Execution Version
MUTUAL RELEASE
This Mutual Release Agreement (this “Release Agreement”) is entered into as of August 14, 2024, by and among:
RECITALS
WHEREAS, the Company and its Consenting Stakeholders (collectively, the “Parties” and each signatory hereto, a “Party”) have in good faith and at arms’ length negotiated or been apprised of certain out-of-court restructuring and recapitalization efforts and transactions with respect to the Company’s capital structure on the terms set forth in this Release Agreement and as specified in the Transaction Support Agreement and that certain Transaction Term Sheet, attached
as Exhibit A to the Transaction Support Agreement (the “Transaction Term Sheet” and such transactions as described in the Transaction Support Agreement and the Transaction Term Sheet, the “Transactions”);
WHEREAS, the Company and the Consenting Stakeholders intend to implement the Transactions through the Exchange Agreement dated as of July 3, 2024, by and among the Company and certain of the Consenting Stakeholders (the “Exchange Agreement”), the Definitive Documents (as defined below), and this Release Agreement;
WHEREAS, subject to the terms of the Transaction Support Agreement and the Exchange Agreement, the Parties have agreed to take certain actions with respect to and in support of the Transactions;
WHEREAS, for example, Carlyle has agreed that, in exchange for the releases, exculpations, and other consideration set forth in the Transaction Support Agreement and Transaction Term Sheet (including payment of the Latham Fees and Expenses), all fees and expenses due to Carlyle or its Affiliates and principals (including any “broker” or “financing” fees, but excluding the Latham Fees and Expenses), and all Existing Equity Interests (including Contingent Shares) held by Carlyle other than KLD Common Stock, shall be cancelled, released, and discharged in exchange for no additional consideration other than as provided in the Transaction Term Sheet (the “Carlyle Settlement”);
WHEREAS, the approval by the Company Parties of the Transactions and related negotiations and agreements has been broadly delegated to the Special Review Committee of the board of directors of KLD (the “Special Review Committee”); and
WHEREAS, in exchange for the Consenting Stakeholders’ covenants, agreements, and support with respect to the Transactions (and solely with respect to Carlyle, including but not limited to the Carlyle Settlement), the Special Review Committee has determined (following lengthy discussions, including with KLD’s outside counsel and financial advisors) that is in the best interests of the Company Parties and other stakeholders to enter into this Release Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Party, severally and not jointly, intending to be legally bound hereby, agrees as follows:
AGREEMENT
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This Release Agreement and the Parties’ respective rights, covenants, and obligations hereunder shall become automatically and immediately effective upon the following: (i) each Party has executed and delivered its signature page to the Transaction Support Agreement and this Release Agreement and (ii) the closing of the Transactions has occurred in accordance with the Transaction Support Agreement (the “Effective Date”).
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Notwithstanding anything herein to the contrary, it is agreed that (x) nothing herein shall affect the Liens (as defined in the Credit Agreement) and security interests of the Secured Parties (as defined in the Credit Agreement) or the Lenders (as defined in the Credit Agreement) on any of the Collateral (as defined in the Credit Agreement) and (y) the Secured Parties may exercise their respective rights and remedies with respect to the Collateral in the future from time to time in accordance with the terms of the Loan Documents and applicable law.
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A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.
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(i) Specific Performance. Each Party recognizes and acknowledges that a breach by such Party of any covenants or agreements contained in this Release Agreement will cause the other Parties to sustain damages for which such other Parties would not have an adequate remedy at law for money damages, and therefore each Party agrees that in the event of any such breach, the other Parties shall be entitled to the remedy of specific performance of such covenants and agreements and injunctive and other equitable relief in addition to any other remedy to which such other Parties may be entitled, at law or in equity.
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IN WITNESS WHEREOF, this Release Agreement has been duly executed as of the date first above written.
KLDiscovery Inc., on behalf of itself and the entities listed below
By: /s/ Dawn Wilson
Name: Dawn Wilson
Title: Chief Financial Officer
Entity |
Ibas Ontrack AB |
Ibas Ontrack ApS |
Ibas Ontrack AS |
Ibas Ontrack OY |
KLDiscovery Franchising, LLC |
KLDiscovery Holdings, Inc. |
KLDiscovery Limited |
KLDiscovery Limited |
KLDiscovery Ontrack (HK) Limited |
KLDiscovery Ontrack (Switzerland) GmbH |
KLDiscovery Ontrack AS |
KLDiscovery Ontrack BV |
KLDiscovery Ontrack Canada Co. |
KLDiscovery Ontrack GmbH |
KLDiscovery Ontrack Information Technology Service (Shanghai) Co Ltd |
KLDiscovery Ontrack K.K. |
KLDiscovery Ontrack Limited |
KLDiscovery Ontrack Pte Ltd |
KLDiscovery Ontrack Pty Ltd. |
KLDiscovery Ontrack S.L. |
KLDiscovery Ontrack S.p z.o.o. |
KLDiscovery Ontrack S.r.l. |
KLDiscovery Ontrack Sarl |
KLDiscovery Ontrack Single Member P.C. |
KLDiscovery Ontrack, LLC |
LD International Holdings Limited |
LD International Holdings SRL |
LD Topco, Inc. |
Ontrack Data Recovery, LLC |
KLDiscovery India Technology Services Private Limited |
[Signature Page to Mutual Release Agreement]
Address for Notices:
9023 Columbine Road
Eden Prairie, MN 55347
Attention: Andy Southam
Email: andrew.southam@kldiscovery.com
with a copy to (which shall not constitute notice):
Gibson, Dunn & Crutcher, LLP
1050 Connecticut Avenue, N.W.
Washington, DC 20036-5306
Attention: Stephen I. Glover
Email: siglover@gibsondunn.com
[Signature Page to Mutual Release Agreement]
[Consenting STAKEHOLDER]
By:
Name:
Title:
Address:
E-mail address(es):
Aggregate Amounts Beneficially Owned or Managed on Account of: | |
Term Loan Claims | $ |
Revolving Credit Claims | $ |
Debenture Claims | $ |
Existing Equity Interests |
|
[Signature Page to Mutual Release Agreement]
CEOF II DE I AIV, L.P.
By:
Name:
Title:
CEOF II Coinvestment (DE), L.P.
By:
Name:
Title:
CEOF II Coinvestment B (DE), L.P.
By:
Name:
Title:
Address for Notices:
The Carlyle Group Inc.
1001 Pennsylvania Avenue NW
Washington, DC 20004
Attention: Louise Dumican
Email: louise.dumican@carlyle.com
with a copy to (which shall not constitute notice):
Latham & Watkins LLP
555 Eleventh Street, NW, Suite 1000
Washington, D.C. 20004
Attention: Paul Sheridan
Email: paul.sheridan@lw.com
[Signature Page to Mutual Release Agreement]