0001628280-21-006609.txt : 20210406 0001628280-21-006609.hdr.sgml : 20210406 20210406165553 ACCESSION NUMBER: 0001628280-21-006609 CONFORMED SUBMISSION TYPE: 10-12B/A PUBLIC DOCUMENT COUNT: 23 FILED AS OF DATE: 20210406 DATE AS OF CHANGE: 20210406 FILER: COMPANY DATA: COMPANY CONFORMED NAME: N-able, LLC CENTRAL INDEX KEY: 0001834488 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 854069861 FILING VALUES: FORM TYPE: 10-12B/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-40297 FILM NUMBER: 21809688 BUSINESS ADDRESS: STREET 1: 1209 ORANGE STREET CITY: WILMINGTON STATE: DE ZIP: 19801 BUSINESS PHONE: 5126829300 MAIL ADDRESS: STREET 1: 1209 ORANGE STREET CITY: WILMINGTON STATE: DE ZIP: 19801 FORMER COMPANY: FORMER CONFORMED NAME: SWI Spinco, LLC DATE OF NAME CHANGE: 20201202 10-12B/A 1 n-ablexform10x12baregistra.htm 10-12B/A Document


As filed with the Securities and Exchange Commission on April 6, 2021.

File No. 001-40297     
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934
N-able, LLC
(Exact name of registrant as specified in its charter)
Delaware
85-4069861
(State or other jurisdiction of
incorporation or organization)
(I.R.S. employer
identification number)
7171 Southwest Parkway
Building 400
Austin, Texas
78735
(Address of principal executive offices)(Zip code)
Registrant’s telephone number, including area code: (512) 682.9300
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class
to be so registered
Name of each exchange on which
each class is to be registered
Common stock, par value $0.001 per shareThe New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




N-able, LLC
INFORMATION REQUIRED IN REGISTRATION STATEMENT
CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT
AND ITEMS OF FORM 10
Certain information required to be included herein is incorporated by reference to specifically identified portions of the body of the information statement of N-able, LLC ("N-able") filed herewith as Exhibit 99.1. None of the information contained in the information statement shall be incorporated by reference herein or deemed to be a part hereof, unless such information is specifically incorporated by reference.
Item 1. Business.
The information required by this item is contained under the sections of the information statement entitled “Summary,” “Special Note Regarding Forward-Looking Statements,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” “Certain Relationships and Related Party Transactions” and “Where You Can Find More Information.” Those sections are incorporated herein by reference.
Item 1A. Risk Factors.
The information required by this item is contained under the sections of the information statement entitled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Those sections are incorporated herein by reference.
Item 2. Financial Information.
The information required by this item is contained under the sections of the information statement entitled “Selected Combined Financial Data,” “Capitalization,” “Summary Historical Combined Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Those sections are incorporated herein by reference.
Item 3. Properties.
The information required by this item is contained under the section of the information statement entitled “Business—Facilities.” That section is incorporated herein by reference.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The information required by this item is contained under the section of the information statement entitled “Security Ownership of Certain Beneficial Owners and Management.” That section is incorporated herein by reference.
Item 5. Directors and Executive Officers.
The information required by this item is contained under the section of the information statement entitled “Management.” That section is incorporated herein by reference.
Item 6. Executive Compensation.
The information required by this item is contained under the section of the information statement entitled “Executive Compensation.” That section is incorporated herein by reference.




Item 7. Certain Relationships and Related Transactions, and Director Independence.
The information required by this item is contained under the sections of the information statement entitled “Management” and “Certain Relationships and Related Party Transactions.” Those sections are incorporated herein by reference.
Item 8. Legal Proceedings.
The information required by this item is contained under the section of the information statement entitled “Business—Legal Proceedings.” That section is incorporated herein by reference.
Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.
The information required by this item is contained under the sections of the information statement entitled “Risk Factors,” “Dividend Policy,” “Capitalization,” “The Separation and Distribution” and “Description of Capital Stock.” Those sections are incorporated herein by reference.
Item 10. Recent Sales of Unregistered Securities.
The information required by this item is contained under the section of the information statement entitled “Description of Capital Stock—Sale of Unregistered Securities.” That section is incorporated herein by reference.
Item 11. Description of Registrant’s Securities to Be Registered.
The information required by this item is contained under the sections of the information statement entitled “Risk Factors,” “Dividend Policy,” “The Separation and Distribution” and “Description of Capital Stock.” Those sections are incorporated herein by reference.
Item 12. Indemnification of Directors and Officers.
The information required by this item is contained under the section of the information statement entitled “Executive Compensation—Limitations of Liability; Indemnification of Directors and Officers.” That section is incorporated herein by reference.
Item 13. Financial Statements and Supplementary Data.
The information required by this item is contained under the section of the information statement entitled “Index to Combined Financial Statements” and the financial statements referenced therein. That section is incorporated herein by reference.
Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 15. Financial Statements and Exhibits.
(a)Financial Statements and Schedule
The information required by this item is contained under the section of the information statement entitled “Index to Combined Financial Statements” and the financial statements referenced therein. That section is incorporated herein by reference.




(b)Exhibits
The following documents are filed as exhibits hereto:
Exhibit
Number
Exhibit Description
2.1
3.1
3.2
4.1
4.2
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
21.1
99.1





SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

N-able, LLC
By:/s/ John Pagliuca
Name: John Pagliuca
Title: Chief Executive Officer and President
Date: April 6, 2021

EX-2.1 2 n-ablexform10x12baxex21.htm EX-2.1 Document
Exhibit 2.1

FORM OF
SEPARATION AND DISTRIBUTION AGREEMENT
by and between
SOLARWINDS CORPORATION
and
N-ABLE, INC.
Dated as of [●], 2021



TABLE OF CONTENTS
ARTICLE I    DEFINITIONS AND INTERPRETATION
2
Section 1.1General2
Section 1.2References; Interpretation19
ARTICLE II    THE SEPARATION
19
Section 2.1General19
Section 2.2Restructuring: Transfer of Assets; Assumption of Liabilities20
Section 2.3Treatment of Shared Contracts21
Section 2.4Intercompany Accounts, Loans and Agreements22
Section 2.5Limitation of Liability; Intercompany Contracts23
Section 2.6Transfers Not Effected at or Prior to the Effective Time; Transfers Deemed Effective as of the Effective Time24
Section 2.7Conveyancing and Assumption Instruments26
Section 2.8Further Assurances; Ancillary Agreements26
Section 2.9Novation of Liabilities; Indemnification27
Section 2.10Guarantees; Credit Support Instruments29
Section 2.11Disclaimer of Representations and Warranties31
Section 2.12SpinCo Financing Arrangements32
Section 2.13Cash Management; Cash Adjustment32
ARTICLE III    CERTAIN ACTIONS AT OR PRIOR TO THE DISTRIBUTIONS
35
Section 3.1Organizational Documents35
Section 3.2Directors35
Section 3.3Officers35
Section 3.4Resignations and Removals35
Section 3.5Ancillary Agreements36
ARTICLE IV    THE DISTRIBUTION
36
Section 4.1Distribution36
Section 4.2Fractional Shares36
Section 4.3Actions in Connection with the Distribution37
Section 4.4Sole Discretion of Parent38
Section 4.5Conditions to Distribution38
ARTICLE V    CERTAIN COVENANTS
39
Section 5.1Cooperation39
Section 5.2Retained Names40
Section 5.3No Restriction on Competition41
Section 5.4No Hire and No Solicitation of Employees41
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ARTICLE VI    INDEMNIFICATION
42
Section 6.1Release of Pre-Distribution Claims42
Section 6.2Indemnification by Parent45
Section 6.3Indemnification by SpinCo45
Section 6.4Procedures for Indemnification45
Section 6.5Cooperation in Defense and Settlement48
Section 6.6Indemnification Payments49
Section 6.7Indemnification Obligations Net of Insurance Proceeds and Other Amounts49
Section 6.8Contribution50
Section 6.9Additional Matters; Survival of Indemnities50
ARTICLE VII
PRESERVATION OF RECORDS; ACCESS TO INFORMATION; CONFIDENTIALITY; PRIVILEGE51
Section 7.1Preservation of Corporate Records51
Section 7.2Financial Statements and Accounting52
Section 7.3Provision of Corporate Records53
Section 7.4Witness Services55
Section 7.5Reimbursement; Other Matters56
Section 7.6Confidentiality56
Section 7.7Privilege Matters58
Section 7.8Ownership of Information60
Section 7.9Personal Data60
Section 7.10Other Agreements60
ARTICLE VIII    DISPUTE RESOLUTION
60
Section 8.1Negotiation and Arbitration60
Section 8.2Specific Performance64
Section 8.3Treatment of Arbitration65
Section 8.4Continuity of Service and Performance65
Section 8.5Consolidation65
ARTICLE IX    INSURANCE
65
Section 9.1Insurance Matters65
Section 9.2Certain Matters Relating to Parent’s Organizational Documents68
Section 9.3Directors and Officers Liability Insurance69
ARTICLE X    MISCELLANEOUS
69
Section 10.1Entire Agreement; Construction69
Section 10.2Ancillary Agreements69
Section 10.3Counterparts70
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Section 10.4Survival of Agreements70
Section 10.5Expenses70
Section 10.6Notices70
Section 10.7Consents; Waivers71
Section 10.8Assignment71
Section 10.9Successors and Assigns71
Section 10.10Termination and Amendment71
Section 10.11Payment Terms72
Section 10.12Subsidiaries72
Section 10.13Third Party Beneficiaries72
Section 10.14Title and Headings73
Section 10.15Exhibits and Schedules73
Section 10.16Governing Law73
Section 10.17Severability73
Section 10.18Public Announcements73
Section 10.19Interpretation73
Section 10.20No Duplication; No Double Recovery74
Section 10.21Tax Treatment of Payments74
Section 10.22No Waiver74
Section 10.23No Admission of Liability74
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FORM OF SEPARATION AND DISTRIBUTION AGREEMENT
This SEPARATION AND DISTRIBUTION AGREEMENT (this “Agreement”), dated as of [●], 2021, is entered into by and between SolarWinds Corporation, a Delaware corporation (“Parent”), and N-able, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“SpinCo”). “Party” or “Parties” means Parent or SpinCo, individually or collectively, as the case may be. Capitalized terms used and not defined herein shall have the meaning set forth in Section 1.1.
W I T N E S S E T H:
WHEREAS, Parent, acting through its direct and indirect Subsidiaries, currently owns and conducts the Parent Retained Business and the SpinCo Business;
WHEREAS, the Board of Directors of Parent (the “Board”) has determined that it is appropriate, desirable and in the best interests of Parent and its stockholders to separate Parent into two separate, publicly traded companies, one for each of (i) the Parent Retained Business, which shall be owned and conducted by the Parent Group and (ii) the SpinCo Business, which shall be owned and conducted by the SpinCo Group;
WHEREAS, in furtherance of the separation, the Board authorized the Internal Reorganization;
WHEREAS, following the completion of the Internal Reorganization, Parent shall cause the Contribution and the Internal Distributions to effected and thereafter cause the Distribution Agent to issue pro rata to the Record Holders, in accordance with the Distribution Ratio, all of the issued and outstanding shares of SpinCo Common Stock (such issuance, the “Distribution” or the “External Distribution”) on the terms and conditions set forth in this Agreement;
WHEREAS, (i) the Board has (x) determined that each Internal Distribution, the Distribution and the other transactions contemplated by this Agreement and the Ancillary Agreements (as defined below) have a valid business purpose, are in furtherance of and consistent with its business strategy and are in the best interests of Parent and its stockholders and (y) approved this Agreement and each of the Ancillary Agreements and (ii) the Board of Directors of SpinCo has approved this Agreement and each of the Ancillary Agreements (to the extent SpinCo is a party thereto);
WHEREAS, the Parties desire to set forth the principal corporate transactions required to effect the Distribution and certain other agreements relating to the relationship of Parent and SpinCo and their respective Subsidiaries following the Distribution;
WHEREAS, it is the intention of the Parties that the Contribution and the First Internal Distribution, taken together, qualify as a transaction that is tax-deferred for U.S. federal income tax purposes pursuant to Sections 368(a)(1)(D) and 355 of the Code;
WHEREAS, it is the intention of the Parties that the Second Internal Distribution, the Third Internal Distribution and the Distribution each qualify as a transaction that is tax-deferred for U.S. federal income tax purposes pursuant to Sections 355 of the Code; and
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WHEREAS, this Agreement is intended to be and is hereby adopted as a “plan of reorganization” with respect to the Contribution and the First Internal Distribution within the meaning of Treas. Reg. Section 1.368-2(g).
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, provisions and covenants contained in this Agreement, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1    General. As used in this Agreement, the following terms shall have the following meanings:
(1)    “AAA” shall have the meaning set forth in Section 8.1(c).
(2)    “Action” shall mean any demand, action, claim, suit, countersuit, arbitration, inquiry, subpoena, case, litigation, proceeding or investigation (whether civil, criminal, administrative or investigative) by or before any court or grand jury, any Governmental Entity or any arbitration or mediation tribunal.
(3)    “Affiliate” shall mean, when used with respect to a specified Person and at a point in, or with respect to a period of, time, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person at such point in or during such period of time. For the purposes of this definition, “control”, 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 through the ownership of voting securities or other interests, by Contract or otherwise. It is expressly agreed that no Party or member of its Group shall be deemed to be an Affiliate of another Party or member of such other Party’s Group, including by reason of having one or more directors in common or by reason of having been under common control of Parent or Parent’s stockholders prior to or, in case of Parent’s stockholders, after, the Effective Time.
(4)    “Agreement” shall have the meaning set forth in in the Preamble.
(5)    “Ancillary Agreements” shall mean the Transition Services Agreement, the Employee Matters Agreement, the Tax Matters Agreement, the Intellectual Property Matters Agreement, the Software Cross License Agreement, the Trademark License Agreement, the lease agreements for the sites set forth in Schedule 1.1(5), any Continuing Arrangements, any and all Conveyancing and Assumption Instruments and any other agreements to be entered into by and between any member of the Parent Group, on one hand, and any member of the SpinCo Group, on the other hand, at, prior to or after the Distribution in connection with the Distribution.
(6)    “Arbitral Panel” shall have the meaning set forth in Section 8.1(c)(i).
(7)    “Assets” shall mean all rights (including Intellectual Property), title and ownership interests in and to all properties, claims, Contracts, businesses, or assets (including goodwill or equity interests in any Person), wherever located (including in the possession of vendors or other third parties or elsewhere), of every kind, character and description, whether real, personal or
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mixed, tangible or intangible, whether accrued, contingent or otherwise, in each case, whether or not recorded or reflected on the books and records or financial statements of any Person. Except as otherwise specifically set forth herein or in the Tax Matters Agreement, the rights and obligations of the Parties with respect to Taxes shall be governed by the Tax Matters Agreement and, therefore, Taxes (including any Tax items, attributes or rights to receive any Tax Refunds (as defined in the Tax Matters Agreement)) shall not be treated as Assets.
(8)    “Asset Transferors” shall mean the entities transferring Assets to SpinCo Group or Parent Group, as the case may be, in order to consummate the transactions contemplated hereby.
(9)    “Assume” shall have the meaning set forth in Section 2.2(c); and the terms “Assumed” and “Assumption” shall have their correlative meanings.
(10)    “Audited Party” shall have the meaning set forth in Section 7.2(a).
(11)    “Board” shall have the meaning set forth in the Recitals.
(12)    “Business” shall mean the Parent Retained Business or the SpinCo Business, as applicable.
(13)    “Business Day” shall mean any day other than Saturday or Sunday and any other day on which commercial banking institutions located in New York, New York are required, or authorized by Law, to remain closed.
(14)    “Business Entity” shall mean any corporation, partnership, limited liability company, joint venture or other entity which may legally hold title to Assets.
(15)    “Cash Adjustment” shall have the meaning set forth in Section 2.13(b)(vi).
(16)    “Cash Equivalents” shall mean (i) cash and (ii) checks, certificates of deposit having a maturity of less than one year, money orders, marketable securities, money market funds, commercial paper, short-term instruments and other cash equivalents, funds in time and demand deposits or similar accounts, and any evidence of indebtedness issued or guaranteed by any Governmental Entity, minus the amount of any outbound checks, plus the amount of any deposits in transit.
(17)    “Change of Control” shall mean, with respect to a Party, the occurrence after the Effective Date of any of the following: (a) the sale, conveyance or disposition, in one or a series of related transactions, of all or substantially all of the assets of such Party to a third party that is not an Affiliate of such Party prior to such transaction or the first of such related transactions; (b) the consolidation, merger or other business combination of a Party with or into any other Person, immediately following which the stockholders of the Party prior to such transaction fail to own in the aggregate the Majority Voting Power of the surviving Party in such consolidation, merger or business combination or of its ultimate publicly traded parent Person; or (c) a transaction or series of transactions in which any Person or “group” (as such term is used in Section 13(d) of the Exchange Act) acquires the Majority Voting Power of such Party (other than in a reincorporation or similar corporate transaction in which each of such Party’s stockholders own,
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immediately thereafter, interests in the new parent company in substantially the same percentage as such stockholder owned in such Party immediately prior to such transaction).
(18)    “Code” shall mean the Internal Revenue Code of 1986, as amended
(19)    “Commission” shall mean the United States Securities and Exchange Commission.
(20)    “Company Policies” shall mean all insurance policies, insurance contracts and claim administration contracts of any kind of any member of the Parent Group, which are in effect at the Effective Time, except all insurance policies, insurance contracts and claim administration contracts established in contemplation of the Distribution to cover any member of the SpinCo Group after the Effective Time.
(21)    “Confidential Information” shall mean all non-public, confidential or proprietary Information to the extent concerning a Party, its Group and/or its Subsidiaries or with respect to SpinCo, the SpinCo Business, any SpinCo Assets or any SpinCo Liabilities or with respect to Parent, the Parent Retained Business, any Parent Retained Assets or any Parent Liabilities, including any such Information that was acquired by any Party after the Effective Time pursuant to Article VII or otherwise in accordance with this Agreement, or that was provided to a Party by a third party in confidence, including (a) any and all technical information relating to the design, operation, development, use, hosting, marketing, distribution, provisioning, licensing out and manufacture of any Party’s product or service (including product specifications, documentation, engineering, and design; software, software as a service, firmware, computer programs and applications (including source code, executable or object code, architecture, algorithms, data files, computerized databases, plugins, libraries, subroutines, tools and APIs), programming data, databases, user manuals and training materials, and all information and documentation referred to in the same and supporting the foregoing); product or service costs, margins and pricing; as well as product or service marketing studies and strategies; all other methodologies, procedures, techniques and Know-How related to design, operation, development, use, hosting, marketing, distribution, provisioning, licensing out and manufacturing; (b) information, documents and materials relating to the Party’s financial condition, management and other business conditions, prospects, plans, procedures, infrastructure, security, information technology procedures and systems, and other business or operational affairs; (c) pending unpublished patent applications and trade secrets; and (d) any other data or documentation resident, existing or otherwise provided in a database or in a storage medium, permanent or temporary, intended for confidential, proprietary and/or privileged use by a Party; except for any Information that is (i) in the public domain or known to the public through no fault of the receiving Party or its Subsidiaries, (ii) lawfully acquired after the Effective Time by such Party or its Subsidiaries from other sources not known to be subject to confidentiality obligations with respect to such Information or (iii) independently developed by the receiving Party after the Effective Time without reference to any Confidential Information. As used herein, by example and without limitation, Confidential Information shall mean any information of a Party intended or marked as confidential, proprietary and/or privileged.
(22)    “Consents” means any consents, waivers, notices, reports or other filings to be obtained from or made, including with respect to any Contract, or any registrations, licenses, permits,
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authorizations to be obtained from, or approvals from, or notification requirements to, any third parties, including any third party to a Contract and any Governmental Entity.
(23)    “Continuing Arrangements” shall mean:
(i)    those arrangements set forth on Schedule 1.1(23)(i);
(ii)    this Agreement and the Ancillary Agreements (and each other Contract expressly contemplated by this Agreement or any Ancillary Agreement to be entered into or continued by any of the Parties or any of the members of their respective Groups);
(iii)    any Contracts between: (i) a Parent Group member that is in the business of selling or buying products or services to or from third parties; and (ii) a member of the SpinCo Group, and which Contract is related primarily to the provision of such products or services and was or is entered into in the ordinary course of business and on arms’-length terms; and such other commercial arrangements among the Parties that are intended to survive and continue following the Effective Time; provided that none of the intercompany Contracts set forth on Schedule 1.1(23)(iii) shall be deemed to be Continuing Arrangements, it being understood that Schedule 1.1(23)(iii) is not intended to be an exclusive list of arrangements that are to be terminated at the Effective Time; provided, however, that for the avoidance of doubt, Continuing Arrangements shall not be Third Party Agreements.
(24)    “Contract” shall mean any agreement, contract, subcontract, obligation, binding understanding, note, indenture, instrument, option, lease, promise, arrangement, release, warranty, license, sublicense, insurance policy, benefit plan, purchase order or legally binding commitment or undertaking of any nature (whether written or oral and whether express or implied).
(25)    “Contribution” shall mean the Transfer, directly or indirectly, of Assets and Liabilities from the Parent Group to SpinCo or its Subsidiaries prior to the First Internal Distribution.
(26)    “Conveyancing and Assumption Instruments” shall mean, collectively, the various Contracts, including the related local asset transfer agreements and local stock transfer agreements, and other documents entered into prior to the Effective Time and to be entered into to effect the Transfer of Assets and the Assumption of Liabilities in the manner contemplated by this Agreement, or otherwise relating to, arising out of or resulting from the transactions contemplated by this Agreement, in such form or forms as the applicable Parties thereto agree.
(27)    “Credit Support Instruments” shall mean any letters of credit, performance bonds, surety bonds (including, with respect to the surety bonds, letters of credit and performance bonds set forth on Schedule 1.1(27), the allocable portion of the surety bonds, letters of credit and performance bonds as set forth on Schedule 1.1(27)), bankers acceptances, or other similar arrangements.
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(28)    “Cyber Incident” means the cyberattack announced by Parent on December 14, 2020 on the products and IT Systems of Parent and its then Subsidiaries, and subsequent disclosures related thereto made by Parent and SpinCo.
(29)    “Data Protection Laws” shall mean any and all Laws concerning the privacy, protection and security of personal information.
(30)    “Decision on Interim Relief” shall have the meaning set forth in Section 8.1(c)(vii).
(31)    “Dispute Notice” shall have the meaning set forth in Section 8.1(b)(i).
(32)    “Dispute” shall have the meaning set forth in Section 8.1(a).
(33)    “Distribution” shall have the meaning set forth in the Recitals.
(34)    “Distribution Agent” shall mean American Stock Transfer & Trust Company.
(35)    “Distribution Cash Amount Dispute Notice” shall have the meaning set forth in Section 2.13(b)(iii).
(36)    “Distribution Cash Amount Statement” shall have the meaning set forth in Section 2.13(b)(i).
(37)    “Distribution Date” shall mean the date, as shall be determined by the Board, on which the Distribution occurs.
(38)    “Distribution Date Cash Amount” shall have the meaning set forth in Section 2.13(b)(i).
(39)    “Distribution Disclosure Documents” shall mean the Form 10 and all exhibits thereto (including the Information Statement), any current reports on Form 8-K and the registration statement on Form S-8 related to securities to be offered under SpinCo’s employee benefit plans, in each case as filed or furnished by SpinCo with or to the Commission in connection with the Distribution or filed or furnished by Parent with or to the Commission solely to the extent such documents relate to SpinCo or the Distribution.
(40)    “Distribution Ratio” shall mean [●] share[s] of SpinCo Common Stock for every [●] share[s] of Parent Common Stock.
(41)    “Effective Time” shall mean 12:01 a.m., New York time, on the Distribution Date.
(42)    “Emergency Arbitrator” shall have the meaning set forth in Section 8.1(c)(vii).
(43)    “Employee Matters Agreement” shall mean the Employee Matters Agreement by and between Parent and SpinCo, in the form attached hereto as Exhibit A.
(44)    “Environmental Laws” shall mean all Laws relating to pollution or protection of human health or safety or the environment, including Laws relating to the exposure to, or release, threatened release or the presence of hazardous substances, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, transport or handling of hazardous substances and all Laws with regard to recordkeeping, notification, disclosure and reporting
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requirements respecting hazardous substances, and all laws relating to endangered or threatened species of fish, wildlife and plants and the management or use of natural resources.
(45)    “Environmental Liabilities” shall mean Liabilities relating to Environmental Law.
(46)    “Exchange Act” means the United States Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.
(47)    “External Distributions” shall have the meaning set forth in the Recitals.
(48)    “Final Cash Amount” shall have the meaning set forth in Section 2.13(b)(v).
(49)    “Final Determination” shall have the meaning set forth in the Tax Matters Agreement.
(50)    “First Internal Distribution” shall mean the distribution by SolarWinds Holdings Inc. of all of the issued and outstanding shares of SpinCo Common Stock to SolarWinds Intermediate Holdings I, Inc., effective as of [●], and as part of the Internal Spinoff.
(51)    “Form 10” shall mean the registration statement on Form 10 (Registration No. 001-40297) filed by SpinCo with the Commission under the Exchange Act in connection with the Distribution, including any amendment or supplement thereto.
(52)    “Former Business” means any corporation, partnership, entity, division, business unit or business (in each case, including any assets and liabilities comprising the same) that has been sold, conveyed, assigned, transferred or otherwise disposed of or divested (in whole or in part) to a Person that is not a member of the SpinCo Group or the Parent Group or the operations, activities or production of which has been discontinued, abandoned, completed or otherwise terminated (in whole or in part), in each case, prior to the Effective Time.
(53)    “Governmental Approvals” shall mean any notices or reports to be submitted to, or other registrations or filings to be made with, or any consents, approvals, licenses, permits or authorizations to be obtained from, any Governmental Entity.
(54)    “Governmental Entity” shall mean any nation or government, any state, municipality or other political subdivision thereof and any entity, body, agency, commission, department, board, bureau or court, whether domestic, foreign, multinational, or supranational exercising executive, legislative, judicial, regulatory, self-regulatory or administrative functions of or pertaining to government and any executive official thereof.
(55)    “Group” shall mean (i) with respect to Parent, the Parent Group and (ii) with respect to SpinCo, the SpinCo Group.
(56)    “Indebtedness” shall mean, with respect to any Person, (i) the principal amount, prepayment and redemption premiums and penalties (if any), unpaid fees and other monetary obligations in respect of any indebtedness for borrowed money, whether short term or long term, and all obligations evidenced by bonds, debentures, notes, other debt securities or similar instruments, (ii) any indebtedness arising under any capital leases (excluding, for the avoidance of doubt, any real estate leases), whether short term or long term, (iii) all liabilities secured by any Security Interest on any assets of such Person, (iv) all liabilities under any interest rate,
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currency, commodity or other swap, collar, cap or other hedging or similar agreements or arrangements, (v) all liabilities under any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement or other similar agreement designed to protect such Person against fluctuations in interest rates, (vi) all interest bearing indebtedness for the deferred purchase price of property or services, (vii) all liabilities under any Credit Support Instruments, (viii) all interest, fees and other expenses owed with respect to indebtedness described in the foregoing clauses (i) through (vii), and (ix) without duplication, all guarantees of indebtedness referred to in the foregoing clauses (i) through (viii).
(57)    “Indemnifiable Loss” and “Indemnifiable Losses” shall mean any and all damages, losses, deficiencies, Liabilities, obligations, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including the costs and expenses of any and all Actions and demands, assessments, judgments, settlements and compromises relating thereto and the costs and expenses of attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder).
(58)    “Indemnifying Party” shall have the meaning set forth in Section 6.4(a).
(59)    “Indemnitee” shall have the meaning set forth in Section 6.4(a).
(60)    “Indemnity Payment” shall have the meaning set forth in Section 6.7(a).
(61)    “Independent Accounting Firm” shall mean [●] or if such firm is not available or is unwilling to serve, then a mutually acceptable expert in public accounting upon which Parent and SpinCo mutually agree.
(62)    “Information” shall mean information, content, and data in written, oral, electronic, computerized, digital or other tangible or intangible media, including (i) books and records, whether accounting, legal or otherwise, ledgers, studies, reports, surveys, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, marketing plans, customer names and information (including prospects); technical information relating to the design, operation, development, use, hosting, marketing, distribution, provisioning, licensing out and manufacture of any Party’s or its Group’s product or service (including product specifications, documentation, engineering, and design; software, software as a service, firmware, computer programs and applications (including source code, executable or object code, architecture, algorithms, data files, computerized databases, plugins, libraries, subroutines, tools and APIs), programming data, databases, user manuals and training materials, and all information and documentation referred to in the same and supporting the foregoing); product or service costs, margins and pricing; as well as product or service marketing studies and strategies; all other methodologies, procedures, techniques and Know-How related to design, operation, development, use, hosting, marketing, distribution, provisioning, licensing out and manufacturing; communications, correspondence, materials, product or service literature, files, documents; and (ii) financial and business information, including earnings reports and forecasts, macro-economic reports and forecasts, all cost information (including supplier records and lists), sales and pricing data, business plans, market evaluations, surveys, credit-related information, and other such information as may be needed for reasonable compliance with reporting,
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disclosure, filing or other requirements, including under applicable securities laws or regulations of securities exchanges.
(63)    “Information Statement” shall mean the Information Statement attached as Exhibit 99.1 to the Form 10, to be distributed to the holders of shares of Parent Common Stock in connection with the Distribution, including any amendment or supplement thereto.
(64)    “Insurance Proceeds” shall mean those monies (i) received by an insured from an insurance carrier or (ii) paid by an insurance carrier on behalf of an insured, in either case net of any applicable deductible or retention.
(65)    “Insured Claims” shall mean those Liabilities that, individually or in the aggregate, are covered within the terms and conditions of any of the Company Policies, whether or not subject to deductibles, co-insurance, uncollectability or retrospectively-rated premium adjustments, but only to the extent that such Liabilities are within applicable Company Policy limits, including aggregates.
(66)    “Intellectual Property” shall mean all U.S. and foreign: (i) trademarks, trade dress, service marks, certification marks, logos, slogans, design rights, names, corporate names, trade names, Internet domain names, social media accounts and addresses and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing (collectively, “Trademarks”); (ii) patents and patent applications, and any and all related national or international counterparts thereto, including any divisionals, continuations, continuations-in-part, reissues, reexaminations, substitutions and extensions thereof (collectively, “Patents”); (iii) copyrights and copyrightable subject matter, excluding Know-How; (iv) trade secrets, and all other confidential or proprietary information, know-how, inventions, processes, formulae, models, and methodologies, excluding Patents (collectively, “Know-How”); (v) all applications and registrations for the foregoing; and (vi) all rights and remedies against past, present, and future infringement, misappropriation, or other violation thereof.
(67)    “Intellectual Property Matters Agreement” shall mean the Intellectual Property Matters Agreement between Parent and SpinCo in the form attached hereto as Exhibit D.
(68)    “Interim Relief” shall have the meaning set forth in Section 8.1(c)(vii).
(69)    “Internal Distributions” shall mean the First Internal Distribution, the Second Internal Distribution, and the Third Internal Distribution.
(70)    “Internal Reorganization” shall mean the allocation and transfer or assignment of Assets and Liabilities, including by means of the Conveyance and Assumption Instruments, resulting in (i) the SpinCo Group owning and operating the SpinCo Business, and (ii) the Parent Group continuing to own and operate the Parent Retained Business, as described in the step plan set forth in Schedule 1.1(70).
(71)    “Internal Spinoff” shall mean the Contribution together with the First Internal Distribution.
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(72)    “IT Assets” shall mean all software, computer systems, telecommunications equipment, databases, Internet Protocol addresses, data rights and documentation, reference, resource and training materials relating thereto, and all Contracts (including Contract rights) relating to any of the foregoing (including software license agreements, source code escrow agreements, support and maintenance agreements, electronic database access contracts, domain name registration agreements, website hosting agreements, software or website development agreements, outsourcing agreements, service provider agreements, interconnection agreements, governmental permits, radio licenses and telecommunications agreements).
(73)    “Law” shall mean any applicable U.S. or non-U.S. federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, income tax treaty, order, requirement or rule of law (including common law) or other binding directives promulgated, issued, entered into or taken by any Governmental Entity.
(74)    “Liabilities” shall mean any and all Indebtedness, liabilities, costs, expenses, interest and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, known or unknown, reserved or unreserved, or determined or determinable, including those arising under any Law (including Environmental Law), Action, whether asserted or unasserted, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Entity and those arising under any Contract or any fines, damages or equitable relief which may be imposed and including all costs and expenses related thereto. Except as otherwise specifically set forth herein or in the Tax Matters Agreement, the rights and obligations of the Parties with respect to Taxes shall be governed by the Tax Matters Agreement and, therefore, Taxes shall not be treated as Liabilities governed by this Agreement other than for purposes of indemnification related to the Distribution Disclosure Documents.
(75)    “Liable Party” shall have the meaning set forth in Section 2.9(b).
(76)    “Majority Voting Power” means a majority of the voting power in the election of directors of all outstanding voting securities of the Person in question.
(77)    “Negotiation Period” shall have the meaning set forth in Section 8.1(b)(i).
(78)    “Non-Assumable Third Party Claim” shall have the meaning set forth in Section 6.4(c).
(79)    “NYSE” shall mean the New York Stock Exchange.
(80)    “Other Party” shall have the meaning set forth in Section 2.9(a).
(81)    “Other Party’s Auditors” shall have the meaning set forth in Section 7.2(a).
(82)    “Parent” shall have the meaning set forth in in the Preamble.
(83)    “Parent Asset Transferee” shall mean any Parent Retained Business to which Parent Retained Assets shall be or have been transferred, directly or indirectly, prior to the Effective Time, or which is contemplated by the Internal Reorganization or this Agreement or the Ancillary Agreements to occur after the Effective Time, by an Asset Transferor in order to consummate the transactions contemplated hereby.
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(84)    “Parent Common Stock” shall mean the common stock of Parent, par value $0.001 per share.
(85)    “Parent CSIs” shall have the meaning set forth in Section 2.10(d).
(86)    “Parent Cyber Liabilities” shall mean all Liabilities based upon, arising out of, or relating to the Cyber Incident, including all out-of-pocket direct costs and expenses (including fees and costs of outside counsel, investigators, consultants, and experts), judgments, penalties and fines for:
(i)    any Action brought or asserted by any Person (other than any member of any Group or their Affiliates) within four years after the Effective Time related to the Cyber Incident with respect to any product or service of the Parent Retained Business or the SpinCo Business;
(ii)    any Action brought or asserted by any Person (other than any member of any Group or their Affiliates) within four years after the Effective Time with respect to any breach or exfiltration of Information (including any Information of any employee, consultant, customer, vendor or business partner) related to the Cyber Incident and the Parent Retained Business or the SpinCo Business;
(iii)    any Action made by or on behalf of holders of Parent Company Stock, in their capacity as such, related to the Cyber Incident;
(iv)    any investigation conducted by SpinCo following discovery by SpinCo within four years after the Effective Time of a cyber event relating to, arising out of or resulting from the Cyber Incident; and
(v)    any Action brought by or asserted by any Person (other than any member of any Group or their Affiliates) with respect to any Information containing a statement of facts regarding the Cyber Incident in any Distribution Disclosure Document or any SpinCo Disclosure Document to the extent such Information was provided in writing by Parent to SpinCo for express inclusion in such Distribution Disclosure Document or SpinCo Disclosure Document and included in reliance and in conformity with such Information provided by Parent (other than (x) any Information included in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” or any other disclosure regarding the affects or impact of the Cyber Incident may have on the SpinCo Business or the SpinCo Assets and (y) with respect to SpinCo’s disclosure of such Information after Parent has previously notified SpinCo that such Information has materially changed or upon which SpinCo should no longer rely).
Notwithstanding anything to the contrary in the foregoing, “Parent Cyber Liabilities” shall not include any Liabilities incurred by any member of the SpinCo Group or the SpinCo Business or on any SpinCo Asset, to the extent based upon, arising out of, or relating to: (1) any compliance, mitigation, increased or changed IT, cybersecurity and other internal controls and enhancements (whether or not capitalized), research and development (whether or not capitalized) and additional personnel and related costs with respect to the SpinCo Business or any SpinCo Asset
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with respect to improving, enhancing or hardening the cyber security or defenses of the IT Assets of the SpinCo Group whether as a result of the Cyber Incident or otherwise; (2) any government relations, lobbying or public relations advisory work other than as described in clause (i) or (ii) above; (3) any Action relating to, arising out of or resulting from any breach or cyberattack occurring after the Effective Time where the events or circumstances giving rise to such Liabilities were not related to, arising out of or resulting from the Cyber Incident; (4) the Distribution Disclosure Documents, any SpinCo Disclosure, and any other public statements made by any member of the SpinCo Group or any of their respective officers or directors (in their capacity as such) after the Effective Time, in each case, related to the Cyber Incident (other than as provided in clause (v) above); and (5) any consequential, special or exemplary Liabilities (including any Liabilities for any loss of reputation or goodwill, diminution in value of the SpinCo Business or any SpinCo Assets (including any loss of revenues, cash flow or profits)) from any loss of SpinCo Group customers, vendors, partners, employees or other commercial relationships or any increase in insurance premiums, whether or not relating to, arising out of or resulting from the Cyber Incident.
(87)    “Parent Former Business” shall mean any Former Business (other than the SpinCo Business or the SpinCo Former Businesses) that, at the time of sale, conveyance, assignment, transfer, disposition, divestiture (in whole or in part) or discontinuation, abandonment, completion or termination of the operations, activities or production thereof, was primarily managed by or associated with the Parent Retained Business as then conducted.
(88)    “Parent Group” shall mean (i) Parent and each Person that is a direct or indirect Subsidiary of Parent as of immediately following the Distribution and (ii) each Business Entity that becomes a Subsidiary of Parent after the Effective Time.
(89)    “Parent Indemnitees” shall mean each member of the Parent Group and each of their respective Affiliates from and after the Effective Time and each member of the Parent Group’s and such Affiliates’ respective current, former and future directors, officers, managers, partners, employees and agents and each of the heirs, executors, successors and assigns of any of the foregoing, except, for the avoidance of doubt, the SpinCo Indemnitees.
(90)    “Parent Released Liabilities” shall have the meaning set forth in Section 6.1(a)(i).
(91)    “Parent Retained Assets” shall mean:
(i)    the Assets listed or described on Schedule 1.1(91) and any and all Assets that are expressly contemplated by this Agreement or any Ancillary Agreement as Assets to be retained by Parent or any other member of the Parent Group (which for the avoidance of doubt is not a comprehensive listing of all Parent Retained Assets and is not intended to limit other clauses in this definition of “Parent Retained Assets”);
(ii)    any and all Assets that are owned, leased or licensed, at or prior to the Effective Time, by Parent and/or any of its Subsidiaries, that are not SpinCo Assets;
(iii)    any and all Assets that are acquired or otherwise becomes an Asset of the Parent Group after the Effective Time; and
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(iv)    all Parent Retained IP.
(92)    “Parent Retained Business” shall mean (i) those businesses operated by the Parent Group prior to the Effective Time (including the information technology operations management business) other than the SpinCo Business, (ii) those Business Entities or businesses acquired or established by or for any member of the Parent Group after the Effective Time, and (iii) any Parent Former Business; provided that Parent Retained Business shall not include any SpinCo Former Business.
(93)    “Parent Retained IP” shall mean (i) all Intellectual Property other than SpinCo Intellectual Property, (ii) any Intellectual Property licensed to SpinCo pursuant to the Ancillary Agreements, and (iii) the Parent Retained Names.
(94)    “Parent Retained Liabilities” shall mean:
(i)    any and all Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement as Liabilities to be retained or assumed by Parent or any other member of the Parent Group, and all agreements, obligations and other Liabilities of Parent or any member of the Parent Group under this Agreement or any of the Ancillary Agreements;
(ii)    any and all Liabilities of a member of the Parent Group to the extent relating to, arising out of or resulting from any Parent Retained Assets (other than Liabilities arising under any Shared Contracts to the extent such Liabilities relate to the SpinCo Business);
(iii)    any and all Parent Cyber Liabilities;
(iv)    the Liabilities listed on Schedule 1.1(94); and
(v)    any and all Liabilities of Parent and each of its Subsidiaries that are not SpinCo Liabilities.
(95)    “Parent Retained Names” shall mean the names and marks set forth in Schedule 1.1(95), and any Trademarks containing or comprising any of such names or marks, and any Trademarks derivative thereof or confusingly similar thereto, or any telephone numbers or other alphanumeric addresses or mnemonics containing any of the foregoing names or marks.
(96)    “Party” and “Parties” shall have the meanings set forth in the Preamble.
(97)    “Person” shall mean any natural person, firm, individual, corporation, business trust, joint venture, association, bank, land trust, trust company, company, limited liability company, partnership, or other organization or entity, whether incorporated or unincorporated, or any Governmental Entity.
(98)    “Policies” shall mean insurance policies and insurance contracts of any kind (other than life and benefits policies or contracts), including primary, excess and umbrella policies, commercial general liability policies, fiduciary liability, directors and officers liability,
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automobile, property and casualty, workers’ compensation and employee dishonesty insurance policies and bonds, together with the rights, benefits and privileges thereunder.
(99)    “Personal Data” shall mean any information that is defined as ‘personal data’, ‘personal information’, ‘personally identifiable information’ or other similar term, under applicable Data Protection Laws.
(100)    “Prime Rate” shall mean the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the United States or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein or any similar release by the Federal Reserve Board. Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.
(101)    “Privilege” shall have the meaning set forth in Section 7.7(a).
(102)    “Privileged Information” has the meaning set forth in Section 7.7(a).
(103)    “Record Date” shall mean the date determined by the Board of Directors of Parent as the record date for determining the holders of Parent Common Stock entitled to receive SpinCo Common Stock in the Distribution.
(104)    “Record Holders” shall mean holders of Parent Common Stock on the Record Date.
(105)    “Records” shall mean any Contracts, documents, books, records or files.
(106)    “Released Insurance Matters” shall have has the meaning set forth in Section 9.1(j).
(107)    “Rules” shall have the meaning set forth in Section 8.1(c).
(108)    “Second Internal Distribution” shall mean the distribution by SolarWinds Intermediate Holdings I, Inc. of all of the issued and outstanding shares of SpinCo Common Stock to SolarWinds Intermediate Holdings II, Inc. effective as of [●].
(109)    “Securities Act” shall mean the Securities Act of 1933, together with the rules and regulations promulgated thereunder.
(110)    “Security Interest” shall mean any mortgage, security interest, pledge, lien, charge, claim, option, right to acquire, voting or other restriction, right-of-entry, covenant, condition, easement, encroachment, restriction on transfer, or other encumbrance of any nature whatsoever, excluding restrictions on transfer under securities Laws.
(111)    “Shared Contract” shall have the meaning set forth in Section 2.3(a).
(112)    “Software Cross License Agreement” shall mean the Software Cross License Agreement by and between the Parties, in the form attached hereto as Exhibit E.
(113)    “SpinCo” shall have the meaning set forth in the Preamble.
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(114)    “SpinCo Asset Transferee” shall mean any Business Entity that is or will be a member of the SpinCo Group to which SpinCo Assets shall be or have been transferred at or prior to the Effective Time, or which is contemplated by the Internal Reorganization or this Agreement or the Ancillary Agreements to occur after the Effective Time, by an Asset Transferor in order to consummate the transactions contemplated hereby.
(115)    “SpinCo Assets” shall mean, without duplication:
(i)    all interests in the capital stock of, or any other equity interests in, the members of the SpinCo Group held, directly or indirectly, by Parent immediately prior to the Distribution (other than SpinCo);
(ii)    the Assets set forth on Schedule 1.1(115)(ii) (which for the avoidance of doubt is not a comprehensive listing of all SpinCo Assets and is not intended to limit other clauses of this definition of “SpinCo Assets”);
(iii)    any and all Assets that are expressly contemplated by this Agreement or any Ancillary Agreement as Assets which have been or are to be Transferred to or retained by any member of the SpinCo Group;
(iv)    any and all Assets (other than Cash Equivalents, which shall be governed solely by Section 2.13, and Assets listed on Schedule 1.1(115)(iv)) reflected on the SpinCo Balance Sheet or the accounting records supporting such balance sheet and any Assets acquired by or for SpinCo or any member of the SpinCo 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 if prepared on a consistent basis, subject to any dispositions of any of such Assets subsequent to the date of the SpinCo Balance Sheet;
(v)    all rights, title and interest in, and to and under the leases or subleases of the real property set forth on Schedule 1.1(115)(v) and other leases primarily related to SpinCo Business, including, to the extent provided for in the SpinCo leases, any land and land improvements, structures, buildings and building improvements, other improvements and appurtenances (the “SpinCo Leased Real Property”);
(vi)    all Contracts primarily related to the SpinCo Business and any rights or claims arising thereunder, including any Contracts set forth on Schedule 1.1(115)(vi) (the “SpinCo Contracts”);
(vii)    Intellectual Property exclusively related to the SpinCo Business, including the Intellectual Property applications and registrations set forth on Schedule 1.1(115)(vii) (the “SpinCo Intellectual Property”);
(viii)    all licenses, permits, registrations, approvals and authorizations which have been issued by any Governmental Entity and are held by a member of the SpinCo Group or relate primarily to, or to the extent transferable, are used primarily in the SpinCo Business (other than to the extent that any member of the Parent Group
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benefits from such licenses, permits, registrations, approvals and authorizations in connection with the Parent Retained Business);
(ix)    all Information exclusively related to, or exclusively used in, the SpinCo Business;
(x)    excluding any Intellectual Property (which is addressed in Section 1.1(115)(vii) above), the IT Assets that are primarily used or primarily held for use in the SpinCo Business, including the IT Assets listed on Schedule 1.1(115)(x);
(xi)    all office equipment and furnishings located at the physical site of which the ownership or a leasehold or sub leasehold interest is being transferred to or retained by a member of the SpinCo Group, and which as of the Effective Time is not subject to a lease or sublease back to a member of the Parent Group (excluding any office equipment and furnishings owned by persons other than Parent and its Subsidiaries);
(xii)    subject to Article IX, any rights of any member of the SpinCo Group under any insurance policies held solely by one or more members of the SpinCo Group; and
(xiii)    all other Assets (other than any Assets relating to the Intellectual Property, SpinCo Leased Real Property, or Assets that are of the type that would be listed in clauses (v) and (viii) through (xii)) that are held by the SpinCo Group or the Parent Group immediately prior to the Distribution and that are primarily used and primarily held for use in the SpinCo Business as conducted immediately prior to the Distribution (the intention of this clause (xiii) is only to rectify an inadvertent omission of transfer or assignment of any Asset that, had the Parties given specific consideration to such Asset as of the date of this Agreement, would have otherwise been classified as a SpinCo Asset based on the principles of this Section 1.1(115); provided that no Asset shall be a SpinCo Asset solely as a result of this clause (xiii) unless a written claim with respect thereto is made by SpinCo on or prior to the date that is eighteen (18) months after the Distribution).
Notwithstanding anything to the contrary herein, the SpinCo Assets shall not include (A) any Assets that are expressly contemplated by this Agreement or by any Ancillary Agreement (or the Schedules hereto or thereto) as Assets to be retained by or Transferred to any member of the Parent Group (including all Parent Retained Assets), or (B) any Assets governed by the Tax Matters Agreement or (C) any Assets that are expressly listed on Schedule 1.1(115)(C).
(116)    “SpinCo Balance Sheet” shall mean the pro forma balance sheet of the SpinCo Group, including the notes thereto, as of December 31, 2020, as included in the Information Statement.
(117)    “SpinCo Business” shall mean the businesses comprising of Parent’s managed service provider business conducted prior to the Effective Time by any member of the SpinCo Group and any other businesses or operations conducted primarily through the use of the SpinCo Assets, as such businesses are described in the Information Statement, or established by or for SpinCo or any of its Subsidiaries after the Effective Time and shall include any SpinCo Former
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Business; provided that, other than the SpinCo Former Businesses listed on Schedule 1.1(123), the SpinCo Business shall not include any Parent Former Business.
(118)    “SpinCo Common Stock” shall mean the common stock of SpinCo, par value $0.001 per share.
(119)    “SpinCo Disclosure” shall mean any form, statement, schedule or other material (other than the Distribution Disclosure Documents) filed with or furnished to the Commission, including in connection with SpinCo’s obligations under the Securities Act and the Exchange Act, any other Governmental Entity, or holders of any securities of any member of the SpinCo Group, in each case, prior to, on, or after the Distribution Date by or on behalf of any member of the SpinCo Group.
(120)    “SpinCo Environmental Liabilities” shall mean any and all Environmental Liabilities, whether arising before, on or after the Effective Time, to the extent relating to or resulting from or arising out of (i) the past, present or future operation, conduct or actions of the SpinCo Group, SpinCo Business or the past, present or future use of the SpinCo Assets or (ii) the SpinCo Former Business, including, any agreement, decree, judgment, or order relating to the foregoing entered into by Parent or any Affiliate of Parent prior to the Effective Time.
(121)    “SpinCo Financing Arrangements” means the financing arrangements described on Schedule 1.1(121) and the SpinCo PIPE Issuance and SpinCo PIPE Offering.
(122)    “SpinCo Financing Cash Distribution” means the cash distribution made from SpinCo to SolarWinds Holdings Inc., and from SolarWinds Holdings Inc. upstream to Parent in connection with the SpinCo Financing Arrangements as further described on Schedule 1.1(122).
(123)    “SpinCo Former Businesses” means (i) any Former Business that, at the time of sale, conveyance, assignment, transfer, disposition, divestiture (in whole or in part) or discontinuation, abandonment, completion or termination of the operations, activities or production thereof, was primarily managed by or associated with the SpinCo Business as then conducted and (ii) the Former Businesses set forth on Schedule 1.1(123), whether or not such Former Business would meet the standard set forth in sub-clause (i) of this definition.
(124)    “SpinCo Group” shall mean SpinCo and each Person that is a direct or indirect Subsidiary of SpinCo as of immediately prior to the Distribution (but after giving effect to the Internal Reorganization), and each Person that becomes a Subsidiary of SpinCo after the Effective Time.
(125)    “SpinCo Indemnitees” shall mean each member of the SpinCo Group and each of their respective Affiliates from and after the Effective Time and each member of the SpinCo Group’s and such respective Affiliates’ respective current, former and future directors, officers, employees and agents and each of the heirs, administrators, executors, successors and assigns of any of the foregoing.
(126)    “SpinCo Liabilities” shall mean:
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(i)    any and all Liabilities to the extent relating to, arising out of or resulting from (a) the operation or conduct of the SpinCo Business, as conducted at any time prior to, at or after the Effective Time (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person’s authority) of the SpinCo Group); (b) the operation or conduct of any business conducted by any member of the SpinCo Group at any time after the Effective Time (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person’s authority) of the SpinCo Group); or (c) any SpinCo Asset, whether arising before, on or after the Effective Time (including any Liability relating to, arising out of or resulting from SpinCo Contracts, Shared Contracts (to the extent such Liability relates to the SpinCo Business) and any real property and leasehold interests):
(ii)    the Liabilities set forth on Schedule 1.1(126)(ii) and any and all other Liabilities that are expressly provided by this Agreement or any of the Ancillary Agreements 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 Ancillary Agreements;
(iii)    any and all Liabilities reflected on the SpinCo Balance Sheet (other than those in Schedule 1.1(126)(iii)) or the accounting records supporting such balance sheet and any Liabilities incurred by or for SpinCo or any member of the SpinCo Group subsequent to the date of the SpinCo Balance Sheet which, had they been so incurred on or before such date, would have been reflected on the SpinCo Balance Sheet if prepared on a consistent basis, subject to any discharge of any of such Liabilities subsequent to the date of the SpinCo Balance Sheet;
(iv)    any and all Liabilities to the extent relating to, arising out of, or resulting from, whether prior to, at or after the Effective Time, any infringement, misappropriation or other violation of any Intellectual Property of any other Person related to the conduct of the SpinCo Business;
(v)    any and all SpinCo Environmental Liabilities;
(vi)    any and all Liabilities (including under applicable federal and state securities Laws or any Action brought by or on behalf of any holder of any securities of SpinCo (including the SpinCo Common Stock)) relating to, arising out of or resulting from (i) the Distribution Disclosure Documents, (ii) any SpinCo Disclosure, and (iii) the SpinCo Pipe Offering and the SpinCo PIPE Issuance, except, in each case, to the extent such Liabilities constitute a Parent Cyber Liability;
(vii)    for the avoidance of doubt, and without limiting any other matters that may constitute SpinCo Liabilities, any Liabilities relating to, arising out of or resulting
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from any Action primarily related to the SpinCo Business, including such Actions listed on Schedule 1.1(126)(vii);
(viii)    all Liabilities relating to, arising out of or resulting from any Indebtedness of any member of the SpinCo Group or any Indebtedness secured exclusively by any of the SpinCo Assets;
(ix)    all Liabilities relating to, arising out of or resulting from the SpinCo Financing Arrangements; and
(x)    any and all other Liabilities that are held by the SpinCo Group or the Parent Group immediately prior to the Distribution that were inadvertently omitted or assigned that, had the parties given specific consideration to such Liability as of the date of this Agreement, would have otherwise been classified as a SpinCo Liability based on the principles set forth in this Section 1.1(126); provided, that no Liability shall be a SpinCo Liability solely as a result of this clause (x) unless a claim with respect thereto is made by Parent on or prior to the date that is eighteen (18) months after the Distribution.
Notwithstanding the foregoing, the SpinCo Liabilities shall not include any Liabilities that are expressly (A) contemplated by this Agreement or by any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be Assumed by any member of the Parent Group or (B) discharged pursuant to Section 2.2(c) of this Agreement. Any Liabilities of any member of the Parent Group not referenced in this Section 1.1(126) are Parent Retained Liabilities, and all Parent Retained Liabilities shall not be SpinCo Liabilities; provided, however, that Parent Retained Liabilities shall not include any Liabilities for Taxes that are governed by the Tax Matters Agreement.
(127)    “SpinCo PIPE Common Stock” means the SpinCo Common Stock to be issued in connection with the SpinCo PIPE Issuance.
(128)    “SpinCo PIPE Issuance” shall have the meaning as set forth in Section 2.14.
(129)    “SpinCo PIPE Offering” shall have the meaning as set forth in Section 2.14.
(130)    “SpinCo PIPE Offering Cap” means the number of shares of SpinCo Common Stock equal to nineteen and half percent (19.5%) of the aggregate outstanding number of shares of SpinCo Common Stock immediately after the SpinCo PIPE Issuance and the Contribution and after giving effect to the issuance all of the shares of SpinCo Common Stock to be distributed by Parent in the Distributions.
(131)    “SpinCo Released Liabilities” shall have the meaning set forth in Section 6.1(a)(ii).
(132)    “Subsidiary” shall mean with respect to any Person (i) a corporation, fifty percent (50%) or more of the voting or capital stock of which is, as of the time in question, directly or indirectly owned by such Person and (ii) any other Person in which such Person, directly or indirectly, owns fifty percent (50%) or more of the equity or economic interest thereof or has the power to
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elect or direct the election of fifty percent (50%) or more of the members of the governing body of such entity.
(133)    “Target Cash Amount” shall have the meaning set forth in Section 2.13(a).
(134)    “Tax” or “Taxes” shall have the meaning set forth in the Tax Matters Agreement.
(135)    “Tax Contest” shall have the meaning as set forth in the Tax Matters Agreement.
(136)    “Tax Matters Agreement” shall mean the Tax Matters Agreement by and between Parent and SpinCo, in the form attached hereto as Exhibit B.
(137)    “Tax Returns” shall have the meaning set forth in the Tax Matters Agreement.
(138)    “Taxing Authority” shall have the meaning set forth in the Tax Matters Agreement.
(139)    “Third Internal Distribution” means the distribution by SolarWinds Intermediate Holdings II, Inc. of all of the issued and outstanding shares of SpinCo Common Stock to SolarWinds Corporation effective as of [●].
(140)    “Third Party Agreements” shall mean any agreements, arrangements, commitments or understandings between or among a Party (or any member of its Group) and any other Persons (other than either Party or any member of its respective Groups) (it being understood that to the extent that the rights and obligations of the Parties and the members of their respective Groups under any such Contracts constitute SpinCo Assets or SpinCo Liabilities, or Parent Retained Assets or Parent Retained Liabilities, such Contracts shall be assigned or retained pursuant to Article II)
(141)    “Third Party Claim” shall have the meaning set forth in Section 6.4(b).
(142)    “Third Party Proceeds” shall have the meaning set forth in Section 6.7(a).
(143)    “Trademark Licensing Agreement” shall mean the Trademark Licensing Agreement by and between the Parties, in the form attached hereto as Exhibit F.
(144)    “Transfer” shall have the meaning set forth in Section 2.2(b)(i); and the term Transferred shall have its correlative meaning.
(145)    “Transition Services Agreement” shall mean the Transition Services Agreements by and between the Parties, which is attached hereto as Exhibit C.
Section 1.2    References; Interpretation. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. Unless the context otherwise requires, the words “include”, “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation”. Unless the context otherwise requires, references in this Agreement to Articles, Sections, Annexes, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Annexes, Exhibits and Schedules to, this Agreement. Unless the context otherwise requires, the words “hereof”, “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or
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provision of this Agreement. The words “written request” when used in this Agreement shall include email. Reference in this Agreement to any time shall be to New York City, New York time unless otherwise expressly provided herein. Unless the context requires otherwise, references in this Agreement to “Parent” shall also be deemed to refer to the applicable member of the Parent Group, references to “SpinCo” shall also be deemed to refer to the applicable member of the SpinCo Group and, in connection therewith, any references to actions or omissions to be taken, or refrained from being taken, as the case may be, by Parent or SpinCo shall be deemed to require Parent or SpinCo, as the case may be, to cause the applicable members of the Parent Group or the SpinCo Group, respectively, to take, or refrain from taking, any such action. In the event of any inconsistency or conflict which may arise in the application or interpretation of any of the definitions set forth in Section 1.1, for the purpose of determining what is and is not included in such definitions, any item explicitly included on a Schedule referred to in any such definition shall take priority over any provision of the text thereof.
ARTICLE II
THE SEPARATION
Section 2.1     General. Subject to the terms and conditions of this Agreement, the Parties shall use, and shall cause their respective Groups to use, their respective commercially reasonable efforts to consummate the transactions contemplated hereby, a portion of which may have already been implemented prior to the date hereof, including the completion of the Internal Reorganization.
Section 2.2    Restructuring: Transfer of Assets; Assumption of Liabilities.
(a)    Internal Reorganization. Prior to the First Internal Distribution, except for Transfers contemplated by the Internal Reorganization or this Agreement or the Ancillary Agreements to occur after the Effective Time, the Parties shall complete the Internal Reorganization, including by taking the actions referred to in Section 2.2(b) and 2.2(c) below.
(b)    Transfer of Assets. Prior to the effective time of the First Internal Distribution (it being understood that some of such Transfers may occur following the Effective Time in accordance with Section 2.2(a) and Section 2.6), pursuant to the Conveyancing and Assumption Instruments and in connection with the Contribution:
(i)    Parent shall cause the applicable Asset Transferors to, transfer, contribute, assign and/or convey or cause to be transferred, contributed, assigned and/or conveyed (“Transfer”) to (A) the respective Parent Asset Transferees, all of the applicable Asset Transferors’ right, title and interest in and to the Parent Retained Assets and (B) SpinCo and/or the respective SpinCo Asset Transferees, all of its and the applicable Asset Transferors’ right, title and interest in and to the SpinCo Assets, and the applicable Parent Asset Transferees and SpinCo Asset Transferees shall accept from Parent and the applicable members of the Parent Group, all of Parent’s and the other members of the Parent Group’s respective direct or indirect
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rights, title and interest in and to the applicable Assets, including all of the outstanding shares of capital stock or other ownership interests.
(ii)    Any costs and expenses incurred after the Effective Time to effect any Transfer contemplated by this Section 2.2(b) (including any transfer effected pursuant to Section 2.6) shall be paid by the Parties as set forth in Section 10.5(b). Other than costs and expenses incurred in accordance with the foregoing, nothing in this Section 2.2(b) shall require any member of any Group to incur any material obligation or grant any material concession for the benefit of any member of any other Group in order to effect any transaction contemplated by this Section 2.2(b).
(c)    Assumption of Liabilities. Except as contemplated pursuant to this Agreement or as otherwise specifically set forth in any Ancillary Agreement, in connection with the Internal Reorganization and the Contribution or, if applicable, from and after, the Effective Time (i) pursuant to this Agreement or the applicable Conveyancing and Assumption Instruments, Parent shall, or shall cause a member of the Parent Group to, accept, assume (or, as applicable, retain) and perform, discharge and fulfill, in accordance with their respective terms (“Assume”), all of the Parent Retained Liabilities and (ii) pursuant to this Agreement or the applicable Conveyancing and Assumption Instruments, SpinCo shall, or shall cause a member of the SpinCo Group to, Assume all of the SpinCo Liabilities, in each case, regardless of (A) when or where such Liabilities arose or arise, (B) whether the facts upon which they are based occurred prior to, on or subsequent to the Effective Time, (C) where or against whom such Liabilities are asserted or determined (D) whether arising from or alleged to arise from negligence, gross negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the Parent Group or the SpinCo Group, as the case may be, or any of their past or present respective directors, officers, managers, partners, employees, agents, Subsidiaries or Affiliates, (E) which entity is named in any Action associated with any Liability.
(d)    Consents. The Parties shall use their commercially reasonable efforts to obtain the Consents required to Transfer any Assets, Contracts, licenses, permits and authorizations issued by any Governmental Entity or parts thereof as contemplated by this Agreement. Notwithstanding anything herein to the contrary, no Contract or other Asset shall be transferred if it would violate applicable Law or, in the case of any Contract, the rights of any third party to such Contract; provided that Section 2.6, to the extent provided therein, shall apply thereto.
(e)    It is understood and agreed by the Parties that certain of the Transfers referenced in Section 2.2(b) or Assumptions referenced in Section 2.2(c) have heretofore occurred and, as a result, no additional Transfers or Assumptions by any member of the Parent Group or the SpinCo Group, as applicable, shall be deemed to occur upon the execution of this Agreement with respect thereto. Moreover, to the extent that any Subsidiary of the Parent Group or the SpinCo Group, as applicable, is liable for any Parent Retained Liability or Assumed Liability, respectively, by operation of law immediately following any Transfer in accordance with this Agreement or any Conveyancing and Assumption Instruments, there shall be no need for any other member of the Parent Group or the SpinCo Group, as
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applicable, to Assume such Liability in connection with the operation of Section 2.2(c) and, accordingly, no other member of such Group shall Assume and such Liability in connection with Section 2.2(c).
Section 2.3    Treatment of Shared Contracts. Without limiting the generality of the obligations set forth in Section 2.2(a) and 2.2(b):
(a)    Unless the Parties otherwise agree or the benefits of any Contract described in this Section 2.3 are expressly conveyed to the applicable Party pursuant to an Ancillary Agreement, any Contract (i) that is a Parent Retained Asset but a portion of which inures to the benefit of a member of the SpinCo Group or (ii) a SpinCo Contract but a portion of which materially inures to the benefit of a member of the Parent Group (each, a “Shared Contract”) shall be assigned in part to the applicable member(s) of the applicable Group, if so assignable, or appropriately amended prior to, on or after the Effective Time, so that each Party or the members of their respective Groups as of the Effective Time shall be entitled to the rights and benefits, and shall Assume the related portion of any Liabilities, inuring to their respective Businesses; provided, however, that (x) in no event shall any member of any Group be required to assign (or amend) any Shared Contract in its entirety or to assign a portion of any Shared Contract (including any Policy) which is not assignable (or cannot be amended) by its terms (including any terms imposing consents or conditions on an assignment where such consents or conditions have not been obtained or fulfilled, subject to Section 2.2(d)), and (y) if any Shared Contract cannot be so partially assigned by its terms or otherwise, cannot be amended or has not for any other reason been assigned or amended, or if such assignment or amendment would impair the benefit the parties thereto derive from such Shared Contract, (A) at the reasonable request of the Party (or the member of such Party’s Group) to which the benefit of such Shared Contract inures in part, the Party for which such Shared Contract is, as applicable, a Parent Retained Asset or SpinCo Asset shall, and shall cause each of its respective Subsidiaries to, for a period ending not later than six (6) months after the Distribution Date (unless the term of Shared Contract (excluding any extensions thereof) ends at a later date, in which case for a period ending on such date), take such other reasonable and permissible actions to cause such member of the SpinCo Group or the Parent Group, as the case may be, to receive the benefit of that portion of each Shared Contract that relates to the SpinCo Business or the Parent Retained Business, as the case may be (in each case, to the extent so related) as if such Shared Contract had been assigned to (or amended to allow) a member of the applicable Group pursuant to this Section 2.3 and to bear the burden of the corresponding Liabilities (including any Liabilities that may arise by reason of such arrangement) as if such Liabilities had been Assumed by a member of the applicable Group pursuant to this Section 2.3; provided that the Party for which such Shared Contract is a Parent Retained Asset or a SpinCo Asset, as applicable, shall be indemnified for all Indemnifiable Losses or other Liabilities arising out of any actions (or omissions to act) of such retaining Party taken at the direction of the other Party (or relevant member of its Group) in connection with and relating to such Shared Contract, as the case may be, and (B) the Party to which the benefit of such Shared Contract inures in part shall use commercially reasonable efforts to enter into a separate contract pursuant to
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which it procures such rights and obligations as are necessary such that it no longer needs to avail itself of the arrangements provided pursuant to this Section 2.3(a); provided that, depending on whether such Shared Contract is a Parent Retained Asset or SpinCo Asset, then the applicable Parent Group Member or SpinCo Group Member for which such Shared Contract is not an Asset shall not be liable for any actions or omissions taken in accordance with clause (y) of this Section 2.3(a).
(b)    Each of Parent and SpinCo shall, and shall cause the members of its Group to, (A) treat for all Tax purposes the portion of each Shared Contract inuring to its respective Businesses as Assets owned by, and/or Liabilities of, as applicable, such Party as of the Effective Time and (B) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment (unless required by applicable Law or good faith resolution of a Tax Contest).
Section 2.4    Intercompany Accounts, Loans and Agreements.
(a)    Except as set forth in Section 6.1(b), all intercompany receivables and payables (other than (x) intercompany loans (which shall be governed by Section 2.4(c)) (y) receivables or payables otherwise specifically provided for on Schedule 2.4(a), and (z) payables created or required hereby or by any Ancillary Agreement or any Continuing Arrangements) and intercompany balances, including in respect of any cash balances, any cash balances representing deposited checks or drafts or any cash held in any centralized cash management system between any member of the Parent Group, on the one hand, and any member of the SpinCo Group, on the other hand, which exist and are reflected in the accounting records of the relevant Parties immediately prior to the Effective Time, shall continue to be outstanding after the Effective Time and thereafter (i) shall be an obligation of the relevant Party (or the relevant member of such Party’s Group), each responsible for fulfilling its (or a member of such Party’s Group’s) obligations in accordance with the terms and conditions applicable to such obligation or if such terms and conditions are not set forth in writing, such obligation shall be satisfied within 30 days of a written request by the beneficiary of such obligation given to the corresponding obligor thereunder, and (ii) shall be for each relevant Party (or the relevant member of such Party’s Group) an obligation to a third party and shall no longer be an intercompany account.
(b)    As between the Parties (and the members of their respective Group) all payments and reimbursements received after the Effective Time by one Party (or member of its Group) that relate to a Business, Asset or Liability of the other Party (or member of its Group), shall be held by such Party in trust for the use and benefit of the Party entitled thereto (at the expense of the Party entitled thereto) and, promptly upon receipt by such Party of any such payment or reimbursement, such Party shall pay or shall cause the applicable member of its Group to pay over to the Party entitled thereto the amount of such payment or reimbursement without right of set-off.
(c)    Except as set forth on Schedule 2.4(c), each of Parent or any member of the Parent Group, on the one hand, and SpinCo or any member of the SpinCo Group, on the other hand, will settle with the other Party, as the case may be, all intercompany loans,
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including any promissory notes, owned or owed by the other Party on or prior to the First Internal Distribution, except as otherwise agreed to in good faith by the Parties in writing on or after the date hereof, it being understood and agreed by the Parties that all guarantees and Credit Support Instruments shall be governed by Section 2.10.
Section 2.5    Limitation of Liability; Intercompany Contracts. No Party nor any Subsidiary thereof shall be liable to the other Party or any Subsidiary of the other Party based upon, arising out of or resulting from any Contract, arrangement, course of dealing or understanding between or among it and the other Party existing at or prior to the Effective Time (other than as set forth on Schedule 2.5, pursuant to this Agreement, any Ancillary Agreement, any Continuing Arrangements, any Third Party Agreements, as set forth in Section 2.4 or Section 6.1(b) or pursuant to any other Contract entered into in connection herewith or in order to consummate the transactions contemplated hereby or thereby) and each Party hereby terminates any and all Contracts, arrangements, courses of dealing or understandings between or among it and the other Party effective as of the Effective Time (other than as set forth on Schedule 2.5, this Agreement, any Ancillary Agreement, any Continuing Arrangements, any Third Party Agreements, as set forth in Section 2.4 or Section 6.1(b) or pursuant to any Contract entered into in connection herewith or in order to consummate the transactions contemplated hereby or thereby), provided, however, that with respect to any Contract, arrangement, course of dealing or understanding between or among the Parties or any Subsidiaries thereof discovered after the Effective Time, the Parties agree that such Contract, arrangement, course of dealing or understanding shall nonetheless be deemed terminated as of the Effective Time with the only liability of the Parties in respect thereof to be the obligations incurred between the Parties pursuant to such Contract, arrangement, course of dealing or understanding between the Effective Time and the time of discovery or later termination of any such Contract, arrangement, course of dealing or understanding.
Section 2.6    Transfers Not Effected at or Prior to the Effective Time; Transfers Deemed Effective as of the Effective Time.
(a)    To the extent that any Transfers or Assumptions contemplated by this Article II shall not have been consummated at or prior to the Effective Time, the Parties shall use commercially reasonable efforts to effect such Transfers or Assumptions as promptly following the Effective Time as shall be practicable. Nothing herein shall be deemed to require or constitute the Transfer of any Assets or the Assumption of any Liabilities which by their terms or operation of Law cannot be Transferred; provided, however, that the Parties and their respective Subsidiaries shall cooperate and use commercially reasonable efforts to seek to obtain, in accordance with applicable Law, any necessary Consents or Governmental Approvals for the Transfer of all Assets and Assumption of all Liabilities contemplated to be Transferred and Assumed pursuant to this Article II to the fullest extent permitted by applicable Law. In the event that any such Transfer of Assets or Assumption of Liabilities has not been consummated, from and after the Effective Time (i) the Party (or relevant member in its Group) retaining such Asset shall thereafter hold (or shall cause such member in its Group to hold) such Asset in trust for the use and benefit of the Party entitled thereto (at the expense of the Party entitled thereto) and (ii) the Party intended to Assume such Liability shall, or shall cause the applicable member
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of its Group to, pay or reimburse the Party retaining such Liability for all amounts paid or incurred in connection with the retention of such Liability. To the extent the foregoing applies to any Contracts (other than Shared Contracts, which shall be governed solely by Section 2.3) to be assigned for which any necessary Consents or Governmental Approvals are not received prior to the Effective Time, the treatment of such Contracts shall, for the avoidance of doubt, be subject to Section 2.8 and Section 2.9, to the extent applicable. In addition, the Party retaining such Asset or Liability (or relevant member of its Group) shall (or shall cause such member in its Group to) treat, insofar as reasonably possible and to the extent permitted by applicable Law, such Asset or Liability in the ordinary course of business in accordance with past practice and take such other actions as may be reasonably requested by the Party to which such Asset is to be Transferred or by the Party Assuming such Liability in order to place such Party, insofar as reasonably possible and to the extent permitted by applicable Law, in the same position as if such Asset or Liability had been Transferred or Assumed as contemplated hereby and so that all the benefits and burdens relating to such Asset or Liability, including possession, use, risk of loss, potential for income and gain, and dominion, control and command over such Asset or Liability, are to inure from and after the Effective Time to the relevant member or members of the Parent Group or the SpinCo Group entitled to the receipt of such Asset or required to Assume such Liability. In furtherance of the foregoing, the Parties agree that, as of the Effective Time, subject to Section 2.2(c) and Section 2.9(b), each Party shall be deemed to have acquired complete and sole beneficial ownership over all of the Assets, together with all rights, powers and privileges incident thereto, and shall be deemed to have Assumed in accordance with the terms of this Agreement all of the Liabilities, and all duties, obligations and responsibilities incident thereto, which such Party is entitled to acquire or required to Assume pursuant to the terms of this Agreement.
(b)    If and when the Consents, Governmental Approvals and/or conditions, the absence or non-satisfaction of which caused the deferral of Transfer of any Asset or deferral of the Assumption of any Liability pursuant to Section 2.6(a), are obtained or satisfied, the Transfer, assignment, Assumption or novation of the applicable Asset or Liability shall be effected without further consideration in accordance with and subject to the terms of this Agreement (including Section 2.2) and/or the applicable Ancillary Agreement, and shall, to the extent possible without the imposition of any undue cost on any Party, be deemed to have become effective as of the Effective Time.
(c)    The Party (or relevant member of its Group) retaining any Asset or Liability due to the deferral of the Transfer of such Asset or the deferral of the Assumption of such Liability pursuant to Section 2.6(a) or otherwise shall (i) not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced, assumed, or agreed in advance to be reimbursed by the Party (or relevant member of its Group) entitled to such Asset or the Person intended to be subject to such Liability, other than reasonable and documented attorneys’ fees and recording or similar or other incidental fees, all of which shall be promptly reimbursed by the Party (or relevant member of its Group) entitled to such Asset or the Person intended to be subject to such Liability and
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(ii) be indemnified for all Indemnifiable Losses or other Liabilities arising out of any actions (or omissions to act) of such retaining Party taken at the direction of the other Party (or relevant member of its Group) in connection with and relating to such retained Asset or Liability, as the case may be.
(d)    After the Effective Time, each Party (or any member of its Group) may receive mail, packages, electronic mail and any other written communications properly belonging to another Party (or any member of its Group). Accordingly, at all times after the Effective Time, each Party is hereby authorized to receive and, if reasonably necessary to identify the proper recipient in accordance with this Section 2.6(d), open all mail, packages, electronic mail and any other written communications received by such Party that belongs to such other Party, and to the extent that they do not relate to the business of the receiving Party, the receiving Party shall promptly deliver such mail, packages, electronic mail or any other written communications (or, in case the same also relates to the business of the receiving Party or another Party, copies thereof) to such other Party as provided for in Section 10.6 at the expense of the Receiving Party; it being understood that if a Party receives a telephone call that relates to the business of the other Party, then the receiving Party shall inform the person making such telephone call to contact the other Party. The provisions of this Section 2.6(d) 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.
(e)    With respect to Assets and Liabilities described in Section 2.6(d), each of Parent and SpinCo shall, and shall cause the members of its respective Group to, (i) treat for all Tax purposes (A) the deferred Assets as assets having been Transferred to and owned by the Party entitled to such Assets not later than the Effective Time and (B) the deferred Liabilities as liabilities having been Assumed and owned by the Person intended to be subject to such Liabilities not later than the Effective Time and (ii) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment (unless required by a change in applicable Law, Final Determination or good faith resolution of a Tax Contest).
Section 2.7    Conveyancing and Assumption Instruments. In connection with, and in furtherance of, the Transfers of Assets and the Assumptions of Liabilities contemplated by this Agreement, the Parties shall execute or cause to be executed, on or after the date hereof by the appropriate entities to the extent not executed prior to the date hereof, any Conveyancing and Assumption Instruments necessary to evidence the valid Transfer to the applicable Party or member of such Party’s Group of all right, title and interest in and to its accepted Assets and the valid and effective Assumption by the applicable Party of its Assumed Liabilities for Transfers and Assumptions to be effected pursuant to Delaware Law or the Laws of one of the other states of the United States or, if not appropriate for a given Transfer or Assumption, and for Transfers or Assumptions to be effected pursuant to non-U.S. Laws, in such form as the Parties shall reasonably agree, including the Transfer of real property by mutually acceptable conveyance deeds as may be appropriate and in form and substance as may be required by the jurisdiction in which the real property is located. The Transfer of capital stock shall be effected by means of
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executed stock powers and notation on the stock record books of the corporation or other legal entities involved, or by such other means as may be required in any non-U.S. jurisdiction to Transfer title to stock and, only to the extent required by applicable Law, by notation on public registries.
Section 2.8    Further Assurances; Ancillary Agreements.
(a)    In addition to and without limiting the actions specifically provided for elsewhere in this Agreement and subject to the limitations expressly set forth in this Agreement, including Section 2.6, each of the Parties shall cooperate with each other and use (and shall cause its respective Subsidiaries and controlled Affiliates to use) commercially reasonable efforts, at and after the Effective Time, to take, or to cause to be taken, all actions, and to do, or to cause to be done, all things reasonably necessary on its part under applicable Law or contractual obligations to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements.
(b)    Without limiting the foregoing, at and after the Effective Time, each Party shall cooperate with the other Party, and without any further consideration, but at the expense of the requesting Party (except as provided in Section 2.2(b)(ii) and 2.6(c)) from and after the Effective Time, to execute and deliver, or use commercially reasonable efforts to cause to be executed and delivered, all instruments, including instruments of Transfer or title, and to make all filings with, and to obtain all Consents and/or Governmental Approvals, any permit, license, Contract, indenture or other instrument (including any Consents or Governmental Approvals), and to take all such other actions as such Party may reasonably be requested to take by any other Party from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements and the Transfers of the applicable Assets and the assignment and Assumption of the applicable Liabilities and the other transactions contemplated hereby and thereby. Without limiting the foregoing, each Party shall, at the reasonable request, cost and expense of the other Party (except as provided in Section 2.2(b)(ii) and 2.6(c)), take such other actions as may be reasonably necessary to vest in such other Party such title and such rights as possessed by the transferring Party to the Assets allocated to such other Party under this Agreement or any of the Ancillary Agreements, free and clear of any Security Interest.
(c)    Without limiting the foregoing, in the event that any Party (or member of such Party’s Group) receives any Assets (including the receipt of payments made pursuant to Contracts and proceeds from accounts receivable with respect to such Asset) or is liable for any Liability that is otherwise allocated to any Person that is a member of the other Group pursuant to this Agreement or the Ancillary Agreements, such Party agrees to promptly Transfer, or cause to be Transferred such Asset or Liability to the other Party so entitled thereto (or member of such other Party’s Group as designated by such other Party) at such other Party’s expense. Prior to any such Transfer, such Asset or Liability, as the case may be, shall be held in accordance with the provisions of Section 2.6.
(d)    At or prior to the Effective Time, each of Parent and SpinCo shall enter into, and/or (where applicable) shall cause a member or members of their respective Group to enter
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into, the Ancillary Agreements and any other Contracts in respect of the Distributions reasonably necessary or appropriate in connection with the transactions contemplated hereby and thereby.
(e)    On or prior to the Distribution Date, Parent and SpinCo in their respective capacities as direct or indirect stockholders of their respective Subsidiaries, shall each ratify any actions that are reasonably necessary or desirable to be taken by any Subsidiary of Parent or Subsidiary of SpinCo, as the case may be, to effectuate the transactions contemplated by this Agreement and the Ancillary Agreements.
Section 2.9     Novation of Liabilities; Indemnification.
(a)    Each Party, at the request of any member of the other Party’s Group (such other Party, the “Other Party”), shall use commercially reasonable efforts to obtain, or to cause to be obtained, any Consent, Governmental Approval, substitution or amendment required to novate or assign to the fullest extent permitted by applicable Law all obligations under Contracts (other than Shared Contracts, which shall be governed by Section 2.3) and Liabilities (other than with regard to guarantees or Credit Support Instruments, which shall be governed by Section 2.10), but solely to the extent that the Parties are jointly or each severally liable with regard to any such Contracts or Liabilities and such Contracts or Liabilities have been, in whole, but not in part, allocated to the first Party, or, if permitted by applicable Law, to obtain in writing the unconditional release of the applicable Other Party so that, in any such case, the members of the applicable Group shall be solely responsible for such Contracts or Liabilities; provided, however, that no Party shall be obligated to pay any consideration therefor to any third party from whom any such Consent, Governmental Approval, substitution or amendment is requested (unless such Party is fully reimbursed by the requesting Party). In addition, with respect to any Action where any Party hereto is a defendant, when and if requested by such Party, the Other Party will use commercially reasonable efforts to petition the applicable court to remove the requesting Party as a defendant to the extent that such Action relates solely to Assets or Liabilities that the Other Party (or any member of such requesting Party’s Group) has been allocated pursuant to this Article II, and the Other Party will cooperate and assist in any required communication with any plaintiff or other related third party.
(b)    If the Parties are unable to obtain, or to cause to be obtained, any such required Consent, Governmental Approval, release, substitution or amendment referenced in Section 2.9(a), the Other Party or a member of such Other Party’s Group shall continue to be bound by such Contract, license or other obligation that does not constitute a Liability of such Other Party and, unless not permitted by Law or the terms thereof, as agent or subcontractor for such Party, the Party or member of such Party’s Group who Assumed or retained such Liability as set forth in this Agreement (the “Liable Party”) shall, or shall cause a member of its Group to, pay, perform and discharge fully all the obligations or other Liabilities of such Other Party or member of such Other Party’s Group thereunder from and after the Effective Time. For the avoidance of doubt, in furtherance of the foregoing, the Liable Party or a member of such Liable Party’s Group, as agent or subcontractor of the Other Party or a member of such Other Party’s Group, to the extent
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reasonably necessary to pay, perform and discharge fully any Liabilities, or retain the benefits (including pursuant to Section 2.6) associated with such Contract or license, is hereby granted the right to, among other things, (i) prepare, execute and submit invoices under such Contract or license in the name of the Other Party (or the applicable member of such Other Party’s Group), (ii) send correspondence relating to matters under such Contract or license in the name of the Other Party (or the applicable member of such Other Party’s Group), (iii) file Actions in the name of the Other Party (or the applicable member of such Other Party’s Group) in connection with such Contract or license and (iv) otherwise exercise all rights in respect of such Contract or license in the name of the Other Party (or the applicable member of such Other Party’s Group); provided that (y) such actions shall be taken in the name of the Other Party (or the applicable member of such Other Party’s Group) only to the extent reasonably necessary or advisable in connection with the foregoing and (z) to the extent that there shall be a conflict between the provisions of this Section 2.9(b) and the provisions of any more specific written arrangement between a member of such Liable Party’s Group and a member of such Other Party’s Group, such more specific arrangement shall control. The Liable Party shall indemnify each Other Party and hold each of them harmless against any Liabilities (other than Liabilities of such Other Party) arising in connection therewith; provided, that the Liable Party shall have no obligation to indemnify the Other Party with respect to any matter to the extent that such Liabilities arise from such Other Party’s willful breach, knowing violation of Law, fraud, misrepresentation or gross negligence in connection therewith, in which case such Other Party shall be responsible for such Liabilities. The Other Party shall, without further consideration, promptly pay and remit, or cause to be promptly paid or remitted, to the Liable Party or, at the direction of the Liable Party, to another member of the Liable Party’s Group, all money, rights and other consideration received by it or any member of its Group in respect of such performance by the Liable Party (unless any such consideration is an Asset of such Other Party pursuant to this Agreement). If and when any such Consent, Governmental Approval, release, substitution or amendment shall be obtained or such agreement, lease, license or other rights or obligations shall otherwise become assignable or able to be novated, the Other Party shall, to the fullest extent permitted by applicable Law, promptly Transfer or cause the Transfer of all rights, obligations and other Liabilities thereunder of such Other Party or any member of such Other Party’s Group to the Liable Party or to another member of the Liable Party’s Group without payment of any further consideration and the Liable Party, or another member of such Liable Party’s Group, without the payment of any further consideration, shall Assume such rights and Liabilities to the fullest extent permitted by applicable Law. Each of the applicable Parties shall, and shall cause their respective Subsidiaries to, take all actions and do all things reasonably necessary on its part, or such Subsidiaries’ part, under applicable Law or contractual obligations to consummate and make effective the transactions contemplated by this Section 2.9.
Section 2.10    Guarantees; Credit Support Instruments.
(a)    Except as otherwise specified in any Ancillary Agreement, at or prior to the Effective Time or as soon as practicable thereafter, (i) Parent shall (with the reasonable cooperation
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of the applicable member of the SpinCo Group) use its commercially reasonable efforts to have each member of the SpinCo Group removed as guarantor of or obligor for any Parent Retained Liability to the fullest extent permitted by applicable Law, including in respect of those guarantees set forth on Schedule 2.10(a)(i), to the extent that they relate to Parent Retained Liabilities and (ii) SpinCo shall (with the reasonable cooperation of the applicable member of the Parent Group) use commercially reasonable efforts to have each member of the Parent Group removed as guarantor of or obligor for any SpinCo Liability, to the fullest extent permitted by applicable Law, including in respect of those guarantees set forth on Schedule 2.10(a)(ii), to the extent that they relate to SpinCo Liabilities.
(b)    At or prior to the Effective Time, to the extent required to obtain a release from a guaranty:
(i)    of any member of the Parent Group, SpinCo shall execute a guaranty agreement substantially in the form of the existing guaranty or such other form as is agreed to by the relevant parties to such guaranty agreement, except to the extent that such existing guaranty contains representations, covenants or other terms or provisions either (A) with which SpinCo would be reasonably unable to comply or (B) which would be reasonably expected to be breached; and
(ii)    of any member of the SpinCo Group, Parent shall execute a guaranty agreement substantially in the form of the existing guaranty or such other form as is agreed to by the relevant parties to such guaranty agreement, except to the extent that such existing guaranty contains representations, covenants or other terms or provisions either (A) with which Parent would be reasonably unable to comply or (B) which would be reasonably expected to be breached.
(c)    If Parent or SpinCo is unable to obtain, or to cause to be obtained, any such required removal as set forth in clauses (a) and (b) of this Section 2.10, (i) Parent, to the extent a member of the Parent Group has assumed the underlying Liability with respect to such guaranty or SpinCo, to the extent a member of the SpinCo Group has assumed the underlying Liability with respect to such guaranty, as the case may be, shall indemnify and hold harmless the guarantor or obligor for any Indemnifiable Loss arising from or relating thereto (in accordance with the provisions of Article VI) and shall or shall cause one of its Subsidiaries, as agent or subcontractor for such guarantor or obligor to pay, perform and discharge fully all the obligations or other Liabilities of such guarantor or obligor thereunder, (ii) SpinCo shall reimburse the applicable member of the Parent Group for all out of pocket expenses incurred by it arising out of or related to any such guaranty; and (iii) each of Parent 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 party, any loan, guaranty, lease, contract or other obligation for which another Party or member of such Party’s Group is or may be liable without the prior written consent of such other Party, unless all obligations of such other Party and the other members of such Party’s Group with respect thereto are thereupon terminated by documentation reasonably satisfactory in form and substance to such Party.
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(d)    Parent and SpinCo shall cooperate and SpinCo shall use commercially reasonable efforts to replace all Credit Support Instruments issued by Parent or other members of the Parent Group on behalf of or in favor of any member of the SpinCo Group or the SpinCo Business (the “Parent CSIs”) as promptly as practicable with Credit Support Instruments from SpinCo or a member of the SpinCo Group as of the Effective Time. With respect to any Parent CSIs that remain outstanding after the Effective Time, (i) SpinCo shall, and shall cause the members of the SpinCo Group to, jointly and severally indemnify and hold harmless the Parent Indemnitees for any Liabilities arising from or relating to such Credit Support Instruments, including, any fees in connection with the issuance and maintenance thereof and any funds drawn by (or for the benefit of), or disbursements made to, the beneficiaries of such Parent CSIs in accordance with the terms thereof, (ii) SpinCo shall reimburse the applicable member of the Parent Group for all out of pocket expenses incurred by it arising out of or related to any such Credit Support Instrument, and (iii) without the prior written consent of Parent, SpinCo shall not, and shall not permit any member of the SpinCo Group to, enter into, renew or extend the term of, increase its obligations under, or transfer to a third party, any loan, lease, Contract or other obligation in connection with which Parent or any member of the Parent Group has issued any Credit Support Instruments which remain outstanding. Neither Parent nor any member of the Parent Group will have any obligation to renew any Credit Support Instruments issued on behalf of or in favor of any member of the SpinCo Group or the SpinCo Business after the expiration of any such Credit Support Instrument.
Section 2.11    Disclaimer of Representations and Warranties.
(a)    EACH OF PARENT (ON BEHALF OF ITSELF AND EACH MEMBER OF THE PARENT GROUP) AND SPINCO (ON BEHALF OF ITSELF AND EACH MEMBER OF THE SPINCO GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, IN ANY ANCILLARY AGREEMENT OR IN ANY CONTINUING ARRANGEMENT, NO PARTY TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, ANY ANCILLARY AGREEMENTS OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY, AND HEREBY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, AS TO THE ASSETS, BUSINESSES OR LIABILITIES CONTRIBUTED, TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS OR GOVERNMENTAL APPROVALS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, AS TO NONINFRINGEMENT, VALIDITY OR ENFORCEABILITY OR ANY OTHER MATTER CONCERNING, ANY ASSETS OR BUSINESS OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY ACTION OR OTHER ASSET, INCLUDING ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY CONTRIBUTION, ASSIGNMENT, DOCUMENT, CERTIFICATE OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON
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THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN “AS IS, WHERE IS” BASIS (AND, IN THE CASE OF ANY REAL PROPERTY, BY MEANS OF A QUITCLAIM OR SIMILAR FORM DEED OR CONVEYANCE) 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 TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST AND (II) ANY NECESSARY CONSENTS OR GOVERNMENTAL APPROVALS ARE NOT OBTAINED OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED WITH.
(b)    Each of Parent (on behalf of itself and each member of the Parent Group) and SpinCo (on behalf of itself and each member of the SpinCo Group) further understands and agrees that if the disclaimer of express or implied representations and warranties contained in Section 2.11(a) is held unenforceable or is unavailable for any reason under the Laws of any jurisdiction outside the United States or if, under the Laws of a jurisdiction outside the United States, both Parent or any member of the Parent Group, on the one hand, and SpinCo or any member of the SpinCo Group, on the other hand, are jointly or severally liable for any Parent Liability or any SpinCo Liability, respectively, then, the Parties intend that, notwithstanding any provision to the contrary under the Laws of such foreign jurisdictions, the provisions of this Agreement and the Ancillary Agreements (including the disclaimer of all representations and warranties, allocation of Liabilities among the Parties and their respective Subsidiaries, releases, indemnification and contribution of Liabilities) shall prevail for any and all purposes among the Parties and their respective Subsidiaries.
(c)    Parent hereby waives compliance by itself and each and every member of the Parent 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 Parent Assets to Parent or any member of the Parent Group.
(d)    SpinCo hereby waives compliance by itself and 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 SpinCo Assets to SpinCo or any member of the SpinCo Group.
Section 2.12    SpinCo Financing Arrangements. Prior to the Effective Time, SpinCo shall enter into the SpinCo Financing Arrangements, on such terms and conditions as agreed by Parent in its sole discretion (including the amount that shall be borrowed pursuant to the SpinCo Financing Arrangements and the terms and interest rates for such borrowings) and the SpinCo Financing Arrangements shall have been consummated in accordance therewith. Parent and SpinCo shall participate in the preparation of all materials and presentations as may be reasonably necessary to secure funding pursuant to the SpinCo Financing Arrangements, including rating agency presentations necessary to obtain the requisite ratings needed to secure the financing under any of the SpinCo Financing Arrangements. The Parties agree that SpinCo, and not Parent, shall be
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ultimately responsible for all costs and expenses incurred by, and for reimbursement of such costs and expenses to, any member of the Parent Group or the SpinCo Group associated with the SpinCo Financing Arrangements. It is the intent of the Parties that the SpinCo Financing Cash Distribution is made in connection with the separation and Internal Reorganization, including the transfer of the SpinCo Assets to Parent in the Internal Reorganization whenever made.
Section 2.13    Cash Management; Cash Adjustment.
(a)    From the date of this Agreement until the Distribution, Parent and its Subsidiaries shall be entitled to use, retain or otherwise dispose of all cash and cash equivalents generated by the SpinCo Business and the SpinCo Assets in accordance with the ordinary course operation of Parent’s cash management systems. Notwithstanding the foregoing, it is the intention of Parent and SpinCo that, at the time of the Distribution, SpinCo shall have a minimum Cash Equivalents balance, as would be reflected on the unaudited consolidated balance sheet of the SpinCo Group as of the close of business on the date prior to the Distribution Date, of $50,000,000 (the “Target Cash Amount”). Subject to any adjustment in accordance with this Section 2.13, all cash held by any member of the SpinCo Group as of the Distribution shall be a SpinCo Asset and all cash held by any member of the Parent Group as of the Distribution shall be a Parent Retained Asset.
(b)    Cash Adjustment.
(i)    No later than sixty (60) days after the Distribution Date, Parent shall prepare and deliver, or cause to be prepared and delivered, to SpinCo a statement reflecting the amount of Cash Equivalents on the unaudited consolidated balance sheet of the SpinCo Group as of the close of business on the last day prior to the Distribution Date (giving effect to the Distribution and reflecting the terms and conditions of Article II of this Agreement) (the “Distribution Date Cash Amount”), including supporting account information (the “Distribution Cash Amount Statement”). The Distribution Cash Amount Statement shall be calculated in U.S. dollars and consistently with the historical practices used in calculating cash in Parent.
(ii)    Subject to the terms set forth in Section 7.6, in connection with the preparation of the Distribution Cash Amount Statement, Parent shall have reasonable access, during normal business hours and upon reasonable notice, to the books and records, the financial systems and finance personnel and any other information of the members of the SpinCo Group that Parent or its representatives reasonably request, and SpinCo shall, and shall cause the members of the SpinCo Group and their respective representatives and employees to, cooperate with Parent and its representatives in connection therewith.
(iii)    SpinCo shall have thirty (30) days following receipt of the Distribution Cash Amount Statement to review such statement and to notify Parent, in writing, if SpinCo disputes any of the amounts set forth on the Distribution Cash Amount Statement (the “Distribution Cash Amount Dispute Notice”), specifying the reasons therefor in reasonable detail.
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(iv)    Subject to the terms set forth in Section 7.6, in connection with SpinCo’s review of the Distribution Cash Amount Statement, SpinCo and its representatives shall have reasonable access, during normal business hours and upon reasonable notice, to all relevant work papers, schedules, memoranda and other documents prepared by Parent or its representatives in connection with its preparation of the Distribution Cash Amount Statement and to finance personnel of Parent and any other information that SpinCo or its representatives reasonably requests, and Parent shall cooperate with SpinCo and its representatives in connection therewith.
(v)    In the event that SpinCo shall deliver a Distribution Cash Amount Dispute Notice to Parent, SpinCo and Parent shall cooperate in good faith to resolve such dispute as promptly as practicable and, upon such resolution, if any, any adjustments to the Distribution Date Cash Amount shall be made in accordance with the written agreement of SpinCo and Parent. Subject to the terms set forth in Section 7.6, in connection with Parent’s review of the Distribution Cash Amount Dispute Notice, Parent and its representatives shall have reasonable access, during normal business hours and upon reasonable notice, to all relevant work papers, schedules, memoranda and other documents prepared by SpinCo or its representatives in connection with SpinCo’s preparation of the Distribution Cash Amount Dispute Notice and to finance personnel of SpinCo and any other information that Parent or its representatives reasonably requests, and SpinCo shall cooperate with Parent and its representatives in connection therewith. If SpinCo and Parent are unable to resolve any such dispute within fifteen (15) Business Days (or such longer period as SpinCo and Parent shall mutually agree in writing) of SpinCo’s delivery of such Distribution Cash Amount Dispute Notice, such dispute shall be resolved by the Independent Accounting Firm, and the final determination of such Independent Accounting Firm with regard to the matters referenced in the Distribution Cash Amount Dispute Notice shall be final and binding on the Parties as from the date rendered. Any expenses relating to the engagement of the Independent Accounting Firm in respect of its services pursuant to this Section 2.13 shall be shared equally by Parent and SpinCo. With respect to matters referenced in the Distribution Cash Amount Dispute Notice, the Independent Accounting Firm’s determination, if not in accordance with the position of either SpinCo or Parent, shall not be in excess of the higher, nor less than the lower, of the amounts set forth by SpinCo or Parent in the Distribution Cash Amount Dispute Notice, as applicable. The Independent Accounting Firm shall be instructed to complete the performance of its services as promptly as practicable, but in any event, no later than thirty (30) days after submission of such dispute to the Independent Accounting Firm. The Distribution Date Cash Amount, (i) if no Distribution Cash Amount Dispute Notice has been timely delivered by SpinCo in accordance with Section 2.13(b)(iii), as originally submitted by Parent, or (ii) if a Distribution Cash Amount Dispute Notice has been timely delivered by SpinCo, the Distribution Date Cash Amount as adjusted pursuant to the resolution of such
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dispute in accordance with this Section 2.13(b), shall be deemed to be the “Final Cash Amount.”
(vi)    (A) if the Final Cash Amount exceeds the Target Cash Amount, the amount of such excess, plus any interest accrued in accordance with Section 2.13(c), shall be paid by SpinCo to Parent in accordance with Section 2.13(b)(vii) or (B) if the Target Cash Amount exceeds the Final Cash Amount, the amount of such excess, plus any interest accrued in accordance with Section 2.13(c), shall be paid by Parent to SpinCo in accordance with Section 2.13(b)(vii) (the amount of such increases or decreases, as the case may be, the “Cash Adjustment”).
(vii)    If payment is required to be made by SpinCo in accordance with Section 2.13(b)(vi)(A), SpinCo shall, within five (5) Business Days after the determination of the Final Cash Amount pursuant to this Section 2.13, make payment to Parent by wire transfer in immediately available funds of the amount payable by SpinCo in an amount equal to the Cash Adjustment. If payment is required to be made by Parent in accordance with Section 2.13(b)(vi)(B), Parent shall, within five (5) Business Days after the determination of the Final Cash Amount pursuant to this Section 2.13, make payment to SpinCo by wire transfer in immediately available funds of the amount payable by Parent in an amount equal to the Cash Adjustment.
(c)    Any payments made by SpinCo or Parent with respect to the Cash Adjustment shall accrue interest from the Distribution Date to the date of payment at a rate equal to the Prime Rate. Such interest shall be calculated based on a year of 365 days and the number of days elapsed since the Distribution Date. Any payment made in accordance with this Section 2.13 shall be treated in accordance with the terms of Section 10.21.
Section 2.14    SpinCo PIPE Offering. Prior to the First Internal Distribution, with the prior written consent of Parent (which consent may be granted or denied in its sole discretion), SpinCo may enter into agreements with one or more third parties pursuant to which, in a private offering exempt from registration under the Securities Act, SpinCo will agree to issue and sell SpinCo Common Stock to such Third Parties for cash immediately prior to the First Internal Distribution on the Distribution Date, (the “SpinCo PIPE Offering” and the issuance of any shares of SpinCo Common Stock at the closing of such offering, the “SpinCo PIPE Issuance”); provided, however, that the number of shares of SpinCo Common Stock to be sold and issued in the SpinCo PIPE Offering shall not exceed the SpinCo PIPE Offering Cap. SpinCo shall distribute to SolarWinds Holdings Inc. all the net cash proceeds from the SpinCo PIPE Offering immediately following the Contribution, and SolarWinds Holdings Inc. shall distribute to SolarWinds Intermediate Holdings I, Inc. such cash proceeds as part of or simultaneous with the First Internal Distribution.
ARTICLE III
CERTAIN ACTIONS AT OR PRIOR TO THE DISTRIBUTIONS
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Section 3.1    Organizational Documents. At or prior to the Effective Time, all necessary actions shall be taken to adopt the form of amended and restated certificate of incorporation and bylaws filed by SpinCo with the Commission as exhibits to the Form 10, to be effective as of the Effective Time.
Section 3.2    Directors. At or prior to the Effective Time, Parent shall take all necessary action to cause the board of directors of SpinCo to include, at the Effective Time, the individuals identified in the Information Statement as director nominees of SpinCo.
Section 3.3    Officers. At or prior to the Effective Time, Parent shall take all necessary action to cause the individuals identified as such in the Information Statement to be officers of SpinCo as of the Effective Time.
Section 3.4    Resignations and Removals.
(a)    On or prior to the Distribution Date or as soon thereafter as practicable, (i) Parent shall cause all its employees and any employees of its Subsidiaries (excluding any employees of any member of the SpinCo Group) to resign or be removed, effective as of the Effective Time, from all positions as officers or directors of any member of the SpinCo Group in which they serve, and (ii) SpinCo shall cause all its employees and any employees of its Subsidiaries to resign, effective as of the Effective Time, from all positions as officers or directors of any members of the Parent Group in which they serve.
(b)    No Person shall be required by any Party to resign from any position or office with another Party if such Person is disclosed in the Information Statement as the Person who is to hold such position or office following the Distribution.
Section 3.5    Ancillary Agreements. At or prior to the Effective Time, Parent and SpinCo shall enter into, and/or (where applicable) shall cause a member or members of their respective Groups to enter into, the Ancillary Agreements.
ARTICLE IV
THE DISTRIBUTION
Section 4.1    Distribution. On or prior to the Effective Time, in connection with the Distribution, SpinCo shall issue to Parent such number of shares of SpinCo Common Stock (or Parent and SpinCo shall take or cause to be taken such other appropriate actions to ensure that Parent has the requisite number of shares of SpinCo Common Stock) as may be requested by Parent after consultation with SpinCo in order to effect the Distribution, which shares as of the date of issuance shall represent (together with such shares previously held by Parent) all of the issued and outstanding shares of SpinCo Common Stock (other than any SpinCo PIPE Common Stock issued in the SpinCo PIPE Issuance). Subject to the conditions and other terms set forth in this Article IV, Parent shall cause the Distribution Agent on the Distribution Date to make the Distribution of all SpinCo Common Stock held by Parent after the Internal Distributions, including by crediting the appropriate number of shares of SpinCo Common Stock (to book-entry accounts for each Record Holder or designated transferee or transferees of such Record Holder. For Record Holders who own Parent Common Stock through a broker or other nominee,
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their shares of SpinCo Common Stock will be credited to their respective accounts by such broker or nominee. No action by any Record Holder (or such Record Holder’s designated transferee or transferees) shall be necessary to receive the applicable number of shares of SpinCo Common Stock (and, if applicable, cash in lieu of any fractional shares) such stockholder is entitled to in the Distribution.
Section 4.2    Fractional Shares. Record Holders who, after aggregating the number of shares of SpinCo Common Stock (or fractions thereof) to which such stockholder would be entitled on the Record Date, would be entitled to receive a fraction of a share of SpinCo Common Stock in the Distribution, will receive cash in lieu of fractional shares. Fractional shares of SpinCo Common Stock will not be distributed in the Distribution nor credited to book-entry accounts. The Distribution Agent shall, as soon as practicable after the Distribution Date (a) determine the number of whole shares and fractional shares of SpinCo Common Stock allocable to each Record Holder, (b) aggregate all such fractional shares into whole shares and sell the whole shares obtained thereby in open market transactions at then prevailing trading prices on behalf of holders who would otherwise be entitled to fractional share interests, and (c) distribute to each such holder, or for the benefit of each such beneficial owner, such holder’s or owner’s ratable share of the net proceeds of such sale, after making appropriate deductions for any amount required to be withheld for U.S. federal income tax purposes, any applicable transfer Taxes, and after deducting the costs and expenses of such sale and distribution, including brokers fees and commissions. The sales of fractional shares of SpinCo Common Stock shall occur as soon after the Distribution Date as practicable and as determined by the Distribution Agent. None of Parent, SpinCo or the applicable Distribution Agent will guarantee any minimum sale price for the fractional shares of SpinCo Common Stock. Neither Parent nor SpinCo will pay any interest on the proceeds from the sale of fractional shares. The Distribution Agent will have the sole discretion to select the broker-dealers through which to sell the aggregated fractional shares and to determine when, how and at what price to sell such shares. Neither the Distribution Agent nor the selected broker-dealers will be Affiliates of Parent or SpinCo.
Section 4.3    Actions in Connection with the Distribution.
(a)    Prior to the Distribution Date, SpinCo shall file such amendments and supplements to its Form 10 as Parent may reasonably request, and such amendments as may be necessary in order to cause the same to become and remain effective as required by Law, including filing such amendments and supplements to its Form 10 as may be required by the Commission or federal, state or foreign securities Laws. Parent shall, or at Parent’s election, SpinCo shall, mail (or deliver by electronic means where not prohibited by Law) to the holders of Parent Common Stock, at such time on or prior to the Distribution Date as Parent shall determine, the Information Statement included in its Form 10 (or a Notice of Internet Availability of the Information Statement), as well as any other information concerning SpinCo, its business, operations and management, the transaction contemplated herein and such other matters as Parent shall reasonably determine are necessary and as may be required by Law. Promptly after receiving a request from Parent, SpinCo shall prepare and, in accordance with applicable Law, file with the Commission any such documentation that Parent reasonably determines is necessary or desirable to effectuate the Distribution, and Parent and SpinCo shall each use
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commercially reasonable efforts to obtain all necessary approvals from the Commission with respect thereto as soon as practicable.
(b)    SpinCo shall use commercially reasonable efforts in preparing, filing with the Commission and causing to become effective, as soon as reasonably practicable (but in any case prior to the Effective Time), an effective registration statement or amendments thereof which are required in connection with the establishment of, or amendments to, any employee benefit plans of SpinCo.
(c)    To the extent not already approved and effective, SpinCo shall use commercially reasonable efforts to have approved and made effective, the application for the original listing on the NYSE of the SpinCo Common Stock to be distributed in the Distribution, subject to official notice of distribution.
(d)    To the extent not already completed, SpinCo shall use its commercially reasonable efforts to take all actions to effectuate the transactions contemplated by the SpinCo Financing Arrangements, pursuant to the terms and conditions of the agreements governing the foregoing.
(e)    Nothing in this Section 4.3 shall be deemed to shift or otherwise impose Liability for any portion of SpinCo’s Form 10 or Information Statement to Parent.
Section 4.4    Sole Discretion of Parent. Parent, in its sole and absolute discretion, shall determine the Distribution Date, the Effective Time and all other terms of the Distribution, including the form, structure and terms of any transactions and/or offerings to effect the Distribution and the timing of and conditions to the consummation thereof. In addition, Parent may, in accordance with Section 10.10, at any time and from time to time until the completion of the Distribution decide to abandon the Distribution or modify or change the terms of the Distribution, including by accelerating or delaying the timing of the consummation of all or part of the Distribution. Without limiting the foregoing, Parent shall have the right not to complete the Distribution if, at any time prior to the Effective Time, the Board shall have determined, in its sole discretion, that the Distribution is not in the best interests of Parent or its stockholders, that a sale or other alternative is in the best interests of Parent or its stockholders or that it is not advisable at that time for the SpinCo Business to separate from Parent.
Section 4.5    Conditions to Distribution. Subject to Section 4.4, the obligation of Parent to consummate the Distribution is subject to the prior or simultaneous satisfaction, or, to the extent permitted by applicable Law, waiver by Parent, in its sole and absolute discretion, of the following conditions. None of SpinCo, any other member of the SpinCo Group, or any third party shall have any right or claim to require the consummation of the Distribution, which shall be effected at the sole discretion of the Board. Any determination made by Parent prior to the Distribution concerning the satisfaction or waiver of any or all of the conditions set forth in this Section 4.5 shall be conclusive and binding on the Parties hereto. The conditions are for the sole benefit of Parent and shall not give rise to or create any duty on the part of Parent or the Board to waive or not waive any such condition. Each Party will use its commercially reasonable efforts
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to keep the other Party apprised of its efforts with respect to, and the status of, each of the following conditions:
(a)    the Commission shall have declared effective the Form 10, of which the information statement forms a part, and no stop order relating to the registration statement will be in effect, no proceedings seeking such stop order shall be pending before or threatened by the Commission, and the information statement (or the Notice of Internet Availability of the Information Statement) shall have been distributed to holders of Parent Common Stock;
(b)    the SpinCo Common Stock shall have been approved and accepted for listing by the NYSE, subject to official notice of issuance;
(c)    the receipt of the opinions of Ernst & Young LLP and DLA Piper LLP (US), in form and substance acceptable to Parent, substantially to the effect that the Contribution and the First Internal Distribution, taken together, as well as each subsequent Internal Distribution and the Distribution should, based upon and subject to the assumptions, representations and qualifications set forth therein, qualify as a tax-deferred transaction pursuant to Sections 368(a)(1)(D) and/or 355 of the Code
(d)    all permits, registrations and consents required under the securities or blue sky laws of states or other political subdivisions of the United States or of other foreign jurisdictions in connection with the Distribution shall have been received;
(e)    no order, injunction, or decree issued by any Governmental Entity of competent jurisdiction, or other legal restraint or prohibition preventing the consummation of the Distribution or any of the related transactions shall be pending, threatened, issued or in effect, and no other event outside the control of Parent shall have occurred or failed to occur that prevents the consummation of all or any portion of the Distribution;
(f)    the Internal Reorganization shall have been effectuated prior to the Distribution, except for such steps (if any) as Parent in its sole discretion shall have determined need not be completed or may be completed after the Effective Time;
(g)    the Board shall have declared the Distribution and approved all related transactions (and such declaration or approval shall not have been withdrawn);
(h)    Parent shall have elected the board of directors of SpinCo, as described in the Form 10, immediately prior to the Distribution;
(i)    SpinCo shall have entered into all Ancillary Agreements in connection with the Distribution prior to or concurrent with the Distribution;
(j)    the SpinCo Financing Arrangements shall have been executed and delivered, and the proceeds thereof shall have been received by SpinCo and distributed to Parent; and
(k)    no events or developments shall have occurred or shall exist that, in the sole and absolute judgment of the Board, make it inadvisable to effect the Distribution or would result in
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the Distribution and related transactions not being in the best interest of Parent or its stockholders.
ARTICLE V
CERTAIN COVENANTS
Section 5.1    Cooperation. From and after the Effective Time, and subject to the terms of and limitations contained in this Agreement and the Ancillary Agreements, each Party shall, and shall cause each member of its Group and its and their respective employees to, (i) provide reasonable cooperation and assistance to the other Party (and any member of its respective Group) in connection with the completion of the transactions contemplated herein and in each Ancillary Agreement, (ii) reasonably assist the other Party in the orderly and efficient transition in becoming an independent company to the extent set forth in the Transition Services Agreement or as otherwise set forth herein (including, but not limited to, complying with Article VI, VII, and IX) and (iii) reasonably assist the other Party to the extent such Party is providing or has provided services, as applicable, pursuant to the Transition Services Agreement in connection with requests for information from, audits or other examinations of, such other Party by a Governmental Entity; in each case, except as otherwise set forth in this Agreement or may otherwise be agreed to by the Parties in writing, at no additional cost to the Party requesting such assistance other than for the actual documented out-of-pocket costs (which shall not include the costs of salaries and benefits of employees of such Party or any pro rata portion of overhead or other costs of employing such employees which would have been incurred by such employees’ employer regardless of the employees’ service with respect to the foregoing) incurred by any such Party, if applicable.
Section 5.2    Retained Names.
(a)    No later than twenty (20) days following the Distribution Date, SpinCo shall, and shall cause the members of the SpinCo Group, to change their names and cause their certificates of incorporation and bylaws (or equivalent organizational documents), as applicable, to be amended to remove any reference to the Parent Retained Names. Following the Distribution Date, SpinCo shall, and shall cause the members of the SpinCo Group, to (i) immediately cease to hold themselves out as having any ownership affiliation with Parent or any members of the Parent Group (provided that this obligation shall not apply to inventory of printed materials of the SpinCo Group existing as of the Distribution Date), and (ii) except as set forth in any Ancillary Agreement, as soon as practicable, but in no event later than sixty (60) days following the Distribution Date, cease to make any use of any Parent Retained Names. In furtherance thereof, and except as set forth in any Ancillary Agreement, as soon as practicable but in no event later than six (6) months following the Distribution Date, SpinCo shall, and shall cause the members of the SpinCo Group, to remove, strike over, or otherwise obliterate all Parent Retained Names from all assets and other materials owned by or in the possession of any member of the SpinCo Group, including any vehicles, business cards, schedules, stationery, packaging materials, displays, signs, promotional materials, manuals, forms, websites, email, computer software and other materials and systems; provided, however, that SpinCo shall promptly after the Distribution Date post a disclaimer in a form and
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manner reasonably acceptable to Parent on the “www.SpinCo.com” website informing its customers that as of the Effective Time and thereafter SpinCo, and not Parent, is responsible for the operation of the SpinCo Business, including such website and any applicable services. Any use by the members of the SpinCo Group of any of the Parent Retained Names as permitted in this Section 5.2(a) is subject to their use of the Parent Retained Names in a form and manner, and with standards of quality, of that in effect for the Parent Retained Names as of the Distribution Date. SpinCo and the members of the SpinCo Group shall not use the Parent Retained Names in a manner that may reflect negatively on such name and marks or on Parent or any member of the Parent Group. Upon expiration or termination of the rights granted to the SpinCo Group pursuant to this Section or any Ancillary Agreement, SpinCo hereby assigns, and shall cause the other members of the SpinCo Group to assign, to Parent their rights (if any) to any Trademarks forming a part of or associated with the Parent Retained Names. Except as set forth in any Ancillary Agreement, Parent shall have the right to terminate the foregoing license, effective immediately, if any member of the SpinCo Group fails to comply with the foregoing terms and conditions or otherwise fails to comply with any reasonable direction of Parent in relation to use of the Parent Retained Names. SpinCo shall indemnify, defend and hold harmless Parent and the members of the Parent Group from and against any and all Indemnifiable Losses arising from or relating to the use by any member of the SpinCo Group of the Parent Retained Names pursuant to this Section 5.2(a).
(b)    Each of the Parties acknowledges and agrees that the remedy at Law for any breach of the requirements of this Section 5.2 would be inadequate and agrees and consents that without intending to limit any additional remedies that may be available, Parent and the members of the Parent Group shall be entitled to a temporary or permanent injunction, without proof of actual damage or inadequacy of legal remedy, and without posting any bond or other undertaking, in any Action which may be brought to enforce any of the provisions of this Section 5.2.
Section 5.3    No Restriction on Competition. It is the explicit intent of each of the Parties hereto that the provisions of this Agreement shall not include any non-competition or other similar restrictive arrangements with respect to the range of business activities which may be conducted by the Parties hereto. Accordingly, each of the Parties hereto acknowledges and agrees that nothing set forth in this Agreement shall be construed to create any explicit or implied restriction or other limitation on (i) the ability of any party hereto to engage in any business or other activity which competes with the business of any other Party hereto or (ii) the ability of any party to engage in any specific line of business or engage in any business activity in any specific geographic area.
Section 5.4    No Hire and No Solicitation of Employees. For and during the twelve (12) month period following the Distribution, none of Parent, SpinCo or any member of their respective Groups will, without the prior written consent of the other applicable Party, either directly or indirectly, on their own behalf or in the service or on behalf of others, agree to an employment, contractual or other relationship or otherwise hire, retain or employ any employee of any other Party’s respective Group. For and during the twelve (12) month period following the Distribution, none of Parent, SpinCo or any member of their respective Groups will, without the
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prior written consent of the other applicable Party, either directly or indirectly, on their own behalf or in the service or on behalf of others, solicit, aid, induce or encourage any employee of any other Party’s respective Group to leave his or her employment; provided, however, that nothing in this Section 5.4 shall restrict or preclude Parent, SpinCo or any member of their respective Groups from soliciting or hiring (i) any employee who responds to a general solicitation or advertisement or contact by a recruiter, whether in-house or external, that is not specifically targeted or focused on the employees employed by any other Party’s respective Group (and nothing shall prohibit such generalized searches for employees through various means, including, but not limited to, the use of advertisements in the media (including trade media) or the engagement of search firms to engage in such searches); provided that the applicable Party has not encouraged or advised such firm to approach any such employee; (ii) any employee whose employment has been terminated by the other Party’s respective Group without cause; or (iii) any employee whose employment has been terminated by such employee after one hundred twenty (120) days from the date of termination of such employee’s employment.
ARTICLE VI
INDEMNIFICATION
Section 6.1    Release of Pre-Distribution Claims.
(a)    Except (i) as provided in Section 6.1(b), (ii) as may be otherwise expressly provided in this Agreement or in any Ancillary Agreement and (iii) for any matter for which any Party is entitled to indemnification pursuant to this Article VI:
(i)    Parent, for itself and each member of the Parent Group and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time were directors, managers, partners, officers, agents or employees of any member of the Parent Group (in their respective capacities as such), in each case, together with their respective heirs, executors, administrators, successors and assigns, does hereby remise, release and forever discharge SpinCo and the other members of the SpinCo Group, its Affiliates and all Persons who at any time prior to the Effective Time were stockholders, directors, officers, managers, partners, agents or employees of any member of the SpinCo Group (in their respective capacities as such), in each case, together with their respective heirs, executors, administrators, successors and assigns, from any and all Parent Retained Liabilities, whether at Law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, in each case, 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 on or before the Effective Time, including in connection with the Internal Reorganization and the Distribution and any of the other transactions contemplated hereunder and under the Ancillary Agreements (such liabilities, the “Parent Released Liabilities”) and in any event shall not, and shall cause its respective Subsidiaries not to, bring any Action against any member of the SpinCo Groups in respect of any Parent Released Liabilities. Notwithstanding the
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foregoing, nothing in this Agreement shall be deemed to limit any member of the Parent Group from commencing any Actions against any SpinCo officer, director, agent or employee, or their respective heirs, executors, administrators, successors and assigns with regard to matters arising from, or relating to, intentional misconduct by any such officer, director, agent or employee.
(ii)    SpinCo, for itself and each member of the SpinCo Group and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time were directors, managers, partners, officers agents or employees of any member of the SpinCo Group (in their respective capacities as such), in each case, together with their respective heirs, executors, administrators, successors and assigns, does hereby remise, release and forever discharge (A) Parent and the other members of the Parent Group and all Persons who at any time prior to the Effective Time were stockholders, directors, officers, managers, partners, agents or employees of any member of the Parent Group (in their respective capacities as such), and (B) all Persons who at any time prior to the Effective Time were stockholders, directors, officers, managers, partners, agents or employees of any member of the SpinCo Group (in their respective capacities as such) and who are not, as of immediately following the Effective Time, stockholders, directors, officers, managers, partners, agents or employees of any member of the SpinCo Group, in each case, together with their respective heirs, executors, administrators, successors and assigns, from any and all SpinCo Liabilities, whether at Law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, in each case, 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 on or before the Effective Time, including in connection with the Internal Reorganization and the Distribution and any of the other transactions contemplated hereunder and under the Ancillary Agreements (such liabilities, the “SpinCo Released Liabilities”) and in any event shall not, and shall cause its respective Subsidiaries not to, bring any Action against any member of the Parent Group in respect of any SpinCo Released Liabilities. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to limit any member of the SpinCo Group from commencing any Actions against any Parent director, officer, agent or employee, or their respective heirs, executors, administrators, successors and assigns with regard to matters arising from, or relating to intentional misconduct by any such director, officer, agent or employee.
(b)    Nothing contained in this Agreement, including Section 6.1(a), Section 2.4(a), or Section 2.5, shall impair or otherwise affect any right of any Party and, as applicable, a member of such Party’s Group, as well as their respective heirs, executors, administrators, successors and assigns, to enforce this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or understandings contemplated in this Agreement or in any Ancillary Agreement to continue in effect after the Effective Time. In addition, nothing contained in Section 6.1(a) shall release any person from:
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(i)    any Liability Assumed, Transferred or allocated to a Party or a member of such Party’s Group pursuant to or as contemplated by, or any other Liability of any member of such Group under, this Agreement or any Ancillary Agreement including (A) with respect to Parent, any Parent Retained Liability and (B) with respect to SpinCo, any SpinCo Liability;
(ii)    any Liability provided for in or resulting from any other Contract or understanding that is entered into after the Effective Time between any Party (and/or a member of such Party’s or Parties’ Group), on the one hand, and any other Party or Parties (and/or a member of such Party’s or Parties’ Group), on the other hand;
(iii)    any Liability with respect to any Continuing Arrangements;
(iv)    any Liability that the Parties may have with respect to indemnification pursuant to this Agreement or otherwise for Actions brought against the Parties by third Persons, which Liability shall be governed by the provisions of this Agreement and, in particular, this Article VI and, if applicable, the appropriate provisions of the Ancillary Agreements;
(v)    any Liability provided in or resulting from any agreement between any Person, who after the Effective Time, is an employee of the SpinCo Group, on the one hand, and on the other hand, and any member of the Parent Group, on the other hand, including any Liability resulting from any obligation of any such Person in respect of confidentiality, non-competition, non-disparagement or assignment of rights;
(vi)    any Liability provided in or resulting from any agreement between any Person, who after the Effective Time, is an employee of the Parent Group, on the one hand, and on the other hand, and any member of the SpinCo Group, on the other hand, including any Liability resulting from any obligation of any such Person in respect of confidentiality, non-competition, non-disparagement or assignment of rights; and
(vii)    any Liability the release of which would result in a release of any Person other than the Persons released in Section 6.1(a); provided that the Parties agree not to bring any Action or permit any other member of their respective Group to bring any Action against a Person released in Section 6.1(a) with respect to such Liability.
In addition, nothing contained in Section 6.1(a) shall release Parent from indemnifying any director, officer, manager, partner or employee of the SpinCo Group who was a director, officer, manager, partner or employee of Parent or any of its Subsidiaries prior to the Distribution Date, as the case may be, to the extent such director, officer, manager, partner or employee is or becomes a named defendant in any Action with respect to which he or she was entitled to such indemnification 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 Parent for
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such Liability (including Parent’s costs to indemnify the director, officer, manager, partner or employee) in accordance with the provisions set forth in this Article VI.
(c)    Each Party shall not, and shall not permit any member of its Group to, make any claim for offset, or commence any Action, including any claim of contribution or any indemnification, against any other Party or any member of any other Party’s Group, or any other Person released pursuant to Section 6.1(a), with respect to any Liabilities released pursuant to Section 6.1(a).
(d)    If any Person associated with a Party (including any director, officer or employee of a Party) initiates any Action with respect to claims released by this Section 6.1, the Party with which such Person is associated shall be responsible for the fees and expenses of counsel of the other Party (and/or the members of such Party’s Group, as applicable) and such other Party shall be indemnified for all Liabilities incurred in connection with such Action in accordance with the provisions set forth in this Article VI.
(e)    The Parties expressly understand and acknowledge that it is possible that unknown losses or claims exist or might come to exist or that present losses may have been underestimated in amount, severity, or both. Accordingly, the Parties are deemed expressly to understand provisions and principles of law such as Section 1542 of the Civil Code of the State of California (“Section 1542”) (as well as any and all provisions, rights and benefits conferred by any Law (including any principle of common law), which is similar or comparable to Section 1542), which provides: GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. The Parties are hereby deemed to agree that the provisions of Section 1542 and all similar Laws, rights, or legal principles of California or any other jurisdiction that may be applicable herein, are hereby knowingly and voluntarily waived and relinquished with respect to the releases in Section 6.1(a)(i) and Section 6.1(a)(ii).
Section 6.2    Indemnification by Parent. In addition to any other provisions of this Agreement requiring indemnification and except as otherwise specifically set forth in any provision of this Agreement or of any Ancillary Agreement, following the Effective Time, Parent shall indemnify, defend and hold harmless the SpinCo Indemnitees from and against any and all Indemnifiable Losses of the SpinCo Indemnitees to the extent relating to, arising out of, by reason of or otherwise in connection with (a) the Parent Retained Liabilities, including the failure of any member of the Parent Group or any other Person to pay, perform or otherwise discharge any Parent Retained Liability in accordance with its respective terms, whether arising prior to, on or after the Effective Time, (b) any Parent Retained Asset or Parent Retained Business, whether arising prior to, on or after the Effective Time, or (c) any breach by Parent of any provision of this Agreement or any Ancillary Agreement unless such Ancillary Agreement expressly provides
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for separate indemnification therein, in which case any such indemnification claims shall be made thereunder.
Section 6.3    Indemnification by SpinCo. In addition to any other provisions of this Agreement requiring indemnification and except as otherwise specifically set forth in any provision of this Agreement or of any Ancillary Agreement, following the Effective Time, SpinCo shall and shall cause the other members of the SpinCo Group to indemnify, defend and hold harmless the Parent Indemnitees from and against any and all Indemnifiable Losses of the Parent Indemnitees to the extent relating to, arising out of, by reason of or otherwise in connection with (a) the SpinCo Liabilities, including the failure of any member of the SpinCo Group or any other Person to pay, perform or otherwise discharge any SpinCo Liability in accordance with its respective terms, whether prior to, on or after the Effective Time, (b) any SpinCo Asset or SpinCo Business, whether arising prior to, on or after the Effective Time, or (c) any breach by SpinCo of any provision of this Agreement or any Ancillary Agreement unless such Ancillary Agreement expressly provides for separate indemnification therein, in which case any such indemnification claims shall be made thereunder.
Section 6.4    Procedures for Indemnification.
(a)    Direct Claims. Other than with respect to Third Party Claims, which shall be governed by Section 6.4(b), each Parent Indemnitee and SpinCo Indemnitee (each, an “Indemnitee”) shall notify in writing, with respect to any matter that such Indemnitee has determined has given or could give rise to a right of indemnification under this Agreement or any Ancillary Agreement, the Party which is or may be required pursuant to this Article VI or pursuant to any Ancillary Agreement to make such indemnification (the “Indemnifying Party”), within forty-five (45) days of such determination, stating in such written notice the amount of the Indemnifiable Loss claimed, if known, and, to the extent practicable, method of computation thereof, and referring to the provisions of this Agreement in respect of which such right of indemnification is claimed by such Indemnitee or arises; provided, however, that the failure to provide such written notice shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been actually materially prejudiced as a result of such failure. The Indemnifying Party will have a period of forty-five (45) days after receipt of a notice under this Section 6.4(a) within which to respond thereto. If the Indemnifying Party fails to respond within such period, the Liability specified in such notice from the Indemnitee shall be conclusively determined to be a Liability of the Indemnifying Party hereunder. If such Indemnifying Party responds within such period and rejects such claim in whole or in part, the disputed matter shall be resolved in accordance with Article VIII.
(b)    Third Party Claims. If a claim or demand is made against an Indemnitee by any Person who is not a member of the Parent Group or the SpinCo Group (a “Third Party Claim”) as to which such Indemnitee is or may be entitled to indemnification pursuant to this Agreement or any Ancillary Agreement, such Indemnitee shall notify the Indemnifying Party in writing (which notice obligation may be satisfied by providing copies of all notices and documents received by the Indemnitee relating to the Third Party Claim), and in reasonable detail, of the Third Party Claim promptly (and in any event within the
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earlier of (x) forty-five (45) days or (y) two (2) Business Days prior to the final date of the applicable response period under such Third Party Claim) after receipt by such Indemnitee of written notice of the Third Party Claim; provided, however, that the failure to provide notice of any such Third Party Claim pursuant to this or the preceding sentence shall not release the Indemnifying Party from any of its obligations except and solely to the extent the Indemnifying Party shall have been actually materially prejudiced as a result of such failure. Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) Business Days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third Party Claim. For all purposes of this Section 6.4(b), each Party shall be deemed to have notice of the matters set forth on Schedule 1.1(126)(vii).
(c)    Other than in the case of (i) Taxes addressed in the Tax Matters Agreement, which shall be addressed as set forth therein or (ii) indemnification by a beneficiary Party of a guarantor Party pursuant to Section 2.10(c) (the defense of which shall be controlled by the beneficiary Party), the Indemnifying Party shall be entitled, if it so chooses, to assume the defense thereof, and if it does not assume the defense of such Third Party Claim, to participate in the defense of any Third Party Claim in accordance with the terms of Section 6.5 at such Indemnifying Party’s own cost and expense and by such Indemnifying Party’s own counsel, that is reasonably acceptable to the Indemnitee, within thirty (30) days of the receipt of an indemnification notice from such Indemnitee; provided, however, that the Indemnifying Party shall not be entitled to assume the defense of any Third Party Claim to the extent such Third Party Claim (x) seeks injunctive, equitable or other relief other than monetary damages (provided that such Indemnitee shall reasonably cooperate with the Indemnifying Party, at the request of the Indemnifying Party, in seeking to separate any such claims from any related claim from any monetary damages if this clause (z) is the solely reason that such Third Party Claim is a Non-Assumable Third Party Claim), (y) is an Action by a Governmental Entity, or (z) involves an allegation of a criminal violation (any of clauses (x), (y) and (z), a “Non-Assumable Third Party Claim”); provided, further, that any Third Party Claim relating to, or arising from, the Cyber Incident and constituting a Parent Retained Liability shall be controlled by Parent and shall not be deemed a “Non-Assumable Third Party Claim”. In connection with the Indemnifying Party’s defense of a Third Party Claim, such Indemnitee 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 cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party’s expense, all witnesses, pertinent Information, materials and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnifying Party; provided, however, that in the event of a conflict of interest between the Indemnifying Party and the applicable Indemnitee(s), such Indemnitee(s) shall be entitled to retain, at the Indemnifying Party’s expense, separate counsel as required by the applicable rules of professional conduct with respect to such matter. In the event the Indemnifying Party exercises the right to assume and control the defense of a Third Party, (1) the Indemnifying Party shall keep the Indemnitees(s) apprised of all material
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developments in such defense, (2) the Indemnifying Party shall not withdraw from the defense of such Third Party Claim without providing advance notice to the Indemnitee(s) reasonably sufficient to allow the Indemnitee(s) to prepare to assume the defense of such Third Party Claim, and (3) the Indemnifying Party shall conduct the defense of the Third Party Claim actively and diligently, including the posting of bonds or other security in connection with the defense of such Third Party Claims.
(d)    Other than in the case of a Non-Assumable Third Party Claim, if an Indemnifying Party fails for any reason to assume responsibility for defending a Third Party Claim within the period specified in this Section 6.4 or if the Indemnifying Party fails to actively and diligently defend the Third Party Claim, such Indemnitee may defend such Third Party Claim at the cost and expense of the Indemnifying Party. If the Indemnitee is conducting the defense of any Third Party Claim, the Indemnifying Party shall cooperate with the Indemnitee in such defense and make available to the Indemnitee, at the Indemnifying Party’s expense, and make available to the Indemnitee, at the Indemnifying Party’s expense, all witnesses, pertinent Information, materials and information in such Indemnitee’s possession or under such Indemnitee’s control relating thereto as are reasonably required by the Indemnitee.
(e)    No Indemnitee may admit any liability with respect to, consent to the entry of any judgement of, or settle, compromise or discharge, the Third Party Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, conditioned or delayed. No Indemnified Party shall admit any liability with respect to, consent to entry of any judgment of, or settle, compromise or discharge, the Third Party Claim without the prior written consent of the Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed) unless such settlement or judgement (i) completely and unconditionally releases the Indemnitee in connection with such matter, (ii) provides relief consisting solely of money damages borne by the Indemnifying Party and (iii) does not involve any admission by the Indemnitee of any wrongdoing or violation of Law.
(f)    Except as otherwise set forth in Section 7.6 and Section 8.2, or to the extent set forth in any Ancillary Agreement, absent fraud or willful misconduct by an Indemnifying Party, the indemnification provisions of this Article VI shall be the sole and exclusive remedy of an Indemnitee for any monetary or compensatory damages or losses resulting from any breach of this Agreement or any Ancillary Agreement and each Indemnitee expressly waives and relinquishes any and all rights, claims or remedies such Person may have with respect to the foregoing other than under this Article VI against any Indemnifying Party. For the avoidance of doubt, all disputes in respect of this Article VI shall be resolved in accordance with Article VIII.
(g)    Notwithstanding the foregoing, to the extent any Ancillary Agreement provides procedures for indemnification that differ from the provisions set forth in this Section 6.4, the terms of the Ancillary Agreement will govern.
(h)    The provisions of this Article VI shall apply to Third Party Claims that are already pending or asserted as well as Third Party Claims brought or asserted after the date of this
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Agreement. There shall be no requirement under this Section 6.4 to give a notice with respect to any Third Party Claim that exists as of the Effective Time. The Parties acknowledge that Liabilities for Actions (regardless of the parties to the Actions) may be partly Parent Liabilities and partly SpinCo Liabilities. If the Parties cannot agree on the allocation of any such Liabilities for Actions, they shall resolve the matter pursuant to the procedures set forth in Article VIII. Neither Party shall, nor shall either Party permit its Subsidiaries to, file Third Party claims or cross-claims against the other Party or its Subsidiaries in an Action in which a Third Party Claim is being resolved.
Section 6.5    Cooperation in Defense and Settlement.
(a)    With respect to any Third Party Claim that implicates both Parties in any material respect due to the allocation of Liabilities, responsibilities for management of defense and related indemnities pursuant to this Agreement or any of the Ancillary Agreements, the Parties agree to use commercially reasonable efforts to cooperate fully and maintain a joint defense (in a manner that, to the extent reasonably practicable, will preserve for all Parties any Privilege with respect thereto). The Party that is not responsible for managing the defense of any such Third Party Claim shall, upon reasonable request and at such Party’s own expense, be consulted with respect to significant matters relating thereto and may, if necessary or helpful, retain counsel to assist in the defense of such claims. Notwithstanding the foregoing, nothing in this Section 6.5(a) shall derogate from any Party’s rights to control the defense of any Action in accordance with Section 6.4.
(b)    Each of Parent and SpinCo agrees that at all times from and after the Effective Time, if an Action is commenced by a third party naming two (2) or more Parties (or any member of such Parties’ respective Groups) as defendants and with respect to which one or more named Parties (or any member of such Party’s respective Group) is a nominal defendant and/or such Action is otherwise not a Liability allocated to such named Party under this Agreement or any Ancillary Agreement, then the other Party or Parties shall use commercially reasonable efforts to cause such nominal defendant to be removed from such Action, as soon as reasonably practicable.
Section 6.6    Indemnification Payments. Indemnification required by this Article VI shall be made by periodic payments of the amount of Indemnifiable Losses in a timely fashion during the course of the investigation or defense, as and when bills are received or an Indemnifiable Loss incurred.
Section 6.7    Indemnification Obligations Net of Insurance Proceeds and Other Amounts.
(a)    Any recovery by any Indemnitee for any Indemnifiable Loss subject to indemnification pursuant to this Article VI shall be calculated (i) net of Insurance Proceeds actually received by such Indemnitee with respect to any Indemnifiable Loss (which such proceeds shall be reduced by the present value, based on that Party’s then cost of short term borrowing, of future premium increases only if known at such time) and (ii) net of any proceeds actually received by the Indemnitee from any third party with respect to any such Liability corresponding to the Indemnifiable Loss (“Third Party Proceeds”). Accordingly, the amount which any Indemnifying Party is required to pay pursuant to
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this Article VI to any Indemnitee pursuant to this Article VI shall be reduced by any Insurance Proceeds or Third Party Proceeds theretofore actually recovered by or on behalf of the Indemnitee corresponding to the related Indemnifiable Loss. If an Indemnitee receives a payment required by this Agreement from an Indemnifying Party corresponding to any Indemnifiable Loss (an “Indemnity Payment”) and subsequently receives Insurance Proceeds or Third Party Proceeds, then the Indemnitee shall pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if the Insurance Proceeds or Third Party Proceeds had been received, realized or recovered before the Indemnity Payment was made.
(b)    Any Indemnity Payment shall be increased as necessary so that after making all payments corresponding to Taxes imposed on or attributable to such Indemnity Payment, the Indemnitee receives an amount equal to the sum it would have received had no such Taxes been imposed.
(c)    The Parties hereby agree that an insurer or other third party that would otherwise be obligated to pay any amount shall not be relieved of the responsibility with respect thereto or have any subrogation rights with respect thereto by virtue of any provision contained in this Agreement or any Ancillary Agreement, and that no insurer or any other Third Party shall be entitled to a “windfall” (e.g., a benefit they would not otherwise be entitled to receive, or the reduction or elimination of an insurance coverage obligation that they would otherwise have, in the absence of the indemnification or release provisions) by virtue of any provision contained in this Agreement or any Ancillary Agreement. Each Party shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to collect or recover, or allow the Indemnifying Party to collect or recover, or cooperate with each other in collecting or recovering, any Insurance Proceeds that may be collectible or recoverable respecting the Liabilities for which indemnification may be available under this Article VI. Notwithstanding the foregoing, an Indemnifying Party may not delay making any indemnification payment required under the terms of this Agreement, or otherwise satisfying any indemnification obligation, pending the outcome of any Actions to collect or recover Insurance Proceeds, and an Indemnitee need not attempt to collect any Insurance Proceeds prior to making a claim for indemnification or receiving any Indemnity Payment otherwise owed to it under this Agreement or any Ancillary Agreement.
Section 6.8    Contribution. If the indemnification provided for in this Article VI is unavailable for any reason to an Indemnitee (other than failure to provide notice with respect to any Third Party Claims in accordance with Section 6.4(b)) in respect of any Indemnifiable Loss, then the Indemnifying Party shall, in accordance with this Section 6.8, contribute to the Indemnifiable Losses incurred, paid or payable by such Indemnitee as a result of such Indemnifiable Loss in such proportion as is appropriate to reflect the relative fault of SpinCo and each other member of the SpinCo Group, on the one hand, and Parent and each other member of the Parent Group, on the other hand, in connection with the circumstances which resulted in such Indemnifiable Loss. With respect to any Indemnifiable Losses arising out of or related to information contained in the Distribution Disclosure Documents or other securities law filing, the relative fault shall be
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determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact relates to information supplied by the SpinCo Business of a member of the SpinCo Group, on the one hand, or the Parent Retained Business or a member of the Parent Group, on the other hand.
Section 6.9    Additional Matters; Survival of Indemnities.
(a)    The indemnity agreements contained in this Article VI shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Indemnitee; and (ii) the knowledge by the Indemnitee of Indemnifiable Losses for which it might be entitled to indemnification hereunder. The indemnity agreements contained in this Article VI shall survive the Distribution.
(b)    The rights and obligations of any member of the Parent Group or any member of the SpinCo Group, in each case, under this Article VI shall survive (i) the sale or other Transfer by any Party or its Affiliates of any Assets or businesses or the assignment by it of any Liabilities and (ii) any merger, consolidation, division, business combination, restructuring, recapitalization, reorganization or similar transaction involving either Party or any of its Subsidiaries.
ARTICLE VII
PRESERVATION OF RECORDS; ACCESS TO INFORMATION; CONFIDENTIALITY; PRIVILEGE
Section 7.1    Preservation of Corporate Records.
(a)    Except to the extent otherwise contemplated by any Ancillary Agreement, a Party providing Records or access to Information to another Party under this Article VII shall be entitled to receive from the recipient, upon the presentation of invoices therefor, payments for such amounts, relating to supplies, disbursements and other out-of-pocket expenses (which shall not include the costs of salaries and benefits of employees of such Party or any pro rata portion of overhead or other costs of employing such employees which would have been incurred by such employees’ employer regardless of the employees’ service with respect to the foregoing), as are reasonably incurred in providing such Records or access to Information.
(b)    Except as otherwise required or agreed in writing, or as otherwise provided in any Ancillary Agreement, with regard to any Information referenced in Section 7.3, each Party shall use its commercially reasonable efforts, at such Party’s sole cost and expense, to retain, until the latest of, as applicable, (i) the date on which such Information is no longer required to be retained pursuant to the applicable record retention policy of Parent or such other member of the Parent Group, respectively, as in effect immediately prior to the Distribution, including, pursuant to any “Litigation Hold” issued by Parent or any of its Subsidiaries prior to the Distribution, (ii) the concluding date of any period as may be required by any applicable Law, (iii) the concluding date of any period during which such Information relates to a pending or threatened Action which is known to the members of the Parent Group or the SpinCo Group, as applicable, in possession of such Information
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at the time any retention obligation with regard to such Information would otherwise expire, and (iv) the concluding date of any period during which the destruction of such Information could interfere with a pending or threatened investigation by a Governmental Entity which is known to the members of the Parent Group or the SpinCo Group, as applicable, in possession of such Information at the time any retention obligation with regard to such Information would otherwise expire; provided that with respect to any pending or threatened Action arising after the Distribution, clause (iii) of this sentence applies only to the extent that whichever member of the Parent Group or the SpinCo Group, as applicable, is in possession of such Information has been notified in writing pursuant to a “Litigation Hold” by the other Party of the relevant pending or threatened Action. The Parties hereto agree that upon written request from the other that certain Information relating to the SpinCo Business, the Parent Retained Businesses or the transactions contemplated hereby be retained in connection with an Action, the Parties shall use reasonable efforts to preserve and not to destroy or dispose of such Information without the consent of the requesting Party.
(c)    Each Party shall respond to reasonable requests from the other Party regarding the current status and disposition of particular Records, Personal Data or information, including by: (i) providing a written certification to the other Party that particular Records and other Information have been securely deleted or purged in accordance with the terms and milestones agreed upon by the respective Parties herein or in any Ancillary Agreement(s) (subsequently referred to as the “applicable terms” in this paragraph); (ii) providing information to the other Party regarding the status of any migration or transition of Records, Personal Data or other Information in accordance with the applicable terms; and (iii) by providing any other information reasonably requested by the other Party regarding the current status or disposition of particular Records, Personal Data or Information. Without limiting the foregoing obligations and subject to any relevant Ancillary Agreement(s), each Party shall, upon the request of the other Party, submit to an inspection or audit (by the requesting Party or its independent auditor) to verify or confirm the current status or disposition of particular Records, Personal Data or other Information in accordance with applicable terms; such audit or inspection shall take place upon reasonable notice, during regular business hours, and shall be at the cost and expense of the requesting Party.
(d)    Parent and SpinCo intend that any transfer of Information that would otherwise be within the attorney-client or attorney work product privileges shall not operate as a waiver of any potentially applicable privilege.
Section 7.2    Financial Statements and Accounting. Each Party agrees to provide the following reasonable assistance and, subject to Section 7.6, reasonable access to its properties, Records, other Information and personnel set forth in this Section 7.2, from the Effective Time until the completion of each Party’s audit for the fiscal year ending December 31, 2021, (i) in connection with the preparation and audit of each Party’s quarterly and annual financial statements for the fiscal years ended December 31, 2021, and the filing of such financial statements and the audit of each Party’s internal controls over financial reporting and management’s assessment thereof and management’s assessment of each Party’s disclosure controls and procedures, if required, and (ii)
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to the extent reasonably necessary to respond (and for the limited purpose of responding) to any written request or official comment from a Governmental Entity, such as in connection with responding to a comment letter from the Commission. Notwithstanding the foregoing, in the event that either Party changes its independent auditors within one (1) year following the Distribution Date, then such Party may request reasonable access on the terms set forth in this Section 7.2 for a period of up to one hundred and eighty (180) days from such change. Without limiting the foregoing and from the Effective Time until the completion of each Party’s audit for the fiscal year ending December 31, 2021, each Party agrees as follows:
(a)    Access to Personnel and Records. Except to the extent otherwise contemplated by the Ancillary Agreements and subject to Section 7.6, each Party shall authorize and request its respective auditors to make reasonably available to the other Party’s auditors (the “Other Party’s Auditors”) both the personnel who performed or are performing the annual audits of such audited Party (each Party with respect to its own audit, the “Audited Party”) and work papers related to the annual audits of such Audited Party (subject to the execution of any reasonable and customary access letters that such Audited Party’s auditors may require in connection with the review of such work papers by such Other Party’s Auditors), in all cases within a reasonable time prior to such Audited Party’s auditors’ opinion date, so that the Other Party’s Auditors are able to perform the procedures they reasonably consider necessary to take responsibility for the work of the Audited Party’s auditors as it relates to their auditors’ report on such other Party’s financial statements, all within sufficient time to enable such other Party to meet its timetable for the filing of its annual financial statements with the Commission.
(b)    Current, Quarterly and Annual Reports. At least three (3) Business Days prior to the earlier of public dissemination or filing with the Commission, each Party shall deliver to the other Party, a reasonably complete draft of any earnings news release, any filing with the Commission containing financial statements, including, but not limited to current reports on Form 8-K, quarterly reports on 10-Q and annual reports on Form 10-K or any other Annual Report purporting to fulfill the requirements of 17 CFR 240-14c-3. Each Party shall notify the other Party, as soon as reasonably practicable after becoming aware thereof, of any material accounting differences between the financial statements to be included in such Party’s annual report on Form 10-K and the pro-forma financial statements included, as applicable, in the Form 10 or the Form 8-K to be filed by Parent with the Commission on or about the time of the Distribution. If any such differences are notified by any Party, the Parties shall confer and/or meet as soon as reasonably practicable thereafter, and in any event prior to the filing of any Annual Report, to consult with each other in respect of such differences and the effects thereof on the Parties’ applicable Annual Reports.
(c)    Nothing in this Article VII shall require any Party to violate any agreement with any third party regarding the confidentiality of confidential and proprietary Information relating to that third party or its business; provided, however, that in the event that a Party is required under this Section 7.2 to disclose any such Information, such Party shall use commercially reasonable efforts to seek to obtain such third party’s written consent to the disclosure of such Information.
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(d)    The Parties acknowledge that Information provided under this Section 7.2 may constitute material, nonpublic information, and trading in the securities of a Party (or the securities of its Affiliates, Subsidiaries or partners) while in possession of such material, nonpublic material information may constitute a violation of the U.S. federal securities laws.
Section 7.3    Provision of Corporate Records. Other than in circumstances in which indemnification is sought pursuant to Article VI (in which event the provisions of such Article VI shall govern) or for matters related to provision of Tax Records (in which event the provisions of the Tax Matters Agreement shall govern) and subject to appropriate restrictions for Privileged Information or Confidential Information:
(a)    After the Effective Time, and subject to compliance with the terms of the Ancillary Agreements, upon the prior written reasonable request by, and at the expense of, SpinCo for specific and identified Information:
(i)    that (x) relates to SpinCo or the SpinCo Business, as the case may be, prior to the Effective Time or (y) is necessary for SpinCo to comply with the terms of, or otherwise perform under, any Ancillary Agreement to which Parent and/or SpinCo are parties, Parent shall provide, as soon as reasonably practicable following the receipt of such request, appropriate copies of such Information (or the originals thereof if SpinCo has a reasonable need for such originals) in the possession or control of Parent or any of its controlled Affiliates or Subsidiaries, but only to the extent such items so relate and are not already in the possession or control of SpinCo; provided that, to the extent any originals are delivered to SpinCo pursuant to this Agreement or the Ancillary Agreements, SpinCo shall, at its own expense, return them to Parent within a reasonable time after the need to retain such originals has ceased; provided further that, such obligation to provide any requested Information shall terminate and be of no further force and effect on the date that is the first anniversary of the date of this Agreement; provided further that, in the event that Parent, in its sole discretion, determines that any such access or the provision of any such Information (including information requested under Section 7.2) would violate any Law or Contract with a third party or could reasonably result in the waiver of any attorney-client privilege, rights under the work product doctrine or other applicable privilege, Parent shall not be obligated to provide such Information requested by SpinCo;
(ii)    that (x) is required by SpinCo with regard to reasonable compliance with reporting, disclosure, filing or other requirements imposed on SpinCo (including under applicable securities laws) by a Governmental Entity having jurisdiction over SpinCo, or (y) is for use in any other judicial, regulatory, administrative or other proceeding or in order to satisfy audit, accounting, claims, regulatory, litigation, Action or other similar requirements, as applicable, Parent shall provide, as soon as reasonably practicable following the receipt of such request, appropriate copies of such Information (or the originals thereof if SpinCo has a reasonable need for such originals) in the possession or control of Parent or any of its controlled Affiliates or Subsidiaries, but only to the extent such items so relate
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and are not already in the possession or control of SpinCo; provided that, to the extent any originals are delivered to SpinCo pursuant to this Agreement or the Ancillary Agreements, SpinCo shall, at its own expense, return them to Parent within a reasonable time after the need to retain such originals has ceased; provided further that, in the event that Parent, in its sole discretion, determines that any such access or the provision of any such Information (including information requested under Section 7.2) would violate any Law or Contract with a Third Party or waive any attorney-client privilege, the work product doctrine or other applicable privilege, Parent shall not be obligated to provide such Information requested by SpinCo; or
(b)    After the Effective Time, and subject to compliance with the terms of the Ancillary Agreements, upon the prior written reasonable request by, and at the expense of, Parent for specific and identified Information:
(i)    that (x) relates to Parent or the Parent Retained Business, as the case may be, prior to the Effective Time or (y) is necessary for Parent to comply with the terms of, or otherwise perform under, any Ancillary Agreement to which Parent and/or SpinCo are parties, SpinCo shall provide, as soon as reasonably practicable following the receipt of such request, appropriate copies of such Information (or the originals thereof if Parent has a reasonable need for such originals) in the possession or control of SpinCo or any of its controlled Affiliates or Subsidiaries, but only to the extent such items so relate and are not already in the possession or control of Parent; provided that, to the extent any originals are delivered to Parent pursuant to this Agreement or the Ancillary Agreements, Parent shall, at its own expense, return them to SpinCo within a reasonable time after the need to retain such originals has ceased; provided further that, such obligation to provide any requested information shall terminate and be of no further force and effect on the date that is the first anniversary of the date of this Agreement; provided further that, in the event that SpinCo, in its sole discretion, determines that any such access or the provision of any such Information (including information requested under Section 7.2) would violate any Law or Contract with a third party or waive any attorney-client privilege, the work product doctrine or other applicable privilege, SpinCo shall not be obligated to provide such Information requested by Parent.
(ii)    that (x) is required by Parent with regard to reasonable compliance with reporting, disclosure, filing or other requirements imposed on Parent (including under applicable securities laws) by a Governmental Entity having jurisdiction over Parent, or (y) is for use in any other judicial, regulatory, administrative or other proceeding or in order to satisfy audit, accounting, claims, regulatory, litigation, Action or other similar requirements, as applicable, SpinCo shall provide, as soon as reasonably practicable following the receipt of such request, appropriate copies of such Information (or the originals thereof if Parent has a reasonable need for such originals) in the possession or control of SpinCo or any of its controlled Affiliates or Subsidiaries, but only to the extent such items so relate and are not
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already in the possession or control of Parent; provided that, to the extent any originals are delivered to Parent pursuant to this Agreement or the Ancillary Agreements, Parent shall, at its own expense, return them to SpinCo within a reasonable time after the need to retain such originals has ceased.
(c)    Each of Parent and SpinCo shall inform their respective officers, employees, agents, consultants, advisors, authorized accountants, counsel and other designated representatives who have or have access to the other Party’s Confidential Information or other information provided pursuant to Section 7.2 or this Article VII of their obligation to hold such information confidential in accordance with the provisions of this Agreement.
Section 7.4    Witness Services. At all times from and after the Effective Time, each of Parent and SpinCo shall use its commercially reasonable efforts to make available to the other, upon reasonable written request, its and its Subsidiaries’ officers, directors, employees and agents (taking into account the business demands of such individuals) as witnesses to the extent that (i) such Persons may reasonably be required to testify in connection with the prosecution or defense of any Action in which the requesting Party may from time to time be involved (except for claims, demands or Actions in which one or more members of one Group is adverse to one or more members of the other Group) and (ii) there is no conflict in the Action between the requesting Party and the other Party. A Party providing a witness to the other Party under this Section 7.4 shall be entitled to receive from the recipient of such witness services, upon the presentation of invoices therefor, payments for such amounts, relating to supplies, disbursements and other out-of-pocket expenses (which shall not include the costs of salaries and benefits of employees who are witnesses or any pro rata portion of overhead or other costs of employing such employees which would have been incurred by such employees’ employer regardless of the employees’ service as witnesses), as may be reasonably incurred and properly paid under applicable Law.
Section 7.5    Reimbursement; Other Matters. Except to the extent otherwise contemplated by this Agreement or any Ancillary Agreement, a Party providing Information or access to Information to the other Party under this Article VII shall be entitled to receive from the recipient, upon the presentation of invoices therefor, payments for such amounts, relating to supplies, disbursements and other out-of-pocket expenses (which shall not include the costs of salaries and benefits of employees of such Party or any pro rata portion of overhead or other costs of employing such employees which would have been incurred by such employees’ employer regardless of the employees’ service with respect to the foregoing), as may be reasonably incurred in providing such Information or access to such Information.
Section 7.6    Confidentiality.
(a)    Notwithstanding any termination of this Agreement, and except as otherwise provided in the Ancillary Agreements, each of Parent and SpinCo shall hold, and shall cause members of their respective Groups and their officers, employees, agents, consultants and advisors to hold, in strict confidence (and not to disclose or release or, except as otherwise permitted by this Agreement or any Ancillary Agreement, use, including for any ongoing or future commercial purpose, without the prior written consent of the Party
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to whom the Confidential Information relates (which may be withheld in such Party’s sole and absolute discretion, except where disclosure is required by applicable Law)), any and all Confidential Information concerning or belonging to the other Party or its Group; provided that each Party may disclose, or may permit disclosure of, Confidential Information (i) to its respective auditors, attorneys, financial advisors, bankers and other appropriate consultants and advisors who have a need to know such Information or auditing and other non-commercial purposes and are informed of the obligation to hold such Information confidential and in respect of whose failure to comply with such obligations, the applicable Party will be responsible, (ii) if any Party or any of its respective Subsidiaries is required or compelled to disclose any such Confidential Information by judicial or administrative process or by other requirements of Law or stock exchange rule or is advised by outside counsel in connection with a proceeding brought by a Governmental Entity that it is advisable to do so, (iii) as required in connection with any legal or other proceeding by one Party against any other Party or in respect of claims by one Party against the other Party brought in a proceeding, (iv) as necessary in order to permit a Party to prepare and disclose its financial statements in connection with any regulatory filings or Tax Returns, (v) as necessary for a Party to enforce its rights or perform its obligations under this Agreement (including pursuant to Section 2.3) or an Ancillary Agreement, or (vi) to other Persons in connection with their evaluation of, and negotiating and consummating, a potential strategic transaction, to the extent reasonably necessary in connection therewith, provided an appropriate and customary confidentiality agreement has been entered into with the Person receiving such Confidential Information. Notwithstanding the foregoing, in the event that any demand or request for disclosure of Confidential Information is made by a third party pursuant to clause (ii), (iii), or (v) above, each Party, as applicable, shall promptly notify (to the extent permissible by Law) the Party to whom the Confidential Information relates of the existence of such request, demand or disclosure requirement and shall provide such affected Party a reasonable opportunity to seek an appropriate protective order or other remedy, which such Party will cooperate in obtaining to the extent reasonably practicable. In the event that such appropriate protective order or other remedy is not obtained, the Party which faces the disclosure requirement shall furnish only that portion of the Confidential Information that is required to be disclosed and shall take commercially reasonable steps to ensure that confidential treatment is accorded such Confidential Information.
(b)    Each Party acknowledges that it and the other members of its Group may have in its or their possession confidential or proprietary Information of third parties that was received under confidentiality or non-disclosure agreements with such third party while such Party and/or members of its Group were part of the Parent Group. Each Party shall comply, and shall cause the other members of its Group to comply, and shall cause its and their respective officers, employees, agents, consultants and advisors (or potential buyers) to comply, with all terms and conditions of any such third-party agreements entered into prior to the Effective Time, with respect to any confidential and proprietary Information of third parties to which it or any other member of its Group has had access.
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(c)    Notwithstanding anything to the contrary set forth herein, (i) the Parties shall be deemed to have satisfied their obligations hereunder with respect to Confidential Information if they exercise at least the same degree of care that applies to Parent’s confidential and proprietary information pursuant to policies in effect as of the Effective Time and (ii) confidentiality obligations provided for in any Contract between each Party or its Subsidiaries and their respective employees shall remain in full force and effect. Notwithstanding anything to the contrary set forth herein, Confidential Information of any Party in the possession of and used by any other Party as of the Effective Time may continue to be used by such Party in possession of the Confidential Information in and only in the operation of the SpinCo Business (in the case of the SpinCo Group) or the Parent Retained Business (in the case of the Parent Group); provided that such Confidential Information may only be used by such Party and its officers, employees, agents, consultants and advisors in the specific manner and for the specific purposes for which it is used as of the date of this Agreement; and may only be shared with additional officers, employees, agents, consultants and advisors of such Party on a need-to-know basis exclusively with regard to such specified use; provided, further that such Confidential Information may be used only so long as the Confidential Information is maintained in confidence and not disclosed in violation of Section 7.6(a).
(d)    The Parties agree that irreparable damage may occur in the event that the provisions of this Section 7.6 were not performed in accordance with their specific terms. Accordingly, it is hereby agreed that the Parties shall be entitled to seek an injunction or injunctions to enforce specifically the terms and provisions hereof in any court having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.
(e)    For the avoidance of doubt and notwithstanding any other provision of this Section 7.6, (i) the disclosure and sharing of Privileged Information shall be governed solely by Section 7.7, and (ii) Information that is subject to any confidentiality provision or other disclosure restriction in any Ancillary Agreement shall be governed by the terms of such Ancillary Agreement.
Section 7.7    Privilege Matters.
(a)    Pre-Distribution Services. The Parties recognize that legal and other professional services that have been and will be provided prior to the Effective Time have been and will be rendered for the collective benefit of each of the members of the Parent Group and the SpinCo Group, and that each of the members of the Parent Group and the SpinCo Group should be deemed to be the client with respect to such pre-distribution services for the purposes of asserting all privileges, immunities, or other protections from disclosure which may be asserted under applicable Law, including attorney-client privilege, business strategy privilege, joint defense privilege, common interest privilege, and protection under the work-product doctrine (“Privilege”). The Parties shall have a shared Privilege with respect to all Information subject to Privilege (“Privileged Information”) which relates to such pre-distribution services. For the avoidance of doubt, Privileged Information within the scope of this Section 7.7 includes, but is not limited to, services
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rendered by legal counsel retained or employed by any Party (or any member of such Party’s respective Group), including outside counsel and in-house counsel.
(b)    Post-Separation Services. The Parties recognize that legal and other professional services will be provided following the Effective Time to each of Parent and SpinCo. The Parties further recognize that certain of such post-separation services will be rendered solely for the benefit of Parent or SpinCo, as the case may be, while other such post-separation services may be rendered with respect to claims, proceedings, litigation, disputes, or other matters which involve both Parent and SpinCo. With respect to such post-separation services and related Privileged Information, the Parties agree as follows:
(i)    All Privileged Information relating to any claims, proceedings, litigation, disputes, or other matters which involve both Parent and SpinCo shall be subject to a shared Privilege among the Parties involved in the claims, proceedings, litigation, disputes, or other matters at issue; and
(ii)    Except as otherwise provided in Section 7.7(b)(i), Privileged Information relating to post-separation services provided solely to one of Parent or SpinCo shall not be deemed shared between the Parties, provided, that the foregoing shall not be construed or interpreted to restrict the right or authority of the Parties (x) to enter into any further agreement, not otherwise inconsistent with the terms of this Agreement, concerning the sharing of Privileged Information or (y) otherwise to share Privileged Information without waiving any Privilege which could be asserted under applicable Law.
(c)    The Parties agree as follows regarding all Privileged Information with respect to which the Parties shall have a shared Privilege under Section 7.7(a) or (b):
(i)    Subject to Section 7.7(c)(iii) and (iv), no Party may waive, nor allege or purport to waive, any Privilege which could be asserted under any applicable Law, and in which the other Party has a shared Privilege, without the consent of the other Party, which shall not be unreasonably withheld or delayed. Consent shall be in writing, or shall be deemed to be granted unless written objection is made within fifteen (15) days after written notice by the requesting Party to the Party whose consent is sought;
(ii)    If a dispute arises between or among the Parties or their respective Subsidiaries regarding whether a Privilege should be waived to protect or advance the interest of any Party, each Party agrees that it shall negotiate in good faith, shall endeavor to minimize any prejudice to the rights of the other Party, and shall not unreasonably withhold consent to any request for waiver by the other Party. Each Party specifically agrees that it shall not withhold consent to waive for any purpose except to protect its own legitimate interests;
(iii)    If, within fifteen (15) days of receipt by the requesting Party of written objection, the Parties have not succeeded in negotiating a resolution to any dispute regarding whether a Privilege should be waived, and the requesting Party determines that a
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Privilege should nonetheless be waived to protect or advance its interest, the requesting Party shall provide the objecting Party fifteen (15) days written notice prior to effecting such waiver. Each Party specifically agrees that failure within fifteen (15) days of receipt of such notice to commence proceedings in accordance with Section 8.2 to enjoin such disclosure under applicable Law shall be deemed full and effective consent to such disclosure, and the Party’s agree that any such Privilege shall not be waived by either party under the final determination of such dispute in accordance with Section 8.2; and
(iv)    In the event of any litigation or dispute between the Parties, or any members of their respective Groups, either such Party may waive a Privilege in which the other Party or member of such Group has a shared Privilege, without obtaining the consent of the other Party; provided that such waiver of a shared Privilege shall be effective only as to the use of Privileged Information with respect to the litigation or dispute between the Parties and/or the applicable members of their respective Groups, and shall not operate as a waiver of the shared Privilege with respect to third parties.
(d)    The transfer of all Information pursuant to this Agreement is made in reliance on the agreement of Parent or SpinCo as set forth in Section 7.6 and this Section 7.7, to maintain the confidentiality of Privileged Information and to assert and maintain any applicable Privilege. The access to Information being granted pursuant to Section 6.5, 7.2, and 7.3 hereof, the agreement to provide witnesses and individuals pursuant to Section 6.5 and 7.4 hereof, the furnishing of notices and documents and other cooperative efforts contemplated by Section 6.5 hereof, and the transfer of Privileged Information between the Parties and their respective Subsidiaries pursuant to this Agreement shall not be deemed a waiver of any Privilege that has been or may be asserted under this Agreement or otherwise.
Section 7.8    Ownership of Information. Any Information owned by one Party or any of its Subsidiaries that is provided to a requesting Party pursuant to this Article VII shall be deemed to remain the property of the providing Party. Unless expressly set forth herein, nothing contained in this Agreement shall be construed as granting a license or other rights to any Party with respect to any such Information, whether by implication, estoppel or otherwise.
Section 7.9    Personal Data. Both Parties shall cooperate to ensure that their creation, collection, receipt, access, use, storage, disposal, processing and disclosure of the other Party’s Personal Data hereunder does and will comply with all applicable Data Protection Laws and any relevant Ancillary Agreement(s), and will take all reasonable precautions to avoid acts that place the other Party in breach of its obligations under any applicable Data Protection Laws and any relevant Ancillary Agreement(s). Nothing in this Section shall be deemed to prevent any Party from taking the steps it reasonably deems necessary to comply with any applicable Data Protection Laws.
Section 7.10    Other Agreements. The rights and obligations granted under this Article VII are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange or confidential treatment of Information set forth in any Ancillary Agreement.
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ARTICLE VIII
DISPUTE RESOLUTION
Section 8.1    Negotiation and Arbitration.
(a)    Except as expressly provided in any Ancillary Agreement, in the event of a controversy, dispute or Action between the Parties arising out of, in connection with, or in relation to this Agreement or any Ancillary Agreement or any of the transactions contemplated hereby or thereby, including with respect to the interpretation, performance, nonperformance, validity or breach of this Agreement or any Ancillary Agreement or otherwise arising out of, or in any way related to, this Agreement or any Ancillary Agreements or the transactions contemplated hereby or thereby, and including any Action based on contract, tort, statute or constitution, including the arbitrability of such controversy, dispute or Action and any controversy, dispute or Action related to Section 7.7(c) concerning privilege issues (a “Dispute”), the following provisions shall apply, unless expressly specified herein; provided, that disputes concerning the correctness of the calculations in the Distribution Cash Statement shall be resolved in accordance with the process set forth in Section 2.13(b).
(b)    Negotiations.
(i)    Except in cases of Disputes regarding privilege issues (in which case the procedure in Section 7.7(c) shall apply), (A) either Party may deliver written notice of a Dispute (a “Dispute Notice”) and (B) the general counsels of the Parties (and/or such other individuals designated by the respective general counsels) and/or the executive officers designated by the Parties in writing shall thereupon negotiate for a reasonable period of time to settle such Dispute; provided, however, that such reasonable period shall not, unless otherwise agreed by the Parties in writing, exceed sixty (60) days from the date of receipt of the Dispute Notice (the “Negotiation Period”).
(ii)    With respect to the subject Dispute, in the event of any arbitration in accordance with this Section 8.1, the Parties shall not assert the defenses of statute of limitations and laches arising during the period beginning after the date of receipt of the Dispute Notice, and any contractual time period or deadline under this Agreement or any Ancillary Agreement to which such Dispute relates occurring after the Dispute Notice is received shall not be deemed to have passed until such Dispute has been resolved.
(iii)    All offers, promises, conduct and statements, whether oral or written, made in the course of the discussions and negotiations related to the relevant Negotiation Period by any of the Parties (or the other members of their respective Group), their respective agents, employees, experts and attorneys are confidential, privileged and inadmissible for any purpose, including impeachment, in any arbitration or other proceeding involving the Parties (or any other member of a Group), and, in any Action, shall be governed by Rule 408 of the Federal Rules of
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Evidence and any applicable similar state or foreign rule and evidence of such discussions shall not be admissible in any future Action between the Parties and any member of their respective and/or any Indemnitee, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the negotiation or discussion.
(c)    Arbitration. If the Dispute has not been resolved for any reason as of the expiration of the applicable Negotiation Period, such Dispute shall be submitted to final and binding arbitration administered in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) then in effect (the “Rules”), except as modified herein.
(i)    The arbitration shall be conducted by an arbitral panel (the “Arbitral Panel”) consisting of three members whenever the amount in controversy exceeds $3,000,000 in principle amount, and by only one arbitrator for any lesser sum. In the instance where a three-person Arbitral Panel is used, the claimant shall appoint one arbitrator in its demand for arbitration and the respondent shall appoint one arbitrator within twenty-one (21) days after the appointment of the first arbitrator. The third arbitrator, who shall serve as chair of the Arbitral Panel, shall be jointly appointed by the two party-nominated arbitrators within twenty-one (21) days of the appointment of the second arbitrator. In the event of an instance where a one-person Arbitral Panel is used, the arbitrator shall be appointed by the AAA in accordance with its Rules. Any arbitrator not timely appointed by the Parties shall be appointed by the AAA according to its Rules.
(ii)    In resolving any Dispute to the extent it involves contractual issues under this Agreement or any Ancillary Agreement, the arbitrator(s) shall apply the governing law specified in this Agreement or the applicable Ancillary Agreement.
(iii)    The arbitration shall be held, and the award shall be rendered, in Austin, Texas, in the English language.
(iv)    For the avoidance of doubt, by submitting their dispute to arbitration under the Rules, the Parties expressly agree that all issues of arbitrability, including all issues concerning the propriety and timeliness of the commencement of the arbitration (including any defense based on a statute of limitation, if applicable), the jurisdiction of the Arbitral Panel, and the procedural conditions for arbitration, shall be finally and solely determined by the Arbitral Panel.
(v)    The Arbitral Panel shall be entitled, if appropriate, to award any remedy, including monetary damages, specific performance and all other forms of legal and equitable relief that is in accordance with the terms of this Agreement; providedhowever, that the Arbitral Panel shall have no authority or power to (i) limit, expand, alter, modify, revoke or suspend any condition or provision of this Agreement, nor any right or power to award punitive, exemplary, treble or similar damages, or (ii) review, resolve or adjudicate, or render any award or grant any relief in respect of, any issue, matter, claim or Dispute other than the
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specific Dispute or Disputes submitted by the Parties to such Arbitral Panel for final and binding arbitration, including any Disputes consolidated therewith in accordance with Section 8.1(c)(ix).
(vi)    The Parties agree to engage in full disclosure of all related documents and evidence (electronic or otherwise, including email, text, and similar writings) related to the Dispute. There shall otherwise be no discovery pursuant to rules providing for same in certain states or nations. Any failure to fully disclose shall result in a negative inference being taken by the arbitrator(s) against the party failing to disclose said evidence or documents. Testimony by any witness during a merits or interim relief hearing shall be taken on examination, in the first instance, by way of a declaration provided to the arbitrator(s) and the opposing party in advance of said hearing on a schedule imposed by the arbitrator(s).
(vii)    The Arbitral Panel (and, if applicable, Emergency Arbitrator (as defined below)) shall have the full authority to grant any pre-arbitral injunction, pre-arbitral attachment, interim or conservatory measure or other order in aid of arbitration proceedings (“Interim Relief”). The Parties shall exclusively submit any application for Interim Relief to only: (A) the Arbitral Panel; or (B) prior to the constitution of the Arbitral Panel, an emergency arbitrator appointed in the manner provided for in the Rules (an “Emergency Arbitrator”). Any Interim Relief so issued shall, to the extent permitted by applicable Law, be deemed a final arbitration award for purposes of enforceability, and, moreover, shall also be deemed a term and condition of this Agreement subject to specific performance in Section 8.2. The foregoing procedures shall constitute the exclusive means of seeking Interim Relief, provided, however, that (i) the Arbitral Panel shall have the power to continue, review, vacate or modify any Interim Relief granted by an Emergency Arbitrator, and the Arbitral Panel shall apply a de novo standard of review to the factual and legal findings of the Emergency Arbitrator and conduct any such proceeding with respect to the actions of the Emergency Arbitrator on an expedited basis; and (ii) in the event an Emergency Arbitrator or the Arbitral Panel issues an order granting, denying or otherwise addressing Interim Relief (a “Decision on Interim Relief”), any Party may apply to enforce or require specific performance of such Decision on Interim Relief in any court of competent jurisdiction. For the avoidance of doubt, any Party may appeal any Decision on Interim Relief determined by any Emergency Arbitrator to an Arbitral Panel; provided that, such Decision on Interim Relief shall remain enforceable from and after any such appeal, unless and until the Decision on Interim Relief is vacated or modified by the Arbitral Panel.
(viii)    The Arbitral Panel shall have the power to allocate the costs and fees of the arbitration (including reasonable attorney’s fees and costs) and the costs and fees addressed in the bules between the Parties in the manner it deems fit with a purpose to substantially defray the costs and attorneys fees incurred by the prevailing party.
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(ix)    The Arbitral Panel may, if requested by a Party, consolidate the arbitration with any other arbitration (A) if the other arbitration involves another Dispute arising under either this Agreement or an Ancillary Agreement, provided the Arbitral Panel is satisfied such other dispute involves common factual issues, or (B) with the prior written consent of all parties engaged in such arbitrations. Such consolidated arbitration shall be determined by the Arbitral Panel appointed for the arbitration proceeding that was commenced first in time, unless otherwise agreed in writing by all parties engaged in such arbitration.
(d)    Confidentiality. Without limiting the provisions of the Rules, unless otherwise agreed in writing by or among the Parties or permitted by this Agreement or any Ancillary Agreement, the Parties shall keep, and shall cause the members of their Group to keep, confidential all matters relating to the arbitration (including the existence of the proceeding and all of its elements and including any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions) or the award, and any negotiations, conferences and discussions pursuant to this Article VIII shall be treated as compromise and settlement negotiations; provided that such matters may be disclosed (i) to the extent reasonably necessary in any proceeding brought to enforce this Article VIII or the award or for entry of a judgment upon the award and (ii) to the extent otherwise required by Law or the rules of any stock exchange on which a Party securities may be listed. Nothing said or disclosed, nor any document produced, in the course of any negotiations, conferences and discussions that is not otherwise independently discoverable shall be offered or received as evidence or used for impeachment or for any other purpose in any current or future arbitration. In the event any Party makes application to any court in connection with this Section 8.1(d) (including any proceedings to enforce a final award or any Interim Relief), that Party, as applicable, shall take all steps reasonably within its power to cause such application, and any exhibits (including copies of any award or decisions of the Arbitral Panel or Emergency Arbitrator) to be filed under seal, shall oppose any challenge by any third party to such sealing, and shall give the other Party notice of such challenge as promptly as practicable.
(e)    Sole and Exclusive Remedy. Arbitration under this Article VIII shall be the sole and exclusive remedy for any Dispute, and any award rendered thereby shall be final and binding upon the Parties as from the date rendered. Judgment on the award rendered by the Arbitral Panel may be entered in any court having jurisdiction thereof, including any court having jurisdiction over the relevant Party or its Assets.
(f)    Service of Process. In the event any proceeding is brought in any court of competent jurisdiction to enforce the dispute resolutions provisions of this Section 8.1, to obtain relief as described in this Section 8.1, or to enforce any award, relief or decision issued by an Arbitral Tribunal, each Party irrevocably consents to the service of process in any action by mailing of copies of the process to the Parties as provided in Section 10.6. Service effected as provided in this manner will become effective five (5) days after the mailing of the process.
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(g)    Waiver of Jury Trial. EACH OF PARENT AND SPINCO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PERSON MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY ANCILLARY AGREEMENT. EACH OF PARENT AND SPINCO CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY PARTY TO THIS AGREEMENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY TO THIS AGREEMENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH OF PARENT AND SPINCO UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH OF PARENT AND SPINCO MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH OF PARENT AND SPINCO HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.1.
Section 8.2    Specific Performance. From and after the Distribution, 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 Ancillary Agreement, the Parties agree that the Party or Parties to this Agreement or such Ancillary Agreement who are or are to be thereby aggrieved shall, subject and pursuant to the terms of this Article VIII (including for the avoidance of doubt, after compliance with all notice and negotiation provisions herein), have the right to specific performance and injunctive or other equitable relief of its or their rights under this Agreement or such Ancillary Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that, from and after the Distribution, the remedies at law for any breach or threatened breach of this Agreement or any Ancillary Agreement, including monetary damages, are inadequate compensation for any Indemnifiable Loss, that any defense in any action for specific performance that a remedy at law would be adequate is hereby waived, and that any requirements for the securing or posting of any bond with such remedy are hereby waived.
Section 8.3    Treatment of Arbitration. The Parties agree that any arbitration hereunder shall be kept confidential, and that the existence of the proceeding and all of its elements (including any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions, and any awards) shall be deemed confidential, and shall not be disclosed beyond the Arbitral Panel, the Parties, their counsel, and any Person necessary to the conduct of the proceeding, except as and to the extent required by law and to defend or pursue any legal right. In the event any Party makes application to any court in connection with this Section 8.3 (including any proceedings to enforce a final award or any Interim Relief), that party shall take all steps reasonably within its power to cause such application, and any exhibits (including copies of any award or decisions of the Arbitral Panel or Emergency Arbitrator) to be filed under seal, shall oppose any challenge by any third party to such sealing, and shall give the other Party immediate notice of such challenge.
Section 8.4    Continuity of Service and Performance. Unless otherwise agreed in writing, the Parties shall continue to provide service and honor all other commitments under this Agreement
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and each Ancillary Agreement during the course of dispute resolution pursuant to the provisions of this Article VIII with respect to all matters not subject to such dispute resolution.
Section 8.5    Consolidation. The arbitrator may consolidate an arbitration under this Agreement with any arbitration arising under or relating to the Ancillary Agreements or any other agreement between the Parties entered into pursuant hereto, as the case may be, if the subject of the Disputes thereunder arises out of or relates essentially to the same set of facts or transactions. Such consolidated arbitration shall be determined by the arbitrator(s) appointed for the arbitration proceeding that was commenced first in time, and affirmed by the Arbitration Tribunal in the instance of each arbitration thereby being consolidated.
ARTICLE IX
INSURANCE
Section 9.1    Insurance Matters.
(a)    SpinCo acknowledges and agrees that, from and after the Effective Time, neither SpinCo nor any member of the SpinCo Group shall have any rights to or under any Policies of Parent, including the Company Policies, other than any insurance policies acquired prior to the Effective Time directly by and in the name of SpinCo or a member of the SpinCo Group or as expressly provided in Section 6.7 or this Article IX.
(b)    Notwithstanding Section 9.1(a), from and after the Effective Time, with respect to any Liability accrued and/or incurred by SpinCo or its predecessors prior to the Effective Time, Parent shall, at its sole discretion, provide SpinCo with access to, and, if and to the extent determined by Parent in its sole discretion, SpinCo and Parent may jointly make claims under, Company Policies if and solely to the extent that the terms of such policies provide for such coverage to SpinCo or its predecessors with respect to any SpinCo Liabilities accrued and/or incurred prior to the Effective Time, and subject to the terms and conditions of such insurance policies, including any limits on coverage or scope, any deductibles and other fees and expenses, and subject to the following additional conditions:
(i)    SpinCo shall inform Parent of any potential claim under any of the Company Policies with regard to any SpinCo Liability and Parent shall determine whether and at what time to report any such claims under such Company Policies directly to the applicable insurance company, and to submit a claim for coverage thereunder, and Parent shall provide a copy of all such claim reports and submissions to SpinCo; provided, that with respect to any such claims, SpinCo shall provide Parent with the information regarding the claims and provide recommendations with regard to the reporting and submission of such claims, and Parent shall consult with SpinCo with regard to the timing thereof;
(ii)    If and to the extent that SpinCo is the sole entity recovering insurance proceeds under one or more of the Company Policies in respect of a particular claim for coverage, SpinCo shall exclusively bear and be responsible for (and Parent shall have no obligation to repay or reimburse SpinCo for) and pay the applicable
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insurers as required under the applicable Company Policies for any and all costs as a result of having access to, or making claims under, such Policies, including any amounts of deductibles and self-insured retention associated with such claims, claim handling and administrative costs, Taxes, surcharges, state assessments, reinsurance costs, and other related costs, relating to all open, closed, re-opened claims covered by the applicable Policies, whether such claims are made by SpinCo, its employees or third parties, and SpinCo shall indemnify, hold harmless and reimburse Parent for any such amounts incurred by Parent to the extent resulting from any access to, any claims made by SpinCo under, any Company Policies provided pursuant to this Section 9.1. If Parent and SpinCo jointly make a claim for coverage under the Company Policies for amounts that have been or may in the future be incurred partially by Parent and partially by SpinCo, any insurance recovery resulting therefrom will first be allocated to reimburse Parent and/or SpinCo for their respective costs, legal and consulting fees, and other out-of-pocket expenses incurred in pursuing such insurance recovery, with the remaining net proceeds from the insurance recovery to be allocated as between Parent and SpinCo in a manner to be negotiated in good faith by Parent and SpinCo at or near the time of such recovery; provided that if the Parties cannot agree to an allocation within twenty (20) Business Days of the grant, settlement or other agreement, either Party may submit the dispute to arbitration in accordance with the terms and procedures set forth in Section 8.2;
(iii)    SpinCo shall exclusively bear (and Parent shall have no obligation to repay or reimburse SpinCo for) and shall be liable for all uninsured, uncovered, unavailable or uncollectible amounts, incurred from and after the Effective Time, of all such claims pursued by SpinCo under the Company Policies as provided for in this Section 9.1(b); and
(iv)    in connection with making any joint claim under any Company Policies pursuant to this Section 9.1(b), Parent shall control the administration of all such claims, including the timing of any assertion and pursuit of coverage, and SpinCo shall not take any action that would be reasonably likely to: (A) have an adverse impact on the then-current relationship between Parent and the applicable insurance company; (B) result in the applicable insurance company terminating or reducing coverage to Parent or SpinCo, or increasing the amount of any premium owed by Parent under the applicable Company Policies; (C) otherwise compromise, jeopardize or interfere with the rights of Parent under the applicable Company Policies or (D) otherwise compromise or impair Parent’s ability to enforce its rights with respect to any indemnification under or arising out of this Agreement, and Parent shall have the right, in its sole discretion, to cause SpinCo to desist from any action that Parent determines, in its sole discretion, would compromise or impair Parent’s rights in accordance with this clause (D).
At all times, Parent and SpinCo shall, subject to the limitations set forth in Section 7.6, cooperate with reasonable requests for information by the other Party or the insurance companies regarding any such insurance policy claim.
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(c)    Any payments, costs and adjustments required pursuant to Section 9.1(b) shall be billed by Parent to SpinCo on a monthly basis and SpinCo shall pay such billed payments, costs and adjustments to Parent within sixty (60) days from receipt of invoice. If Parent incurs costs to enforce SpinCo’s obligations under this Section 9.1, SpinCo agrees to indemnify Parent for such enforcement costs, including reasonable attorneys’ fees.
(d)    Notwithstanding anything to the contrary in this Agreement, from and after the Effective Time, neither SpinCo nor any member of the SpinCo Group shall have any rights or claims against or with respect to any self-insurance or captive insurance company arrangement of Parent or any member of the Parent Group. In addition, as of the Effective Time, SpinCo, for itself and each member of the SpinCo Groups does hereby remise, release and forever discharge Parent and the other members of the Parent Group of any rights or claims against or with respect to any self-insurance or captive insurance company arrangement of Parent or any member of the Parent Group.
(e)    At the Effective Time, SpinCo shall have in effect all insurance programs required to comply with SpinCo’s statutory obligations.
(f)    This Agreement shall not be considered as an attempted assignment of any policy of insurance in its entirety, nor is it considered to be itself a contract of insurance, and further this Agreement shall not be construed to waive any right or remedy of Parent under or with respect to any of the Company Policies and programs or any other contract or policy of insurance, and Parent reserves all of its rights under such Policies.
(g)    Parent shall not be liable to SpinCo for claims not reimbursed by insurers for any reason not within the control of Parent, including coinsurance provisions, deductibles, quota share deductibles, exhaustion of aggregates, self-insured retentions, bankruptcy or insolvency of an insurance carrier, Company Policy limitations or restrictions, any coverage disputes, any failure to timely claim by Parent or any defect in such claim or its processing.
(h)    In the event that Insured Claims of more than one Party exist relating to the same occurrence, the relevant Parties shall jointly defend and waive any conflict of interest to the extent necessary to the conduct of the joint defense. Nothing in this Section 9.1(h) shall be construed to limit or otherwise alter in any way the obligations of the Parties, including those obligations under Article VI, including those created by this Agreement, by operation of law or otherwise.
(i)    In the event of any Action by any Party (or both of the Parties) to recover or obtain insurance proceeds, or to defend against any Action by an insurance carrier to deny any Policy benefits, both Parties may join in any such Action and be represented by joint counsel and both Parties shall waive any conflict of interest to the extent necessary to conduct any such Action. Nothing in this Section 9.1(i) shall be construed to limit or otherwise alter in any way the obligations of the Parties, including those created under Article VI of this Agreement or otherwise, by operation of Law, or otherwise.
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(j)    Notwithstanding anything contained in this Section 9.1, to the extent Parent has entered into or agrees to enter into, whether on its own or with respect to the any arrangement provided for under this Section 9.1, any settlement agreement or other arrangement with any insurance provider regarding coverage under any Company Policy that provides for any limitation of coverage or release of such insurance provider with regard to any coverage thereunder, whether in whole or in part (collectively, the “Released Insurance Matters”), SpinCo agrees that it shall (i) abide by the terms of and, to the extent required, consent to, any such settlement or arrangement relating to the Released Insurance Matters as a condition to receiving any coverage under any Company Policy related thereto, (ii) have no rights to any such coverage under the Company Policies with respect to any Released Insurance Matters and (iii) make no claims under any Company Policies with respect to any Released Insurance Matters.
Section 9.2    Certain Matters Relating to Parent’s Organizational Documents. For a period of six (6) years from the Distribution Date, the Certificate of Incorporation and Bylaws of Parent shall contain provisions no less favorable with respect to indemnification of directors and officers than are set forth in such Certificate of Incorporation or Bylaws of Parent immediately before the Effective Time, which provisions shall not be amended, repealed or otherwise modified for a period of six (6) years from the Distribution Date in any manner that would affect adversely the rights thereunder of individuals who, at or prior to the Effective Time, were indemnified under such Certificate of Incorporation or Bylaws, unless such amendment, repeal, or other modification shall be required by Law and then only to the minimum extent required by Law or approved by Parent’s shareholders.
Section 9.3    Directors and Officers Liability Insurance. Effective as of the Effective Time, Parent shall not be obligated to maintain insurance coverage with respect to the SpinCo Business, except as is expressly provided as follows: prior to the Distribution Date, Parent shall obtain and fully pay for a “tail” directors and officers insurance policy for directors and officers of Parent and its Subsidiaries and SpinCo and its Subsidiaries covering acts and omissions in their respective capacities as directors and officers of Parent, Parent’s Subsidiaries, SpinCo or SpinCo’s Subsidiaries prior to the Distribution Date for a period of six (6) years from and after the Distribution Date and such tail directors and officers insurance policy shall contain terms and conditions as Parent determines, and following the Effective Time, each party shall be responsible for any deductibles, co-payments or retention amounts with respect to any claims that it may make under such tail policy.
ARTICLE X
MISCELLANEOUS
Section 10.1    Entire Agreement; Construction. This Agreement, including the Exhibits and Schedules, and the Ancillary Agreements shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments, course of dealings and writings with respect to such subject matter. In the event of any inconsistency between this Agreement and any Schedule hereto, the Schedule shall prevail. In the event and to the extent that there shall be a conflict between the provisions of (a) this Agreement and the provisions of any Ancillary Agreement or Continuing Arrangement, such
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Ancillary Agreement or Continuing Arrangement shall control (except with respect to any Conveyancing and Assumption Instruments, in which case this Agreement shall control) and (b) this Agreement and any agreement which is not an Ancillary Agreement, this Agreement shall control unless specifically stated otherwise in such agreement. For the avoidance of doubt, the Conveyancing and Assumption Instruments are intended to be ministerial in nature and only to effect the transactions contemplated by this Agreement with respect to the applicable local jurisdiction and shall not expand or modify the rights and obligations of the parties hereto or their Affiliates under this Agreement or any of the Ancillary Agreements that are not Conveyancing and Assumption Instruments. Except as expressly set forth in this Agreement or any Ancillary Agreement: (i) all matters relating to Taxes and Tax Returns of the Parties and their respective Subsidiaries shall be governed exclusively by the Tax Matters Agreement; and (ii) for the avoidance of doubt, in the event of any conflict between this Agreement or any Ancillary Agreement, on the one hand, and the Tax Matters Agreement, on the other hand, with respect to such matters, the terms and conditions of the Tax Matters Agreement shall govern.
Section 10.2    Ancillary Agreements. Except as expressly set forth herein, this Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements.
Section 10.3    Counterparts. This Agreement may be executed in more than one counterpart, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to each of the Parties.
Section 10.4    Survival of Agreements. Except as otherwise contemplated by this Agreement or any Ancillary Agreement, all covenants and agreements of the Parties contained in this Agreement and each Ancillary Agreement shall survive the Effective Time and remain in full force and effect in accordance with their applicable terms.
Section 10.5    Expenses.
(a)    Except as otherwise expressly provided in this Agreement (including paragraphs (b) and (c) of this Section 10.5) or any Ancillary Agreement, or as otherwise agreed to in writing by the Parties, all out-of-pocket fees and expenses incurred on or prior to the Effective Time in connection, and as required by, with the preparation, execution, delivery and implementation of this Agreement and any Ancillary Agreement, the Distribution, the Information Statement, the Internal Reorganization and the consummation of the transactions contemplated hereby and thereby shall be borne and paid by Parent (but excluding for the avoidance of doubt, Liabilities under the clause (ix) of the definition of SpinCo Liabilities).
(b)    Except as otherwise expressly provided in this Agreement (including paragraphs (a) and (c) of this Section 10.5) or any Ancillary Agreement, or as otherwise agreed to in writing by the Parties, each Party shall bear its own costs and expenses incurred or accrued after the Effective Time; provided, however, that any costs and expenses incurred in obtaining any Consents or novation from a third party in connection with the assignment to or assumption by a Party or its Subsidiary of any Contracts in connection with the Internal
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Reorganization or the Distribution shall be borne by the Party or its Subsidiary to which such Contract is being assigned.
(c)    With respect to any expenses incurred pursuant to a request for further assurances granted under Section 2.8, the Parties agree that any and all fees and expenses incurred by either Party shall be borne and paid by the requesting Party; it being understood that no Party shall be obliged to incur any third party accounting, consulting, advisor, banking or legal fees, costs or expenses, and the requesting Party shall not be obligated to pay such fees, costs or expenses, unless such fee, cost or expense shall have had the prior written approval of the requesting Party. Notwithstanding the foregoing, each Party shall be responsible for paying its own internal fees, costs and expenses (e.g., salaries of personnel). With respect to any fees, costs and expenses incurred by either Party in satisfying its obligations under Section 7.2, the requesting Party shall be responsible for the other Party’s fees, costs and expenses.
Section 10.6    Notices. All notices, requests, claims, demands and other communications under this Agreement and, to the extent applicable and unless otherwise provided therein, under each of the Ancillary Agreements shall be in English, shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, or by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 10.6):
To Parent:
SolarWinds Corporation
7171 Southwest Parkway
Building 400
Austin, Texas
Attn: General Counsel
Email:
To SpinCo:
N-able, Inc.
301 Edgewater Dr., Suite 306
Wakefield, Massachusetts 01880
Attn: General Counsel
Email:
Section 10.7    Consents; Waivers. Any consent or waiver required or permitted to be given by any Party to the other Party under this Agreement shall be in writing and signed by the Party giving such consent or waiver and shall be effective only against such Party (and its Group).
Section 10.8    Assignment. This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party without the prior written consent of the other Party (such consent not to be unreasonably withheld or delayed), and any attempt to assign any rights or obligations
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arising under this Agreement without such consent shall be void. Notwithstanding the foregoing, this Agreement shall be assignable to (i) a Subsidiary of a Party, or (ii) a bona fide unaffiliated third party in connection with a Change of Control of a Party so long as the resulting, surviving or transferee entity assumes all the obligations of the relevant party hereto by operation of law or otherwise; provided, however, that, unless otherwise agreed by the non-assigning Party in writing or in connection with a Change of Control of a Party as described above, no assignment permitted by this Section 10.8 shall release the assigning Party from Liability for the full performance of its obligations under this Agreement.
Section 10.9    Successors and Assigns. The provisions of this Agreement and the obligations and rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and against) the Parties and their respective successors and permitted assigns.
Section 10.10    Termination and Amendment. This Agreement (including Article VI hereof) may be terminated, modified or amended and the Distribution may be amended, modified or abandoned at any time prior to the Effective Time by and in the sole discretion of Parent without the approval of SpinCo or the stockholders of Parent. In the event of such termination, no Party shall have any liability of any kind to the other Party or any other Person. After the Effective Time, this Agreement may not be terminated, modified or amended except by an agreement in writing signed by Parent and SpinCo.
Section 10.11    Payment Terms.
(a)    Except as set forth in Article VI or as otherwise expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount to be paid or reimbursed by a Party (and/or a member of such Party’s Group), on the one hand, to the other Party (and/or a member of such Party’s Group), on the other hand, under this Agreement shall be paid or reimbursed hereunder within sixty (60) days after presentation of an invoice or a written demand therefor and setting forth, or accompanied by, reasonable documentation or other reasonable explanation supporting such amount.
(b)    Except as set forth in Article VI or as expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount not paid when due pursuant to this Agreement (and any amount billed or otherwise invoiced or demanded and properly payable that is not paid within sixty (60) days of such bill, invoice or other demand) shall bear interest at a rate per annum equal to the Prime Rate, from time to time in effect, calculated for the actual number of days elapsed, accrued from the date on which such payment was due up to the date of the actual receipt of payment.
(c)    Without the consent of the party receiving any payment under this Agreement specifying otherwise, all payments to be made by either Parent or SpinCo under this Agreement shall be made in US Dollars. Except as expressly provided herein, any amount which is not expressed in US Dollars shall be converted into US Dollars by using the exchange rate published on Bloomberg at 5:00 pm Eastern Standard time (EST) on the day before the relevant date or in the Wall Street Journal on such date if not so published on Bloomberg. Except as expressly provided herein, in the event that any indemnification payment required to be made hereunder or under any Ancillary Agreement may be
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denominated in a currency other than US Dollars, the amount of such payment shall be converted into US Dollars on the date in which notice of the claim is given to the Indemnifying Party.
Section 10.12    Subsidiaries. Each of the Parties shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary of such Party or by any entity that becomes a Subsidiary of such Party at and after the Effective Time, to the extent such Subsidiary remains a Subsidiary of the applicable Party.
Section 10.13    Third Party Beneficiaries. Except (i) as provided in Article VI relating to Indemnitees and for the release under Section 6.1 of any Person provided therein, (ii) as provided in Section 9.3 relating to the directors, officers, managers, partners, employees, fiduciaries or agents provided therein, and (iii) as specifically provided in any Ancillary Agreement, this Agreement is solely for the benefit of the Parties and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, claim of Action or other right in excess of those existing without reference to this Agreement.
Section 10.14    Title and Headings. Titles and headings to sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
Section 10.15    Exhibits and Schedules.
(a)    The Exhibits and Schedules shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein. Nothing in the Exhibits or Schedules constitutes an admission of any liability or obligation of any member of the Parent Group or the SpinCo Group or any of their respective Affiliates to any third party, nor, with respect to any third party, an admission against the interests of any member of the Parent Group or the SpinCo Group or any of their respective Affiliates. The inclusion of any item or liability or category of item or liability on any Exhibit or Schedule is made solely for purposes of allocating potential liabilities among the Parties and shall not be deemed as or construed to be an admission that any such liability exists.
(b)    Subject to the prior written consent of the other Party (not to be unreasonably withheld or delayed), each Party shall be entitled to update the Schedules from and after the date hereof until the Effective Time.
Section 10.16    Governing Law. This Agreement and any dispute arising out of, in connection with or relating to this Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware, without giving effect to the conflicts of laws principles thereof.
Section 10.17    Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good-faith negotiations to replace
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the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
Section 10.18    Public Announcements. From and after the Effective Time until each Party has filed its Annual Report on Form 10-K for the fiscal year ending December 31, 2021, Parent and SpinCo shall consult with each other before issuing, and give each other the opportunity to review and comment upon, that portion of any press release or other public statements that relates to the transactions contemplated by this Agreement or the Ancillary Agreements or the matter set forth on Schedule 10.18, and shall not issue any such press release or make any such public statement prior to such consultation, except (a) as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchange or national securities quotation system; (b) for disclosures made that are substantially consistent with disclosure contained in any Distribution Disclosure Document, (c) as otherwise set forth on Schedule 10.18, or (d) as may pertain to disputes between one Party or any member of its Group, on one hand, and the other Party or any member of its Group, on the other hand.
Section 10.19    Interpretation. The Parties have participated jointly in the negotiation and drafting of this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting or causing any instrument to be drafted.
Section 10.20    No Duplication; No Double Recovery. Nothing in this Agreement is intended to confer to or impose upon any Party a duplicative right, entitlement, obligation or recovery with respect to any matter arising out of the same facts and circumstances (including with respect to the rights, entitlements, obligations and recoveries that may arise out of one or more of the following Sections: Section 6.2; Section 6.3; and Section 6.4).
Section 10.21    Tax Treatment of Payments. Unless otherwise required by a Final Determination, this Agreement or the Tax Matters Agreement or otherwise agreed to among the Parties, for U.S. federal income tax purposes, any payment made pursuant to this Agreement (other than any payment of interest pursuant to Section 10.11 or repayment of any intercompany loan) by: (i) SpinCo to SolarWinds Holdings Inc. shall be treated for all Tax purposes as a distribution by SpinCo to SolarWinds Holdings Inc. with respect to stock of SpinCo occurring immediately before the First Internal Distribution; or (ii) SolarWinds Holdings Inc. to SpinCo shall be treated for all Tax purposes as a tax-deferred contribution by SolarWinds Holdings Inc. to SpinCo with respect to its stock occurring immediately before the First Internal Distribution; and in each case, no Party shall take any position inconsistent with such treatment. In the event that a Taxing Authority asserts that a Party’s treatment of a payment pursuant to this Agreement should be other than as set forth in the preceding sentence, such Party shall use its commercially reasonable efforts to contest such challenge.
Section 10.22    No Waiver. No failure to exercise and no delay in exercising, on the part of any Party, any right, remedy, power or privilege hereunder or under the other Ancillary Agreements shall operate as a waiver hereof or thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.
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Section 10.23    No Admission of Liability. The allocation of Assets and Liabilities herein (including on the Schedules hereto) is solely for the purpose of allocating such Assets and Liabilities between Parent and SpinCo and is not intended as an admission of liability or responsibility for any alleged Liabilities vis-à-vis any third party, including with respect to the Liabilities of any non-wholly owned Subsidiary of Parent or SpinCo.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first above written.
SOLARWINDS CORPORATION
By:
Name:
Title:
N-ABLE, INC.
By:
Name:
Title:

EX-3.1 3 n-ableform10x12baxexhibit31.htm EX-3.1 Document
Exhibit 3.1
FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
N-ABLE, INC.
(a Delaware corporation)
****
N-able, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”) hereby certifies as follows:
FIRST: The name of the Corporation is N-able, Inc. The Corporation was formed as a Delaware limited liability company by filing a Certificate of Formation with the Delaware Secretary of State on November 30, 2020 under the name of SWI SpinCo, LLC. The Corporation converted to a Delaware corporation by filing its original Certificate of Incorporation with the Delaware Secretary of State on [_____], 2021 under the name of N-able, Inc.
SECOND: Pursuant to Sections 141, 228 and 242 of the DGCL, the amendments and restatement herein set forth have been duly approved by the Board of Directors of the Corporation and by the unanimous written consent of the sole stockholder of the Corporation.
THIRD: Pursuant to Section 245 of the DGCL, this Amended and Restated Certificate of Incorporation restates and integrates and further amends the provisions of the currently existing Certificate of Incorporation of this Corporation.
FOURTH: As so restated, integrated and further amended, the Amended and Restated Certificate of Incorporation (hereinafter, this “Certificate”) reads in its entirety as follows:
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
N-ABLE, INC.
Article I
The name of the corporation is N-able, Inc. (hereinafter referred to as the “Corporation”).
Article II
The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801. The name of the Corporation’s registered agent at such address is The Corporation Trust Company.
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Article III
The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law (the “DGCL”) and to possess and employ all powers and privileges now or hereafter granted or available under the laws of the State of Delaware to such corporations.
Article IV
A.    The total number of shares of capital stock of all classes which the Corporation shall have authority to issue is [_____] shares, consisting of: [_____] shares of common stock, par value $0.001 per share (“Common Stock”) and [_____] shares of preferred stock, par value $0.001 per share (“Preferred Stock”).
B.    Except as otherwise restricted by this Amended and Restated Certificate of Incorporation (this “Certificate”), the Corporation is authorized to issue, from time to time, all or any portion of the capital stock of the Corporation which may have been authorized but not issued, to such person or persons and for such lawful consideration as it may deem appropriate, and generally in its absolute discretion to determine the terms and manner of any disposition of such authorized but unissued capital stock.
Any and all such shares issued for which the full consideration has been paid or delivered shall be deemed fully paid shares of capital stock, and the holder of such shares shall not be liable for any further call or assessment or any other payment thereon.
C.    This Certificate shall become effective at [_____] on [_____], 2021 (the “Effective Time”). At the Effective Time, the shares of common stock, par value $0.01 per share, of the Corporation, issued and outstanding immediately prior to the Effective Time shall automatically be reclassified and shall thereafter represent [_____] shares of Common Stock.
D.    The designations and the powers, preferences and rights and qualifications, limitations or restrictions of the shares of each class of stock are as follows:
1.    Common Stock
(a)    Each holder of record of shares of Common Stock shall be entitled to one vote for each share of Common Stock held on all matters submitted to a vote of stockholders of the Corporation on which holders of Common Stock are entitled to vote.
(b)    The holders of shares of Common Stock shall not have cumulative voting rights (as defined in Section 214 of the DGCL).
(c)    Subject to the rights of the holders of Preferred Stock, and subject to any other provisions of this Certificate, as it may be amended from time to time, holders of shares of Common Stock shall be entitled to receive such dividends and other distributions in cash, stock or property of the Corporation if, as and when declared thereon by the Board of Directors of the
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Corporation (the “Board of Directors”) from time to time out of assets or funds of the Corporation legally available therefor.
(d)    In the event of any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, after payment or provision for the payment of the debt and liabilities of the Corporation and subject to the prior payment in full of the preferential amounts, if any, to which any series of Preferred Stock may be entitled, the holders of shares of Common Stock shall be entitled to receive the assets and funds of the Corporation remaining for distribution in proportion to the number of shares held by them, respectively.
(e)    No holder of shares of Common Stock shall be entitled to preemptive or subscription rights.
2.    Preferred Stock. The shares of Preferred Stock shall initially be undesignated and may be issued from time to time in one or more additional series by the Board of Directors. The Board of Directors is hereby authorized, subject to any limitations prescribed by law, to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon a wholly-unissued series of Preferred Stock, and the number of shares constituting any such series and the designation thereof, or any of them; and to increase or decrease the number of shares constituting any such series and the designation thereof, or any of them; and to increase or decrease the number of shares of any series subsequent to the issue of shares of that series, but, in respect of decreases, not below the number of shares of such series then outstanding. In case the number of shares of any series should be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolutions originally fixing the number of shares of such series. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the outstanding shares of Common Stock without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the certificate or certificates establishing any series of Preferred Stock.
Article V
The Corporation is to have perpetual existence.
Article VI
The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:
A.    The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the powers and authority expressly conferred upon them by law or by this Certificate or the bylaws of the Corporation, as the same may be amended from time to time (the “Bylaws”), the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.
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B.    Subject to any rights of the holders of any series of Preferred Stock then outstanding or the rights granted pursuant to the Stockholders Agreement (as defined below) to elect additional directors under specified circumstances, the number of directors which shall constitute the Board of Directors shall be fixed exclusively from time to time by, (i) for so long as the Silver Lake Investors (defined herein) and Thoma Bravo Investors (defined herein) (collectively, the “Investors”) collectively beneficially own (directly or indirectly), in the aggregate, at least 40% of the outstanding Common Stock of the Corporation, the Investors, or (ii) thereafter, resolution adopted by the affirmative vote of a majority of the directors then in office. “Silver Lake Investors” means Silver Lake Partners IV, L.P., Silver Lake Technology Investors IV, L.P., SLP Aurora Co-Invest, L.P. and their respective Affiliates (as defined in Article X). “Thoma Bravo Investors” means Thoma Bravo Fund XI, L.P., Thoma Bravo Fund XI-A, L.P., Thoma Bravo Executive Fund XI, L.P., Thoma Bravo Special Opportunities Fund II, L.P., Thoma Bravo Special Opportunities Fund II-A, L.P., Thoma Bravo Fund XII, L.P., Thoma Bravo Fund XII-A, L.P., Thoma Bravo Executive Fund XII, L.P. and Thoma Bravo Executive Fund XII-A, L.P. and their respective Affiliates.
C.    The directors of the Corporation, other than those who may be elected by the holders of any series of Preferred Stock under specified circumstances, shall be divided into three classes, hereby designated Class I, Class II and Class III, as nearly equal in number as possible.
D.    The term of office of the initial Class I directors shall expire at the annual meeting of stockholders to be held in 2022, the term of office of the initial Class II directors shall expire at the annual meeting of stockholders to be held in 2023 and the term of office of the initial Class III directors shall expire at the annual meeting of the stockholders to be held in 2024. At each annual meeting of stockholders commencing with the 2022 annual meeting of stockholders, directors elected to replace those of a Class whose terms expire at such annual meeting shall be elected for a term expiring at the third succeeding annual meeting after their election and shall remain in office until their respective successors shall have been duly elected and qualified. Nothing in this Certificate shall preclude a director from serving consecutive terms. Elections of directors need not be by written ballot.
E.    Subject to the rights of the holders of any series of Preferred Stock then outstanding or the rights granted pursuant to the Stockholders Agreement, dated on or about the date hereof, by and among the Corporation, the Silver Lake Investors, the Thoma Bravo Investors and certain other parties named therein (as amended, supplement, restated or otherwise modified from time to time, the “Stockholders Agreement”), (i) newly created directorships resulting from any increase in the authorized number of directors and (ii) any vacancies in the Board of Directors resulting from death, resignation, disqualification, removal from office or any other cause may be filled only by the Board of Directors (and not by stockholders), provided that a quorum is then in office and present, or by a majority of the directors then in office, if less than a quorum is then in office, or by the sole remaining director. A director elected to fill a vacancy shall be elected for the unexpired term of his or her predecessor in office and until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal. A director chosen to fill a position resulting from an increase in the number of directors shall hold office until the next election of the Class for which such director shall have been chosen and until
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his or her successor is elected and qualified, or until his or her earlier death, resignation or removal. No decrease in the authorized number of directors shall shorten the term of any incumbent director.
F.    Subject to the rights of the holders of any series of Preferred Stock then outstanding or the rights granted pursuant to the Stockholders Agreement and notwithstanding any other provision of this Certificate, (i) prior to the first date on which the Investors and their Affiliates cease to beneficially own (directly or indirectly) in the aggregate at least 30% of the voting power of the then outstanding shares of capital stock of the Corporation then entitled to vote generally in the election of directors, directors may be removed with or without cause upon the affirmative vote of the Investors and their respective Affiliates which beneficially own shares of capital stock of the Corporation entitled to vote generally in the election of directors and (ii) on and after such date, directors may only be removed for cause (as defined below) and only upon the affirmative vote of stockholders representing at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class. Unless the Board of Directors has made a determination that removal is in the best interests of the Corporation (in which case the following definition shall not apply), “cause” for removal of a director shall be deemed to exist only if (a) the director whose removal is proposed has been convicted of a felony by a court of competent jurisdiction and such conviction is no longer subject to direct appeal; (b) such director has been found by the affirmative vote of a majority of the directors then in office at any regular or special meeting of the Board of Directors called for that purpose, or by a court of competent jurisdiction, to have been guilty of willful misconduct in the performance of such director’s duties to the Corporation in a matter of substantial importance to the Corporation; or (c) such director has been adjudicated by a court of competent jurisdiction to be mentally incompetent, which mental incompetency directly affects such director’s ability to perform his or her obligations as a director of the Corporation. Any director may resign at any time upon written notice to the Corporation.
G.    Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws of the Corporation.
Article VII
No director shall be personally liable to the Corporation or its stockholders for monetary damages for breach of his or her fiduciary duty as a director of the Corporation, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL hereafter is amended to authorize further elimination or limitation of the liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the amended DGCL. Any repeal or modification of this paragraph by the stockholders of the Corporation shall be prospective only,
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and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification.
The Corporation shall indemnify any director or officer to the fullest extent permitted by Delaware law.
Article VIII
A.    From and after the first date (the “Trigger Date”) on which the Investors, including through their Affiliates, cease to beneficially own (directly or indirectly), in the aggregate, at least 40% of the voting power of the then outstanding shares of capital stock of the Corporation then entitled to vote generally in the election of directors, any action required or permitted to be taken by the Corporation’s stockholders may be effected only at a duly called annual or special meeting of the Corporation’s stockholders and the power of stockholders to consent in writing without a meeting is specifically denied. Prior to the Trigger Date, any action which is required or permitted to be taken by the Corporation’s stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of the Corporation’s stock entitled to vote thereon were present and voted.
B.    Subject to the rights of the holders of any series of Preferred Stock then outstanding and to the requirements of applicable law, special meetings of stockholders of the Corporation may be called only (i) by or at the direction of the Board of Directors pursuant to a written resolution adopted by the affirmative vote of the majority of the total number of directors that the Corporation would have if there were no vacancies or (ii) prior to the Trigger Date, by the Secretary of the Corporation at the request of the Investors and their Affiliates that hold shares of capital stock of the Corporation then entitled to vote generally in the election of directors in the manner provided for in the Bylaws. Any business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of the meeting.
Article IX
A.    In recognition and anticipation that: (i) the principals, officers, members, managers, partners, directors, employees and/or independent contractors of the Investors and SolarWinds Corporation (“SolarWinds”) may serve as directors or officers of the Corporation, (ii) members of the Investors and SolarWinds engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlay with or compete with those in which the Corporation, directly or indirectly, may engage, and (iii) that the Corporation and its Affiliated Companies (as defined below) may engage in material business transactions with SolarWinds or the Investors, and that the Corporation is expected to benefit therefrom, the provisions of this Article IX are set forth to regulate and define the conduct of certain affairs of the Corporation as they may involve SolarWinds, the Investors and/or their respective principals,
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officers, members, managers, partners, directors, employees and/or independent contractors, including any of the foregoing who serve as officers or directors of the Corporation (collectively, the “Exempted Persons”), and the powers, rights, duties and liabilities of the Corporation and its officers, directors, stockholders and employees in connection therewith.
B.    To the fullest extent permitted by applicable law, neither SolarWinds, the Investors nor any of their respective Exempted Persons shall have any fiduciary duty to refrain from engaging, directly or indirectly, in the same or similar business activities or lines of business as the Corporation or any of its Affiliated Companies, and no Exempted Person shall be liable to the Corporation or its stockholders for breach of any fiduciary or other duty (whether contractual or otherwise) solely by reason of any such activities of SolarWinds, the Investors or such Exempted Person. To the fullest extent permitted by applicable law, the Corporation, on behalf of itself and its Affiliated Companies, renounces any interest or expectancy of the Corporation and its Affiliated Companies in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to SolarWinds, any Investor or any of its Exempted Persons, even if the opportunity is one that the Corporation or its Affiliated Companies might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, and each Exempted Person shall have no duty to communicate or offer such business opportunity to the Corporation or its Affiliated Companies and, to the fullest extent permitted by applicable law, shall not be liable to the Corporation or any of its Affiliated Companies for breach of any fiduciary or other duty (whether contractual or otherwise), as a director, officer or stockholder of the Corporation solely, by reason of the fact that SolarWinds, any Investor or any Exempted Person pursues or acquires such business opportunity, sells, assigns, transfers or directs such business opportunity, or information regarding such business opportunity, to the Corporation or any of its Affiliated Companies. For the avoidance of doubt, any member of SolarWinds, the Investors and its Exempted Persons shall have the right to, and shall have no duty (whether contractual or otherwise) not to, directly or indirectly: (A) engage in the same, similar or competing business activities or lines of business as the Corporation or its Affiliated Companies, (B) do business with any client or customer of the Corporation or its Affiliated Companies, or (C) make investments in competing businesses of the Corporation or its Affiliated Companies, and such acts shall not be deemed wrongful or improper.
C.    In addition to and notwithstanding the foregoing provisions of this Article IX, the Corporation renounces any interest or expectancy of the Corporation or any of its Affiliated Companies in, or in being offered an opportunity to participate in, any business opportunity that the Corporation is not financially able or contractually permitted or legally able to undertake. Moreover, nothing in this Article IX shall amend or modify in any respect any written contractual agreement between SolarWinds or any Investor on one hand and the Corporation or any of its Affiliated Companies on the other hand.
D.    For purposes of this Article IX, “Affiliated Companies” means any companies controlled by the Corporation.
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E.    Notwithstanding anything to the contrary elsewhere contained in this Certificate and in addition to any vote required by law: (i) the affirmative vote of the holders of at least 80% of the voting power of all shares of Common Stock then outstanding, voting together as a single class, shall be required to alter, amend or repeal, or to adopt any provision inconsistent with, this Article IX; provided however, that neither the alteration, amendment or repeal of this Article IX nor the adoption of any provision of this Certificate inconsistent with this Article IX shall apply to or have any effect on the liability or alleged liability of any Exempted Person for or with respect to any activities or opportunities which such Exempted Person becomes aware prior to such alteration, amendment, repeal or adoption.
F.    Any person or entity purchasing or otherwise acquiring or obtaining any interest in any capital stock of the Corporation shall be deemed to have notice and to have consented to the provisions of this Article IX.
G.    To the extent that any provision or part of any provision of this Article IX is found to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of any other provision or part of any other provision of this Article IX, and this Article IX shall be construed in all respects as if such invalid or enforceable provisions or parts were omitted.
Article X
A.    The Corporation hereby expressly elects not to be governed by Section 203 of the DGCL.
B.    Notwithstanding any other provision in this Certificate to the contrary, the Corporation shall not engage in any Business Combination (as defined hereinafter) with any Interested Stockholder (as defined hereinafter) for a period of three years following the time that such stockholder became an Interested Stockholder, unless:
(i)    prior to such time the Board of Directors approved either the Business Combination or the transaction which resulted in such stockholder becoming an Interested Stockholder;
(ii)    upon consummation of the transaction which resulted in such stockholder becoming an Interested Stockholder, such stockholder owned at least 85% of the Voting Stock (as defined hereafter) of the Corporation outstanding at the time the transaction commenced, excluding for purposes of determining the Voting Stock outstanding (but not the outstanding Voting Stock owned by such Interested Stockholder) those shares owned (a) by Persons (as defined hereinafter) who are directors and also officers of the Corporation and (b) employee stock plans of the Corporation in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
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(iii)    at or subsequent to such time the Business Combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least sixty-six and two-thirds percent (66-2/3%) of the outstanding Voting Stock which is not owned by such Interested Stockholder.
C.    The restrictions contained in this Article X shall not apply if:
(i)    a stockholder becomes an Interested Stockholder inadvertently and (i) as soon as practicable divests itself of ownership of sufficient shares so that the stockholder ceases to be an Interested Stockholder; and (ii) would not, at any time within the threeyear period immediately prior to a Business Combination between the Corporation and such stockholder, have been an Interested Stockholder but for the inadvertent acquisition of ownership; or
(ii)    the Business Combination is proposed prior to the consummation or abandonment of and subsequent to the earlier of the public announcement or the notice required hereunder of a proposed transaction which (a) constitutes one of the transactions described in the second sentence of this Section C(ii) of this Article X; (b) is with or by a Person who either was not an Interested Stockholder during the previous three years or who became an Interested Stockholder with the approval of the Board of Directors; and (c) is approved or not opposed by a majority of the directors then in office (but not less than one) who were directors prior to any Person becoming an Interested Stockholder during the previous three years or were recommended for election or elected to succeed such directors by a majority of such directors. The proposed transactions referred to in the preceding sentence are limited to (x) a merger or consolidation of the Corporation (except for a merger in respect of which, pursuant to Section 251(f) of the DGCL, no vote of the stockholders of the Corporation is required); (y) a sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majorityowned subsidiary of the Corporation (other than to any direct or indirect whollyowned subsidiary or to the Corporation) having an aggregate market value equal to 50% or more of either that aggregate market value of all of the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding Stock (as defined hereinafter) of the Corporation; or (z) a proposed tender or exchange offer for 50% or more of the outstanding Voting Stock of the Corporation. The Corporation shall give not less than 20 days’ notice to all Interested Stockholders prior to the consummation of any of the transactions described in clause (x) or (y) of the second sentence of this Section C(ii) of this Article X.
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D.    As used in this Article X only, and unless otherwise provided by the express terms of this Article X, the following terms shall have the meanings ascribed to them as set forth in this Section D of this Article X:
(i)    “Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another Person.
(ii)    “Associate,” when used to indicate a relationship with any Person, means (a) any corporation, partnership, unincorporated association or other entity of which such Person is a director, officer or partner, or is, directly or indirectly, the owner of 20% or more of any class of Voting Stock; (b) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of such Person, or any relative of such spouse, who has the same residence as such Person.
(iii)    “Business Combination” means:
(a)    any merger or consolidation of the Corporation (other than pursuant to Section 251(g), Section 253 or Section 267 of the DGCL) or any direct or indirect majorityowned subsidiary of the Corporation with (A) the Interested Stockholder, or (B) with any Person if the merger or consolidation is caused by the Interested Stockholder and as a result of such merger or consolidation Section B of this Article X is not applicable to the surviving entity.
(b)    any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a stockholder of the Corporation, to or with the Interested Stockholder, whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majorityowned subsidiary of the Corporation which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding Stock of the Corporation.
(c)    any transaction or series of transactions which results in the issuance or transfer by the Corporation or by any direct or indirect majorityowned subsidiary of the Corporation of 10% or more of any class or series of Stock of the Corporation or of such subsidiary to the Interested Stockholder, except: (A) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into Stock of the Corporation or
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any such subsidiary which securities were outstanding prior to the time that the Interested Stockholder became such; (B) pursuant to a merger under Section 251(g) or Section 253 or Section 267 of the DGCL; (C) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into Stock of the Corporation or any such subsidiary which security is distributed, pro rata to all holders of a class or series of Stock of the Corporation subsequent to the time the Interested Stockholder became such; or (D) pursuant to an exchange offer by the Corporation to purchase Stock made on the same terms to all holders of such Stock.
(iv)    “Control,” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of stock or other equity interests, by contract or otherwise. A Person who is the owner of 20% or more of the outstanding Voting Stock of any corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary; notwithstanding the foregoing, a presumption of control shall not apply where such Person holds Voting Stock, in good faith and not for the purpose of circumventing this Article X, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity;
(v)    “Interested Stockholder” means any Person (other than the Corporation and any direct or indirect majorityowned subsidiary of the Corporation) that (i) is the owner of 15% or more of the outstanding Voting Stock of the Corporation, or (ii) is an Affiliate or Associate of the Corporation and was the owner of 15% or more of the outstanding Voting Stock of the Corporation at any time within the threeyear period immediately prior to the date on which it is sought to be determined whether such Person is an Interested Stockholder, and the Affiliates and Associates of such Person. Notwithstanding anything in this Article X to the contrary, the term “Interested Stockholder” shall not include: (x) the Investors or any of their Affiliates or Associates, including any investment funds managed by the Investors, or any other Person with whom any of the foregoing are acting as a group or in concert for the purpose of acquiring, holding, voting or disposing of shares of Stock of the Corporation; (y) any Person who would otherwise be an Interested Stockholder because of a transfer, sale, assignment, conveyance, hypothecation, encumbrance, or other disposition of 5% or more of the outstanding Voting Stock of the Corporation (in one transaction or a series of transactions) by any party specified in the immediately preceding clause (x) to such Person;
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provided, however, that such Person was not an Interested Stockholder prior to such transfer, sale, assignment, conveyance, hypothecation, encumbrance, or other disposition; or (z) any Person whose ownership of shares in excess of the 15% limitation set forth herein is the result of action taken solely by the Corporation, provided that, for purposes of this clause (z), such Person shall be an Interested Stockholder if thereafter such Person acquires additional shares of Voting Stock of the Corporation, except as a result of further action by the Corporation not caused, directly or indirectly, by such Person;
(vi)    “Owner,” including the terms “own” and “owned,” when used with respect to any Stock, means a Person that individually or with or through any of its affiliates or associates beneficially owns such Stock, directly or indirectly; or has (A) the right to acquire such Stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the owner of Stock tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s Affiliates or Associates until such tendered Stock is accepted for purchase or exchange; or (B) the right to vote such Stock pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the owner of any Stock because of such Person’s right to vote such Stock if the agreement, arrangement or understanding to vote such Stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to 10 or more Persons; or has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in (B) of this Section D(vi) of Article X), or disposing of such Stock with any other Person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such Stock; provided, that, for the purpose of determining whether a Person is an Interested Stockholder, the Voting Stock of the Corporation deemed to be outstanding shall include Stock deemed to be owned by the Person through application of this definition of “owned” but shall not include any other unissued Stock of the Corporation which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise;
(vii)    “Person” means any individual, corporation, partnership, unincorporated association or other entity;
(viii)    “Stock” means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest;
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(ix)    “Voting Stock” means, with respect to any corporation, Stock of any class or series entitled to vote generally in the election of directors and, with respect to any entity that is not a corporation, any equity interest entitled to vote generally in the election of the governing body of such entity. Every reference to a percentage of Voting Stock shall refer to such percentage of the votes of such Voting Stock.
Article XI
The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws after the Trigger Date. Any adoption, amendment or repeal of the Bylaws by the Board of Directors shall require the approval of a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any resolution providing for adoption, amendment or repeal is presented to the Board of Directors). The stockholders shall also have power to adopt, amend or repeal the Bylaws. Subject to the rights of the holders of any series of Preferred Stock then outstanding, (i) prior to the Trigger Date, any adoption, amendment or repeal of the Bylaws shall be made solely by the affirmative vote of the holders of at least a majority in voting power of all the then outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class, and (ii) after the Trigger Date, any adoption, amendment or repeal of the Bylaws by the stockholders shall require, in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by this Certificate, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.
Article XII
Notwithstanding anything contained in this Certificate or the Bylaws to the contrary, and notwithstanding the fact that a lesser percentage or separate class vote may be specified by law or otherwise, but in addition to any affirmative vote of the holders of any particular class or series of the capital stock required by law or otherwise, (i) prior to the Trigger Date, this Certificate may be amended, altered, repealed or rescinded, in whole or in part, or any provision inconsistent therewith or herewith may be adopted, only by the affirmative vote of the holders of at least a majority in voting power of all the then outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class, and (ii) after the Trigger Date, the following provisions in this Certificate may be amended, altered, repealed or rescinded, in whole or in part, or any provision inconsistent therewith or herewith may be adopted, only by the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all the then outstanding shares of stock of the Corporation entitled to vote thereon, voting together as a single class, at a meeting of the Corporation’s stockholders called for that purpose: Article VI, Article VII, Article VIII, Article IX and Article X, Article XI and this Article XII.
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Article XIII
If any provision of this Certificate becomes or is declared on any ground by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Certificate, and the court will replace such illegal, void or unenforceable provision of this Certificate with a valid and enforceable provision that most accurately reflects the Corporation’s intent, in order to achieve, to the maximum extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Certificate shall be enforceable in accordance with its terms.
Article XIV
Unless the Corporation consents in writing otherwise, to the fullest extent permitted by law, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or stockholder (including a beneficial owner) of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers, employees or stockholders (including beneficial owners) arising pursuant to any provision of the DGCL, this Certificate or the Bylaws, or (iv) any action asserting a claim against the Corporation, its directors, officers, employees or stockholders (including beneficial owners) governed by the internal affairs doctrine. Further, unless the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States shall be the exclusive forum for the resolution of any claim or cause of action arising under the Securities Act of 1933, as amended.  This Article XIV shall not apply to claims brought pursuant to the Securities Exchange Act of 1934, as amended, or the rules and regulations promulgated thereunder, or any other claim for which the U.S. federal courts have exclusive jurisdiction.  Any person or entity purchasing or otherwise acquiring or holding any interest in any security of the Corporation shall be deemed to have notice of and consented to these provisions.
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IN WITNESS WHEREOF, N-able, Inc. has caused this Amended and Restated Certificate of Incorporation to be executed by [__], its [__] as of this [__] day of [__], 2021.
N-ABLE, INC.
By:
Name:
Title
[Signature Page to Amended and Restated Certificate of Incorporation of N-able, Inc.]
EX-3.2 4 n-ableform10x12baexhibitx32.htm EX-3.2 Document
Exhibit 3.2
FORM OF AMENDED AND RESTATED BYLAWS
OF
N-ABLE, INC.
Effective as of [__], 2021
ARTICLE I
CORPORATE OFFICES
1.1Registered Office. The address of the registered office of N-able, Inc. (the “Corporation”) in the State of Delaware, and the name of its registered agent at such address, shall be as set forth in the Corporation’s certificate of incorporation, as the same may be amended and/or restated from time to time (the “Certificate of Incorporation”)
1.2Other Offices. The Corporation may have an office or offices other than its registered office at such place or places, either within or outside the State of Delaware, as the Board of Directors of the Corporation (the “Board”) may from time to time determine or the business of the Corporation may require.
ARTICLE II
STOCKHOLDERS
2.1.Place of Meetings. All meetings of stockholders shall be held at such place (if any) within or without the State of Delaware as may be determined from time to time by the Board or, if not determined by the Board, by the Chairperson of the Board, the President or the Chief Executive Officer; provided that the Board may, in its sole discretion, determine that any meeting of stockholders shall not be held at any place but shall be held solely by means of remote communication in accordance with Section 2.13.
2.2.Annual Meeting. The annual meeting of stockholders for the election of directors and for the transaction of such other business as may properly be brought before the meeting shall be held on a date to be fixed by the Board at a time to be fixed by the Board and stated in the notice of the meeting.
2.3.Special Meetings. Subject to the Certificate of Incorporation, the Stockholders Agreement (as defined in the Certificate of Incorporation), the rights of the holders of any series of preferred stock then outstanding and to the requirements of applicable law, special meetings of the stockholders of the Corporation may be called only (i) by the Board acting pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board for adoption) or (ii) prior to the Trigger Date (as defined in the Certificate of Incorporation), by the Secretary of the Corporation at the request of the Investors (as defined in the Certificate of Incorporation) holding shares of capital stock of the Corporation then entitled to vote generally in the election of directors. Any business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of the meeting.
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2.4.Notice of Meetings.
(a)    Written notice of each meeting of stockholders, whether annual or special, shall be given not less than 10 nor more than 60 days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting as of the record date fixed by the Board for determining the stockholders entitled to notice of the meeting, except as otherwise provided herein or as required by law (meaning here and hereafter, as required from time to time by the Delaware General Corporation Law (the “DGCL”) or the Certificate of Incorporation. The notice of any meeting shall state the place, if any, date and hour of the meeting, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting. The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called.
(b)    Notice to stockholders shall be delivered in writing or in any other manner permitted by the DGCL. If mailed, such notice shall be delivered by postage prepaid envelope directed to each stockholder at such stockholder’s address as it appears in the records of the Corporation and shall be deemed given when deposited in the United States mail. Notice given by electronic transmission pursuant to this subsection shall be deemed given: (1) if by facsimile telecommunication, when directed to a facsimile telecommunication number at which the stockholder has consented to receive notice; (2) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (3) if by posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (4) if by any other form of electronic transmission, when directed to the stockholder. An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the Corporation that the notice has been given by personal delivery, by mail, or by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
(c)    Notice of any meeting of stockholders need not be given to any stockholder if waived by such stockholder either in a writing signed by such stockholder or by electronic transmission, whether such waiver is given before or after such meeting is held. If such a waiver is given by electronic transmission, the electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder.
2.5.Voting List. The officer who has charge of the stock ledger of the Corporation shall prepare, at least 10 days before each meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting; the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date, arranged in alphabetical order for each class of stock and showing the mailing address of each stockholder and the number of shares registered in the name of each stockholder. The Corporation shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least 10 days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, (b) during ordinary business hours at the principal place of business of the Corporation or (c) in any other manner provided by law. If the meeting is to be held at a place, the list shall be produced and kept at the time and place of the meeting during the whole time of the meeting, and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, such list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. The stock ledger shall be the only evidence as to the stockholders who are entitled to examine the list required by this Section 2.5 or to vote in person or by proxy at any meeting of stockholders.
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2.6.Quorum. Except as otherwise provided by law or these Bylaws, the holders of a majority of the shares of the capital stock of the Corporation entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business. Where a separate class vote by a class or classes or series is required, a majority of the shares of such class or classes or series present in person or represented by proxy shall constitute a quorum entitled to take action with respect to that vote on that matter.
2.7.Adjournments. Any meeting of stockholders may be adjourned to any other time and to any other place at which a meeting of stockholders may be held under these Bylaws by the chairperson of the meeting or, in the absence of such person, by any officer entitled to preside at or to act as secretary of such meeting, or by the holders of a majority of the shares of stock present or represented at the meeting and entitled to vote, although less than a quorum. When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the date, time and place, if any, thereof, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than 30 days after the date for which the meeting was originally noticed, or if the Board fixes a new record date for determining the stockholders entitled to vote at the adjourned meeting in accordance with Section 5.5, written notice of the place, if any, date and time of the adjourned meeting and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting, shall be given in conformity herewith. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting.
2.8.Voting and Proxies. Each stockholder shall have one vote for each share of stock entitled to vote held of record by such stockholder and a proportionate vote for each fractional share so held, unless otherwise provided by law or in the Certificate of Incorporation. Each stockholder of record entitled to vote at a meeting of stockholders may vote in person or may authorize any other person or persons to vote or act for such stockholder by a written proxy executed by the stockholder or the stockholder’s authorized agent or by an electronic transmission permitted by law and delivered to the Secretary of the Corporation. Any copy, facsimile transmission or other reliable reproduction of the writing or electronic transmission created pursuant to this section may be substituted or used in lieu of the original writing or electronic transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile transmission or other reproduction shall be a complete reproduction of the entire original writing or electronic transmission.
2.9.Action at Meeting.
(a)    At any meeting of stockholders for the election of one or more directors at which a quorum is present, the election shall be determined by a plurality of the votes cast by the stockholders entitled to vote at the election.
(b)    All other matters shall be determined by a majority in voting power of the shares present in person or represented by proxy and entitled to vote on the matter (or if there are two or more classes of stock entitled to vote as separate classes, then in the case of each such class, a majority of the shares of each such class present in person or represented by proxy and entitled to vote on the matter shall decide such matter), provided that a quorum is present, except when a different vote is required by express provision of law, the Certificate of Incorporation or these Bylaws.
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(c)    All voting, including on the election of directors, but excepting where otherwise required by law, may be by a voice vote; provided, that upon demand therefor by a stockholder entitled to vote or the stockholder’s proxy, a vote by ballot shall be taken. Each ballot shall state the name of the stockholder or proxy voting and such other information as may be required under the procedure established for the meeting. The Corporation may, and to the extent required by law, shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as an alternate inspector to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting may, and to the extent required by law, shall, appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath to faithfully execute the duties of inspector with strict impartiality and according to the best of his ability.
2.10.Stockholder Business (Other Than the Election of Directors).
(a)    Only such business (other than nominations for election of directors, which is governed by Section 3.16 of these Bylaws) shall be conducted as shall have been properly brought before an annual meeting. To be properly brought before an annual meeting, business must be either (i) brought in accordance with the Stockholders Agreement, (ii) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board, (iii) otherwise properly brought before the meeting by or at the direction of the Board, or (iv) otherwise properly brought before the meeting by a stockholder who (A) is a stockholder of record (and, with respect to any beneficial owner, if different, on whose behalf such business is proposed, only if such beneficial owner is the beneficial owner of shares of the Corporation) both at the time of giving the notice provided for in this Section 2.10 and at the time of the meeting, (B) is entitled to vote at the meeting and (C) has complied with the notice procedures set forth in this Section 2.10 as to such business. For any business to be properly brought before an annual meeting by a stockholder (other than nominations for election of directors, which is governed by Section 3.16 of these Bylaws), it must be a proper matter for stockholder action under the DGCL, and the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice shall be in writing and must be received at the Corporation’s principal executive offices not later than ninety (90) days nor earlier than one hundred twenty (120) days prior to the first anniversary of the date of the preceding year’s annual meeting as first specified in the Corporation’s notice of meeting (without regard to any postponements or adjournments of such meeting after such notice was first sent), provided, however, that if no annual meeting was held in the previous year or the date of the annual meeting is advanced by more than thirty (30) days, or delayed (other than as a result of adjournment) by more than thirty (30) days from the anniversary of the previous year’s annual meeting, notice by the stockholder to be timely must be received not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the date on which public announcement of the date of such meeting is first made. “Public announcement” for purposes hereof shall have the meaning set forth in Section 3.16(c) of these Bylaws. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. For business to be properly brought before a special meeting by a stockholder, the business must be limited to the purpose or purposes set forth in a request under Section 2.3.
(b)    A stockholder’s notice to the Secretary of the Corporation shall set forth (i) as to each matter the stockholder proposes to bring before the annual meeting, a brief description of the business desired to be brought before the annual meeting and the text of the proposal or business, including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws of the Corporation, the language of the proposed amendment,
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and (ii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is being made, and any of their respective affiliates or associates (each within the meaning of Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or others acting in concert therewith (each, a “Proposing Person”), (A) the name and address, as they appear on the Corporation’s books, of the stockholder proposing such business and of any other Proposing Person, (B) the class or series and number of shares of the Corporation which are owned beneficially and of record by the stockholder and any other Proposing Person as of the date of the notice, and a representation that the stockholder will notify the Corporation in writing within five (5) business days after the record date for voting at the meeting of the class or series and number of shares of the Corporation owned beneficially and of record by the stockholder and any other Proposing Person as of the record date for voting at the meeting, (C) a representation that the stockholder intends to appear in person or by proxy at the meeting to propose the business specified in the notice, (D) any material interest of the stockholder and any other Proposing Person in such business, (E) the following information regarding the ownership interests of the stockholder and any other Proposing Person which shall be supplemented in writing by the stockholder not later than ten (10) days after the record date for voting at the meeting to disclose such interests as of such record date: (1) a description of any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, any derivative or synthetic arrangement having the characteristics of a long position in any class or series of shares of the Corporation, or any contract, derivative, swap or other transaction or series of transactions designed to produce economic benefits and risks that correspond substantially to the ownership of any class or series of shares of the Corporation, including due to the fact that the value of such contract, derivative, swap or other transaction or series of transactions is determined by reference to the price, value or volatility of any class or series of shares of the Corporation, whether or not such instrument, contract or right shall be subject to settlement in the underlying class or series of shares of the Corporation, through the delivery of cash or other property, or otherwise, and without regard to whether the stockholder of record or any other Proposing Person may have entered into transactions that hedge or mitigate the economic effect of such instrument, contract or right (a “Derivative Instrument”) directly or indirectly owned beneficially by such stockholder or other Proposing Person, and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation; (2) a description of any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder or other Proposing Person has a right to vote any shares of any security of the Corporation; (3) a description of any agreement, arrangement, understanding, relationship or otherwise, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly, by such stockholder or other Proposing Person, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of the shares of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such stockholder or other Proposing Person with respect to any class or series of the shares of the Corporation, or which provides, directly or indirectly, the opportunity to profit or share in any profit derived from any decrease in the price or value of any class or series of the shares of the Corporation (“Short Interests”); (4) a description of any rights to dividends on the shares of the Corporation owned beneficially by such stockholder or other Proposing Person that are separated or separable from the underlying shares of the Corporation; (5) a description of any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder or other Proposing Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner; (6) a description of any performance-related fees (other than an asset-based fee) to which such stockholder or other Proposing Person is entitled based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the
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date of such notice, including, without limitation, any such interests held by members of such stockholder’s or other Proposing Person’s immediate family sharing the same household; (7) a description of any significant equity interests or any Derivative Instruments or Short Interests in any principal competitor of the Corporation held by such stockholder or other Proposing Person; and (8) a description of any direct or indirect interest of such stockholder or other Proposing Person in any contract with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement), and (F) any other information relating to such stockholder or other Proposing Person, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder.
(c)    Unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders to present the proposed business, such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this section, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or authorized by a writing executed by such stockholder (or a reliable reproduction or electronic transmission of the writing) delivered to the Corporation prior to the making of such proposal at such meeting by such stockholder stating that such person is authorized to act for such stockholder as proxy at the meeting of stockholders.
(d)    Notwithstanding the foregoing provisions of this Section 2.10, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.10; provided however, that any references in this Section 2.10 to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to proposals as to any business to be considered pursuant to this Section 2.10. Nothing in this Section 2.10 shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of preferred stock if and to the extent provided for under law, the Certificate of Incorporation or these Bylaws.
(e)    Notwithstanding any provisions to the contrary, the notice requirements set forth in subsections (a) and (b) above shall be deemed satisfied by a stockholder if the stockholder has notified the Corporation of the stockholder’s intention to present a proposal at an annual meeting in compliance with applicable rules and regulations promulgated under the Exchange Act and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting.
2.11.Conduct of Business. At every meeting of the stockholders, the Chairperson of the Board, or, in his absence, the Chief Executive Officer, or, in his absence, such other person as may be appointed by the Board, shall act as chairperson. The Secretary of the Corporation or a person designated by the chairperson of the meeting shall act as secretary of the meeting. Unless otherwise approved by the chairperson of the meeting, attendance at the stockholders’ meeting is restricted to stockholders of record, persons authorized in accordance with Section 2.8 of these Bylaws to act by proxy, and officers of the Corporation.
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The chairperson of the meeting shall call the meeting to order, establish the agenda, and conduct the business of the meeting in accordance therewith or, at the chairperson’s discretion, the business of the meeting may be conducted otherwise in accordance with the wishes of the stockholders in attendance. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting.
The chairperson shall also conduct the meeting in an orderly manner, rule on the precedence of, and procedure on, motions and other procedural matters, and exercise discretion with respect to such procedural matters with fairness and good faith toward all those entitled to take part. Without limiting the foregoing, the chairperson may (a) restrict attendance at any time to bona fide stockholders of record and their proxies and other persons in attendance at the invitation of the presiding officer or Board, (b) restrict use of audio or video recording devices at the meeting, and (c) impose reasonable limits on the amount of time taken up at the meeting on discussion in general or on remarks by any one stockholder. Should any person in attendance become unruly or obstruct the meeting proceedings, the chairperson shall have the power to have such person removed from the meeting. Notwithstanding anything in the Bylaws to the contrary, no business shall be conducted at a meeting except in accordance with the procedures set forth in Section 2.10, this Section 2.11 and Section 3.16. The chairperson of the meeting, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the provisions of Section 2.10, this Section 2.11 and Section 3.16, and if he should so determine that any proposed nomination or business is not in compliance with such sections, he shall so declare to the meeting that such defective nomination or proposal shall be disregarded.
2.12.Stockholder Action Without Meeting. Any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote only to the extent permitted by and in the manner provided in the Certificate of Incorporation and in accordance with applicable law.
2.13.Meetings by Remote Communication. If authorized by the Board, and subject to such guidelines and procedures as the Board may adopt, stockholders and proxy holders not physically present at a meeting of stockholders may, by means of remote communication, participate in the meeting and be deemed present in person and vote at the meeting, whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (a) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (b) the Corporation shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (c) if any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.
ARTICLE III
BOARD OF DIRECTORS
3.1General Powers. The business and affairs of the Corporation shall be managed by or under the direction of a Board, who may exercise all of the powers of the Corporation except as otherwise provided by law or the Certificate of Incorporation. In the event of a vacancy on the Board, the remaining directors, except as otherwise provided by law, may exercise the powers of the full Board until the vacancy is filled.
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3.2Election. Subject to the rights of the holders of any series of preferred stock to elect directors under specified circumstances, the Certificate of Incorporation and the Stockholders Agreement, members of the Board shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors; provided that, whenever the holders of any class or series of capital stock of the Corporation are entitled to elect one or more directors pursuant to the provisions of the Certificate of Incorporation (including, but not limited to, any duly authorized certificate of designation), such directors shall be elected by a plurality of the votes of such class or series present in person or represented by proxy at the meeting and entitled to vote in the election of such directors. Elections of directors need not be by written ballot.
3.3Number and Term.  Subject to the rights of the holders of any series of preferred stock to elect directors under specified circumstances, the Certificate of Incorporation and the Stockholders Agreement, the number of directors shall initially be seven (7) and, thereafter, shall be fixed from time to time exclusively by the Board pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board for adoption).
3.4Resignations. Any director may resign at any time upon notice given in writing or by electronic transmission to the Board, the Chairperson of the Board, the Chief Executive Officer of the Corporation or the Secretary. The resignation shall take effect at the time specified therein, and if no time is specified, at the time of its receipt. The acceptance of a resignation shall not be necessary to make it effective unless otherwise expressly provided in the resignation.
3.5Removal. Subject to the rights of the holders of any series of preferred stock to elect directors under specified circumstances, the Certificate of Incorporation and the Stockholders Agreement, directors may only be removed for cause and only upon the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.
3.6Vacancies and Newly Created Directorships. Except as otherwise provided by applicable law, vacancies occurring in any directorship (whether by death, resignation, retirement, disqualification, removal or other cause) and newly created directorships resulting from any increase in the number of directors shall be filled in accordance with the Certificate of Incorporation and the Stockholders Agreement. Any director elected to fill a vacancy or newly created directorship shall hold office until the next election of the class for which such director shall have been chosen and until his or her successor shall be duly elected and qualified, or until his or her earlier death, resignation, retirement, disqualification or removal.
3.7Regular Meetings. Regular meetings of the Board may be held without notice at such time and place, either within or without the State of Delaware, as shall be determined from time to time by the Board; provided that any director who is absent when such a determination is made shall be given notice of the determination. A regular meeting of the Board may be held without notice immediately after and at the same place as the annual meeting of stockholders.
3.8Special Meetings. Special meetings of the Board may be called by the Chairperson of the Board, the Chief Executive Officer, the President or two or more directors then in office and may be held at any time and place, within or without the State of Delaware.
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3.9Notice of Special Meetings. Notice of any special meeting of directors shall be given to each director by whom it is not waived by the Secretary or by the officer or one of the directors calling the meeting. Notice shall be duly given to each director by (a) giving notice to such director in person or by telephone, electronic transmission or voice message system at least 24 hours in advance of the meeting, (b) sending a facsimile to such director’s last known facsimile number, or delivering written notice by hand to such director’s last known business or home address, at least 24 hours in advance of the meeting, or (c) mailing written notice to such director’s last known business or home address at least three days in advance of the meeting. A notice or waiver of notice of a meeting of the Board need not specify the purposes of the meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.
3.10Participation in Meetings by Telephone Conference Calls or Other Methods of Communication. Directors or any members of any committee designated by the directors may participate in a meeting of the Board or such committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting.
3.11Quorum; Adjournment. A majority of the total number of authorized directors shall constitute a quorum at any meeting of the Board. In the absence of a quorum at any such meeting, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present. Interested directors may be counted in determining the presence of a quorum at a meeting of the Board or at a meeting of a committee which authorizes a particular contract or transaction.
3.12Action at Meeting. At any meeting of the Board at which a quorum is present, the vote of a majority of those present shall be sufficient to take any action, unless a different vote is specified by law, the Certificate of Incorporation or these Bylaws.
3.13Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board or of any committee of the Board may be taken without a meeting if all members of the Board or committee, as the case may be, consent to the action in writing or by electronic transmission, and the writings or electronic transmissions are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
3.14Committees. The Board may designate one or more committees, each committee to consist of one or more of the directors of the Corporation in accordance with the Stockholder Agreement, with such lawfully delegated powers and duties as it therefor confers; provided that, the committee membership of each committee designated by the Board will comply with the applicable rules of the exchange on which any securities of the Corporation are listed. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members of the committee present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board and subject to the provisions of the DGCL, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each such committee shall keep minutes and make such reports as the Board may from time to
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time request. Except as the Board may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by such rules, its business shall be conducted as nearly as possible in the same manner as is provided in these Bylaws for the Board. Unless otherwise provided in the Certificate of Incorporation, these Bylaws or the resolutions of the Board designating the committee, a committee may create one or more subcommittees, each subcommittee consists of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.
3.15Compensation of Directors. Directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Board may from time to time determine. No such payment shall preclude any director from serving the Corporation or any of its parent or subsidiary Corporations in any other capacity and receiving compensation for such service.
3.16Nomination of Director Candidates.
(a)    Subject to the rights of holders of any class or series of preferred stock then outstanding, nominations for the election of directors at an annual meeting may be made (i) as provided in the Stockholders Agreement, (ii) by the Board or a duly authorized committee thereof or (iii) by any stockholder of the Corporation who is a stockholder of record at the time of giving the notice provided for in paragraphs (b) and (c) of this Section 3.16, who is entitled to vote at the meeting and who complies with the procedures set forth in this Section 3.16.
(b)    All nominations by stockholders must be made pursuant to timely notice given in writing to the Secretary of the Corporation. To be timely, a stockholder’s nomination for a director to be elected at an annual meeting must be received at the Corporation’s principal executive offices not later than ninety (90) days nor earlier than one hundred twenty (120) days prior to the first anniversary of the date of the preceding year’s annual meeting as first specified in the Corporation’s notice of meeting (without regard to any postponements or adjournments of such meeting after such notice was first sent), provided, however, that if no annual meeting was held in the previous year or the date of the annual meeting is advanced by more than thirty (30) days or delayed (other than as a result of adjournment) by more than thirty (30) days from the first anniversary of the previous year’s annual meeting, notice by the stockholder to be timely must be received not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the date on which public announcement of the date of such meeting is first made. Each such notice shall set forth (i) as to the stockholder and the beneficial owner, if any, on whose behalf the nomination is being made, and any of their respective affiliates or associates or others acting in concert therewith (each, a “Nominating Person”), the name and address, as they appear on the Corporation’s books, of the stockholder who intends to make the nomination and of any other Nominating Person, (ii)  the class or series and number of shares of the Corporation which are owned beneficially and of record by the stockholder and any other Nominating Person as of the date of the notice, and a representation that the stockholder will notify the Corporation in writing within five (5) business days after the record date for voting at the meeting of the class or series and number of shares of the Corporation owned beneficially and of record by the stockholder and any other Nominating Person as of the record date for voting at the meeting, (iii) a representation that the stockholder intends to appear in person or by proxy at the meeting to nominate the nominee specified in the notice, (iv) the following information regarding the ownership interests of the stockholder and any other Nominating Person, which shall be supplemented in writing by the stockholder not later than ten (10) days after the record date for notice of the meeting to disclose such interests as of such record date: (A) a description of any Derivative Instrument directly or indirectly owned beneficially by such stockholder or other Nominating Person, and any other direct or indirect
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opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation; (B) a description of any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder or other Nominating Person has a right to vote any shares of any security of the Corporation; (C) a description of any Short Interests in any securities of the Corporation directly or indirectly owned beneficially by such stockholder or other Nominating Person; (D) a description of any rights to dividends on the shares of the Corporation owned beneficially by such stockholder or other Nominating Person that are separated or separable from the underlying shares of the Corporation; (E) a description of any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder or other Nominating Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner; (F) a description of any performance-related fees (other than an asset-based fee) to which such stockholder or other Nominating Person is entitled based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice, including, without limitation, any such interests held by members of such stockholder’s or other Nominating Person’s immediate family sharing the same household; (G) a description of any significant equity interests or any Derivative Instruments or Short Interests in any principal competitor of the Corporation held by such stockholder or other Nominating Person; and (H) a description of any direct or indirect interest of such stockholder or other Nominating Person in any contract with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement), (v) a description of all arrangements or understandings between the stockholder or other Nominating Person and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder, (vi) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder and any other Nominating Person, on the one hand, and each nominee, and his respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the stockholder and any Nominating Person, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant, (vii) such other information regarding each nominee as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC, had the nominee been nominated, or intended to be nominated, by the Board, and (viii) the signed consent of each nominee to serve as a director of the Corporation if so elected. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. Notwithstanding the second sentence of this Section 3.16(b), in the event that the number of directors to be elected at an annual meeting is increased and there is no public announcement by the Corporation naming the nominees for the additional directorships at least 100 days prior to the one-year anniversary of the date of the preceding year’s annual meeting as first specified in the Corporation’s notice of meeting (without regard to any postponements or adjournments of such meeting after such notice was first sent), a stockholder’s notice required by this Section 3.16(b) shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.
(c)    Subject to the rights of holders of any class or series of preferred stock then outstanding, the Certificate of Incorporation, and the terms of the Stockholders Agreement, nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be
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elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board or a committee thereof or (ii) by any stockholder who complies with the notice procedures set forth in this Section 3.16 and who is a stockholder of record at the time such notice is delivered to the Secretary of the Corporation. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as are specified in the Corporation’s notice of meeting, if the stockholder’s notice as required by Section 3.16(a) is delivered to the Secretary at the principal executive offices of the Corporation not earlier than ninety (90) days prior to such special meeting and not later than the close of business on the later of the sixtieth (60th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(d)    For purposes of these Bylaws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed or furnished by the Corporation with the SEC pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(e)    Only those persons who are nominated in accordance with the procedures set forth in this section or the Stockholders Agreement shall be eligible for election as directors at any meeting of stockholders. The Chairperson of the Board or Secretary may, if the facts warrant, determine that a notice received by the Corporation relating to a nomination proposed to be made does not satisfy the requirements of this Section 3.16 (including if the stockholder does not provide the updated information required under Section 3.16(b) to the Corporation within five (5) business days following the record date for the meeting), and if it be so determined, shall so declare and any such nomination shall not be introduced at such meeting of stockholders, notwithstanding that proxies in respect of such vote may have been received. The chairperson of the meeting shall have the power and duty to determine whether a nomination brought before the meeting was made in accordance with the procedures set forth in this section, and, if any nomination is not in compliance with this section (including if the stockholder does not provide the updated information required under Section 3.16(b) to the Corporation within five (5) business days following the record date for the meeting), to declare that such defective nomination shall be disregarded, notwithstanding that proxies in respect of such vote may have been received. Unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting or a special meeting of stockholders of the Corporation to present a nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 3.16, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or authorized by a writing executed by such stockholder (or a reliable reproduction or electronic transmission of the writing) delivered to the Corporation prior to the making of such nomination at such meeting by such stockholder stating that such person is authorized to act for such stockholder as proxy at the meeting of stockholders.
(f)    Notwithstanding the foregoing provisions of this Section 3.16, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 3.16; provided however, that any references in this Section 3.16 to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations to be considered pursuant to this Section 3.16. Nothing in this Section 3.16 shall be deemed to affect any rights of the holders of any series of preferred stock if and to the extent provided for under law, the Certificate of Incorporation or these Bylaws.
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3.17Reliance on Books and Records. A member of the Board, or a member of any committee designated by the Board shall, in the performance of such members’ duties, be fully protected in relying in good faith upon records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees of the Board, or by any other person as to matters the member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
ARTICLE IV
OFFICERS
4.1Enumeration. The officers of the Corporation shall consist of a Chief Executive Officer, a President, a Secretary, a Treasurer, a Chief Financial Officer and such other officers with such other titles as the Board shall determine, including, at the discretion of the Board, a Chairperson of the Board and one or more Vice Presidents and Assistant Secretaries. The Board may appoint such other officers as it may deem appropriate.
4.2Election. Officers shall be elected annually by the Board at its first meeting following the annual meeting of stockholders. Officers may be appointed by the Board at any other meeting.
4.3Qualification. No officer need be a stockholder. Any two or more offices may be held by the same person.
4.4Tenure. Except as otherwise provided by law, by the Certificate of Incorporation or by these Bylaws, each officer shall hold office until such officer’s successor is elected and qualified, unless a different term is specified in the vote appointing the officer, or until such officer’s earlier death, resignation or removal.
4.5Resignation and Removal. Any officer may resign by delivering his written resignation to the Corporation at its principal office or to the President or Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event. Any officer elected by the Board may be removed at any time, with or without cause, by the Board.
4.6Chairperson of the Board. The Board may appoint a Chairperson of the Board. If the Board appoints a Chairperson of the Board, the Chairperson of the Board shall perform such duties and possess such powers as are assigned to the Chairperson by the Board and these Bylaws. Unless otherwise provided by the Board, the Chairperson of the Board shall preside at all meetings of the Board.
4.7Chief Executive Officer. The Chief Executive Officer of the Corporation shall, subject to the direction of the Board, have general supervision, direction and control of the business and the officers of the Corporation. The Chief Executive Officer shall preside at all meetings of the stockholders and, in the absence or nonexistence of a Chairperson of the Board, at all meetings of the Board. The Chief Executive Officer shall have the general powers and duties of management usually vested in the chief executive officer of a Corporation, including general supervision, direction and control of the business and supervision of other officers of the Corporation, and shall have such other powers and duties as may be prescribed by the Board or these Bylaws.
4.8President. Subject to the direction of the Board and such supervisory powers as may be given by these Bylaws or the Board to the Chairperson of the Board or the Chief Executive Officer, if
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such titles be held by other officers, the President shall have general supervision, direction and control of the business and supervision of other officers of the Corporation. Unless otherwise designated by the Board, the President shall be the Chief Executive Officer of the Corporation. The President shall have such other powers and duties as may be prescribed by the Board or these Bylaws. The President shall have power to sign stock certificates, contracts and other instruments of the Corporation which are authorized and shall have general supervision and direction of all of the other officers, employees and agents of the Corporation, other than the Chairperson of the Board and the Chief Executive Officer.
4.9Vice Presidents. Any Vice President shall perform such duties and possess such powers as the Board, the Chief Executive Officer or the President may from time to time prescribe. In the event of the absence, inability or refusal to act of the President, the Vice President (or if there shall be more than one, the Vice Presidents in the order determined by the Board) shall perform the duties of the President and when so performing shall have all the powers of and be subject to all the restrictions upon the President. The Board may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title selected by the Board.
4.10Secretary and Assistant Secretaries. The Secretary shall perform such duties and shall have such powers as the Board or the President may from time to time prescribe. In addition, the Secretary shall perform such duties and have such powers as are set forth in these Bylaws and as are incident to the office of the Secretary, including, without limitation, the duty and power to give notices of all meetings of stockholders and special meetings of the Board, to keep a record of the proceedings of all meetings of stockholders and the Board, to maintain a stock ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix and attest to the same on documents.
Any Assistant Secretary shall perform such duties and possess such powers as the Board, the Chief Executive Officer, the President or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assistant Secretary (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board) shall perform the duties and exercise the powers of the Secretary.
In the absence of the Secretary or any Assistant Secretary at any meeting of stockholders or directors, the person presiding at the meeting shall designate a temporary secretary to keep a record of the meeting.
4.11Treasurer. The Treasurer shall perform such duties and have such powers as are incident to the office of treasurer, including without limitation, the duty and power to keep and be responsible for all funds and securities of the Corporation, to maintain the financial records of the Corporation, to deposit funds of the Corporation in depositories as authorized, to disburse such funds as authorized, to make proper accounts of such funds, and to render as required by the Board accounts of all such transactions and of the financial condition of the Corporation.
4.12Chief Financial Officer. The Chief Financial Officer shall perform such duties and shall have such powers as may from time to time be assigned to the Chief Financial Officer by the Board, the Chief Executive Officer or the President. Unless otherwise designated by the Board, the Chief Financial Officer shall be the Treasurer of the Corporation.
4.13Salaries. Officers of the Corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed from time to time by the Board.
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4.14Delegation of Authority. The Board may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof.
ARTICLE V
Capital Stock
6.1Issuance of Stock. Subject to the provisions of the Certificate of Incorporation, the whole or any part of any unissued balance of the authorized capital stock of the Corporation or the whole or any part of any unissued balance of the authorized capital stock of the Corporation held in its treasury may be issued, sold, transferred or otherwise disposed of by vote of the Board in such manner, for such consideration and on such terms as the Board may determine.
6.2Stock Certificates. The shares of stock of the Corporation shall be represented by certificates, provided that the Board may provide by resolution or resolutions that some or all of any class or series of stock of the Corporation shall be uncertificated shares; provided, however, that no such resolution shall apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Every holder of stock of the Corporation represented by certificates, and, upon written request to the Corporation’s transfer agent or registrar, any holder of uncertificated shares, shall be entitled to have a certificate, in such form as may be prescribed by law and by the Board, certifying the number and class of shares of stock owned by such stockholder in the Corporation. Each such certificate shall be signed by, or in the name of the Corporation by, the Chairperson or Vice Chairperson, if any, of the Board, or the President or a Vice President, and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation. Any or all of the signatures on the certificate may be a facsimile.
Each certificate for shares of stock which are subject to any restriction on transfer pursuant to the Certificate of Incorporation, the Bylaws, applicable securities laws or any agreement among any number of stockholders or among such holders and the Corporation shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restriction.
6.3Transfers. Except as otherwise established by rules and regulations adopted by the Board, and subject to applicable law, shares of stock may be transferred on the books of the Corporation: (i) in the case of shares represented by a certificate, by the surrender to the Corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or authenticity of signature as the Corporation or its transfer agent may reasonably require; and (ii) in the case of uncertificated shares, upon the receipt of proper transfer instructions from the registered owner thereof. Except as may be otherwise required by law, the Certificate of Incorporation or the Bylaws, the Corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to such stock, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the Corporation in accordance with the requirements of these Bylaws.
6.4Lost, Stolen or Destroyed Certificates. The Corporation may issue a new certificate in place of any previously issued certificate alleged to have been lost, stolen, or destroyed, or it may issue uncertificated shares if the shares represented by such certificate have been designated as uncertificated shares in accordance with Section 5.2, upon such terms and conditions as the Board may prescribe, including the presentation of reasonable evidence of such loss, theft or destruction and the giving of such
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indemnity as the Board may require for the protection of the Corporation or any transfer agent or registrar.
6.5Record Dates. The Board may fix in advance a record date for the determination of the stockholders entitled to vote at any meeting of stockholders. Such record date shall not precede the date on which the resolution fixing the record date is adopted and shall not be more than 60 nor less than 10 days before the date of such meeting.
If no record date is fixed by the Board, the record date for determining the stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the day before the date on which notice is given, or, if notice is waived, the close of business on the day before the date on which the meeting is held.
A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for the determination of stockholders entitled to vote in accordance with the foregoing provisions.
The Board may fix in advance a record date (a) for the determination of stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights in respect of any change, concession or exchange of stock, or (b) for the purpose of any other lawful action. Any such record date shall not precede the date on which the resolution fixing the record date is adopted and shall not be more than 60 days prior to the action to which such record date relates. If no record date is fixed by the Board, the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting when no prior action by the Board is necessary shall be the date on which the first written consent is expressed. The record date for determining stockholders for any other purpose shall be the close of business on the day on which the Board adopts the resolution relating to such purpose.
ARTICLE VI
General Provisions
6.1Fical Year. The fiscal year of the Corporation shall be as fixed by the Board.
6.2Waiver of Notice. Whenever any notice whatsoever is required to be given by law, by the Certificate of Incorporation or by these Bylaws, a waiver of such notice either in writing signed by the person entitled to such notice or such person’s duly authorized attorney, or by electronic transmission or any other method permitted under the DGCL, whether before, at or after the time stated in such waiver, or the appearance of such person or persons at such meeting in person or by proxy, shall be deemed equivalent to such notice. Neither the business nor the purpose of any meeting need be specified in such a waiver. Attendance at any meeting shall constitute waiver of notice except attendance for the sole purpose of objecting to the timeliness or manner of notice.
6.3Actions with Respect to Securities of Other Corporations. Except as the Board may otherwise designate, the Chief Executive Officer or President or any officer of the Corporation authorized by the Chief Executive Officer or President shall have the power to vote and otherwise act on behalf of the Corporation, in person or by proxy, and may waive notice of, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact to this Corporation (with or without power of substitution) at any meeting of stockholders or shareholders (or with respect to any action of stockholders) of any other
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Corporation or organization, the securities of which may be held by this Corporation and otherwise to exercise any and all rights and powers that this Corporation may possess by reason of this Corporation’s ownership of securities in such other Corporation or other organization.
6.4Evidence of Authority. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the stockholders, directors, a committee or any officer or representative of the Corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.
6.5Certificate of Incorporation. All references in these Bylaws to the Certificate of Incorporation shall be deemed to refer to the Certificate of Incorporation of the Corporation, as amended and in effect from time to time.
6.6Severability. Any determination that any provision of these Bylaws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these Bylaws.
6.7Pronouns. All pronouns used in these Bylaws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.
6.8Notices. Except as otherwise specifically provided herein or required by law, all notices required to be given to any stockholder, director, officer, employee or agent of the Corporation shall be in writing and may in every instance be effectively given by hand delivery to the recipient thereof, by depositing such notice in the mails, postage paid, or by sending such notice by commercial courier service, or by facsimile or other electronic transmission, provided that notice to stockholders by electronic transmission shall be given in the manner provided in Section 232 of the DGCL. Any such notice shall be addressed to such stockholder, director, officer, employee or agent at his, her or its last known address as the same appears on the books of the Corporation. The time when such notice shall be deemed to be given shall be the time such notice is received by such stockholder, director, officer, employee or agent, or by any person accepting such notice on behalf of such person, if delivered by hand, facsimile, other electronic transmission or commercial courier service, or the time such notice is dispatched, if delivered through the mails. Without limiting the manner by which notice otherwise may be given effectively, notice to any stockholder shall be deemed given: (a) if by facsimile, when directed to a number at which the stockholder has consented to receive notice; (b) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (c) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (i) such posting and (ii) the giving of such separate notice; (d) if by any other form of electronic transmission, when directed to the stockholder; and (e) if by mail, when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation.
6.9Reliance Upon Books, Reports and Records. Each director, each member of any committee designated by the Board, and each officer of the Corporation shall, in the performance of such individual’s duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation as provided by law, including reports made to the Corporation by any of its officers, by an independent certified public accountant, or by an appraiser selected with reasonable care.
6.10Time Periods. In applying any provision of these Bylaws which require that an act be done or not done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.
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6.11Facsimile Signatures. In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board or a committee thereof.
6.12Voting of Securities Owned by the Corporation. All stock and other securities of other Corporations owned or held by the Corporation for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the person authorized so to do by resolution of the Board, or, in the absence of such authorization, the Chief Executive Officer, the President, or any Vice President.
ARTICLE VII
Amendments
7.1By the Board. Except as otherwise set forth in these Bylaws, these Bylaws may be altered, amended or repealed or new Bylaws may be adopted only in accordance with Article XI of the Certificate of Incorporation.
7.2By the Stockholders. Except as otherwise set forth in these Bylaws, and subject to the Certificate of Incorporation and the Stockholders Agreement, these Bylaws may be altered, amended or repealed or new Bylaws may be adopted by the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the shares of capital stock of the Corporation issued and outstanding and entitled to vote generally in any election of directors, voting together as a single class.  Such vote may be held at any annual meeting of stockholders, or at any special meeting of stockholders provided that notice of such alteration, amendment, repeal or adoption of new Bylaws shall have been stated in the notice of such special meeting.
ARTICLE VIII
Indemnification of Directors and Officers
8.1Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (“proceeding”), by reason of the fact that such person or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of another Corporation, or as a controlling person of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director or officer, or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment) against all expenses, liability and loss reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of his heirs, executors and administrators; provided, that except as provided in Section 8.2 of this Article VIII, the Corporation shall indemnify any such person seeking indemnity in connection with a proceeding (or part thereof) initiated by such person only if (a) such indemnification is expressly required to be made by law, (b) the proceeding (or part thereof) was authorized by the Board, (c) such indemnification is provided by the Corporation, in its sole discretion, pursuant to the powers vested in the Corporation under the DGCL, or (d) the proceeding (or part thereof) is brought to establish or enforce a right to indemnification or advancement under an indemnity agreement or any other statute or law or otherwise as required under Section 145 of the DGCL. The rights hereunder shall be contract rights and shall include the right to be paid reasonable expenses and
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attorneys’ fees incurred in defending any such proceeding in advance of its final disposition; provided, that the payment of such expenses incurred by a director or officer of the Corporation in his capacity as a director or officer (and not in any other capacity in which service was or is tendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of such proceeding, shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it should be determined ultimately by final judicial decision from which there is no further right to appeal that such director or officer is not entitled to be indemnified under this section or otherwise.
8.2Right of Claimant to Bring Suit. If a claim under Section 8.1 is not paid in full by the Corporation within sixty (60) days after a written claim has been received by the Corporation, or twenty (20) days in the case of a claim for advancement of expenses, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if such suit is not frivolous or brought in bad faith, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, has been tendered to this Corporation) that the claimant has not met the standards of conduct which make it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed. Neither the failure of the Corporation (including its Board, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because the claimant has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. In any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final judicial decision from which there is no further right to appeal that the indemnitee has not met any applicable standard for indemnification set forth in the DGCL. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, shall be on the Corporation.
8.3Indemnification of Employees and Agents. The Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification, and to the advancement of related expenses, to any employee or agent of the Corporation to the fullest extent of the provisions of this Article VIII with respect to the indemnification of and advancement of expenses to directors and officers of the Corporation.
8.4Non-Exclusivity of Rights. The rights conferred on any person in this Article VIII shall not be exclusive of any other right which such persons may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
8.5Indemnification Contracts. The Board is authorized to enter into a contract with any director, officer, employee or agent of the Corporation, or any person serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise, including employee benefit plans, providing for indemnification rights equivalent to or, if the Board so determines, greater than, those provided for in this Article VIII.
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8.6Insurance. The Corporation shall maintain insurance to the extent reasonably available, at its expense, to protect itself and any such director, officer, employee or agent of the Corporation or another Corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.
8.7Effect of Amendment. Any amendment, repeal or modification of any provision of this Article VIII shall not adversely affect any right or protection of an indemnitee or his successor in respect of any act or omission occurring prior to such amendment, repeal or modification.
8.8Reliance. Persons who after the date of the adoption of this provision become or remain directors or officers of the Corporation or who, while a director or officer of the Corporation, become or remain a director, officer, employee or agent of a subsidiary, shall be conclusively presumed to have relied on the rights to indemnity, advance of expenses and other rights contained in this Article VIII in entering into or continuing such service. The rights to indemnification and to the advance of expenses conferred in this Article VIII shall apply to claims made against an indemnitee arising out of acts or omissions which occurred or occur both prior and subsequent to the adoption hereof.
*               *               *
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EX-4.1 5 n-ablexform10x12baxex41.htm EX-4.1 Document
Exhibit 4.1

FORM OF STOCKHOLDERS’ AGREEMENT
by and among
N-ABLE, INC.
and
THE STOCKHOLDERS NAMED HEREIN
Dated as of [ ], 2021



TABLE OF CONTENTS
1.EFFECTIVENESS; DEFINITIONS2
1.1Effective Time2
1.2Definitions2
2.CORPORATE GOVERNANCE2
2.1Board of Directors2
2.2Voting Agreement5
2.3Controlled Company6
2.4Special Meetings6
3.POST-DISTRIBUTION TRANSFERS6
3.1Restrictions on Transfer6
3.2Post-Distribution Sell-Downs7
3.3Permitted Transferees8
3.4Other Restrictions on Transfer9
4.PUBLIC OFFERING COOPERATION9
4.1Public Offering9
5.COVENANTS9
5.1Directors’ and Officers’ Insurance9
5.2Indemnification Agreements10
5.3Indemnification10
5.4Actions Requiring Approval of the Lead Investors11
5.5Other Business Opportunities; Company Charter; Company Bylaws13
5.6Information Rights13
5.7Affiliate Transactions14
5.8Acquisition of Shares15
5.9Notice of Lock-Up Release or Waiver15
5.10Confidentiality15
6.AMENDMENT, TERMINATION, ETC16
6.1Oral Modifications16
6.2Written Modifications16
6.3Effect of Termination16
7.DEFINITIONS17
7.1Certain Matters of Construction17
7.2Definitions17
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8.MISCELLANEOUS22
8.1Authority; Effect22
8.2Notices22
8.3Binding Effect, Etc23
8.4Descriptive Headings24
8.5Counterparts24
8.6Severability24
8.7No Recourse24
9.GOVERNING LAW24
9.1Governing Law24
9.2Consent to Jurisdiction; Venue; Service25
9.3WAIVER OF JURY TRIAL25
9.4Exercise of Rights and Remedies25
9.5Waiver of Sovereign Immunity26
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STOCKHOLDERS’ AGREEMENT
This Stockholders’ Agreement (the “Agreement”) is made as of [ ], 2021 by and among:
(i)    N-able, Inc., a Delaware corporation (the “Company”);
(ii)    Silver Lake Partners IV, L.P., a Delaware limited partnership (together with its Permitted Transferees, “SLP IV”), and Silver Lake Technology Investors IV, L.P., a Delaware limited partnership (collectively with SLP IV, and together with its Permitted Transferees, “Silver Lake”);
(iii)    Thoma Bravo Fund XI, L.P., a Delaware limited partnership (“TB Fund XI”), Thoma Bravo Fund XI-A, L.P., a Delaware limited partnership (“TB Fund XI-A”), Thoma Bravo Executive Fund XI, L.P., a Delaware limited partnership (“TB Exec Fund”), Thoma Bravo Special Opportunities Fund II, L.P., a Delaware limited partnership (“TB SOF II”), Thoma Bravo Special Opportunities Fund II-A, L.P., a Delaware limited partnership (“TB SOF II-A”), Thoma Bravo Fund XII, L.P., a Delaware limited partnership (“TB Fund XII”), Thoma Bravo Fund XII-A, L.P., a Delaware limited partnership (“TB Fund XII-A”), Thoma Bravo Executive Fund XII, L.P., a Delaware limited partnership (“TB Exec Fund XII”), and Thoma Bravo Executive Fund XII-A, L.P., a Delaware limited partnership (“TB Exec Fund XII-A” and, collectively with TB Fund XI, TB Fund XI-A, TB Exec Fund, TB SOF II, TB SOF II-A, TB Fund XII, TB Fund XII-A, TB Exec Fund XII-a, and together with their Permitted Transferees, “Thoma Bravo”);
(iv)    SLP Aurora Co-Invest L.P. (together with its Permitted Transferees, the “SL Co-Investor”);
(v)    Howard Hughes Medical Institute, AlpInvest Partners Co-Investments 2014 I C.V., AlpInvest Partners Co-Investments 2014 II C.V., AM 2014 CO C.V., AlpInvest GA CO C.V., SMRS-TOPE LLC, Meranti Fund L.P., HarbourVest Global Annual Private Equity Fund L.P., HarbourVest 2015 Global Fund L.P., HarbourVest Partners X Buyout Fund LP., HarbourVest Partners X AIF Buyout L.P., HarbourVest Partners IX-Buyout Fund L.P., NPS Co-Investment (A) Fund L.P., Lexington Co-Investment Holdings III, L.P., The Prudential Insurance Company of America, Prudential Legacy Insurance Company of New Jersey, Hermes USA Investors Venture II, LP, NB Crossroads XX - MC Holdings LP, NB Crossroads XXI - MC Holdings LP, NB Wildcats Fund LP, NB RP Co-Investment & Secondary Fund LLC, NB Sonoran Fund Limited Partnership, TFL Trustee Company Limited as Trustee of the TFL Pension Fund, NB - Iowa’s Public Universities LP, NB PEP Holdings Limited, Neuberger Berman Insurance Fund Series of the SALI Multi-Series Fund, L.P., and NB Strategic Co-Investment Partners II Holdings LP (each a “TB Co-Investor” and collectively, together with their Permitted Transferees, the “TB Co-Investors”); and
(vi)    the Persons who from time to time became party to the Original Agreement by executing a counterpart signature page thereto as a “Manager” (such Persons,



together with their Permitted Transferees, the “Managers” and, collectively with Silver Lake, Thoma Bravo, the SL Co-Investor, the TB Co-Investors and the Managers, the “Stockholders”).
RECITALS
WHEREAS, the parties hereto believe that it is in the best interests of the Company and the Stockholders to enter into this Agreement to set forth herein their agreements on certain matters relating to the governance of the Company and the rights and obligations of the Stockholders following the Distribution (as defined below).
NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1.    EFFECTIVENESS; DEFINITIONS.
1.1    Effective Time. This Agreement will become effective as of immediately prior to the Form 10 Effective Time (the “Effective Time”). This Agreement shall automatically terminate and be deemed null and avoid if the Distribution is not consummated on or before the tenth business day following the date of this Agreement.
1.2    Definitions. Certain terms are used in this Agreement as specifically defined herein. These definitions are set forth or referred to in Section 7 hereof.
2.    CORPORATE GOVERNANCE.
2.1    Board of Directors.
2.1.1    Size. On and after the Effective Time, the Board shall consist of seven (7) Directors; provided, that the Board shall further increase (a) the number of Independent Directors to the extent necessary to comply with applicable law and the Stock Exchange rules, or as otherwise agreed by the Board, subject to the rights of the Lead Investors under Section 5.4.7, or (b) the number of Directors as otherwise requested in writing by the Lead Investors.
2.1.2    Composition; Company Recommendation. Subject to Section 2.1.1, the rights of the Lead Investors to nominate Directors shall be as follows:
(a)    So long as the Aggregate Silver Lake Ownership continues to be (i) at least 20% of the aggregate number of outstanding shares of Common Stock immediately following the consummation of the Distribution, Silver Lake shall be entitled to nominate three Directors, (ii) less than 20% but at least 10% of the aggregate number of outstanding shares of Common Stock immediately following the consummation of the Distribution, Silver Lake shall be entitled to nominate two Directors and (iii) less than 10% but at least 5% of the aggregate number of outstanding shares of Common Stock immediately following the consummation of the Distribution, Silver Lake shall be entitled to nominate one Director. Each Director so nominated
2



may be referred to as a “Silver Lake Director”. Notwithstanding the foregoing, Silver Lake shall be entitled to nominate three Directors only if the total number of Directors (inclusive of the number of Directors nominated by Silver Lake and Thoma Bravo) exceeds seven Directors.
(b)    So long as the Aggregate Thoma Bravo Ownership continues to be (i) at least 20% of the aggregate number of outstanding shares of Common Stock immediately following the consummation of the Distribution, Thoma Bravo shall be entitled to nominate three Directors, (ii) less than 20% but at least 10% of the aggregate number of outstanding shares of Common Stock immediately following the consummation of the Distribution, Thoma Bravo shall be entitled to nominate two Directors and (iii) less than 10% but at least 5% of the aggregate number of outstanding shares of Common Stock immediately following the consummation of the Distribution, Thoma Bravo shall be entitled to nominate one Director. Each Director so nominated may be referred to as a “Thoma Bravo Director”. Notwithstanding the foregoing, Thoma Bravo shall be entitled to nominate three Directors only if the total number of Directors (inclusive of the number of Directors nominated by Silver Lake and Thoma Bravo) exceeds seven Directors.
(c)    The Company hereby agrees (i) to include the nominees of the Lead Investors nominated pursuant to this Section 2.1.2 as the nominees to the Board on each slate of nominees for election of the Board included in the Company’s annual meeting proxy statement (or consent solicitation or similar document), (ii) to recommend the election of such nominees to the stockholders of the Company and (iii) without limiting the foregoing, to otherwise use its reasonable best efforts to cause such nominees to be elected to the Board, including providing at least as high a level of support for the election of such nominees as it provides to any other individual standing for election as a director.
2.1.3    Nominations. With respect to any Director to be nominated by the applicable Lead Investor other than the initial Directors appointed in accordance with Section 2.1.2 or the then-serving Silver Lake Director(s) or Thoma Bravo Director(s), a Lead Investor shall nominate its Director(s) by delivering to the Company a written statement at least sixty (60) days prior to the one-year anniversary of the preceding annual meeting (or, in the case of the first annual meeting following the Distribution, at least sixty (60) days prior to the date of the annual meeting) which sets forth the names, business address, telephone number, facsimile number and e-mail address of such nominee(s); provided, that if a Lead Investor fails to deliver such written notice, such Lead Investor shall be deemed to have nominated the Director(s) previously nominated (or designated pursuant to this Section 2.1.3) by such Lead Investor who is/are currently serving on the Board.
2.1.4    Right to Delegate; Committees. The Company shall establish and maintain an audit committee of the Board (the “Audit Committee”), a compensation committee of the Board (the “Compensation Committee”), a nominating and corporate governance committee of the Board (the “Nominating Committee”), and such other Board committees as the Board deems appropriate from time to time or as may be required by applicable law or the Stock Exchange rules. The committees shall have such duties and responsibilities as are customary for such committees, subject to the provisions of this Agreement.
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(a)    No later than 90 days after the date of effectiveness of the Form 10 Registration Statement, the Audit Committee shall include one additional Independent Director. No later than the first anniversary of the effectiveness of the Form 10 Registration Statement, the Audit Committee shall consist of at least three Independent Directors (at least one of whom shall satisfy the “audit committee financial expert” requirements as such term is defined by Item 407(d)(5) of Regulation S-K). Subject to Section 2.1.4(d), for so long as the Company maintains the Audit Committee, it shall consist of at least one Silver Lake Director (but only if Silver Lake is then entitled to nominate at least one Silver Lake Director) and at least one Thoma Bravo Director (but only if Thoma Bravo is then entitled to nominate at least one Thoma Bravo Director).
(b)    Subject to Section 2.1.4(d), for so long as the Company maintains the Compensation Committee and Nominating Committee, such committees shall each consist of at least one Silver Lake Director (but only if Silver Lake is then entitled to nominate at least one Silver Lake Director) and at least one Thoma Bravo Director (but only if Thoma Bravo is then entitled to nominate at least one Thoma Bravo Director).
(c)    Subject to Section 2.1.4(d), any committee of the Board not specified in Section 2.1.4(a) or 2.1.4(b) shall consist of at least one Silver Lake Director (but only if Silver Lake is then entitled to nominate at least one Silver Lake Director) and at least one Thoma Bravo Director (but only if Thoma Bravo is then entitled to nominate at least one Thoma Bravo Director) and such additional members as may be determined by the Board; provided, that a special committee may exclude Directors nominated by the Lead Investors if (i) no such Director is eligible to serve on such special committee due to the rules and requirements of any national stock exchange on which the Company’s stock is listed or (ii) the primary purpose of such special committee is to review, assess and/or approve a transaction in which the applicable Lead Investor has a material direct or indirect interest and having such Lead Investor’s Director appointed on such special committee would constitute a clear conflict of interest, in each case as determined by a majority of the Independent Directors in their reasonable good faith discretion.
(d)    Notwithstanding the foregoing, the Board (upon the recommendation of the Nominating Committee) shall, only to the extent necessary to comply with applicable law or the Stock Exchange rules, modify the composition of any such committee to the extent required to comply with such applicable law or the Stock Exchange rules. If any vacant Director position on any committee of the Board results from a Lead Investor no longer being entitled to nominate at least one Director or declining to have one of its Director nominees serve on such committee, then such vacant position shall be filled by the Board upon the recommendation of the Nominating Committee, in accordance with Section 2.1.6.
2.1.5    Removal. If the number of Directors that a Lead Investor is entitled to nominate is reduced pursuant to the terms of Section 2.1.2, then such Lead Investor shall, if requested by either (i) the other Lead Investor or (ii) a majority of the Independent Directors, promptly cause a number of Directors equal to such reduction to resign from service on the Board and any board or other similar governing body of any Subsidiary of the Company, including all committees thereof. Each Lead Investor shall cause any Director nominated by it to resign from service on any committee of the Board if, as a result of such Director’s service on
4



such committee, such committee does not satisfy the requirements of applicable law or the Stock Exchange rules for service on such committee.
2.1.6    Vacancies.
(a)    If any Director previously nominated by a Lead Investor dies or is unwilling or unable to serve as such or is otherwise removed or resigns from office (other than pursuant to Section 2.1.5), then the Lead Investor whose previously nominated Director shall have been removed or shall have resigned shall promptly nominate a successor to such Director; but if neither of the Lead Investors is entitled to fill such vacant Director position(s), such vacant Director position(s) shall be filled by the Board, upon the recommendation of the Nominating Committee. If (i) a Director position is vacant (including due to a Lead Investor not nominating a Director) and a Lead Investor is entitled to fill that vacant position and (ii) such Lead Investor elects to nominate a Director to fill that position, the Board shall take all actions necessary to appoint such nominee to the Board as promptly as practicable.
(b)    If, subject to the rights of the Lead Investors under Section 5.4.7, the Board votes to increase the size of the Board, the vacant Director position(s) created as a result of such newly created directorship(s) shall be filled by the Board, upon the recommendation of the Nominating Committee.
(c)    Any other vacant Director position(s) (other than any Director position which any Lead Investor is entitled to fill but which position is vacant due to such Lead Investor not nominating a Director) shall be filled by the Board, or the Board shall nominate a replacement Director, in each case, upon the recommendation of the Nominating Committee, in accordance with the Company Charter.
(d)    Any recommendation of the Nominating Committee shall require the approval of the Silver Lake Director (if any) serving on the Nominating Committee, for so long as the Aggregate Silver Lake Ownership continues to be at least 10% of the aggregate number of outstanding shares of Common Stock immediately following the consummation of the Distribution, and the Thoma Bravo Director (if any) serving on the Nominating Committee, for so long as the Aggregate Thoma Bravo Ownership continues to be at least 10% of the aggregate number of outstanding shares of Common Stock immediately following the consummation of the Distribution.
2.1.7    Subsidiaries. At the request of any Lead Investor, the Company shall cause the members of the Board or other similar governing body, and committees thereof, of any “significant subsidiary” (as defined in Rule 1-02 of Regulation S-X under the Exchange Act) to comply with this Section 2.1 as if such Subsidiary were the Company.
2.1.8    Expense Reimbursement. The Company shall pay or reimburse the reasonable, documented, out-of-pocket expenses incurred by the members of the Board in connection with their service on the Board (and any committee thereof) or in connection with their service on the Board or o