providing for Exchange of Information. The rights and obligations granted under this Article IV are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange, retention or confidential treatment of Information set forth in the Merger Agreement or any Transaction Document.
Section 4.7            Production of Witnesses and Records in Connection with an Action.
(a)           Notwithstanding anything to the contrary in Section 4.1, from and after the Distribution Time, except in the case of an adversarial Action by one Party against another Party, each Party shall use its reasonable efforts to make available to each other Party, upon written request, the former, current and future directors, officers, employees and other Representatives of the members of its respective Group as witnesses, and any books, records or other Information within its control or which it otherwise has the ability to make available, to the extent that any such Person (giving consideration to business demands of such directors, officers, employees and other Representatives) or books, records or other Information may reasonably be required in connection with any Action in which the requesting Party may from time to time be involved, regardless of whether such Action is a matter with respect to which indemnification may be sought under this Agreement. The requesting Party shall bear all out-of-pocket costs and expenses in connection therewith (which, for the avoidance of doubt, shall not include the costs and benefits of employees who are witnesses or any pro rata portion of overhead or other cost of employing such employees which would have been incurred by such employees’ employer regardless of the employees’ service as witnesses).
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(b)           The obligation of the Parties to provide witnesses pursuant to this Section 4.7 is intended to be interpreted in a manner so as to facilitate cooperation and shall include the obligation to provide as witnesses officers without regard to whether the witness or the employer of the witness could assert a possible business conflict, except in the case of an adversarial Action by one Party against another Party.
(c)           In connection with any matter contemplated by this Section 4.7, the Parties will enter into a mutually acceptable joint defense agreement so as to maintain to the extent practicable any applicable attorney-client privilege, work product immunity or other applicable privileges or immunities of any member of any Group.
(d)           For the avoidance of doubt, the provisions of this Section 4.7 are in furtherance of the provisions of Section 4.1 and shall not be deemed to limit the Parties rights and obligations under Section 4.1.
Section 4.8            Counsel; Privileges; Legal Materials.
(a)           In-house lawyers employed by Moon and its Subsidiaries prior to the Distribution Time (Existing Moon Counsel) have provided legal services to and jointly represented Moon and its Subsidiaries, including members of the Moon Group and the SpinCo Group. From and after the Distribution Time, certain Existing Moon Counsel will remain employees of one or more members of the Moon Group and provide legal services to and represent only the Moon Group (Moon Counsel), and certain Existing Moon Counsel will become employees of one or more members of the SpinCo Group and provide legal services to and represent only the SpinCo Group (SpinCo Counsel). From and after the Distribution Time, (i) Moon Counsel will represent only the Moon Group; (ii) SpinCo Counsel will represent only the SpinCo Group; and (iii) SpinCo Counsel and Moon Counsel will, subject to rules of professional responsibility respecting obligations to former clients, owe a duty of loyalty and other professional obligations only to their respective clients. The Parties have previously been jointly represented by the Existing Moon Counsel in various legal matters of common interest. This joint representation included in its scope all matters prior to the Distribution Time in which a Party or another member of its Group was represented by any of the Existing Moon Counsel.
(b)           The Parties acknowledge and agree that all attorney-client privilege, attorney work-product protection and expectation of client confidentiality with respect to any Information concerning general business matters related to the SpinCo Business and members of the SpinCo Group prior to the Distribution (excluding any Information concerning any proposed sale, spin-off or other disposition of the SpinCo Business or any other transaction contemplated by this Agreement, the Merger Agreement or any other Transaction Document or in lieu of any of the foregoing) (collectively, General SpinCo Business Information) shall be subject to a joint privilege and protection between the members of the Moon Group, on the one hand, and the members of the SpinCo Group, on the other hand. Moon and the members of the SpinCo Group shall have equal right and obligation to assert such joint privilege and protection, and no such joint privilege or protection may be waived by (i) Moon without the prior written consent of SpinCo or (ii) any member of the SpinCo Group without the prior written consent of Moon; provided, however, that any such privileged communications or attorney-work product, whether arising prior to or after the Distribution Date, with respect to any matter for which a Party has an
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indemnification obligation hereunder, shall be subject to the sole control of such Party, which shall be solely entitled to control the assertion or waiver of the privilege or protection.
(c)           The Parties acknowledge and agree that all attorney-client privilege, attorney work-product protection and expectation of client confidentiality with respect to (i) any Information concerning any proposed sale, spin-off or other disposition of the SpinCo Business or any other transaction contemplated by this Agreement, the Merger Agreement or any other Transaction Document or in lieu of any of the foregoing, and (ii) any Information other than General SpinCo Business Information, shall in each case be retained and controlled only by Moon and may be waived only by Moon. SpinCo acknowledges and agrees, on behalf of itself and each member of the SpinCo Group, that (i) the foregoing attorney-client privilege, attorney work-product protection and expectation of client confidentiality shall not be controlled, owned, used, waived or claimed by any member of the SpinCo Group at any time after the Distribution Time; and (ii) in the event of a dispute between any member of the SpinCo Group and a third party or any other circumstance in which a third party requests or demands that any member of the SpinCo Group produce privileged materials or attorney work-product of any member of the Moon Group (including the privileged communications and attorney work-product covered by this Section 4.8), SpinCo shall (A) cause such member of the SpinCo Group to assert such privilege or protection on behalf of the applicable member of the Moon Group to prevent disclosure of privileged communications or attorney work-product to such third party and (B) promptly notify Moon of the existence of any such request or demand and shall provide SpinCo a reasonable opportunity to review the privileged materials or attorney work-product and to assert any rights it or they may have, under this Section 4.8 or otherwise, to prevent the production or disclosure of such privileged materials or attorney work-product; provided that if SpinCo is prohibited by applicable Law from disclosing the existence of such request or demand, SpinCo shall provide written notice of such related information for which disclosure is not prohibited by applicable Law and use reasonable best efforts to inform Moon of any related information SpinCo reasonably determines is necessary or appropriate for Moon to be informed of to enable Moon to review the privileged materials or attorney work-product and to assert its rights, under this Section 4.8 or otherwise, to prevent the production or disclosure of such privileged materials or attorney work-product.
(d)           The Parties agree that the Reorganization and Distribution shall not waive or affect any applicable privileges, including the attorney-client privilege, the attorney work product doctrine, the common interest privilege and the joint-client/joint representation privilege. No Party may waive any privilege that could be asserted under any applicable Law and in which the other Party has joint privilege in accordance with the terms of this Section 4.8, without the prior written consent of the other Party. If any dispute arises between Moon and SpinCo, or any members of their respective Groups, regarding whether joint privilege should be waived, each Party (i) shall negotiate with the other Party in good faith and (ii) in furtherance and not in limitation of Section 4.8(b), shall endeavor to minimize any prejudice to the rights of the other Party. For the avoidance of doubt, each Party shall be permitted to withhold its consent to the waiver of a privilege for the purpose of protecting its own legitimate interests.
(e)           Notwithstanding Section 4.8(b), the Parties acknowledge and agree that, as between the Moon Group and the SpinCo Group (as constituted as of immediately before the Distribution) Paul, Weiss, Rifkind, Wharton & Garrison LLP, Arthur Cox and Existing Moon
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Counsel (together, Counsel) represented, for times prior to the Distribution, only Moon and not any member of the SpinCo Group. Notwithstanding Section 4.8(b), the Parties acknowledge and agree that (i) any advice given by or communications with Counsel prior to the Distribution shall not be subject to any joint privilege and shall be owned solely by Moon, (ii) any advice given by or communications with Counsel (to the extent such advice or communications relate to any proposed sale, spin-off or other disposition of the SpinCo Business or any other transaction contemplated by this Agreement, the Merger Agreement or any other Transaction Document) shall not be subject to any joint privilege and shall be owned solely by Moon, and (iii) no member of the SpinCo Group (as of immediately before the Distribution) has the status of a client of Counsel as a result of advice given by or communications with Counsel prior to the Distribution, for conflict of interest or any other purposes. Moon and SpinCo (for itself and on behalf of each member of the SpinCo Group and, after the Effective Time, Clover and each Subsidiary of Clover) hereby agree that, in the event that any Adversarial Action, or any other matter in which the interests of Moon, its Affiliates and its direct and indirect equityholders, on the one hand, and the SpinCo Group or, after the Effective Time, the Clover Group, on the other hand, are adverse, arises after the Effective Time between the SpinCo Group or, after the Effective Time, the Clover Group, on the one hand, and Moon, its Affiliates and its direct and indirect equityholders, on the other hand, Paul, Weiss, Rifkind, Wharton & Garrison LLP and Arthur Cox in connection with the transactions contemplated hereby may represent Moon, its Affiliates and its direct and indirect equityholders in such dispute, even though the interests of Moon, its Affiliates and its direct and indirect equityholders may be directly adverse to one or more members of the SpinCo Group or, after the Effective Time, the Clover Group.
(f)            In furtherance of the Parties agreement under this Section 4.8, Moon and SpinCo shall, and shall cause applicable members of their respective Group to, maintain their respective separate and joint privileges, including by executing joint defense and common interest agreements where necessary or useful for this purpose.
(g)           The transfer of all Information pursuant to this Agreement is made in reliance on the agreement of Moon and SpinCo set forth in this Section 4.8 and in Section 7.2 to maintain the confidentiality of privileged Information and to assert and maintain all applicable privileges. The Parties agree that their respective rights to any access to Information, witnesses and other Persons, the furnishing of notices and documents and other cooperative efforts between the Parties contemplated by this Agreement and the transfer of privileged Information between the Parties and members of their respective Groups pursuant to this Agreement, shall not be deemed a waiver of any privilege (including but not limited to the attorney-client privilege, attorney work product protection, and any other applicable privilege or immunity) that has been or may be asserted under this Agreement or otherwise.
ARTICLE V
RELEASES
Section 5.1            Release of Pre-Distribution Claims.
(a)           Except as provided in Section 5.1(c), effective as of the Distribution Time, SpinCo does hereby, for itself and each other member of the SpinCo Group, their respective 
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successors and assigns, and all Persons who at any time prior to the Distribution Time have been directors, officers, agents or employees of any member of the SpinCo Group (in each case, in their respective capacities as such), remise, release and forever discharge Moon and the other members of the Moon Group, their respective successors and assigns, and all Persons who at any time prior to the Distribution Time have been stockholders, members, partners, directors, managers, officers, agents or employees of any member of the Moon Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns (collectively, the Moon Released Persons), from any and all Liabilities whatsoever, whether at Law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, to the extent existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or prior to the Distribution Time, including in connection with the transactions and all other activities to implement the Reorganization, the Distribution, the Merger and any of the other transactions contemplated by this Agreement, the other Transaction Documents or the Merger Agreement. Without limitation, the foregoing release includes a release of any rights and benefits with respect to such Liabilities that SpinCo or any member of the SpinCo Group, and their respective successors and assigns, now has or in the future may have conferred upon them by virtue of any statute or common law principle which provides that a general release does not extend to claims which a party does not know or suspect to exist in its favor at the time of executing the release, if knowledge of such claims would have materially affected such partys settlement with the obligor. In this connection, SpinCo hereby acknowledges that it is aware that factual matters now unknown to it may have given or may hereafter give rise to Liabilities that are presently unknown, unanticipated and unsuspected, and it further agrees that this release has been negotiated and agreed upon in light of that awareness and it nevertheless hereby intends to release the Moon Released Persons from the Liabilities described in the first sentence of this Section 5.1(a).
(b)           Except as provided in Section 5.1(c), effective as of the Distribution Time, Moon does hereby, for itself and each other member of the Moon Group, their respective successors and assigns, and all Persons who at any time prior to the Distribution Time have been stockholders, members, partners, directors, managers, officers, agents or employees of any member of the Moon Group (in each case, in their respective capacities as such), remise, release and forever discharge SpinCo, the respective members of the SpinCo Group, their respective successors and assigns, and all Persons who at any time prior to the Distribution Time have been directors, officers, agents or employees of any member of the SpinCo Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns (collectively, the SpinCo Released Persons), from any and all Liabilities whatsoever, whether at Law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, to the extent existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or prior to the Distribution Time, including in connection with the transactions and all other activities to implement the Reorganization, the Distribution and any of the other transactions contemplated by this Agreement, the other Transaction Documents or the Merger Agreement. Without limitation, the foregoing release includes a release of any rights and benefits with respect to such Liabilities that Moon or any member of the Moon Group, and their respective successors and assigns, now has or in the future may have conferred upon them by virtue of any statute or common law principle
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which provides that a general release does not extend to claims which a party does not know or suspect to exist in its favor at the time of executing the release, if knowledge of such claims would have materially affected such partys settlement with the obligor. In this connection, Moon hereby acknowledges that it is aware that factual matters now unknown to it may have given or may hereafter give rise to Liabilities that are presently unknown, unanticipated and unsuspected, and it further agrees that this release has been negotiated and agreed upon in light of that awareness and it nevertheless hereby intends to release the SpinCo Released Persons from the Liabilities described in the first sentence of this Section 5.1(b).
(c)           Nothing contained in Section 5.1(a) or Section 5.1(b) shall impair or otherwise impact any right of any Party, and as applicable, any member of such Partys Group, to enforce this Agreement, any other Transaction Document or the Merger Agreement or any other Contracts that are specified in Section 2.6(b) as not terminating as of the Distribution Time, in each case in accordance with its terms. Nothing contained in Section 5.1(a) or Section 5.1(b) shall release any Person from:
(i)          any Liability provided in or resulting from (A) this Agreement (including the indemnification and contribution obligation under Article VI) or any other Transaction Document, (B) the Merger Agreement or (C) any Contract among any members of the Moon Group or the SpinCo Group that is specified in Section 2.6(b) as not terminating as of the Distribution Time or any other Liability specified in Section 2.6(b) as not terminating as of the Distribution Time;
(ii)          any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement, any other Transaction Document or the Merger Agreement;
(iii)          any Liability for the sale, lease, construction or receipt of goods, property or services purchased, obtained or used in the ordinary course of business by a member of one Group from a member of the other Group prior to the Distribution Time (other than any intercompany payables or receivables in respect thereof);
(iv)          any Liability that the Parties may have with respect to indemnification or contribution pursuant to this Agreement or otherwise for claims brought against the Parties by third Persons, which Liability shall be governed by the provisions of Article VI and, if applicable, the appropriate provisions of the other Transaction Documents or the Merger Agreement; or
(v)          any Liability the release of which would result in the release of any Person other than the Persons released pursuant to Section 5.1(a) and Section 5.1(b).
In addition, nothing contained in Section 5.1(a) shall release: (A) Moon or any of its Subsidiaries from indemnifying any director, officer, manager or employee of the SpinCo Group who was a director, officer or employee of Moon or such Subsidiary at or prior to the Distribution Time, to the extent such director, officer, manager or employee is or becomes a named defendant in any Action with respect to which he or she was entitled to such indemnification from a member of
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the Moon Group pursuant to then-existing obligations, it being understood that if the underlying obligation giving rise to such Action is a SpinCo Liability, SpinCo shall indemnify Moon for such Liability (including Moons costs to indemnify the director, officer or employee) in accordance with the provisions set forth in Article VI; and (B) SpinCo or any of its Subsidiaries from indemnifying any director, officer, manager, or employee of the Moon Group who was a director, officer, manager or employee of Moon or such Subsidiary at or prior to the Distribution Time, to the extent such director, officer, manager or employee is or becomes a named defendant in any Action with respect to which he or she was entitled to such indemnification from a member of the SpinCo Group pursuant to then-existing obligations, except to the extent such obligation is an Excluded Liability hereunder (it being understood that if the underlying obligation giving rise to such Action is an Excluded Liability, Moon shall indemnify SpinCo for such Liability (including SpinCos costs to indemnify the director, officer or employee) in accordance with the provisions set forth in Article VI).
(d)           Following the Distribution, SpinCo shall not make, and shall not permit any member of the SpinCo Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Moon or any member of the Moon Group, or any other Person released pursuant to Section 5.1(a), with respect to any Liabilities released pursuant to Section 5.1(a). Following the Distribution, Moon shall not make, and shall not permit any member of the Moon Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against SpinCo or any member of the SpinCo Group, or any other Person released pursuant to Section 5.1(b), with respect to any Liabilities released pursuant to Section 5.1(b).
(e)           It is the intent of each of Moon and SpinCo, by virtue of the provisions of this Section 5.1, to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed prior to the Distribution Time, between or among SpinCo or any member of the SpinCo Group, on the one hand, and Moon or any member of the Moon Group, on the other hand, except as expressly set forth in Section 5.1(c). From and after the Distribution Time, each Party shall cause each member of its respective Group to execute and deliver releases reflecting such provisions at the request of the other Party.
ARTICLE VI
INDEMNIFICATION, GUARANTEES AND LITIGATION
Section 6.1             General Indemnification by SpinCo. Without limiting or otherwise affecting the indemnity provisions of the other Transaction Documents, from and after the Effective Time, SpinCo shall indemnify, defend and hold harmless each member of the Moon Group, each of Moons Affiliates and each of their respective directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the Moon Indemnified Parties), from and against any and all Liabilities of the Moon Indemnified Parties to the extent relating to, arising out of or resulting from any of the following items (without duplication) (collectively, the SpinCo Indemnification Obligations):
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(a)           any SpinCo Liability;
(b)           the failure of SpinCo or any other member of the SpinCo Group or any other Person to pay, perform or otherwise promptly discharge any SpinCo Liabilities, whether prior to, at or after the Effective Time;
(c)           any breach by any member of the SpinCo Group of this Agreement or any of the other Transaction Documents (other than Transaction Documents that expressly contain indemnification provisions, which shall be subject to the indemnification provisions contained therein, and excluding any provision that by its terms does not survive the Effective Time) after the Effective Time; and
(d)           any Specified Asbestos Liability.
Section 6.2             General Indemnification by Moon. Without limiting or otherwise affecting the indemnity provisions of the other Transaction Documents, from and after the Effective Time, Moon shall indemnify, defend and hold harmless each member of the SpinCo Group, each of SpinCos Affiliates and each of their respective directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the SpinCo Indemnified Parties), from and against any and all Liabilities of the SpinCo Indemnified Parties to the extent relating to, arising out of or resulting from any of the following items (without duplication) (collectively, the Moon Indemnification Obligations):
(a)           any Excluded Liability (but, for the avoidance of doubt, not any Specified Asbestos Liability);
(b)           the failure of Moon, any other member of the Moon Group, any member of the SpinCo Group or any other Person to pay, perform or otherwise promptly discharge any Excluded Liabilities, whether prior to, at or after the Distribution Time; and
(c)           any breach by any member of (i) the SpinCo Group prior to the Effective Time or (ii) the Moon Group of this Agreement or any of the other Transaction Documents (other than Transaction Documents that expressly contain indemnification provisions, which shall be subject to the indemnification provisions contained therein, and excluding any provision that by its terms does not survive the Effective Time).
Section 6.3             Contribution. If the indemnification otherwise provided for in Section 6.1 or Section 6.2 is, as a matter of Law, unavailable or insufficient to hold harmless an Indemnified Party in respect of such Liabilities for which they would otherwise be indemnified hereunder (and for which indemnification would otherwise be provided hereunder), then the Indemnifying Party shall contribute to the amount paid or payable by the Indemnified Party in respect of such non-indemnified Liabilities in proportion to the relative fault and benefit of the Indemnifying Party and the Indemnified Party. Solely for purposes of determining relative fault pursuant to this Section 6.3: (a) any fault associated with the conduct of the Moon Business prior to the Effective Time shall be deemed to be allocated to Moon and the other members of the Moon Group, and no such fault shall be deemed to be the fault of SpinCo or any other member of the SpinCo Group; and (b) any fault associated with the conduct of the SpinCo Business prior to the Effective Time shall be deemed to be the fault of SpinCo and the other members of the SpinCo
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Group, and no such fault shall be deemed to be the fault of Moon or any other member of the Moon Group.
Section 6.4             Indemnification Obligations Net of Insurance Proceeds and Other Amounts.
(a)           Any Liability subject to indemnification or contribution pursuant to this Article VI will be net of Insurance Proceeds received by the Indemnified Party that actually reduce the amount of the Liability. Accordingly, the amount which any Party (an Indemnifying Party) is required to pay to any Person entitled to indemnification or contribution under this Article VI (an Indemnified Party) will be reduced by any Insurance Proceeds theretofore actually recovered by or on behalf of the Indemnified Party in respect of the related Liability. If an Indemnified Party receives a payment (an Indemnity Payment) required by this Agreement from an Indemnifying Party in respect of any Liability and subsequently receives Insurance Proceeds in respect of such Liability, then the Indemnified Party will pay to the Indemnifying Party an amount equal to such Insurance Proceeds but not exceeding the amount of the Indemnity Payment paid by the Indemnifying Party in respect of such Liability.
(b)           An insurer who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or have any subrogation rights with respect thereto solely by virtue of the indemnification provisions of this Agreement. The Indemnified Party shall use its commercially reasonable efforts to seek to collect or recover any third-party Insurance Proceeds to which the Indemnified Party is entitled in connection with any Liability for which the Indemnified Party seeks indemnification pursuant to this Article VI; provided that the Indemnified Partys ability or inability to collect or recover any such Insurance Proceeds shall not limit the Indemnifying Partys obligations under this Agreement.
(c)           Subject to Section 6.7(c), any indemnity payment under this Article VI shall be decreased to take into account any actual reduction in Taxes otherwise payable by the Indemnified Party during or prior to the taxable year in which the indemnification payment is made or during the two subsequent taxable years, arising from the incurrence of such indemnified Liability. Solely for purposes of this Section 6.4(c), the term “Indemnified Party” shall include any member of such Indemnified Party’s affiliated, consolidated, combined or unitary group.
Section 6.5            Certain Matters Relating to Indemnification of Third-Party Claims.
(a)           Notice of Third-Party Claim. If an Indemnified Party receives written notice that a Person (including any Governmental Authority) that is not a member of the Moon Group or the SpinCo Group has asserted any claim or commenced any Action (other than any such claim or Action that is governed by the Tender Agreement) that may implicate an Indemnifying Partys obligation to indemnify pursuant to Section 6.1 or Section 6.2, or any other Section of this Agreement or any other Transaction Document (collectively, a Third-Party Claim), the Indemnified Party shall provide the Indemnifying Party written notice thereof as promptly as practicable (and no later than twenty (20) days) after becoming aware of the Third-Party Claim. Such notice shall describe the Third-Party Claim in reasonable detail and include copies of all notices and documents (including court papers) received by the Indemnified Party
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relating to the Third-Party Claim. Notwithstanding the foregoing, the failure of an Indemnified Party to provide notice in accordance with this Section 6.5(a) shall not relieve an Indemnifying Party of its indemnification obligations under this Agreement, except to the extent to which the Indemnifying Party is actually prejudiced by the Indemnified Partys failure to provide notice in accordance with this Section 6.5(a).
(b)           Subrogation. To the extent an indemnification or contribution payment is made by or on behalf of any Indemnifying Party to any Indemnified Party in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnified Party as to any right, defense or claim which such Indemnified Party may have relating to such Third-Party Claim. Subject to Section 6.10, such Indemnified Party shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.
(c)          Defense of Claims. Other than in the case of any Liability being managed by a Party in accordance with any other Transaction Document or in the case of a Mixed Action (which shall be managed in accordance with Section 6.10(d)), an Indemnifying Party shall be entitled (but shall not be required) to assume, control the defense of, and settle any Third-Party Claim, at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, which counsel must be reasonably acceptable to the applicable Indemnified Parties, if it gives written notice of its intention to do so and agreement that the Indemnified Party is entitled to indemnification under this Article VI to the applicable Indemnified Parties within thirty (30) calendar days of the receipt of notice from such Indemnified Parties of the Third-Party Claim. After such notice from an Indemnifying Party to an Indemnified Party of its election to assume the defense of a Third-Party Claim, such Indemnified Parties shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement thereof, at its own expense and, in any event, shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses and all pertinent and material Information and materials in such Indemnified Party’s possession or under such Indemnified Parties’ control relating thereto as are reasonably required by the Indemnifying Party; providedhowever, that such access shall not require the Indemnified Parties to disclose any Information the disclosure of which would, in the reasonable judgment of the Indemnified Parties, result in the loss of any existing attorney-client privilege, attorney work-product protection or other applicable privilege or immunity with respect to such Information or violate any applicable Law (provided that the Indemnified Parties that would otherwise be required to disclose Information shall take any and all reasonable action necessary to permit such disclosure without such loss of privilege, protection or immunity or violation of Law).
Notwithstanding anything to the contrary in this Section 6.5 or Section 6.10, in the event that (i) an Indemnifying Party elects not to assume responsibility for defending a Third-Party Claim, (ii) there exists a conflict of interest or potential conflict of interest between the Indemnifying Party and the applicable Indemnified Party, (iii) any Third-Party Claim seeks an order, injunction or other equitable relief, relief for other than money damages against the Indemnified Party or asserts any criminal wrongdoing (excluding de minimis equitable relief incidental to the award of money damages), (iv) the Indemnifying Party shall not have employed counsel within thirty (30) calendar days after notice from the Indemnified Party of such Third-Party Claim, (v) the Indemnified Party’s exposure to Liability in connection with such Third-
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Party Claim is reasonably expected to exceed the Indemnifying Party’s exposure in respect of such Third-Party Claim taking into account the indemnification obligations hereunder or (vi) the party making such Third-Party Claim is a Governmental Authority with regulatory authority over the Indemnified Party or any of its material Assets, such Indemnified Party(ies) shall be entitled to assume the defense of such Third-Party Claim, at the Indemnifying Party’s expense, with counsel of such Indemnified Party’s choosing. If the Indemnified Party is conducting the defense against any such Third-Party Claim, the Indemnifying Party shall reasonably cooperate with the Indemnified Party in such defense and make available to the Indemnified Party all witnesses and all pertinent and material Information and materials in such Indemnifying Party’s possession or under such Indemnifying Party’s control relating thereto as are reasonably required by the Indemnified Party; providedhowever, that such access shall not require the Indemnifying Party to disclose any Information the disclosure of which would, in the reasonable judgment of the Indemnifying Party, result in the loss of any existing attorney-client privilege, attorney work-product protection or other applicable privilege or immunity with respect to such Information or violate any applicable Law (provided that the Indemnified Parties that would otherwise be required to disclose Information shall take any and all reasonable action necessary to permit such disclosure without such loss of privilege, protection or immunity or violation of Law).
(d)           Settlement. The Indemnifying Party shall not be authorized to settle or compromise or consent to a settlement or compromise of, or the entry of any judgment arising from, any Third-Party Claims unless such settlement, compromise or entry of judgment (A) shall not encumber any of the Assets of any Indemnified Party or contain any restriction or condition that would apply to such Indemnified Party or to the conduct of that Persons business (other than the payment of money), (B) does not result in any non-monetary remedy or relief being imposed upon the Indemnified Party, (C) does not contain or otherwise involve an admission or statement providing for or acknowledging any liability or criminal wrongdoing on behalf of the Indemnified Party or any of its Affiliates, and (D) contains as a condition thereto, a complete release of the Indemnified Party. No settlement or entry of judgment in respect of any Third-Party Claim shall be consented to by any Indemnified Party without the express written consent of the Indemnifying Party (such consent not to be unreasonably withheld, delayed or conditioned).
(e)           Notwithstanding anything herein to the contrary, Moon shall not be required to indemnify any SpinCo Indemnified Party for any Liability pursuant to Section 6.2 if and to the extent such Liability was reflected in the calculation of the Final Adjustment Amount.
Section 6.6            Additional Matters.
(a)           Indemnification or contribution payments in respect of any Liabilities for which an Indemnified Party is entitled to indemnification or contribution under this Article VI shall be paid by the Indemnifying Party to the Indemnified Party as such Liabilities are incurred upon demand by the Indemnified Party, including reasonably satisfactory documentation setting forth the basis for the amount of such payment (including where reasonably practicable an itemization of costs and expenses, attorney invoices and supporting documentation from other vendors in the form reviewed by the Indemnified Party, and any applicable orders, judgments or settlement agreements). The indemnity and contribution agreements contained in this Article VI shall remain operative and in full force and effect, regardless of (i) any investigation made by or
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on behalf of any Indemnified Party or (ii) the knowledge by the Indemnified Party of Liabilities for which it might be entitled to indemnification or contribution under this Agreement.
(b)           Any claim for indemnification under this Article VI other than in respect of a Third-Party Claim shall be asserted by written notice given by the Indemnified Party to the Indemnifying Party, provided that the failure to so notify an Indemnifying Party will not relieve the Indemnifying Party of its obligations hereunder except to the extent the Indemnifying Party has been actually prejudiced by such failure. Such Indemnifying Party shall have a period of thirty (30) days after the receipt of such notice to respond thereto. If such Indemnifying Party does not respond within such thirty (30)-day period, such Indemnifying Party shall be deemed to have refused to accept responsibility for such indemnification obligation. If such Indemnifying Party does not respond within such thirty (30)-day period or rejects such claim in whole or in part, such Indemnified Party shall be free to pursue such remedies as may be available to such Indemnified Party pursuant to this Agreement and the other Transaction Documents, as applicable, without prejudice to its continuing rights to pursue indemnification or contribution under this Agreement.
(c)           Except as otherwise agreed between Moon and SpinCo, all indemnification payments under this Agreement shall be made by Moon LuxCo to the SpinCo Borrower and by the SpinCo Borrower to Moon LuxCo. For U.S. federal (and applicable state, local and foreign) income tax purposes, each of Moon and SpinCo agrees to treat, and to cause its Subsidiaries to treat, (i) any payment required by this Agreement (other than payments of interest) as either a contribution by Moon LuxCo to the SpinCo Borrower or a distribution by the SpinCo Borrower to Moon LuxCo, as the case may be, occurring immediately prior to the Distribution or as a payment of an assumed or retained Liability; and (ii) any payment of interest as taxable or deductible, as the case may be, to the Party entitled under this Agreement to retain such payment or required under this Agreement to make such payment, in each case, except to the extent otherwise required by applicable Law or a determination within the meaning of Section 1313(a) of the Code (or any similar provision of state, local or foreign Law).
(d)           Notwithstanding anything to the contrary herein, in no event shall any Party have any Liability pursuant to this Agreement for any lost profits or opportunity costs, or any special, punitive or consequential damages (except in any such case to the extent assessed in connection with a Third Party Claim or except in the case of consequential damages to the extent such damages are the reasonable and foreseeable result of the matter in question).
Section 6.7            Exclusive Remedy. The indemnification provisions of this Article VI shall be the sole and exclusive remedy of an Indemnified Party for any monetary or compensatory damages or losses for any breach of any representation, warranty, covenant or other claim arising out of or relating to this Agreement (including with respect to the SpinCo Liabilities and the Excluded Liabilities) or any other Transaction Document (other than Transaction Documents that expressly provide otherwise) or the transactions contemplated hereby or thereby. In furtherance of the foregoing, each of the Parties hereby waives, for itself and its respective Affiliates, successors and assigns, to the fullest extent permitted under applicable Law, any and all rights, claims or remedies such Person may have against the other Party and its Affiliates, successors and assigns for any monetary or compensatory damages or losses for any breach of any representation, warranty, covenant or other claim arising out of or relating to this Agreement
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or any other Transaction Document (other than Transaction Documents that expressly provide otherwise) or the transactions contemplated hereby or thereby, other than the right to seek indemnity pursuant to this Article VI. For the avoidance of doubt, the foregoing does not affect (a) either Partys right to seek specific performance under this Agreement as provided in Section 9.10 and (b) either Partys right to exercise all of their rights and seek all damages available to them under Law in the event of claims or causes of action arising from fraud, and (c) any Transaction Document that expressly contains indemnification provisions or other remedies, which shall be subject to the indemnification or other remedy provisions contained therein and not this Article VI.
Section 6.8             Survival of Indemnities. The rights and obligations of each of Moon and SpinCo and their respective Indemnified Parties under this Article VI shall survive the sale or other transfer by any Party of any Assets or businesses or the permitted assignment by it of any Liabilities.
Section 6.9             Guarantees.
(a)           (i) Moon shall (with the reasonable cooperation of the applicable member(s) of the SpinCo Group) use its reasonable efforts to have any member(s) of the SpinCo Group removed as guarantor of or obligor for and released from any Excluded Liability, and (ii) SpinCo shall (with the reasonable cooperation of the applicable member(s) of the Moon Group) use its reasonable efforts to have any member(s) of the Moon Group removed as guarantor of or obligor for and released from any SpinCo Liability, including in respect of those guarantees set forth on Schedule 6.9(a) to the extent that they relate to SpinCo Liabilities.
(b)           To the extent required to obtain a removal or release from a guarantee described in and in accordance with Section 6.9(a) (a Guarantee Release):
(i)          of any member of the Moon Group, SpinCo or an appropriate member of the SpinCo Group shall use commercially reasonable efforts to obtain from the respective beneficiary, in form and substance reasonably satisfactory to Moon, on or prior to the Distribution Time (and, to the extent any guarantee remains outstanding after the Distribution Time, for up to twelve (12) months after the Distribution Time), valid and binding written unconditional releases of Moon and its Subsidiaries (other than the members of the SpinCo Group), as applicable, from any Liability, whether arising before, on or after the Distribution Date, under the applicable guarantee, which shall be effective as of the Distribution Time, including by providing, as reasonably determined by SpinCo and Clover, substitute guarantees, furnishing letters of credit, instituting escrow arrangements, posting surety or performance bonds or making other arrangements as the counterparty may reasonably request. SpinCo shall coordinate with Moon with respect to its initial contact with such beneficiaries, afford Moon a reasonable opportunity to participate in discussions with such beneficiaries prior to engaging therein, and keep Moon reasonably informed of any discussions with such beneficiaries in which Moon does not participate.
(ii)          of any member of the SpinCo Group, Moon or an appropriate member of the Moon Group shall use commercially reasonable efforts to obtain from the respective beneficiary, in form and substance reasonably satisfactory to SpinCo and Clover, on
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or prior to the Distribution Time (and, to the extent any guarantee remains outstanding after the Distribution Time, for up to twelve (12) months after the Distribution Time), valid and binding written unconditional releases of SpinCo and its Subsidiaries (other than the members of the Moon Group), as applicable, from any Liability, whether arising before, on or after the Distribution Date, under the applicable guarantee, which shall be effective as of the Distribution Time, including by providing, as reasonably determined by Moon, substitute guarantees, furnishing letters of credit, instituting escrow arrangements, posting surety or performance bonds or making other arrangements as the counterparty may reasonably request. Moon shall coordinate with SpinCo and Clover with respect to its initial contact with such beneficiaries, afford SpinCo and Clover a reasonable opportunity to participate in discussions with such beneficiaries prior to engaging therein, and keep SpinCo and Clover reasonably informed of any discussions with such beneficiaries in which SpinCo and Clover do not participate.
(c)           If Moon or SpinCo is unable to obtain, or to cause to be obtained, any Guarantee Release, (i) the relevant member of the Moon Group or SpinCo Group, as applicable, that has assumed the Liability with respect to such guarantee shall indemnify and hold harmless the guarantor or obligor for any Liability to the extent arising from or relating thereto in accordance with the provisions of this Article VI and shall, or shall cause one of its Subsidiaries to, as agent or subcontractor for such guarantor or obligor, pay, perform and discharge fully all Excluded Liabilities or SpinCo Liabilities, as applicable, of such guarantor or obligor thereunder and (ii) with respect to such guarantee, each of Moon and SpinCo, on behalf of themselves and the members of their respective Groups, agree not to renew or extend the term of, increase its obligations under or transfer to a third Person, any loan, guarantee, lease, contract or other obligation for which the other Party or any member of the other Partys Group is liable under such guarantee unless all obligations of the other Party and the other members of the other Partys Group with respect thereto are thereupon terminated by documentation reasonably satisfactory in form and substance to the other Party.
Section 6.10          Management of Actions. This Section 6.10 shall govern the direction of pending and future Actions in which members of the SpinCo Group or the Moon Group are named as parties (other than Actions governed by the Tender Agreement, which shall be governed thereby and Indemnity Claims subject to Section 6.5 unless otherwise expressly provided therein), but shall not alter the allocation of Liabilities set forth in Article II unless expressly set forth in this Section 6.10.
(a)           Management of SpinCo Controlled Actions. From and after the Distribution Time, the SpinCo Group shall direct the defense or prosecution of, subject to Section 6.5(c), any Actions that constitute only SpinCo Liabilities or SpinCo Assets (SpinCo Controlled Actions). If an Action that constitutes solely a SpinCo Liability or a SpinCo Asset is commenced after the Distribution Time naming a member of the Moon Group as a party thereto, then SpinCo shall use its commercially reasonable efforts to cause such member of the Moon Group to be removed as a party to such Action. Except in the case of an Adversarial Action, no Party shall add the other Party to any Action pending as of or after the Distribution Time without the prior written consent of the other Party.
(b)           Management of Moon Controlled Actions. From and after the Distribution Time, the Moon Group shall direct the defense or prosecution of, subject to Section 6.5(c), any
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Actions that constitute only Excluded Liabilities or Excluded Assets (Moon Controlled Actions). If an Action that constitutes solely an Excluded Liability or an Excluded Asset is commenced after the Distribution Time naming a member of the SpinCo Group as a party thereto, then Moon shall use its commercially reasonable efforts to cause such member of the SpinCo Group to be removed as a party to such Action. Except in the case of an Adversarial Action, no Party shall add the other Party to any Action pending as of or after the Distribution Time without the prior written consent of the other Party.
(c)           Management of Actions Naming Both SpinCo and Moon. Subject to Section 6.5(c) from and after the Distribution Time, in the event that one or more member(s) of the SpinCo Group and one or more member(s) of the Moon Group is named in an Action that is not a SpinCo Controlled Action, a Moon Controlled Action nor a Mixed Action (a Separate Action), each of SpinCo and Moon shall be entitled to assume their own defense and select counsel of their own choosing to defend their respective interests in such Separate Action. SpinCo and Moon shall consult in good faith with each other regarding the management of the defense of each Separate Action.
(d)           Management of Mixed Actions. From and after the Distribution Time, (i) any Action set forth on Section 6.10(d) and (ii) any Action that constitutes both a SpinCo Liability or a SpinCo Asset, on the one hand, and an Excluded Liability or an Excluded Asset, on the other hand and that do not constitute a SpinCo Controlled Action nor a Moon Controlled Action (clauses (i) and (ii), Mixed Action) shall be managed by the Party with the greater financial exposure with respect thereto (taking into account the provisions of this Article VI), as determined in good faith by the Parties; provided that any outside counsel employed by a Party managing the Action with respect thereto shall be subject to the approval of other Party (such approval not to be unreasonably withheld, conditioned or delayed); provided, further, that if the Action involves the pursuit of any criminal sanctions or penalties or seeks equitable or injunctive relief against only a Party or Subsidiary of such Party, that Party shall be entitled to control the defense of the applicable claims against such Party. Notwithstanding the preceding sentence, if, despite one Party having a greater financial exposure in respect of a Mixed Action, the other Party reasonably considers that such Mixed Action will be materially detrimental to its competitive or commercial business prospects and wishes to manage such Action, the first Party with the greater financial exposure shall consider in good faith the other Party’s request for the second mentioned Party to manage such Mixed Action. The Parties shall reasonably cooperate and consult with each other, and to the extent necessary or advisable, maintain a joint defense in a manner that would preserve for both Parties and their respective Affiliates any attorney-client privilege, attorney work-product protection, joint defense or other privilege with respect to Mixed Actions. The Party managing such Mixed Action shall on a quarterly basis, or if a material development occurs as soon as reasonably practicable thereafter, inform the other Party of the status of and developments relating to any Mixed Action and provide copies of any material document, notices or other materials related to such Mixed Action; provided that the failure to provide any such Information shall not be a basis for liability of a Party managing such Mixed Action except and solely to the extent the other Party shall have been actually prejudiced thereby. Notwithstanding anything to the contrary herein, the Parties may jointly retain counsel (in which case the cost of counsel shall be shared equally by the Parties) or retain separate counsel (in which case each Party will bear the cost of its separate counsel) with respect to any Mixed Action; provided that the Parties shall share discovery and other joint litigation costs in
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proportion to their respective expected financial exposure (in the case of Actions that constitute both a SpinCo Liability and an Excluded Liability) or respective expected financial recovery (in the case of Actions that constitute both a SpinCo Asset and an Excluded Asset). In any Mixed Action, each of Moon and SpinCo may pursue separate defenses, claims, counterclaims or settlements to those claims relating to the Moon Business or the SpinCo Business, respectively; provided that each Party shall in good faith make all reasonable efforts to avoid adverse effects on the other Party. Notwithstanding anything to the contrary herein, (A) if an adverse judgment is obtained with respect to a Mixed Action, the Parties shall endeavor in good faith to allocate the Liabilities in respect of such judgment between them based on the proportion of such Liabilities attributable to the Moon Business and the SpinCo Business; and (B) if a recovery is obtained with respect to a Mixed Action, the Parties shall endeavor in good faith to allocate the Assets in respect of such recovery between them based on their respective injuries. A Party that is not named as a defendant in a Mixed Action may elect to become a party to such Mixed Action, and the Party named in such Mixed Action shall reasonably cooperate to have such first Party named in such Mixed Action.
(e)           Delegation of Rights of Recovery. To the maximum extent permitted by applicable Law, the rights to recovery of each Partys Subsidiaries in respect of any past, present or future Action are hereby delegated to such Party. It is the intent of the Parties that the foregoing delegation shall satisfy any Law requiring such delegation to be effected pursuant to a power of attorney or similar instrument. The Parties and their respective Subsidiaries shall execute such further instruments or documents as may be necessary to effect such delegation.
Section 6.11          Settlement of Actions.  No Party managing an Action pursuant to Section 6.10 shall settle or compromise such Action (other than Moon with respect to Moon Controlled Actions and SpinCo with respect to SpinCo Controlled Actions, in each case, except as provided in Section 6.5(e)) without the prior written consent of the other Party (not to be unreasonably withheld, conditioned or delayed), except that if the Party managing the Action is indemnifying the other Party, such managing Party may nevertheless settle such Action in accordance with Section 6.5(e).
ARTICLE VII
OTHER AGREEMENTS
Section 7.1            Further Assurances.
(a)           In addition to the actions provided for elsewhere in this Agreement and the other Transaction Documents and the Merger Agreement, each of the Parties will cooperate with each other and shall (and will cause their respective Subsidiaries to), prior to, at and after the Distribution Time, use its reasonable best efforts to take, or to cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary on its part under applicable Law or Contracts to consummate and make effective the transactions contemplated by this Agreement and the other Transaction Documents.
(b)           Without limiting the foregoing and except as otherwise provided in any other Transaction Document, prior to, at and for twenty-four (24) months after the Distribution
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Time, each Party shall cooperate with the other Party, without any further consideration but from and after the Distribution Time at the expense of the requesting Party, to execute and deliver, or shall cause to be executed and delivered, all instruments, including instruments of conveyance, assignment, title and transfer, and use reasonable best efforts to obtain or make any Approvals or Notifications from or with any Governmental Authority or any other Person under any Permit, license, Contract or other instrument, and to take all such other actions as such Party may reasonably be requested to take by any other Party, consistent with the terms of this Agreement and the other Transaction Documents, in order to effectuate the provisions and purposes of this Agreement and the other Transaction Documents and the transfers of the SpinCo Assets and the Excluded Assets and the assignment and assumption of the SpinCo Liabilities and the Excluded Liabilities and the other transactions contemplated hereby and thereby; provided, however, that except to the extent expressly provided in Section 7.4 or in any of the other Transaction Documents, neither Party shall be obligated pursuant to this Section 7.1 to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial or commercial accommodation) to any Person in order to obtain or make such Approvals or Notifications. Without limiting the foregoing, except to the extent otherwise provided in any other Transaction Document, each Party will, at the reasonable request and expense of the other Party, take such other actions as may be reasonably necessary to vest in such other Party good and marketable title and rights to the Assets allocated to such other Party under this Agreement or any of the other Transaction Documents, if and to the extent it is practicable to do so.
(c)           At or prior to the Distribution Time, Moon and SpinCo in their respective capacities as direct and indirect stockholders of their respective Subsidiaries, shall each ratify any actions that are reasonably necessary or desirable to be taken by their respective Subsidiaries, as the case may be, to effectuate the transactions contemplated by this Agreement or any other Transaction Document.
(d)           Moon will inform and consult, or procure that its Subsidiaries inform and consult, the relevant employee representative bodies that are required to be informed and/or consulted as a result of or in connection with the transactions contemplated by this Agreement in accordance with applicable Law, and where relevant and necessary the applicable members of the Moon Group or SpinCo Group will use commercially reasonable efforts to enter into collective labor agreements in connection with the transactions contemplated by this Agreement.
Section 7.2             Confidentiality.
(a)           From and after the Distribution Time, subject to Section 7.2(c) and except as contemplated by this Agreement, any other Transaction Document or the Merger Agreement, Moon shall not, and shall cause its Affiliates and their respective officers, directors, employees, agents and representatives, including attorneys, advisors and other representatives of any Person providing financing (collectively, Representatives), not to, directly or indirectly, disclose to any Person, other than Representatives of Moon or its Affiliates who reasonably need to know such information in providing services to any member of the Moon Group, or use or otherwise exploit for its own benefit or for the benefit of any third Person, any SpinCo Confidential Information. If any disclosures are made in connection with providing services to any member of the Moon Group under this Agreement, any other Transaction Document or the Merger
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Agreement, then the SpinCo Confidential Information so disclosed shall be used only as required to perform the services or as otherwise provided in an applicable Transaction Document. Moon shall use the same degree of care to prevent the unauthorized use or disclosure of the SpinCo Confidential Information by any of its Representatives as it currently uses for its own confidential information, but in no event less than a reasonable standard of care. SpinCo Confidential Information means any Information (i) to the extent relating to the SpinCo Business (including any confidential or proprietary Information included in the SpinCo Assets or SpinCo Contracts) furnished to or otherwise in the possession of any member of the Moon Group, including as a result of or in connection with the Reorganization or Distribution or the performance of any Transaction Document or the Merger Agreement or (ii) relating to Clover or its Affiliates furnished to any member of the Moon Group pursuant to the Confidentiality Agreement, in each case, irrespective of the form of communication, and all notes, analyses, compilations, forecasts, data, translations, studies, memoranda or other documents prepared by Moon, any member of the Moon Group or their respective Representatives, to the extent they contain or otherwise reflect such Information; provided that SpinCo Confidential Information does not include, and there shall be no obligation under this Agreement with respect to, Information that (i) is or becomes generally available to the public, other than as a result of a disclosure by any member of the Moon Group or any of its Representatives not otherwise permissible under this Section 7.2, (ii) Moon can demonstrate was or became available to Moon or any of its Representatives after the Distribution Time from a source other than SpinCo or its Representatives, provided that such source was not known by Moon to be bound by a contractual, legal or fiduciary obligation of confidentiality to SpinCo or any member of the SpinCo Group with respect to such Information, or (iii) is developed independently by a member of the Moon Group or any of its Representatives without use or reference to the SpinCo Confidential Information.
(b)           From and after the Distribution Time, subject to Section 7.2(c) and except as contemplated by this Agreement, any other Transaction Document or the Merger Agreement, SpinCo shall not, and shall cause its Affiliates and their respective Representatives not to, directly or indirectly, disclose to any Person, other than Representatives of SpinCo or its Affiliates who reasonably need to know such information in providing services to any member of the SpinCo Group, or use or otherwise exploit for its own benefit or for the benefit of any third Person, any Moon Confidential Information. If any disclosures are made in connection with providing services to any member of the SpinCo Group under this Agreement, any other Transaction Document or the Merger Agreement, then the Moon Confidential Information so disclosed shall be used only as required to perform the services. SpinCo shall use the same degree of care to prevent the unauthorized use or disclosure of the Moon Confidential Information by any of its Representatives as it currently uses for its own confidential information, but in no event less than a reasonable standard of care. Moon Confidential Information means any Information to the extent relating to the Moon Business furnished to or otherwise in the possession of any member of the SpinCo Group as a result of or in connection with the Reorganization or Distribution or the performance of any Transaction Document or the Merger Agreement, irrespective of the form of communication, and all notes, analyses, compilations, forecasts, data, translations, studies, memoranda or other documents prepared by SpinCo, any member of the SpinCo Group or their respective Representatives, to the extent they contain or otherwise reflect such Information; provided that Moon Confidential Information does not include, and there shall be no obligation under this Agreement with respect to, Information
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that (i) is or becomes generally available to the public, other than as a result of a disclosure by any member of the SpinCo Group or any of its Representatives not otherwise permissible under this Section 7.2, (ii) SpinCo can demonstrate was or became available to SpinCo or any of its Representatives after the Distribution Time from a source other than Moon or its Representatives; provided that such source was not known by SpinCo to be bound by a contractual, legal or fiduciary obligation of confidentiality to Moon or any member of the Moon Group with respect to such Information, or (iii) is developed independently by a member of the SpinCo Group or any of its Representatives without use or reference to the Moon Confidential Information.
(c)           Notwithstanding the provisions of Section 7.2(a) and Section 7.2(b), Moon or its Representatives may disclose SpinCo Confidential Information, and SpinCo and its Representatives may disclose Moon Confidential Information: (i) to the extent such Party or such Representative is required or compelled to disclose any such Moon Confidential Information or SpinCo Confidential Information by judicial or administrative process or by other requirements of Law or stock exchange rule, (ii) as required in connection with any Adversarial Action, (iii) as necessary in order to permit a Party to prepare and disclose its financial statements in connection with any regulatory filings or Tax Returns, (iv) as necessary for a Party to enforce its rights or perform its obligations under this Agreement, the Merger Agreement or any other Transaction Document or (v) to Governmental Authorities in accordance with applicable procurement regulations and contract requirements. Notwithstanding the foregoing, in the event that any demand or request for disclosure of Moon Confidential Information or SpinCo Confidential Information is made pursuant to clause (i), (iii) or (v) above (other than with respect to any such Information furnished pursuant to the provisions of Article IV), as applicable, the Person receiving such request or demand or other disclosure requirement shall use commercially reasonable efforts to provide the other Party with written notice of such request or demand as promptly as practicable so that such other Party shall have an opportunity to seek an appropriate protective order. The Party receiving such request or demand shall take, and cause its Representatives to take, at the requesting Partys expense, all other reasonable steps necessary to obtain confidential treatment by the recipient. Subject to the foregoing, the Party or any of its Representatives that received such request or demand may thereafter disclose or provide any SpinCo Confidential Information or Moon Confidential Information, as the case may be, to the extent required by such Governmental Authority, stock exchange or applicable Law (as so advised by counsel).
(d)           Prior to the Distribution, notwithstanding anything to the contrary provided herein but without prejudice to whether any such device would constitute a SpinCo Asset, Moon shall be entitled to cause any Moon Confidential Information to be removed from personal computers or other devices owned or leased by Moon or any of its Subsidiaries and used by a SpinCo Employee, including by replacing such device with a comparable device not containing Moon Confidential Information.  To the extent such process has not been completed prior to the Distribution, SpinCo shall permit Moon to affect such removals or exchanges within three months following the Distribution Date, at Moon’s cost.
Section 7.3            Insurance Matters.
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(a)           From and after the Distribution Time, except as expressly provided herein, the SpinCo Group and the SpinCo Business shall cease to be insured by Moons Insurance Policies. For the avoidance of doubt, Moon shall retain all rights to control its Insurance Policies, including the right to exhaust, settle, release, or otherwise resolve disputes with respect to any of its Insurance Policies notwithstanding whether any such Insurance Policies apply to any Liabilities of any member of the SpinCo Group; provided, however, that Moon shall take no action to commute, buy back or otherwise modify any Insurance Policy to which SpinCo is entitled to rights pursuant to Section 2.2(a)(vii), in a manner that would adversely affect the SpinCo Group or the SpinCo Business without the prior written consent of Clover (SpinCo Group), which consent will not be unreasonably withheld, or without making adequate provision for such rights of SpinCo Group or SpinCo businesses. For the avoidance of doubt, SpinCo shall be responsible for securing all Insurance Policies that it considers appropriate for the SpinCo Business and the operation thereof by the SpinCo Group and for promptly providing evidence thereof, as may be required, to third parties under any Contract. SpinCo agrees to arrange for its own Insurance Policies with respect to the SpinCo Business and the SpinCo Group covering all periods. SpinCo agrees, on behalf of itself and each member of the SpinCo Group, from and after the Distribution Time, not to seek through any means to benefit from and not to assert any right, claim or interest in, to or under, any Insurance Policies of any member of the Moon Group, except as permitted under Section 7.3(b) or the Tender Agreement.
(b)           For any claim asserted against SpinCo or any other member of the SpinCo Group after the Effective Time arising out of any occurrence, claim, loss, injury or damage taking place prior to the Effective Time (“Post-Closing Claims”), SpinCo and each other member of the SpinCo Group may access coverage under the Pre-Closing Occurrence-Based Policies for such claims (it being understood that any retrospective premiums, deductibles or similar obligations arising from such any corresponding insurance claims by or on behalf of any member of the SpinCo Group under the Pre-Closing Occurrence-Based Policies shall be borne by the SpinCo Group).  From and after the Effective Time, if SpinCo or any member of the SpinCo Group determines to submit a Post-Closing Claim for coverage under the Pre-Closing Occurrence-Based Policies, SpinCo shall provide a written request to Moon and shall promptly thereafter provide Moon with all information to be included with such Post-Closing Claim.  Moon shall promptly, following receipt of such information, submit the applicable Post-Closing Claim under the applicable Pre-Closing Occurrence-Based Policies. Moon thereafter shall use its best efforts to secure insurance coverage for SpinCo/Clover for the Post-Closing Claim under the Pre-Closing Occurrence-Based Policies.  In doing so, Moon will undertake reasonable best efforts to get its insurers to accept and pay defense and indemnity costs for the Post-Closing Claim, but in no event will Moon guarantee results and in no event will Moon be liable for Post-Closing Claim costs that are not covered by insurance. In no event will Moon be obligated to initiate at its own costs or bear the costs of coverage litigation. Nor shall Moon be obligated to initiate any coverage litigation that would adversely affect Moon’s rights. No SpinCo Group Member shall be entitled to make claims directly to any Pre-Closing Occurrence-Based Policies and in connection with any Post-Closing Claim. SpinCo or the other member(s) of the SpinCo Group shall be responsible for the satisfaction or payment of any applicable retention, deductible or retrospective premium with respect to any Post-Closing Claim. Subject to the immediately following sentence, any Insurance Proceeds received by a member of the Moon Group in respect of a Post-Closing Claim shall be promptly transmitted to SpinCo or another member of the SpinCo Group designated by SpinCo. In the event that a Post-Closing Claim is a Mixed Action
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or a Mixed Asbestos Claim (as defined in the Tender Agreement) for which Moon or its Subsidiaries and SpinCo or other member of the SpinCo Group are seeking coverage under Pre-Closing Occurrence-Based Policies, and the limits under an applicable Pre-Closing Occurrence-Based Policy are not sufficient to fund all covered claims of SpinCo or any other member of the SpinCo Group (as applicable) and Moon or its Subsidiaries (as applicable), amounts due under such a Pre-Closing Occurrence-Based Policy shall be paid to the respective Persons in proportion to the amounts that otherwise would be due were the limits of liability infinite.
(c)           Nothing in this Section 7.3 will be construed to alter or limit in any way the indemnity obligations of the Parties, including those in this Agreement or any other Transaction Document.
(d)           For the avoidance of doubt, notwithstanding anything in this Section 7.3 to the contrary, insurance coverage rights and obligations with respect to Excluded Asbestos Liabilities and Specified Asbestos Liabilities are governed by the Tender Agreement.
Section 7.4            Separation Expenses.
(a)           Except as otherwise expressly set forth in this Agreement, the Merger Agreement or in any other Transaction Document, the out-of-pocket fees, costs and expenses of Moon, SpinCo and the members of their respective Groups (i) incurred in connection with the Reorganization, the Distribution and the other transactions contemplated by this Agreement (including the transactions contemplated by Section 2.4 and Section 2.5) and the other Transaction Documents, (ii) incurred as Set-Up Costs (as defined in the Transition Services Agreement), (iii) incurred for the provision of post-termination assistance pursuant to Section 5.6 of the Transition Services Agreement or (iv) incurred in connection with the actions or activities set forth in Schedule 2.13 (except as otherwise expressly provided therein), shall in each case be borne as provided in Schedule 7.4. In the event of any conflict between a Transaction Document and an allocation of expenses expressly provided in Schedule 7.4, Schedule 7.4 shall control.
Section 7.5            Transaction Documents.
(a)           Effective on or prior to the Distribution Time, each of Moon and SpinCo will, or will cause the applicable members of its Group to, execute and deliver the Transition Services Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Real Estate Matters Agreement, the Intellectual Property Matters Agreement, the Trademark License Agreement, the Supply Agreements, the Headquarters Lease and the Tender Agreement. In the event that the provisions of any of the other Transaction Documents conflict with the provisions of this Agreement, the provisions of such other agreement or agreements shall govern with respect to the subject matter addressed thereby to the extent of such conflict. Specifically, the Parties intend that, to the extent set forth in such other Transaction Document and unless otherwise provided therein, (i) the representations, warranties, covenants or agreements between the Parties with respect to Taxes or other Tax matters (including indemnification for Taxes and control of any Tax Contest (as defined in the Tax Matters Agreement)) shall be governed exclusively by the Tax Matters Agreement (provided that, for the avoidance of doubt, the covenants and agreements contained in this Agreement to the extent expressly addressing Taxes or other Tax matters, including Section 2.4(e), Section 2.5(e), Section 2.7(d), Section 2.8(f),
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Section 3.3(e) and Section 6.6(c), shall apply in accordance with their terms and nothing in this clause (i) shall be interpreted as affecting the applicability of, or the rights and obligations set forth in, such provisions), (ii) the representations, warranties, covenants or agreements (including agreements as to the allocation of Assets and Liabilities, to the extent addressed therein) between the Parties with respect to employment matters or matters relating to compensation and benefits shall be governed exclusively by the Employee Matters Agreement, (iii) the representations, warranties, covenants or agreements between the Parties with respect to real property matters (including agreements as to the allocation of Assets and Liabilities, to the extent addressed therein) shall be governed exclusively by the Real Estate Matters Agreement, (iv) the representations, warranties, covenants or agreements between the Parties with respect to the subject matters contemplated by the Trademark License Agreement shall be governed exclusively by the Trademark License Agreement, (v) the representations, warranties, covenants or agreements between the Parties with respect to the subject matters contemplated by the Intellectual Property Matters Agreement shall be governed exclusively by the Intellectual Property Matters Agreement and (vi) the representations, warranties, covenants or agreements between the Parties with respect to the subject matters contemplated by the Tender Agreement shall be governed exclusively by the Tender Agreement; provided that, in each case, the representations, warranties, covenants or agreements referred to in this sentence shall refer to the representations, warranties, covenants or agreements set forth in the applicable Transaction Document.
(b)           Prior to the Distribution Time, with respect to any Transaction Document that has not yet been executed, but for which the form of such Transaction Document attached hereto expressly contemplates covenants or other agreements that on their face would be operative prior to the Distribution Time if such Transaction Document had been executed by the parties thereto as of the date hereof, then notwithstanding the fact that such Transaction Document has not yet been executed by the parties thereto, the Parties agree on behalf of themselves and their respective Affiliates that all such provisions are incorporated herein by reference, mutatis mutandis, and shall be operative prior to the Distribution Time as if such Transaction Document had been executed with respect to such provisions prior to the relevant time.
Section 7.6             Permits. The Moon Group shall cooperate with the SpinCo Group and take all actions that are reasonably necessary or advisable to finalize or effectuate the transfer of a Permit to the SpinCo Group that is designated as a SpinCo Asset and that is not already transferred to a member of the SpinCo Group as of the Distribution Time. The SpinCo Group shall cooperate with the Moon Group and take actions that are reasonably necessary or advisable to finalize or effectuate the transfer of a Permit to the Moon Group that is designated as an Excluded Asset and that is not already transferred to a member of the Moon Group as of the Distribution Time. The Moon Group and the SpinCo Group agree to cooperate with each other regarding the allocation of responsibilities for Permits at shared real properties shared between members of the Moon Group and the SpinCo Group. If any Permit cannot be transferred then during the pendency of transferring such Permit, the Parties shall use their reasonable best efforts to develop and implement arrangements to pass along to the SpinCo Group the ability to continue to operate the SpinCo Business as presently conducted under the terms of any such permit. Notwithstanding the foregoing, except to the extent expressly provided in this Agreement (including Section 7.4) or in any of the other Transaction Documents, neither Party shall be
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obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial or commercial accommodation) to any Person in order to effect the transfer of any permit.
ARTICLE VIII
Section 8.1            Dispute Resolution Procedures. (a) Each Party shall appoint a representative who shall be responsible for administering this dispute resolution provision (the “Appointed Representative”).
(b)           Except as otherwise provided in this Agreement or in any other Transaction Document, and without limiting the rights of any Party under Section 9.10, in the event of a controversy, dispute or claim arising out of, in connection with, or in relation to the interpretation, performance, nonperformance, validity, termination or breach of this Agreement or any other Transaction Document or otherwise arising out of, or in any way related to, this Agreement or any other Transaction Document or the transactions contemplated hereby or thereby (collectively, the “Separation Agreement Disputes”), the Appointed Representatives shall negotiate in good faith for a reasonable period of time to settle such Separation Agreement Dispute; provided, however, that: (i) such reasonable period shall not, unless otherwise agreed to by the relevant Parties in writing, exceed twenty (20) days from the time of receipt by a Party of written notice of such Separation Agreement Dispute; and (ii) the relevant employees from both Parties with knowledge and interest in the dispute shall first have tried to resolve the differences between the Parties; provided, further, that prior to the Effective Time, no Separation Agreement Dispute may be settled without the prior written consent of Clover. Nothing said or disclosed, nor any document produced, in the course of any negotiations, conferences and discussions in connection with efforts to settle an Separation Agreement Dispute that is not otherwise independently discoverable shall be offered or received as evidence or used for impeachment or for any other purpose, but shall be considered as to have been disclosed for settlement purposes.
ARTICLE IX
MISCELLANEOUS
Section 9.1            Corporate Power; Facsimile Signatures.
(a)           Moon represents on behalf of itself and on behalf of other members of the Moon Group, and SpinCo represents on behalf of itself and on behalf of other members of the SpinCo Group, as follows:
(i)          each such Person has the requisite corporate power and authority and has taken all corporate action necessary in order to execute, deliver and perform this Agreement and each other Transaction Document to which it is a Party and to consummate the transactions contemplated hereby and thereby; and
(ii)          this Agreement and each Transaction Document to which it is a Party has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms thereof.
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(b)           Notwithstanding any provision of this Agreement or any other Transaction Document, neither Moon nor SpinCo shall be required to take or omit to take any act that would violate its fiduciary duties to any minority stockholders of any non-wholly owned Subsidiary of Moon or SpinCo, as the case may be (it being understood that directors qualifying shares or similar interests will be disregarded for purposes of determining whether a Subsidiary is wholly owned).
Section 9.2            Governing Law; Submission to Jurisdiction; Waiver of Trial.
(a)           This Agreement, and all Actions (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance hereof (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement) shall be governed by and construed in accordance with the Law of the State of Delaware, without regard to the choice of law or conflicts of law principles thereof. The Parties expressly waive any right they may have, now or in the future, to demand or seek the application of a governing Law other than the Law of the State of Delaware.
(b)           Each of the Parties hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if such court shall not have jurisdiction, any federal court of the United States of America sitting in Delaware, of if jurisdiction is not then available in such federal court, then in any Delaware state court siting in New Castle County) and any appellate court from any appeal thereof (the “Chosen Courts”) in any Action arising out of or relating to this Agreement or the Transaction Documents or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each of the Parties hereby irrevocably and unconditionally (i) agrees not to commence any such Action except in such courts, (ii) agrees that any claim in respect of any such Action may be heard and determined in the Chosen Courts, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such Action in the Chosen Courts and (iv) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such Action in the Chosen Courts. Each of the Parties agrees that a final judgment in any such Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each Party irrevocably consents, to the fullest extent permitted by Law, to service of process in the manner provided for notices in Section 9.5. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by Law.
(c)           EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
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REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.2(c).
Section 9.3             Survival of Covenants. Except as expressly set forth in this Agreement, any other Transaction Document or the Merger Agreement, the covenants and other agreements contained in this Agreement and each other Transaction Document, a liability for the breach of any obligations contained herein or therein, shall survive each of the Reorganization, the Distribution and the Merger, and shall remain in full force and effect.
Section 9.4             Waivers of Default. Any Party may, at any time prior to the Closing, by action taken by its board of directors, a committee thereof or officers thereunto duly authorized, waive any of the terms or conditions of this Agreement or (without limiting Section 9.11) agree to an amendment or modification to this Agreement by an agreement in writing executed in the same manner (but not necessarily by the same Persons) as this Agreement; provided, that, unless the Merger Agreement shall have been terminated in accordance with its terms, any such waiver, amendment or modification by SpinCo shall be subject to the prior written consent of Clover (except as otherwise provided in Section 2.1(d) and subject to the consent standards therein). No waiver by any of the Parties of any breach hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent breach hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No waiver by any of the Parties of any of the provisions hereof shall be effective unless explicitly set forth in writing and executed by the Party sought to be charged with such waiver.
Section 9.5             Notices. All notices and other communications among the Parties shall be in writing and shall be deemed to have been duly given (a) when delivered in person, (b) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (c) when delivered by FedEx or other nationally recognized overnight delivery service or (d) when delivered by email (so long as the sender of such email does not receive an automatic reply from the recipient’s email server indicating that the recipient did not receive such email), addressed as follows:
If to Moon or, on or prior to the Distribution Date, to SpinCo, then to:
 
Ingersoll-Rand plc
 
170/175 Lakeview Dr.
 
Airside Business Park, Swords, Co. Dublin, Ireland
 
Attention:
Evan M. Turtz
   
 
with a copy (which shall not constitute notice) to:
   
 
Paul, Weiss, Rifkind, Wharton & Garrison LLP
 
1285 Avenue of the Americas
 
 
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New York, NY 10019
 
Attention:
Scott A. Barshay
   
Steven J. Williams
   
 
and, in the case of SpinCo, with a copy to:
   
 
Ingersoll-Rand U.S. HoldCo, Inc.
 
800-E Beaty Street
 
Davidson, NC 28036
 
Attention: 
Evan M. Turtz
   
 
with a copy (which shall not constitute notice) to:
   
 
Simpson Thacher & Bartlett LLP
 
425 Lexington Avenue
 
New York, NY 10017
 
Attention:
Marni Lerner
   
Mark Pflug
   
 
If, following the Distribution Date, to SpinCo, then to:
   
 
Gardner Denver Holdings, Inc.
 
222 East Erie Street, Suite 500
 
Milwaukee, Wisconsin 53202
 
Attention:
Andy Schiesl
   
 
with a copy (which shall not constitute notice) to:
   
 
Simpson Thacher & Bartlett LLP
 
425 Lexington Avenue
 
New York, NY 10017
 
Attention:
Marni Lerner
   
Mark Pflug
     
Section 9.6            Termination. This Agreement shall terminate simultaneously with the valid termination of the Merger Agreement prior to the Distribution. Except for a termination described in the immediately preceding sentence, prior to the Effective Time, SpinCo shall not agree to terminate this Agreement without the prior written consent of Clover. After the Effective Time, this Agreement may not be terminated except by an agreement in writing signed by each of the Parties. In the event of such termination, this Agreement shall become void and no
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Party, or any of its officers and directors, shall have any liability to any Person by reason of this Agreement.
Section 9.7             Severability. If any provision of this Agreement or any Transaction Document, or the application of any provision to any Person or circumstance, is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The Parties further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the Laws governing this Agreement, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the Parties.
Section 9.8             Entire Agreement. This Agreement, the other Transaction Documents, the Merger Agreement, the Confidentiality Agreement (as defined in the Merger Agreement) including any related annexes, Exhibits and Schedules, as well as any other agreements and documents referred to herein and therein, shall together constitute the entire agreement between the Parties relating to the transactions contemplated hereby and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the Parties or any of their respective Affiliates relating to the transactions contemplated hereby.
Section 9.9             Assignment; No Third-Party Beneficiaries. No Party may assign its rights or delegate its duties under this Agreement without the written consent of the other Parties (provided that prior to the Effective Time, SpinCo shall not assign this Agreement without the prior written consent of Clover). Any attempted assignment or delegation in breach of this Section 9.9 shall be null and void, except that (without limiting any other provision of this Agreement, the Merger Agreement or any other Transaction Agreement) a Party may assign any or all of its rights and obligations under this Agreement in connection with a sale or disposition of any assets or entities or lines of business of such Party or in connection with a merger transaction in which such Party is not the surviving entity; provided, however, that in each case, no such assignment shall release such Party from any liability or obligation under this Agreement. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns. Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any Person, other than the Parties, any rights or remedies under or by reason of this Agreement, except as provided in Article VI with respect to Indemnified Parties (which is intended to be for the benefit of the Persons covered thereby and may be enforced by such Persons); provided, however, that Clover shall be a third-party beneficiary of the rights of Clover as provided in this Agreement and the other Transaction Documents.
Section 9.10          Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement or any Transaction Document (except as otherwise provided therein), the Party who is, or is to be, thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief (on an interim or permanent basis) in respect of its rights under this Agreement or such other Transaction Document. The Parties agree that the remedies at law for any breach or threatened breach,
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including monetary damages, are inadequate compensation for any loss and that any defense in any Action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived by each of the Parties to this Agreement.
Section 9.11          Amendment. No provision of this Agreement or any other Transaction Document (except as otherwise provided herein or therein, including as provided in Section 2.1(d)) may be amended or modified except by a written instrument signed by each of the parties hereto or thereto, as applicable. In addition, unless the Merger Agreement shall have been terminated in accordance with its terms, any such amendment or modification shall be subject to the written consent of Clover (except as otherwise provided in Section 2.1(d)).
Section 9.12          Rules of Construction. Unless the context of this Agreement otherwise requires:
(a)           (A)  Words of any gender include each other gender and neuter form; (B) words using the singular or plural number also include the plural or singular number, respectively; (C) derivative forms of defined terms will have correlative meanings; (D) the terms “hereof,” “herein,” “hereby,” “hereto,” “herewith,” “hereunder” and derivative or similar words refer to this entire Agreement; (E) the terms “Article,” “Section,” “Annex,” “Exhibit,” and “Schedule,” refer to the specified Article, Section, Annex, Exhibit, or Schedule  of this Agreement and references to “paragraphs” or “clauses” shall be to separate paragraphs or clauses of the Section or subsection in which the reference occurs; (F) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” and (G) the word “or” shall be disjunctive but not exclusive.
(b)           References to Contracts (including this Agreement) and other documents or Laws shall be deemed to include references to such Contract, document or Law as amended, supplemented or modified from time to time in accordance with its terms and the terms hereof, as applicable, and in effect at any given time (and, in the case of any Law, to any successor provisions).
(c)           References to any federal, state, local, foreign or supranational statute or other Law shall include all regulations promulgated thereunder.
(d)           References to any Person include references to such Person’s successors and permitted assigns, and in the case of any Governmental Authority, to any Person succeeding to its functions and capacities.
(e)           The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent. The Parties acknowledge that each Party and its attorney has reviewed and participated in the drafting of this Agreement and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting Party, or any similar rule operating against the drafter of an agreement, shall not be applicable to the construction or interpretation of this Agreement.
(f)            Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. If any action is to be taken or given on
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or by a particular calendar day, and such calendar day is not a Business Day, then such action may be deferred until the next Business Day.
(g)           The phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.”
(h)           The term “writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.
(i)            All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP unless the context otherwise requires.
(j)            All monetary figures shall be in United States dollars unless otherwise specified.
Section 9.13           Captions; Counterparts. The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. This Agreement may be executed in two or more counterparts (including by electronic or .pdf transmission), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of any signature page by facsimile, electronic or .pdf transmission shall be binding to the same extent as an original signature page.
Section 9.14           Performance. Moon will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any other Transaction Document to be performed by any member of the Moon Group. SpinCo will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any other Transaction Document to be performed by any member of the SpinCo Group. Each Party (including its permitted successors and assigns) further agrees that it will (a) give timely notice of the terms, conditions and continuing obligations contained in this Section 9.14 to all of the other members of its Group, and (b) cause all of the other members of its Group not to take any action inconsistent with such Partys obligations under this Agreement, any other Transaction Document or the transactions contemplated hereby or thereby.
[The remainder of this page is intentionally left blank.]
 
 
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the date first written above by their respective duly authorized officers.
 
INGERSOLL-RAND PLC
 
         
 
By:
/s/ David C. Butow  
   
Name:
David C. Butow
 
   
Title:
Vice President and General Counsel, Climate Segment
 
         
         
 
INGERSOLL-RAND U.S. HOLDCO, INC.
 
         
 
By:
/s/ David C. Butow  
   
Name:
David C. Butow
 
   
Title:
Assistant Secretary
 





[Signature Page to Separation and Distribution Agreement]

 
 
EXHIBIT A
 
EXECUTION VERSION
 
TRANSITION SERVICES AGREEMENT
 
by and between
INGERSOLL-RAND PLC
and
INGERSOLL-RAND U.S. HOLDCO, INC.
dated as of
[●], 2019



TABLE OF CONTENTS
Page
ARTICLE I
 
TRANSITION SERVICES
 
     
1.1.
Transition Services
1
1.2.
Subcontractors
4
1.3.
Period Transition Services Will Be Provided
4
1.4.
Service Suspensions
4
1.5.
Term
5
1.6.
Commingling of Cash
5
1.7.
Intellectual Property
5
1.8.
Books and Records
6
   
ARTICLE II
 
COMPENSATION FOR TRANSITION SERVICES
 
     
2.1.
Fees
7
2.2.
Set-Up Costs
7
2.3.
Payment Terms
7
2.4.
Audit Rights
8
2.5.
Third-Party Consents; Contravention
8
   
ARTICLE III
 
GOVERNANCE AND DISPUTES
 
     
3.1.
Cooperation, Information and Access; Monthly Meeting
9
3.2.
Dispute Resolution
11
   
ARTICLE IV
 
DISCLAIMERS; LIMITATION OF LIABILITY; INDEMNIFICATION
 
     
4.1.
Disclaimers
12
4.2.
Limitation of Liability
12
4.3.
Indemnification
13
   
ARTICLE V
 
TERMINATION
 
     
5.1.
Termination of Transition Services
14
5.2.
Effect of Termination of Service
15
5.3.
Force Majeure Event
15
5.4.
Survival Upon Expiration or Termination
16
5.5.
Actions Upon Termination
16
5.6.
Transition and Post Termination Assistance
16
 
 
- i -

 
ARTICLE VI
 
NOTICES AND DEMANDS
 
     
6.1.
Notices
17
   
ARTICLE VII
 
MISCELLANEOUS
 
     
7.1.
Relationship of the Parties
18
7.2.
Employees
18
7.3.
Interpretation
18
7.4.
Assignment
19
7.5.
Confidentiality
19
7.6.
Severability
19
7.7.
Third Party Beneficiaries
19
7.8.
Governing Law
20
7.9.
Specific Performance
21
7.11.
Entire Agreement
21
7.12.
Amendments and Waivers
21
7.13.
Remedies Cumulative
22
 

 
- ii -


Exhibits
Exhibit A
Services Schedule
   
Exhibit B
Excluded Services
   
Exhibit C
Annual Cost Caps Schedule
 
 

 
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TRANSITION SERVICES AGREEMENT
This Transition Services Agreement (the “Agreement”), dated as of [Closing Date], is entered into by and between Ingersoll-Rand plc, a Republic of Ireland public limited company (“Moon”), and Ingersoll-Rand U.S. HoldCo, Inc., a Delaware corporation (“SpinCo”).  Both Moon and SpinCo may be individually referred to herein as a “Party” or collectively as the “Parties.”
WHEREAS, Moon, SpinCo, Gardner Denver Holdings, Inc. (“Clover”) and Charm Merger Sub Inc. are parties to that certain Merger Agreement, dated as of April 30, 2019, as may be amended form time to time (the “Merger Agreement”), and Moon and SpinCo are parties to that certain Separation and Distribution Agreement, dated as of April 30, 2019, as may be amended form time to time (the “Separation and Distribution Agreement”);
WHEREAS, capitalized terms used and not otherwise defined herein shall have the respective meanings given such terms in the Separation and Distribution Agreement or, if not defined therein, the Merger Agreement;
WHEREAS, as contemplated by the Separation and Distribution Agreement, Moon and its Affiliates are willing to provide (or cause to be provided) to SpinCo and its Affiliates and SpinCo and its Affiliates are willing to provide (or cause to be provided) to Moon and its Affiliates, certain transition services (as further described below, the “Transition Services”) on the terms and conditions set forth herein; and
WHEREAS, (i) references to “Provider” herein shall mean (A) Moon with respect to Transition Services provided to SpinCo or its Affiliate, and (b) SpinCo with respect to Transition Services to be provided to Moon or its Affiliate; and (ii) references to “Recipient” herein shall mean (A) SpinCo with respect to Transition Services being provided to it by Moon or its Affiliate and (B) Moon with respect to Transition Services being provided to it by SpinCo or its Affiliate.
NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the Parties hereto agree as follows:
ARTICLE I
TRANSITION SERVICES
1.1.        Transition Services.
(a)          In accordance with the terms of this Agreement, Provider shall perform or cause its Affiliates to perform for Recipient or its Affiliates the Transition Services set forth in the Services Schedules attached as Exhibit A hereto (the “Services Schedule, the term “Services Schedule” also includes any additional or supplemental Services Schedules mutually agreed to by the Parties in accordance with this Agreement).
(b)          Provider shall perform, or cause to be performed by one or more of its Affiliates, the Transition Services (i) in accordance with this Agreement and, in any event, in compliance with applicable Law; (ii) (A) in all cases in a professional and workmanlike manner and (B) at a scope, quantity and service level (x) as specified in the Services Schedule, or (y) if or to the extent not specified in the Services Schedule, then at a substantially similar scope, quantity
 

and service level with which the Transition Services have been provided by Moon and its Affiliates during the period commencing twelve (12) months prior to the date of the Merger Agreement until the Closing Date, (the “Reference Period”); and (iii) in a manner that is non-discriminatory compared to the way in which Provider provides the same or similar services to itself and its Affiliates, including in respect of the prioritization of the provision of Transition Services relative to such same or similar services.  Provider agrees to (i) assign sufficient resources and qualified personnel as are reasonably required to perform the Transition Services and (ii) subject to Provider’s security and other access protocols and policies, provide access to existing tangible assets, equipment and infrastructure, if applicable, in good condition and working order, ordinary wear and tear excepted, in each case, as are reasonably required to perform the Transition Services.  Each Transition Service shall be provided at the location or locations specified in the “Geography” column set forth opposite each Transition Service in the Services Schedule, or, if not specified in the Services Schedule, then at the location or locations at which such Transition Service has been provided by Moon and/or its Affiliates during the Reference Period.  Unless otherwise agreed by the Parties in a Service Schedule, neither Provider nor any of its Affiliates shall be required to provide any Transition Service in a location other than where such Transition Service was performed prior to the Closing. Neither Provider nor any of its Affiliates will be required to render any Transition Services in a particular location that would necessitate that Provider or any of its Affiliates qualify to do business in any location or jurisdiction other than the current locations and jurisdictions where Provider or any such Affiliate, as applicable, does business as of the Effective Date.
(c)          Recipient agrees that the Transition Services are for the sole use and benefit of  Recipient and its Affiliates, in each case, solely with respect to the SpinCo Business or the Moon Business, as applicable. Neither Recipient nor any of its Affiliates shall resell any of the Transition Services to any Person whatsoever and shall not permit the receipt or use of the Transition Services by any Person other than for the conduct of the SpinCo Business or the Moon Business, as applicable. For the avoidance of doubt, except as set forth in a Service Schedule executed by each Party or as expressly provided herein, neither Provider nor any of its Affiliates shall be obligated to provide any other services to Recipient or any of its Affiliates.
(d)          Each Transition Service shall include all functions, responsibilities, activities and tasks, and the materials, documentation, resources, rights and licenses to be used, granted or provided by Provider that are not specifically described in this Agreement as part of such Transition Service, but have been incidental to, and were considered an inherent part of, or necessary subpart included within, such Transition Service during the Reference Period or are otherwise necessary to such Transition Service.
(e)          Upon reasonable advance notice to Recipient or its Affiliate (as applicable), Provider may (or may cause its Affiliates to) modify the manner, quality or standard of care of a Transition Service to conform to modifications in the manner, quality or standard of care that Provider or its Affiliates generally provide such Transition Service to other operations, businesses or divisions of Provider and its Affiliates or as required by a contract with a third party, so long as such modifications would not result in (x) Recipient or its Affiliates generally being treated less favorably than Provider or its Affiliates with respect to the other operations, businesses or divisions of Provider and its Affiliates receiving such Transition Service in any material respect, (y) Recipient or its Affiliates losing the benefit of such Transition Service or (z) Recipient being
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charged additional Costs that are not imposed on a non-discriminatory basis as compared to other operations, businesses or divisions of Provider; provided, that with respect to any Transition Service of which Recipient and its Affiliates are the users of more than 50% of the Transition Service in question, any such modification shall require the consent of Recipient (such consent not to be unreasonably withheld, delayed or conditioned). Notwithstanding the foregoing, the restrictions in clauses (x), (y) and (z) above shall not apply when the relevant modification is required to comply with applicable Law.
(f)          If, within six (6) months of the Closing, SpinCo identifies any service not included in the Services Schedule (other than a service listed on Exhibit B as an Excluded Service (an “Excluded Service”)) that was provided to the SpinCo Business by Moon or any of its Affiliates at any time during the Reference Period (other than any such service provided during such period outside of the ordinary course of business in connection with the transactions contemplated by the Separation and Distribution Agreement), either directly or indirectly through third-party service providers, which service (i) Moon or its Affiliates continues to provide with respect to any operations, businesses or divisions of the Moon Group,  (ii) SpinCo is not already receiving from a third-party service provider and (iii) SpinCo reasonably believes is necessary for the operation or conduct of the SpinCo Business following the Closing in substantially the same manner as the SpinCo Business was operated or conducted during the Reference Period, then promptly following a written notice from SpinCo to Moon to such effect and describing such service, the Parties shall promptly  provide for such service to be included hereunder such that Moon or its Affiliates will provide (or arrange for the provision of) such service to SpinCo and its Affiliates in accordance with the terms of this Agreement.  The compensation associated with any such service shall be determined in accordance with the terms set forth in Section 2.1. The Parties shall negotiate and document the terms of such service in a supplemental Services Schedule, which Services Schedule shall describe in reasonable detail the nature, scope, service period(s) and other terms applicable to such service.
(g)          If, within six (6) months of the Closing, Moon identifies any service not included in the Services Schedule (other than an Excluded Service) that was provided to the business of Moon and its Affiliates by the SpinCo Business at any time during the Reference Period (other than any such service provided during such period outside of the ordinary course of business in connection with the transactions contemplated by the Separation and Distribution Agreement), either directly or indirectly through third-party service providers, which service (i) SpinCo or its Affiliates continues to provide with respect to any operations, businesses or divisions of the SpinCo Group or Clover Group, (ii) Moon is not already receiving from a third-party service provider and (iii) Moon reasonably believes is necessary for the operation or conduct of the business of Moon and its Affiliates following the Closing in substantially the same manner as such business was operated or conducted during the Reference Period, then promptly following a written notice from Moon to SpinCo to such effect and describing such service, the Parties shall promptly provide for such service to be included hereunder such that SpinCo or its Affiliates will provide (or arrange for the provision of) such service to Moon and its Affiliates in accordance with the terms of this Agreement.  The compensation associated with any such service shall be determined in accordance with the terms set forth in Section 2.1. The Parties shall negotiate and document the terms of such service in a supplemental Services Schedule, which Services Schedule shall describe in reasonable detail the nature, scope, service period(s) and other terms applicable to such service.

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1.2.        Subcontractors. Provider may, directly or through one or more Affiliates, hire or engage one or more subcontractors or other third-party service providers (each, a “Subcontractor”) to perform any of the Transition Services (a) to the extent that such Transition Service was subcontracted or a subcontractor was utilized during the Reference Period or has been used during the Term or such third party is subcontracted or utilized at the same time to provide substantially the same services to Provider or its Affiliates or (b) upon the prior written consent of Recipient (which may not be unreasonably withheld, conditioned or delayed); provided, that (i) Provider and its Affiliates shall remain primarily responsible for the acts and omissions of each Subcontractor as if they were Provider’s or such Affiliates’ own acts and omissions, including each Subcontractor’s compliance with the terms of this Agreement, (ii) Provider shall be responsible for ensuring, and for causing its Affiliates to ensure, that the performance standards set forth in Section 1.1(b) are satisfied with respect to any Transition Service provided by any such Subcontractor, (iii) the use of any such Subcontractor shall not increase (but may reduce) any fees or other payments payable by the Recipient hereunder, as compared to the fees and other payments if Provider or its Affiliates were to provide such Transition Services itself, and (iv) except as otherwise expressly provided herein, Provider or its relevant Affiliate shall be responsible for any payment or other termination fees due to such Subcontractor in the event Provider or such Affiliate changes or replaces such Subcontractor.  Notwithstanding the foregoing, if Provider did not use a Subcontractor for a Transition Service during the Reference Period or during the Term, and either (x) Recipient and its Affiliates are the users of more than 50% of the Transition Service in question or (y) the use of a Subcontractor would result in the early termination of a secondment arrangement contemplated by Section 3.01(b) of the Employee Matters Agreement (as defined in the Separation and Distribution Agreement), then the use of such Subcontractor shall require the prior written consent of Recipient (which may not be unreasonably withheld, conditioned or delayed).
1.3.        Period Transition Services Will Be Provided.  Each Transition Service shall be provided beginning as of the Closing Date (or such later date as such Transition Service is added to the Services Schedule pursuant to Section 1.1(f) or Section 1.1(g), as applicable) and shall continue through the expiration of the term relating to such Transition Service as set forth in the Services Schedule or if no expiration date for such Transition Service is stated therein, such Transition Service will continue for the Term, unless (a) this Agreement is terminated in its entirety by the Parties in accordance with Section 1.5, (b) this Agreement or such Transition Service is terminated, in whole or in part, in accordance with ARTICLE V, (c) Provider discontinues such Transition Service pursuant to Section 2.5 or (d) otherwise mutually agreed by the Parties in writing.
1.4.        Service Suspensions. Recipient acknowledges that the Transition Services may, from time to time, in the reasonable discretion of Provider, be interrupted, suspended, allocated or reduced in whole or in part for (a) ordinary course or necessary modifications or maintenance relating to the Transition Services or (b) any other reasonable matters to the extent such matters equally affect other operations, businesses or divisions of Provider or its Affiliates receiving the same services (the “Service Suspensions”); provided, however, that (x) Provider shall conduct (and shall cause its Affiliates to conduct) any Service Suspension for the Transition Services, including with respect to bringing systems and services back online, on a non-discriminatory basis as compared to other operations, businesses or divisions of Provider and its Affiliates, and (y) Provider shall notify (or cause its Affiliate to notify) Recipient or its applicable Affiliate of such Service Suspensions consistently with the manner in which it notifies its and its
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Affiliates’ businesses of the same Service Suspensions but, in any event, Provider shall give (or cause its Affiliate to give) Recipient or its applicable Affiliate reasonable advance notice of any planned Service Suspension, provided that, in the event of any unplanned Service Suspension for which advance notice is not practicable, Provider shall give (or cause its Affiliate to give) Recipient or its applicable Affiliate prompt notice thereof. Provider shall consider (or shall cause its Affiliate to consider) in good faith the impact of any such Service Suspension on Recipient or its applicable Affiliate and cooperate (or cause its Affiliate to cooperate) in good faith with Recipient or its applicable Affiliate and use commercially reasonable efforts to minimize any adverse consequences to Recipient or its applicable Affiliate consistent with the manner in which it does so for its and its Affiliates’ businesses. Provider shall keep (or shall cause its Affiliate to keep) Recipient or its applicable Affiliate reasonably and promptly informed of the status and progress of any Service Suspension.

1.5.        Term.
(a)          The term of this Agreement (the “Term”) shall commence as of the Closing Date and shall continue until the date that is the end of the calendar month that is the twenty-fourth (24th) full calendar month after the Closing Date (the “Expiration Date”), unless, subject to Section 1.5(b), this Agreement is earlier terminated in its entirety by the Parties in accordance with ARTICLE V or the Parties agree in writing to extend the Term.
(b)          Notwithstanding anything to the contrary in this Agreement or the Services Schedules, in no event shall Provider or its Affiliates have any obligation to provide any Transition Service beyond the Expiration Date or, if earlier, the term of such Transition Service as set forth in the applicable Services Schedule; provided, however, Recipient may, with ninety (90) days prior written notice, extend the term of such Transition Service (or, for any Transition Service identified in the applicable Services Schedule as being required to be extended or terminated as a group, with respect to such group of Transitional Services), for a period of up to six months, if Recipient determines in good faith such extension is reasonably necessary for the operation of Recipient’s business. The Parties acknowledge and agree that any actual and reasonable increase to Provider or its Affiliates in the actual cost of providing a Transition Service may be charged to Recipient on a pass-through basis during the period of any extension to the extent such actual and reasonable increase is applied on a non-discriminatory basis as compared to other operations, businesses or divisions of Provider.
1.6.        Commingling of Cash.  To the extent Provider or any of its Affiliates shall have charge or possession of Recipient’s or any of its Affiliates’ cash or cash equivalents in connection with the provision of the Transition Services, Provider or its Affiliate shall (i) hold such cash or cash equivalents in the name and for the benefit of Recipient or its Affiliate and (ii) separately maintain, and not commingle, such cash or cash equivalents with any cash or cash equivalents of Provider or any of its Affiliates or any other Person.
1.7.        Intellectual Property.  Provider (on behalf of itself and its Affiliates) hereby grants to Recipient and its Affiliates a limited, non-exclusive, royalty-free, fully paid-up non-assignable and non-sublicensable (except to applicable Subcontractors) license to use any Intellectual Property Rights owned or sublicensable (without consent by or payment of any amounts to any third party) by Provider or its Affiliates, in each case solely if and to the extent
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such use is necessary for Recipient or its Affiliates to receive the Transition Services hereunder. Except as expressly provided in this Agreement, the Merger Agreement or the Separation and Distribution Agreement, neither Party shall acquire any right, title or interest in the other Party’s Intellectual Property Rights by reason of the provision or receipt of the Transition Services. If Provider or any of its Affiliates creates any improvements or derivative works of Recipient’s or any of its Affiliates’ Intellectual Property Rights in the course of performing the Transition Services (“Improvements”), Recipient or such applicable Affiliates shall solely and exclusively own all rights in the same. If, in the course of providing any Transition Service, Provider or any of its Affiliates creates or develops any Intellectual Property Rights that are primarily related to Recipient’s business in connection with such Transition Service for or on behalf of Recipient or any of its Affiliates (“Newly Developed IP”), then, as between the Parties, such Newly Developed IP shall be solely and exclusively owned by Recipient or such applicable Affiliates upon creation or development, together with any Improvements, and shall be deemed a “work made for hire” under applicable Law. Without limiting the generality of the foregoing, to the extent any such Improvements or Newly Developed IP would not qualify as a “work made for hire” under applicable Law, Provider (on behalf of itself and its Affiliates) hereby irrevocably assigns and transfers (and shall cause its Affiliates to assign and transfer) to Recipient (or any of its Affiliates designated by Recipient) all of the right, title and interest in, to and under such Improvements or Newly Developed IP.  To  the  extent  any  such  Improvements or Newly Developed IP (i) that are owned by SpinCo hereunder, relate to the Moon Business  as  of  immediately prior to the Distribution Time,  any such Improvements or Newly Developed IP shall be deemed included in the definition of “SpinCo Licensed IP” or (ii) that are owned by Moon hereunder,  relate to the SpinCo Business as of immediately prior to the Distribution Time, any such Improvements or Newly Developed IP shall be deemed included in the definition of “Moon Licensed IP”, in each case under the Intellectual Property Matters Agreement and licensed to the other Party and its applicable Affiliates thereunder.  The Parties shall take any and all actions and execute any and all other documents reasonably necessary to perfect, confirm and record the ownership of such Intellectual Property Rights as contemplated in this Section 1.7.
1.8.        Books and Records.  During the Term and for three (3) years thereafter (but without limitation to the provisions of the Merger Agreement or the Separation and Distribution Agreement or any other Transaction Document), Provider shall (and shall cause its Affiliates to) keep accurate and complete, in all material respects, books and records relating to the provision of the Transition Services, including with respect to all Costs incurred in providing such Transition Services and reasonable supporting documentation (subject to Provider’s records retention policies, as such policies may be amended or otherwise modified from time to time), provided that the terms of Section 5.5 governing return of Recipient’s and its Affiliates’ records and data will control in the event of a termination of this Agreement. Provider shall (and shall cause its Affiliates to) make such books and records and documentation (including financial data required for filings and audits, in either electronic or paper form) available to Recipient and its Affiliates, at the cost of Recipient, (i) upon reasonable written request, during normal business hours, (ii) subject to reasonably imposed security procedures and limitations and (iii) subject to compliance with Article IV of the Separation and Distribution Agreement.
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ARTICLE II
COMPENSATION FOR TRANSITION SERVICES
2.1.        Fees.  As consideration for each Transition Service actually received by Recipient and its Affiliates, Recipient shall pay, or cause its Affiliates to pay, to Provider (or any of its Affiliates designated by Provider) for such Transition Service an amount equal to the cost of such Transition Service  as set forth on the Services Schedule, provided, that the cost of each Transition Service will be based upon the allocated cost of such service included in the “Transferring Corporate Costs vSent” (located in file 1.8.1 in the SpinCo Datasite (as defined in the Merger Agreement)), provided, further, that, notwithstanding the foregoing, the aggregate annual amounts payable pursuant to this Section 2.1 shall not exceed the “Total Annual Costs Cap” as set forth on Exhibit C.
2.2.        Set-Up Costs.  All fees, costs and expenses for the preparation and setting up activities described in Section 7.21(b) of the Merger Agreement (which are commonly referred to as transition services “set-up costs”) (“Set-Up Costs”), including any one-time license fees, one time set-up fees for software and engaging any third-party consultants to assist with such implementation and initiation, shall be borne as provided in Section 7.4 to the Separation and Distribution Agreement. To the extent that a Party or any of its Affiliates actually incurs any fees, costs or expenses which are Set-Up Cost allocated to the other Party, such Party shall reimburse (or cause its Affiliates to reimburse) the party incurring such amounts (and the provisions of Section 2.3 shall apply in respect of such reimbursements, mutatis mutandis).  For the avoidance of doubt, this Section 2.2 shall not apply with respect to Approvals and Notifications, which matters are addressed in Section 2.5.
2.3.        Payment Terms. Provider shall present Recipient (on account of Transition Services provided to Recipient and its Affiliates) with monthly invoices for the Transition Services Provider and its Affiliates provide.  The format of such invoices shall include, without limitation, a brief description of the applicable Transition Services, the billing period, the applicable Costs, and such other information as Recipient may reasonably request to verify the quantity or volume of and Costs for the Transition Services. Recipient shall pay (or cause its Affiliates to pay), the undisputed amount of the monthly invoiced amount within forty-five (45) days after the date such monthly invoice was received. Any invoiced undisputed amounts not paid within such forty-five (45) day period shall be subject to interest from the due date until the date of payment, compounded monthly, at the Prime Rate published in The Wall Street Journal, Eastern Edition (or the maximum legal rate, whichever is lower). If Recipient in good faith disputes any portion of the amount due on any invoice, Recipient shall notify Provider in writing of the nature and basis of the dispute as soon as commercially reasonable, but no later than forty-five (45) days from the date of such invoice. If Recipient does not notify Provider of any disputed amounts within such forty-five (45) period, then Recipient will be deemed to have accepted Provider’s invoice. With respect to any invoiced amounts disputed by Recipient in good faith and notified to Provider in accordance with the requirements of this Section 2.3, Recipient may, in its discretion, (i) withhold such amounts pending resolution of the dispute in accordance with Section 3.2 or (ii) pay (or cause its Affiliates to pay) such amounts within the period set forth in the applicable invoice and seek reimbursement from Provider if such dispute is resolved in Recipient’s favor. Recipient shall pay (or cause its Affiliates to pay), or reimburse (or cause its Affiliates to reimburse) Provider for, the gross amount of any sales, use, excise, value-added or other similar tax (whether now existing or subsequently
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enacted) applicable to the amounts charged by Provider for Transition Services hereunder.  Provider shall include such taxes on the invoices provided in accordance with this Section 2.3 and shall be responsible for remitting (or causing the remission of) such taxes to the applicable taxing authority.  Each of the Parties and their respective Affiliates shall be solely responsible for the payment of any and all of their own other taxes imposed with respect to the provision of any Transition Services and any fees or charges in respect thereof, including without limitation franchise and similar taxes on capital, employment taxes associated with its employees, property taxes, gross receipts taxes, and taxes based on income. All amounts due and payable hereunder shall be invoiced and paid in (A) U.S. dollars or (B) if the Parties so agree, a foreign currency agreed by the Parties. With respect to Provider or any of its Affiliates that is domiciled outside of the United States that provides Transition Services to Recipient or any of its Affiliates that is domiciled outside the United States, if required by any applicable Law or otherwise reasonably requested by a Party or an Affiliate thereof, such non-U.S. Persons will enter into a local country agreement providing for the performance of such Transition Services.
2.4.        Audit Rights.  During the Term, and for a period of eighteen (18) months thereafter, Recipient shall have the right to conduct or cause to be conducted, an audit of the data, books and records and other pertinent information of Provider and its Affiliates concerning the provision of Transition Services hereunder, including without limitation, for purposes of disputing the calculation of any fees charged under this Agreement or for preparing financial statements. Such audit shall be at Recipient’s cost and expense, provided, however, that if an error in the calculation of the amounts invoiced to Recipient resulting in an overcharge to Recipient and its Affiliates of 10% or more (compared to the amount set forth on the applicable invoice) is identified in any such audit, Provider shall bear the cost of such audit. Without limiting the generality of the foregoing, in connection with the exercise of Recipient’s audit right, Provider shall also provide Recipient and its personnel and third-party accountants with reasonable access to Provider’s and its Affiliates’ pertinent personnel and third-party accountants (subject to execution of any access letters required by third-party accountants); provided that Provider and its personnel and third-party accountants shall not be required to provide information to Recipient or its personnel or third-party accountants that (x) is competitively sensitive or would waive any legal privilege (provided that in such case Provider shall use commercially reasonable efforts to provide Recipient and its personnel and third-party accountants with such information in a form and/or manner that would not result in competitive harm or waive legal privilege), (y) requires a third-party consent, which Provider, despite using commercially reasonable efforts, is not able to obtain, or (z) would be in violation of applicable Law. Recipient shall provide at least ten (10) Business Day’s advance notice of any such audit, and shall conduct such audit during normal business hours and in such a manner so as to reasonably minimize disruptions to Provider and its Affiliates.  No more than one (1) audit contemplated by this Section 2.3 may be conducted by Recipient during any 12-month period.
2.5.        Third-Party Consents; Contravention.

(a)          To the extent that any Approval or Notification is necessary for Provider and its Affiliates to provide the Transition Services to Recipient and its Affiliates, the Parties shall use their reasonable best efforts to obtain or make such Approvals or Notifications as soon as reasonably practicable; provided, however, that, except as otherwise provided in Section 7.4 to the Separation and Distribution Agreement, neither Moon nor SpinCo shall be obligated to contribute
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capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial or commercial accommodation) to any Person in order to obtain or make such Approvals or Notifications. A Party shall not be deemed in breach of this Agreement in connection with the provision, receipt or use of a Transition Service (or failure to do so) if and to the extent such breach is the result of a failure by the Parties to secure an Approval or Notification, and in such event the Parties shall reasonably cooperate in good faith to effect an alternate method of providing the Transition Services to Recipient or its applicable Affiliate to the extent reasonably practicable. If such good faith effort does not result in a solution mutually acceptable to the Parties within thirty (30) days, then upon five (5) Business Days’ written notice delivered to Recipient after the expiration of such thirty (30) day period Provider and its Affiliates shall be relieved of the obligation to perform such Transition Service.
(b)          Neither Provider nor its Affiliates shall be required to perform a Transition Service if the provision of such Transition Service by Provider or its Affiliate conflicts with or violates applicable Law. The Parties shall use their reasonable best efforts to resolve any such conflict or violation as soon as reasonably practicable; provided, however, that, except as otherwise provided in Section 7.4 to the Separation and Distribution Agreement, neither Moon nor SpinCo shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial or commercial accommodation) to any Person in order to resolve any such conflict or violation.  If Provider, Recipient, or any of their  respective Affiliates becomes aware of any of the foregoing conflicts or violations arising from provision of a Transition Service by Provider or its Affiliate, such Party shall promptly advise the other Party upon obtaining knowledge of such potential conflict or violation and Provider may suspend or cease (or cause its Affiliate to suspend or cease) providing such Transition Service. A Party shall not be deemed in breach of this Agreement in connection with the provision, receipt or use of a Transition Service (or failure to do so) if and to the extent such breach is the result of a failure by the Parties to resolve any such conflict or violation, and in such event the Parties shall reasonably cooperate in good faith to effect an alternate method of providing the Transition Services to Recipient or its applicable Affiliate to the extent reasonably practicable.  If such good faith effort does not result in a solution mutually acceptable to the Parties within thirty (30) days, then upon five (5) Business Days’ written notice delivered to Recipient after the expiration of such thirty (30) day period Provider and its Affiliates shall be relieved of the obligation to perform such Transition Service.
ARTICLE III
GOVERNANCE AND DISPUTES
3.1.        Cooperation, Information and Access; Monthly Meeting.
(a)          The Parties will cooperate in good faith in all matters relating to the provision and receipt of the Transition Services and to minimize expense, distraction and disturbance to the other Party in performance of their respective obligations hereunder. Without limiting the generality of the foregoing, Recipient will provide (or cause its Affiliates to provide) to Provider in a timely manner, access to personnel, facilities and information required or reasonably requested by Provider in connection with providing the Transition Services; provided, however, Recipient shall not be required to provide (or cause its Affiliate to provide) access to
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information that (x) is competitively sensitive or would waive legal privilege (provided, that in such case Recipient shall use commercially reasonable efforts to provide (or cause its Affiliate to provide) Provider with such information in a form and/or manner that would not result in competitive harm or waive legal privilege), (y) requires a third-party consent, which Recipient or its Affiliates, despite using commercially reasonable efforts, is not able to obtain or (z) would be in violation of applicable Law; provided that, in each case of clause (x) and (y), Provider will not be liable for breach of this Agreement for a failure to provide a Transition Service to the extent that such failure resulted from the failure of Recipient to provide access to such information.
(b)          Each Party agrees that all of its and its Affiliates’ employees and any third-party service providers and Subcontractors, when on the property of the other Party or any of its Affiliates, or when given access to any equipment, computer, software, network or files owned or controlled by the other Party or any of its Affiliates, shall conform to the policies and procedures of such other Party or its Affiliate concerning health, safety and security (including physical security, network access, internet security, virus protection, disaster recovery, confidentiality, privacy and personal information security guidelines, policies and procedures) which are made known to such Party in advance in writing.
(c)          The Parties shall cooperate (and shall cause their Affiliates to) to ensure that any creation, collection, receipt, access, use, storage, disposal and disclosure of personal information hereunder does and will comply with all applicable Laws, including privacy and data protection Laws, as well as all applicable accepted industry standards. Recipient shall be advised immediately of any actual or attempted unauthorized access to or use of any technology, or any SpinCo Confidential Information or Moon Confidential Information, as the case may be (including any personal information of the Parties or their Affiliates) processed thereby or stored thereon (such unauthorized access or use, a “Security Breach”). Provider shall (and shall cause its Affiliates to) take all reasonable measures, at its expense, to remediate such Security Breach in compliance with all applicable Laws and will cooperate with Recipient’s reasonable requests in responding to such Security Breach. Provider shall not (and shall not permit its Affiliates to) provide notice to or contact any third party regarding a Security Breach, whether actual or suspected, without the prior written consent of Recipient, except to the extent required by applicable Law. Each Party reserves the right to disconnect (or cause its Affiliate to disconnect) the other Party or its Affiliate immediately from its or its Affiliate’s network and suspend any affected Transition Services, to the extent it reasonably deems it necessary and would do so with respect to its own businesses or Affiliates under similar circumstances, if such Party determines that: (1) its network is being attacked by devices from within the other Party’s or its Affiliate’s network, or (2) any network provided to the other Party or its Affiliate by such Party or its Affiliate as a Transition Service under this Agreement has been connected to (i) the internet or any third party network in any manner other than through an approved network, or (ii) any wireless access point. Upon satisfactory remediation the disconnecting Party will reconnect (or will cause its Affiliate to reconnect) the other Party or its applicable Affiliate and resume any affected Transition Services.
(d)          Provider and Recipient understand that, from time to time, each may need to access the other’s or the other’s Affiliate’s software and related data and databases, in which there is no commercially practical method to partition or separately protect confidential data or information or to restrict access to certain proprietary networks or applications. If either Party believes there is a risk to their confidential information due to the other Party’s or its Affiliate’s
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ability to access confidential data, information, or proprietary network or applications, such Party will have the right, but not the obligation, to establish and implement (or cause its Affiliate to establish and implement) reasonable restrictions on the other Party’s or its Affiliate’s access to any software, data, databases, applications, or networks used in connection with the Transition Services. Such restrictions may be imposed only for the purposes of: (i) protecting security of data on physical and electronic networks; (ii) assuring compliance with Law or contract restrictions imposed by third parties; (iii) protecting the integrity of the data, applications, or networks; or (iv) protecting against the loss of any material competitive advantage. Each Party will give (or will cause its Affiliate to give) commercially reasonable notice to the other or its applicable Affiliate of the imposition of any such restrictions. Provider and Recipient agree that they will work together, in good faith, to minimize the need for any such restrictions and the interruption or degrading of any such Transition Services. Both Parties agree to comply (and to cause their Affiliates to comply) with applicable Law with respect to data collection, processing, use, transfer, protection and privacy.
(e)          During the Term, each Party shall nominate one (1) representative (together, “Lead TSA Coordinators”) who shall conduct a joint monthly meeting at a mutually agreed time to discuss all matters arising in connection with the provision of the Transition Services and the performance of the Agreement, provided, however, each such meeting may be canceled in advance upon the mutual agreement of the Lead TSA Coordinators.
(f)          The Lead TSA Coordinators may from time to time nominate functional team leaders, responsible for either (i) a designated geographical area in which Transition Services are being provided or (ii) designated Transition Services and such nominated Persons shall have the authority to handle such daily operational matters related to the applicable Transition Service or Transition Services (such Persons, the “Function Leads”). Function Leads shall not have authority or responsibility with respect to any Transition Services other than the Transition Services(s) with respect to which they have been designated as Function Leads by the Lead TSA Coordinators. Either Lead TSA Coordinator may, from time to time, by written notice to the other Lead TSA Coordinator nominate a replacement Function Lead for any Transition Service. Issues that cannot be resolved by the applicable Function Leads shall be escalated to the Lead TSA Coordinators in accordance with Section 3.2.
(g)          To the extent that the transfer of a SpinCo Employee or a SpinCo Asset to the SpinCo Group results in a reduction in the Total Annual Cost Cap pursuant to Exhibit C, the Moon Group (in its capacity as Provider) shall be entitled to full utilization of such SpinCo Employee or SpinCo Asset in the provision of Transition Services hereunder.  In the event that the employment of any such SpinCo Employee with the SpinCo Group is terminated, SpinCo will use reasonable best efforts to cause such SpinCo Employee to be replaced promptly in order to permit the continued delivery of the applicable Transition Service.
3.2.        Dispute Resolution.  Prior to initiating any Action, any dispute, controversy or claim arising out of, relating to or in connection with the Transition Services or this Agreement (including any dispute in respect of charges or payments pursuant to or otherwise governed by Section 2.3 or in respect of or following any audit pursuant to Section 2.4) (a “Dispute”) that cannot be resolved by the applicable Function Leads after fifteen (15) Business Days, shall be submitted first to the Lead TSA Coordinators, and the Lead TSA Coordinators shall seek to resolve
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such Dispute through good faith negotiation. In the event that any Dispute is not resolved by the Lead TSA Coordinators within fifteen (15) Business Days after the Dispute was referred to the Lead TSA Coordinators (during which time the Lead TSA Coordinators shall meet in person or by telephone as often as reasonably necessary to attempt to resolve the Dispute), the Lead TSA Coordinators shall escalate the Dispute to the chief financial officer of each Party for resolution. Upon such escalation, each TSA Project Lead will provide to his or her Party’s chief financial officer (i) the issues in dispute and such Party’s position thereon, (ii) a summary of the evidence and arguments supporting such Party’s position and (iii) a summary of the negotiations that have taken place to date. The chief financial officers shall meet in person or by telephone as often as reasonably necessary to resolve the Dispute and shall confer in a good faith effort to resolve the Dispute. If such chief financial officers decline to meet, or if they fail to resolve the Dispute within ten (10) Business Days after the matter was first referred to either of them (as such time period may be extended by them in writing), the Dispute shall be escalated to the chief executive officers of each Party and the Parties shall follow the same procedures described above with respect to the chief financial officers. If such chief executive officers decline to meet, or if they fail to resolve the Dispute within ten (10) Business Days, either Party may initiate an Action in accordance with Section 7.8 to resolve the Dispute. Any disputed amount determined by the Parties or a court to be payable to a Party, together with interest thereon at the Prime Rate published in The Wall Street Journal, Eastern Edition (or the maximum legal rate, whichever is lower), on the forty-fifth (45th) day after the applicable invoice was received by the other Party, from such date through the date of payment, shall be due and payable to the Party to which payment is due by wire transfer of immediately available funds to such account or accounts as shall be specified by such Party within three (3) Business Days after such amounts are finally determined as provided in this Section 3.2.
ARTICLE IV
DISCLAIMERS; LIMITATION OF LIABILITY; INDEMNIFICATION
4.1.        Disclaimers.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT (INCLUDING SECTION 1.1(b) AND SECTION 4.3), THE TRANSITION SERVICES AND ACCESS TO THE PARTIES’ AND THEIR RESPECTIVE AFFILIATES’ COMPUTER AND OTHER SYSTEMS OR OTHER FACILITIES OR ASSETS ARE PROVIDED ON AN “AS IS” BASIS, WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, QUALITY, PERFORMANCE, COMMERCIAL UTILITY, NONINFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE OR OTHER WARRANTIES, CONDITIONS, GUARANTEES OR REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED.
4.2.        Limitation of Liability.  NO PARTY NOR ANY STOCKHOLDER, OFFICER, DIRECTOR, AGENT, OTHER REPRESENTATIVE OR AFFILIATE THEREOF SHALL BE LIABLE TO ANY OTHER PARTY OR ANY STOCKHOLDER, OFFICER, DIRECTOR, AGENT, OTHER REPRESENTATIVE OR AFFILIATE THEREOF OR ANY OTHER THIRD PERSON FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES OR LOST PROFITS, OR LOSSES CALCULATED BY REFERENCE TO ANY MULTIPLE OF EARNINGS OR EARNINGS BEFORE INTEREST, TAX, DEPRECIATION OR AMORTIZATION (OR ANY OTHER VALUATION METHODOLOGY) WHETHER BASED ON CONTRACT, TORT, STRICT LIABILITY, OTHER LAW OR OTHERWISE AND WHETHER OR NOT ARISING FROM
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THE OTHER PARTY’S SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT, IN EACH CASE, ARISING IN CONNECTION WITH THIS AGREEMENT OR ANY ACTS OR OMISSIONS RELATING TO THE TRANSITION SERVICES, WHETHER LIABILITY IS BASED ON CONTRACT, TORT, STRICT LIABILITY OR OTHER FAULT FOR ANY MATTER RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY; PROVIDED, HOWEVER, THAT IF A PARTY IS HELD LIABLE TO A THIRD PARTY FOR ANY OF SUCH DAMAGES AND THE OTHER PARTY IS OBLIGATED TO INDEMNIFY SUCH PARTY FOR THE MATTER THAT GAVE RISE TO SUCH DAMAGES, THEN SUCH INDEMNIFYING PARTY SHALL BE LIABLE FOR, AND OBLIGATED TO REIMBURSE THE OTHER PARTY FOR, THE TOTAL AMOUNT OF SUCH DAMAGES HOWSOEVER CHARACTERIZED. WITHOUT LIMITING THE FOREGOING, EXCEPT IN THE CASE OF FRAUD, BAD FAITH, WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF PROVIDER, IN NO EVENT WILL THE TOTAL, CUMULATIVE, AGGREGATE LIABILITY OF SUCH PROVIDER, WHETHER BASED ON CONTRACT, TORT, STRICT LIABILITY, OTHER LAW OR OTHERWISE AND WHETHER OR NOT ARISING FROM THE OTHER PARTY’S SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT, EXCEED AN AMOUNT EQUAL TO TWO (2) TIMES THE AMOUNTS PAID BY SUCH RECIPIENT TO SUCH PROVIDER FOR THE TRANSITION SERVICES PROVIDED DURING THE TERM OF THIS AGREEMENT.
4.3.        Indemnification.(a) Recipient will indemnify, defend and hold harmless Provider and its Affiliates and their respective stockholders, members, managers, officers, directors, agents and other representatives (collectively, the “Provider Indemnitees”) from any and all claims, demands, suits, losses, liabilities, penalties, actions and damages (“Claims”) under or in connection with this Agreement to the extent arising from: (i) fraud, bad faith, willful misconduct or gross negligence of or by Recipient or any of its Affiliates, in each case related to the receipt of Transition Services under this Agreement, (ii) a breach of any provision of this Agreement by Recipient or any of its Affiliates, (iii) a violation of applicable Law by Recipient or any of its Affiliates, (iv) any infringement or misappropriation of Intellectual Property Rights of any third Person by Recipient or any of its Affiliates arising out of the receipt of Transition Services under this Agreement, or (v) any Security Breach by Recipient or any of its Affiliates (other than such Claims to the extent resulting from or arising out of fraud, bad faith, or willful misconduct or gross negligence on the part of Provider or its Affiliates or their respective Subcontractors under or in connection with this Agreement.
(b)         Provider will indemnify, defend and hold harmless Recipient and its Affiliates and their respective stockholders, members, managers, officers, directors, agents, other representatives (collectively, the “Recipient Indemnitees”) from any and all Claims under or in connection with this Agreement to the extent arising from: (i) fraud, bad faith, willful misconduct or gross negligence of or by Provider or any of its Affiliates, in each case related to the provision of Transition Services under this Agreement, (ii) a breach of any provision of this Agreement by Provider or any of its Affiliates, (iii) a violation of applicable Law by Provider or any of its Affiliates, (iv) any infringement or misappropriation of Intellectual Property Rights of any third Person by Provider or any of its Affiliates arising out of the provision of Transition Services under this Agreement, or (v) any Security Breach by Provider or any of its Affiliates (other than such
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Claims to the extent resulting from or arising out of fraud, bad faith, willful misconduct or gross negligence on the part of Recipient or its Affiliates under or in connection with this Agreement).
(c)          Except in the case of fraud, the exclusive remedy for any Provider Indemnitee or any Recipient Indemnitee for monetary damages arising from a breach of this Agreement shall be the indemnification provided under this Section 4.3. For the avoidance of doubt, each Party may seek specific performance and other equitable remedies in accordance with Section 7.9
(d)         Each Provider Indemnitee and Recipient Indemnitee shall use its commercially reasonable efforts to mitigate any loss for which such Provider Indemnitee or Recipient Indemnitee seeks indemnification under this Agreement.
ARTICLE V
TERMINATION
5.1.        Termination of Transition Services. Unless both of the Parties agree in writing to terminate this Agreement, neither Party may terminate this Agreement in its entirety and Provider may not terminate any Transition Service, in whole or in part, during the Term, except as follows:
(a)          Recipient shall have the right to terminate any Transition Service, in whole or in part, upon thirty (30) days prior written notice to Provider, in each case, subject to the obligation to pay Early Termination Charges, as provided for under Section 5.2; provided, however, that (i) to the extent that Provider’s ability to provide (or cause to be provided) a Transition Service is dependent on the continuation by Recipient of another Transition Service (including continuation of access to a facility) to the extent expressly provided in the relevant Services Schedule, then Recipient shall not be entitled to terminate or reduce part of the scope or amount of, any such Transition Service unless, concurrently therewith, Recipient also terminates or reduces all such other interdependent Transition Services and (ii) to the extent that Provider informs Recipient that Provider’s actual cost of providing any other Transition Service would be increased by such termination or reduction, then Recipient shall not be entitled to terminate or reduce part of the scope or amount of, any such Transition Service unless, concurrently therewith, Recipient agrees to such increased Cost for such other Transition Services; and
(b)          if either Party materially breaches any of its material obligations under this Agreement and such Party does not cure such breach within sixty (60) days after the fiftieth (50th) Business Day (or such other period as the Parties agree in writing) after receiving written notice thereof from the non-breaching Party, the non-breaching Party may terminate this Agreement, in whole or in part (with respect to the Transition Services to which the breach relates), by providing written notice of termination to the Party in breach (it being understood that this Section 5.1(b) shall not limit the Parties’ obligations pursuant to Section 3.2); and
(b)          this Agreement may be terminated, effective immediately upon written notice, by a Party, if the other Party files, or has filed against it, a petition for voluntary or involuntary bankruptcy or pursuant to any other insolvency law or makes or seeks to make a
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general assignment for the benefit of its creditors or applies for or consents to the appointment of a trustee, receiver or custodian for it or a substantial part of its property.
5.2.        Effect of Termination of Service.
(a)          Upon termination or reduction of any Transition Service pursuant to this Agreement, Recipient shall pay (or cause its Affiliate to pay) to Provider (or any Affiliate designated by it) all applicable Early Termination Charges, which shall be invoiced and paid as provided in Section 2.3. “Early Termination Charges” means any and all incremental out-of-pocket fees or expenses actually incurred and payable to any unaffiliated, third-party provider solely as a result of any early termination or reduction of a Transition Service (which fees and expenses may include breakage fees, or early termination fees or charges); for the avoidance of doubt, “Early Termination Charges” do not include any fees, costs or expenses incurred upon or in connection with the normal expiration of any Transition Service.
(b)          Upon termination of any Transition Service pursuant to this Agreement, Provider of the terminated Transition Service will have no further obligation to provide (or to cause its Affiliates to provide) any of the terminated Transition Services, and Recipient will have no obligation to pay (or to cause its Affiliate to pay) any future Costs relating to any such Transition Service; provided that such Recipient shall remain obligated to Provider for (i) Costs, any other fees, costs and expenses owed and payable per the terms of Article II with respect to Transition Services provided prior to the effective date of termination and (ii) Early Termination Charges as invoiced by Provider to Recipient.
5.3.        Force Majeure Event.  Provider and its Affiliates shall not be liable for delays or interruptions in performing their obligations (other than obligations to make monetary payments) primarily arising from (i) any act, delay or failure to act on the part of any Governmental Authority; (ii) acts of God; (iii) casualties such as fire or explosions; (iv) labor strikes or (v) any other causes beyond their reasonable control (or beyond the reasonable control of any Person acting on their behalf) (any such event, a “Force Majeure Event”). In the event of any Force Majeure Event which Provider determines will prevent or cause a significant delay in its or its Affiliates’ performance, Provider shall notify Recipient promptly in writing. Provider shall (a) use (and shall cause its Affiliates to use) reasonable best efforts to overcome the circumstances created by such event as quickly as possible, (b) mitigate the impact of such circumstances on its provision of Transition Services hereunder, (c) shall notify Recipient promptly in writing when such circumstances have ceased to affect the provision of Transition Services, (d) shall treat Recipient on a non-discriminatory basis as compared to any other internal or external service recipient, if any, in connection with the restoration of the affected Transition Services and (e) at the option of Recipient, the term and all additional payments owed in respect of any affected Transition Services shall be tolled to the extent such Transition Services are not provided or have not already been provided by Provider, until such Transition Service is resumed in accordance with the standards set forth in Section 1.1(b). Upon a cessation of a Force Majeure Event, Provider shall use reasonable best efforts to resume its performance of any affected Transition Services in accordance with the standards set forth in Section 1.1(b) with the least possible delay. So long as a Force Majeure Event persists, Recipient shall have the right, but not the obligation, (x) to obtain replacement services for the affected Transition Services for the duration of such Force Majeure Event from a third-party service provider at Recipient’s and Provider’s equally shared expense or
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(y) to terminate any Transition Service in whole or in part upon ten (10) Business Days’ prior written notice to Provider.
5.4.        Survival Upon Expiration or Termination.  The provisions of Section 1.8 (Books and Records), ARTICLE IV (Disclaimers; Limitation of Liability; Indemnification), ARTICLE VI (Notices and Demands) ARTICLE VII (Miscellaneous) and Section 5.6 (Transition and Post Termination Assistance) shall survive the termination or expiration of this Agreement unless otherwise agreed to in writing by both Parties; provided that, the provisions of ARTICLE II (Compensation for Transition Services) shall survive such termination and each Party shall remain liable to the other Party for all amounts payable thereunder in respect of Transition Services provided prior to the effective date of such termination.
5.5.        Actions Upon Termination.  Except as otherwise provided in the Merger Agreement, the Separation and Distribution Agreement or other Transaction Documents, upon the termination of any Transition Service with respect to which either Party holds equipment, books, records, files or any other documents or other property owned by (or required by the Merger Agreement, the Separation and Distribution Agreement or any other Transaction Document to be delivered to) the other Party, the Party in possession of such property (including Intellectual Property Rights) shall, at the other Party’s request and option, destroy, return or deliver (or cause to be destroyed, returned or delivered) all such property of the other Party. Each Party shall bear its reasonable costs and expenses associated with the return or destruction thereof, except as otherwise provided in the Merger Agreement, the Separation and Distribution Agreement or the other Transaction Documents. In addition, upon the termination of any of the Transition Services which involved the compilation of records including data on Provider’s or its Affiliates’ computer systems, upon Recipient’s written request, Provider will use (and will direct its Affiliates to use) commercially reasonable efforts to promptly deliver (or to cause to be promptly delivered) such records to Recipient or its Affiliates; provided that, Provider and its Affiliates shall be allowed to retain a copy of such materials (i) to the extent required by applicable Law, or Provider’s or its Affiliates’ bona fide compliance or record retention policies; or (ii) to the extent it is “backed-up” on its or theirs (as the case may be) electronic information management and communications systems or servers, is not available to the end user and cannot be expunged without considerable effort.  Electronic records will be provided on magnetic media in readable format mutually acceptable to the Parties, which format will be capable of being read by a computer mutually acceptable to the Parties.
5.6.        Transition and Post Termination Assistance. During the Term and for a period of three (3) months following expiry of the Term, subject to Section 7.5, Provider shall provide (and cause its Affiliates to provide) reasonable separation assistance to Recipient and its Affiliates to enable Recipient and its Affiliates to transition and transfer responsibility for the provision of the Transition Services to Recipient and its Affiliates. Costs of providing any such assistance in accordance with this Section 5.6 shall be borne as provided in Section 7.4 to the Separation and Distribution Agreement.  
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ARTICLE VI
NOTICES AND DEMANDS
6.1.        Notices.  All notices and other communications among the Parties shall be in writing and shall be deemed to have been duly given (a) when delivered in person, (b) when delivered after posting in the United States mail having been sent registered or certified mail return receipt requested, postage prepaid, (c) when delivered by FedEx or other nationally recognized overnight delivery service or (d) when delivered by email (so long as the sender of such email does not receive an automatic reply from the recipient’s email server indicating that the recipient did not receive such email), addressed as follows:
(a)          if to Moon, to:
 
Ingersoll-Rand plc 
 
170/175 Lakeview Dr.
 
Airside Business Park, Swords, Co. Dublin, Ireland
 
Attention:
Evan M. Turtz
     
 
with a copy to:
   
 
Paul, Weiss, Rifkind, Wharton & Garrison LLP
 
1285 Avenue of the Americas
 
New York, NY 10019
 
Attention:
Scott A. Barshay
   
Steven J. Williams

(b)          if to SpinCo, to:

 
Ingersoll-Rand U.S. HoldCo, Inc.
  c/o Ingersoll-Rand Company
 
800-E Beaty Street
 
Davidson, NC 28036
  Attention: 
Andy Schiesl
     
 
with a copy to:
     
 
Simpson Thacher & Bartlett LLP
 
425 Lexington Avenue
 
New York, NY 10017
 
Attention:
Marni Lerner
   
Mark Pflug
 
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ARTICLE VII
MISCELLANEOUS
7.1.        Relationship of the Parties.  The Parties declare and agree that each Party and its Affiliates is engaged in a business that is independent from that of the other Party and its Affiliates and Provider and its Affiliates shall perform their obligations hereunder as independent contractors. It is expressly understood and agreed that nothing contained herein is intended to create an agency relationship, or a partnership or joint venture.  Neither Party or its Affiliates is an agent or employee of the other Party or its Affiliates.  Neither Party or its Affiliates has authority to represent the other Party or its Affiliates as to any matters, except as may be authorized in writing by the other Party or its Affiliates from time to time.
7.2.        Employees.  Provider or its Affiliates shall be solely responsible for payment of compensation to their respective employees engaged in providing any Transition Services. Provider or its Affiliates shall assume full responsibility for payment of all federal, state, and local taxes or contributions imposed or required under unemployment insurance, social security, and income Tax Laws with respect to such persons.
7.3.        InterpretationUnless the context of this Agreement otherwise requires:
(a)          (i) Words of any gender include each other gender and neuter form; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) derivative forms of defined terms will have correlative meanings; (iv) the terms “hereof,” “herein,” “hereby,” “hereto,” “herewith,” “hereunder” and derivative or similar words refer to this entire Agreement; (v) the terms “Article,” “Section,” “Annex,” “Exhibit,” and “Schedule,” refer to the specified Article, Section, Annex, Exhibit, or Schedule  of this Agreement and references to “paragraphs” or “clauses” shall be to separate paragraphs or clauses of the Section or subsection in which the reference occurs; (vi) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” and (vii) the word “or” shall be disjunctive but not exclusive.
(b)          References to Contracts (including this Agreement) and other documents or Laws shall be deemed to include references to such Contract, document or Law as amended, supplemented or modified from time to time in accordance with its terms and the terms hereof, as applicable, and in effect at any given time (and, in the case of any Law, to any successor provisions).
(c)          References to any federal, state, local, foreign or supranational statute or other Law shall include all regulations promulgated thereunder.
(d)          References to any Person include references to such Person’s successors and permitted assigns, and in the case of any Governmental Authority, to any Person succeeding to its functions and capacities.
(e)          The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent. The Parties acknowledge that each Party and its attorney has reviewed and participated in the drafting of this Agreement and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting Party, or any
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similar rule operating against the drafter of an agreement, shall not be applicable to the construction or interpretation of this Agreement.
(f)          Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. If any action is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action may be deferred until the next Business Day.
(g)          The phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.”
(h)          The term “writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.
(i)          All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP unless the context otherwise requires.
(j)          All monetary figures shall be in United States dollars unless otherwise specified.
7.4.        Assignment. No Party may assign its rights or delegate its duties under this Agreement without the written consent of the other Party. Any attempted assignment or delegation in breach of this Section 7.4 shall be null and void, except that (without limiting any other provision of this Agreement, the Merger Agreement, the Separation and Distribution Agreement, or any other Transaction Document) a Party may assign any or all of its rights and obligations under this Agreement in connection with a sale or disposition of all or substantially all of the business of such Party or in connection with a merger transaction in which such Party is not the surviving entity; provided, however, that in each case, no such assignment shall release such Party from any liability or obligation under this Agreement.
7.5.        Confidentiality.  The Parties acknowledge that certain SpinCo Confidential Information and Moon Confidential Information may be shared or disclosed during the performance of this Agreement.  The Parties agree that all SpinCo Confidential Information and Moon Confidential Information will be subject to the confidentiality provisions of Section 7.2 of the Separation and Distribution Agreement.
7.6.        Severability.  If any provision of this Agreement, or the application of any provision to any Person or circumstance, is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. The Parties further agree that if any provision contained herein is, to any extent, held invalid or unenforceable in any respect under the Laws governing this Agreement, they shall take any actions necessary to render the remaining provisions of this Agreement valid and enforceable to the fullest extent permitted by Law and, to the extent necessary, shall amend or otherwise modify this Agreement to replace any provision contained herein that is held invalid or unenforceable with a valid and enforceable provision giving effect to the intent of the Parties.
7.7.        Third Party BeneficiariesThis Agreement shall be binding upon and inure to the benefit of the Parties and their respective Affiliates, permitted successors and assigns.
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Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any Person, other than the Parties and their Affiliates, any rights or remedies under or by reason of this Agreement; provided, however, that (i) Clover shall be an express third-party beneficiary of the rights of SpinCo as provided in this Agreement and (ii) Provider Indemnitees and Recipient Indemnitees shall be express third-party beneficiaries of ARTICLE IV (Disclaimers; Limitation of Liability; Indemnification).
7.8.        Governing Law; Jurisdiction; WAIVER OF JURY TRAIL.
(a)          This Agreement, and all Actions (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance hereof (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement) shall be governed by and construed in accordance with the Law of the State of Delaware, without regard to the choice of law or conflicts of law principles thereof. Each of the Parties (on behalf of itself and its Affiliates) expressly waives any right it (or any such Affiliate) may have, now or in the future, to demand or seek the application of a governing Law other than the Law of the State of Delaware.
(b)         Each of the Parties (on behalf of itself and its Affiliates) hereby irrevocably and unconditionally submits, for itself (and such Affiliate) and its (and such Affilate’s) property, to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if such court shall not have jurisdiction, any federal court of the United States of America sitting in Delaware, of if jurisdiction is not then available in such federal court, then in any Delaware state court siting in New Castle County) and any appellate court from any appeal thereof (the “Chosen Courts”) in any Action arising out of or relating to this Agreement or the transactions contemplated hereby or for recognition or enforcement of any judgment relating thereto, and each of the Parties hereby irrevocably (on behalf of itself and its Affiliates) and unconditionally (i) agrees not to commence any such Action except in such courts, (ii) agrees that any claim in respect of any such Action may be heard and determined in the Chosen Courts, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such Action in the Chosen Courts and (iv) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such Action in the Chosen Courts. Each of the Parties (on behalf of itself and its Affiliates) agrees that a final judgment in any such Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each Party (on behalf of itself and its Affiliates) irrevocably consents to service of process in the manner provided for notices in Section 6.1. Nothing in this Agreement will affect the right of any Party (or its Affiliates) to serve process in any other manner permitted by applicable Law.
(c)         EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT (ON BEHALF OF ITSELF AND ITS AFFILIATES) HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT (OR ANY OF ITS AFFILIATES) MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
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HEREBY. EACH PARTY (ON BEHALF OF ITSELF AND ITS AFFILIATES) CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.8(c).
7.9.        Specific PerformanceIn the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Party who is, or is to be, thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief (on an interim or permanent basis) in respect of its rights under this Agreement. The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any Action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived by each of the Parties to this Agreement.
7.10.      Captions; counterparts.  The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. This Agreement may be executed in two or more counterparts (including by electronic or .pdf transmission), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of any signature page by facsimile, electronic or .pdf transmission shall be binding to the same extent as an original signature page.
7.11.      Entire Agreement.  This Agreement, the other Transaction Documents, the Merger Agreement, the Confidentiality Agreement (as defined in the Merger Agreement) including any related annexes, Exhibits and Schedules (including the Services Schedule), as well as any other agreements and documents referred to herein and therein, shall together constitute the entire agreement between the Parties relating to the transactions contemplated hereby and supersede any other agreements, whether written or oral, that may have been made or entered into by or among any of the Parties or any of their respective Affiliates relating to the transactions contemplated hereby.
7.12.      Amendments and WaiversNo provision of this Agreement may be amended or modified except by a written instrument signed by each of the parties hereto. Any Party may, at any time, by action taken by its board of directors, a committee thereof or officers thereunto duly authorized, waive any of the terms or conditions of this Agreement or agree to an amendment or modification to this Agreement by an agreement in writing executed in the same manner (but not necessarily by the same Persons) as this Agreement. No waiver by any of the Parties of any breach hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent breach hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No waiver by any of the Parties of any of the provisions hereof shall be effective unless explicitly set forth in writing and executed by the Party sought to be charged with such waiver.
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7.13.      Remedies Cumulative.  Unless otherwise provided under this Agreement (including, for the avoidance of doubt, Section 4.3), all rights of termination or cancellation, or other remedies set forth in this Agreement, are cumulative and are not intended to be exclusive of other remedies to which the injured Party may be entitled by Law or equity in case of any breach or threatened breach by the other Party of any provision in this Agreement.  Unless otherwise provided under this Agreement, use of one or more remedies shall not bar use of any other remedy for the purpose of enforcing any provision of this Agreement.
[Signature Page Follows]
 
 
 
 
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IN WITNESS WHEREOF, the Parties hereto have caused this Transition Services Agreement to be executed by their duly authorized officers as of the date first written above.
 
INGERSOLL-RAND PLC
 
       
       
 
By:
    
 
Name:
   
 
Title:
   
       
       
 
INGERSOLL-RAND U.S. HOLDCO, INC.
 
       
       
 
By:
    
 
Name:
   
 
Title:
   

 
- Signature Page to Transition Services Agreement-

 

EXHIBIT B
TAX MATTERS AGREEMENT
 
BY AND AMONG
 
INGERSOLL-RAND PLC,
 
INGERSOLL-RAND LUX INTERNATIONAL HOLDING COMPANY S.À R.L.,
 
INGERSOLL-RAND SERVICES COMPANY,
 
INGERSOLL-RAND U.S. HOLDCO, INC.,
 
AND
 
GARDNER DENVER HOLDINGS, INC.
 
 



TABLE OF CONTENTS
Page
ARTICLE I DEFINITION OF TERMS
2
   
ARTICLE II PREPARATION AND FILING OF TAX RETURNS
13
Section 2.1
Consolidated Returns
13
Section 2.2
Separate Entity Tax Returns
13
Section 2.3
Tax Reporting Practices
13
Section 2.4
Right to Review Tax Returns
14
Section 2.5
Carrybacks and Amended Tax Returns
16
Section 2.6
Apportionment of Tax Attributes
17
Section 2.7
Coordination
18
   
ARTICLE III ALLOCATION OF TAX LIABILITIES
18
Section 3.1
General Rule
18
Section 3.2
Attribution of Taxes
18
   
ARTICLE IV TAX PAYMENTS
19
Section 4.1
Payment of Amounts Due
19
Section 4.2
Treatment of Indemnification and Other Payments
20
   
ARTICLE V TAX REFUNDS
21
Section 5.1
Tax Refunds and Credits
21
   
ARTICLE VI DEDUCTION AND REPORTING OF EMPLOYEE AWARDS
21
Section 6.1
Moon and SpinCo Income Tax Deductions in Respect of Certain Equity Awards and Compensation
21
   
ARTICLE VII TAX-FREE STATUS
22
Section 7.1
Representations and Warranties
22
Section 7.2
Restrictions on SpinCo
23
Section 7.3
Opinions, Rulings and Voluntary Disclosures
24
Section 7.4
Procedures Regarding Opinions and Rulings
25
   
ARTICLE VIII REPORTING, COOPERATION AND RECORD RETENTION
25
Section 8.1
Assistance and Cooperation
25
Section 8.2
Return Information
26
 
 

Section 8.3
Non-Performance
26
Section 8.4
Costs
26
Section 8.5
Retention of Tax Records
26
Section 8.6
Access to Tax Records
27
   
ARTICLE IX TAX PROCEEDINGS
27
Section 9.1
Notice
27
Section 9.2
Control of Tax Proceedings
27
   
ARTICLE X INTEREST PAYMENTS
29
Section 10.1
Interest Under This Agreement
29
   
ARTICLE XI DISAGREEMENTS
30
Section 11.1
Discussion
30
Section 11.2
Referral to Independent Arbiter
30
   
ARTICLE XII TERM AND COSTS
31
Section 12.1
Effective Date
31
Section 12.2
Survival
31
Section 12.3
Expenses
31
Section 12.4
Payments
31
Section 12.5
Interest
31
   
ARTICLE XIII GENERAL PROVISIONS
32
Section 13.1
Notices
32
Section 13.2
Assignment, Successors, Beneficiaries
33
Section 13.3
Waiver
33
Section 13.4
Severability
33
Section 13.5
Authority
34
Section 13.6
Further Assurances
34
Section 13.7
Integration
34
Section 13.8
Rules of Construction
34
Section 13.9
Governing Law; Submission to Jurisdiction; Waiver of Trial
35
Section 13.10
Specific Performance
36
Section 13.11
Counterparts
37
Section 13.12
Moon or SpinCo Affiliates
37



TAX MATTERS AGREEMENT
This TAX MATTERS AGREEMENT (this “Agreement”) is made and entered into as of [●], by and among Ingersoll-Rand Plc, a Republic of Ireland public limited company (“Moon”), Ingersoll-Rand Lux International Holding Company S.à r.l., a Luxembourg société à responsibilité limitée (“Moon LuxCo”), Ingersoll-Rand Services Company, a Delaware corporation (“SpinCo Borrower”), Ingersoll-Rand U.S. HoldCo, Inc., a Delaware corporation and wholly owned subsidiary of Moon (“SpinCo”), and Gardner Denver Holdings, Inc., a Delaware corporation (“Clover,” and together with Moon and SpinCo, the “Parties,” and each a “Party”).
RECITALS
WHEREAS, the Board of Directors of Moon has determined that it is in the best interests of Moon and its shareholders to separate the SpinCo Business from the Moon Business and to divest the SpinCo Business in the manner contemplated by the Separation and Distribution Agreement by and between Moon and SpinCo, dated as of April 30, 2019 (the “Separation and Distribution Agreement”) and the Merger Agreement;
WHEREAS, the Board of Directors of Moon and the Board of Directors of SpinCo have approved the transfer of the SpinCo assets to SpinCo and its Affiliates and the assumption by SpinCo and its Affiliates of the SpinCo liabilities, all as more fully described in the Separation and Distribution Agreement and the other Transaction Documents;
WHEREAS, upon the terms and subject to the conditions set forth in the Separation and Distribution Agreement, on the Distribution Date, Moon will either (a) cause Moon shareholders to receive on a pro rata basis for no consideration all the shares of SpinCo Common Stock, or (b) consummate an offer to exchange (the “Exchange Offer”) shares of SpinCo Common Stock for outstanding shares of Moon Common Stock and, in the event that Moon’s shareholders subscribe for less than all of the SpinCo Common Stock in the Exchange Offer, Moon will distribute, pro rata to its shareholders, any unsubscribed SpinCo Common Stock on the Distribution Date immediately following the consummation of the Exchange Offer (in each case, the Distribution);
WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of April 30, 2019 (the “Merger Agreement”), by and among Moon, SpinCo, Clover, and Clover Merger Sub Inc., a Delaware corporation (“Merger Sub”), immediately following the Distribution, Merger Sub will merge with and into SpinCo (the “Merger”) and all shares of SpinCo Common Stock will be converted into common stock, $0.01 par value, of Clover, upon the terms and subject to the conditions set forth in the Merger Agreement;
WHEREAS, it is the intention of the Parties that, for U.S. federal income Tax purposes: (a) the Contribution and Distribution qualify as tax‑free under Sections 368(a), 361 and 355 of the Code; (b) each of the transactions described on Schedule 7.3(b) to the Merger Agreement qualify as either a “distribution” under Section 355 of the Code or as a “reorganization” under Sections 368(a), 361 and 355 of the Code; (c) the Merger qualify as a “reorganization” within the meaning of Section 368(a) of the Code; (d) no income, gain or loss be recognized as a result of
 

such transactions described in clauses (a), (b) and (c) by any of Moon, SpinCo, Clover, their respective Subsidiaries, the holders of SpinCo Common Stock (except with respect to the receipt of cash in lieu of fractional shares of Clover Common Stock) or the holders of Moon Common Stock (except with respect to the receipt of cash in lieu of fractional shares of SpinCo Common Stock, if any); and (e) each of the Merger Agreement and the Separation and Distribution Agreement constitute a “plan of reorganization” within the meaning of Sections 1.368‑2(g) and 1.368‑3(a) of the Treasury Regulations; and
WHEREAS, the Parties wish to (a) provide for the payment of Tax liabilities and entitlement to refunds thereof, allocate responsibility for, and cooperation in, the filing of Tax Returns, and provide for certain other matters relating to Taxes and (b) set forth certain covenants and indemnities relating to the preservation of the tax-free status of certain Separation Transactions and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, the Parties agree as follows:
ARTICLE I

Definition of Terms
For purposes of this Agreement (including the recitals hereof), the following terms have the following meanings:
Action” has the meaning set forth in the Separation and Distribution Agreement.
Active Business” means any business relied on to satisfy (i) the active trade or business requirement of Section 355(b) (taking into account Section 355(b)(3) of the Code) or (ii) the continuity of business enterprise requirements under Section 1.355-3 and Treasury Regulations Section 1.368-1(d), to the extent identified as such in the Tax Materials; provided, that none of the businesses specified on Schedule I shall constitute an “Active Business.”
Active Business Entities” means any entity identified in the Tax Materials as conducting an Active Business as of the Distribution Date.
Affiliate” has the meaning set forth in the Separation and Distribution Agreement.
Business Day” means any day that is not a Saturday, Sunday or other day on which the Federal Reserve Bank of New York is closed.
Capital Stock” means all classes or series of capital stock of a Person, including (i) common stock, (ii) all options, warrants and other rights to acquire such capital stock and (iii) all instruments properly treated as stock in such Person for U.S. federal income tax purposes.
Clover Common Stock” has the meaning set forth in the Merger Agreement.
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Clover Consolidated Return” means any Combined Income Tax Return that includes Clover or any Clover Entity that is not a Moon Consolidated Return.
Clover Entity” means any Subsidiary of Clover immediately after the effectiveness of the Merger that is not a member of the SpinCo Group.
Clover Group” means, individually or collectively, as the case may be, Clover and any Clover Entities.
Clover Tax Opinion” has the meaning set forth in the Merger Agreement.
Code” means the U.S. Internal Revenue Code of 1986.
Combined Group” means any group that filed or was required to file (or will file or be required to file) a Tax Return on an affiliated, consolidated, combined, unitary, fiscal unity or other group basis under any applicable Tax Law.
Combined Income Tax Return” means any Tax Return filed in respect of U.S. federal, state, local or non-U.S. Income Taxes for a Combined Group.
Contribution” has the meaning set forth in the Separation and Distribution Agreement.
Distribution” has the meaning set forth in the Separation and Distribution Agreement.
Distribution Date” has the meaning set forth in the Separation and Distribution Agreement.
Distribution Tax-Related Losses” means (a) all Distribution Taxes imposed pursuant to any settlement, Final Determination, judgment or otherwise and (b) all reasonable accounting, legal and other professional fees and court costs incurred in connection with such Distribution Taxes, in each case, resulting from the failure of any Separation Transaction or the Merger to qualify for the Intended Tax Treatment.
Distribution Taxes” means, without duplication, any and all Taxes (a) required to be paid by or imposed on Moon or any of its Affiliates resulting from, or directly arising in connection with, the failure of the Contribution and Distribution, taken together, to qualify as a reorganization described in Sections 355(a) and 368(a)(1)(D) of the Code (or the failure to qualify under or the application of corresponding provisions of U.S. state or local Tax Laws); (b) required to be paid by or imposed on Moon or any of its Affiliates resulting from, or directly arising in connection with, the failure of the stock distributed in the Distribution to constitute “qualified property” for purposes of Sections 355(d), 355(e) and Section 361(c) of the Code (or any corresponding provision of the U.S. state or local Tax Laws); or (c) required to be paid by or imposed on Moon or any of its Affiliates resulting from, or directly arising in connection with, the failure of any Separation Transaction to qualify for the Intended Tax Treatment.
Distribution Time” has the meaning set forth in the Separation and Distribution Agreement.
3

Due Date” means (a) with respect to a Tax Return, the date (taking into account all valid extensions) on which such Tax Return is required to be filed under applicable Law and (b) with respect to a payment of Taxes, the date on which such payment is required to be made, which shall in any case be no later than the payment date required to avoid the incurrence of interest, penalties and additions to Tax.
Effective Time” has the meaning set forth in the Merger Agreement.
Employee Matters Agreement” has the meaning set forth in the Merger Agreement.
Extraordinary Transaction” means any action that is not in the ordinary course of business, but shall not include any action expressly required or permitted by the Separation and Distribution Agreement, the Merger Agreement or any Transaction Document or that is undertaken pursuant to the Separation Transactions or the Merger.
Final Determination” means the final resolution of liability for any Tax, which resolution may be for a specific issue or adjustment or for a taxable period, (a) by IRS Form 870 or 870-AD (or any successor forms thereto), on the date of acceptance by or on behalf of the taxpayer, or by a comparable form under the laws of a state, local, or non-U.S. taxing jurisdiction, except that a Form 870 or 870-AD or comparable form shall not constitute a Final Determination to the extent that it reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for refund or the right of the Tax Authority to assert a further deficiency in respect of such issue or adjustment or for such taxable period (as the case may be); (b) by a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable; (c) by a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or a comparable agreement under the laws of a state, local, or non-U.S. taxing jurisdiction; (d) by any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered (including by way of offset) by the jurisdiction imposing such Tax; (e) by a final settlement resulting from a treaty-based competent authority determination; or (f) by any other final disposition, including by reason of the expiration of the applicable statute of limitations or by mutual agreement of the Parties.
Group” means the Moon Group, the SpinCo Group, the Clover Group, or one or more such Groups, in each case, as the context requires.
Income Tax Returns” means all Tax Returns that relate to Income Taxes.
Income Taxes” means all Taxes based upon, measured by, or calculated with respect to (i) net income or profits (including any capital gains tax), (ii) multiple bases (including corporate franchise and business Taxes) if one or more bases upon which such Tax is determined is described in clause (i) above, and (iii) in each case, any such Tax that is a minimum Tax.
Intended Tax Treatment” means that (i) the Contribution and Distribution, taken together, will constitute a tax-free reorganization to Moon and Moon shareholders for all purposes pursuant to Sections 355, 361 and 368(a)(1)(D) of the Code and the SpinCo Common Stock received pursuant to the Distribution will constitute “qualified property” for purposes of Sections 355 and 361(c) of the Code; (ii) the Merger will constitute a tax-free reorganization
4

pursuant to Section 368(a) of the Code; (iii) the payment of the SpinCo Payment and distribution of any assets and liabilities that are not (x) SpinCo Assets (as defined in the Separation and Distribution Agreement), (y) SpinCo Liabilities (as defined in the Separation and Distribution Agreement) or (z) liabilities under the Financing (as defined in the Separation and Distribution Agreement) by the SpinCo Borrower (as defined in the Separation and Distribution Agreement) to Moon LuxCo will be a distribution described under Section 361(b) of the Code; (iv) each of the transactions described on Schedule 7.3(b) to the Merger Agreement qualify as either a “distribution” under Section 355 of the Code or as a “reorganization” under Sections 368(a), 361 and 355 of the Code, as applicable; and (v) any other transaction (or combination of transactions) undertaken pursuant to the Reorganization qualifies for tax-free treatment under applicable Law, as determined by Moon in its reasonable discretion and in accordance with the Plan of Reorganization, but, in the case of this clause (v), only to the extent that any such transaction (or combination of transactions) is undertaken pursuant to the Plan of Reorganization, and its intended tax-free treatment is described in a “more likely than not” (or higher level) opinion or memorandum of a Tax Advisor or ruling from a Tax Authority obtained by Moon (at the sole expense of the Moon Group) that has been provided to Clover prior to the Distribution Date.  The term “Intended Tax Treatment” will, as applicable, also include the qualification of each transaction described in clauses (i)-(v) above under comparable provisions of state or local Tax Law or, in the case of clause (v), non-U.S. Tax Law.
IRS” means the United States Internal Revenue Service.
Law” means any U.S. or non-U.S. federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, administrative pronouncement, treaty, order, requirement or rule of law (including common law).
Mixed Business Tax Return” means any Separate Entity Tax Return that reflects or reports Taxes that relate to at least one asset or activity that is part of the Moon Business, on the one hand, and at least one asset or activity that is part of the SpinCo Business, on the other hand.
Moon Business” has the meaning set forth in the Separation and Distribution Agreement.
Moon Consolidated Return” means any Combined Income Tax Return that includes any member of the Moon Group.
Moon Consolidated Taxes” means any U.S. federal Income Taxes attributable to any Moon Consolidated Return.
Moon Entity” means any Subsidiary of Moon from and after the Distribution Time.
Moon Group” means, individually or collectively, as the case may be, Moon and any Moon Entities.
Moon Tainting Act” means (a) any action (or the failure to take any action) within its control by Moon or any member of the Moon Group (including entering into any agreement, understanding or arrangement or any negotiations with respect to any transaction or series of transactions) that, (b) any event (or series of events) involving the Capital Stock of Moon, any
5

assets of Moon or any assets of any member of the Moon Group that, or (c) any breach by Moon or any member of the Moon Group of any representation, warranty or covenant made by such Person in this Agreement that, in each case, would affect the Intended Tax Treatment or otherwise cause a Separation Transaction or the Merger to fail to qualify for its Intended Tax Treatment, other than, in each case, any action required by the Separation and Distribution Agreement, Merger Agreement or any Transaction Document or undertaken pursuant to the Distribution.
Moon Taxes” means, without duplication, and after accounting for any adjustment pursuant to a Final Determination, (a) any Moon Consolidated Taxes, (b) any Income Taxes of (i) SpinCo or any member of the SpinCo Group for (A) any Pre-Distribution Period and (B) to the extent attributable to assets or activities of the Moon Business, as determined pursuant to Section 3.2, any Post-Distribution Period or (ii) Moon or a member of the Moon Group, but excluding in either case any Taxes included in clause (a)(i) of the definition of SpinCo Taxes, (c) any Other Taxes of (i) SpinCo or any member of the SpinCo Group attributable to assets or activities of the Moon Business, as determined pursuant to Section 3.2, or (ii) Moon or a member of the Moon Group, but excluding in either case any Taxes included in clause (b)(i) of the definition of SpinCo Taxes, (d) any Taxes imposed on SpinCo, Clover, or any member of the SpinCo Group or Clover Group under Treasury Regulations Section 1.1502-6 (or any equivalent provision of other Tax Law) as a result of SpinCo or any member of the SpinCo Group being or having been included as part of, or ceasing to be part of or owned by, a Combined Group with any Person that is not a member of the SpinCo Group on or prior to the Distribution Date, (e) subject to Section 3.1(c), any Taxes attributable to a Moon Tainting Act, (f) any Taxes of Moon or any Subsidiary of Moon or former Subsidiary of Moon, including members of the SpinCo Group (each, immediately prior to the Distribution Time) attributable to the Separation Transactions (including the settlement of any intercompany transactions), and (g) any Transfer Taxes; provided, that Moon Taxes shall not include any Taxes included in clauses (c), (d), (e) and (f) of the definition of SpinCo Taxes.
Moon Tax Opinion” has the meaning set forth in the Merger Agreement.
Other Taxes” means Taxes other than Income Taxes.
Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof, without regard to whether any entity is treated as disregarded for U.S. federal income tax purposes.
Plan of Reorganization” has the meaning set forth in the Separation and Distribution Agreement.
Post-Distribution Period” means any Tax Period beginning after the Distribution Date, and, in the case of any Straddle Period, the portion of such Straddle Period beginning the day after the Distribution Date.
6

Pre-Distribution Period” means any Tax Period ending on or before the Distribution Date, and, in the case of any Straddle Period, the portion of such Straddle Period ending on the Distribution Date.
Privilege” means any privilege that may be asserted under applicable Law, including, any privilege arising under or relating to the attorney-client relationship (including the attorney-client and work product privileges), the accountant-client privilege and any privilege relating to internal evaluation processes.
Proposed Acquisition Transaction” means a transaction or series of transactions (or any agreement,