VeriSign (VRSN)

DISTRIBUTIONS

7.1 Distributions.

(a) Distributions of Excess Cash. Except as otherwise provided in this Section 7.1, and subject to applicable law, upon payment in full of all outstanding principal of, and any accrued but unpaid interest on, any Cash Shortfall Loan and/or Capital Loans, the Company shall make cash distributions of Excess Cash in accordance with the following sentence, with such distributions, if any, to be paid following [***] and after each subsequent fiscal quarter (with payment of any such distributions occurring no later than the thirtieth (30th)

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*** Note: Confidential treatment has been requested with respect to the information contained within the [***] marking. Such portions have been omitted from this filing and have been files separately with the Securities and Exchange Commission.

day after the Board’s determination of the amount of any such distributions pursuant to the following sentence, and in no event later than the ninetieth day following [***] or the end of each such subsequent fiscal quarter). When determining the amount of any distribution, the Board, in consultation with the Netherlands Joint Venture, shall forecast the cash position of the Joint Ventures for the ensuing twelve (12) month period following [***] or the end of such fiscal quarter, as applicable (taking into consideration the Annual Budget, any necessary reserves and such other factors it reasonably deems relevant) and, if such forecasted cash position would allow the Joint Ventures, taken together, to maintain consistently an Available Cash position in excess of $[***] over such twelve (12) month period, the Board, pursuant to this Section 7.1(a), shall cause the Company to distribute its allocable share of any Available Cash that is not needed to maintain such minimum level of Available Cash consistently over such period (such cash to be distributed being referred to as “Excess Cash”), with the allocation thereof between the Joint Ventures being determined by agreement between the Joint Ventures; provided, however, that the Board, if it so reasonably determines, may increase or decrease such $[***] amount in proportion to the amount of any increase or decrease in the Joint Ventures’ cash collections relative to the Joint Ventures’ cash collections for the preceding twelve months. Subject to Section 4.3 and Section 4.4, distributions of Excess Cash shall be distributed to the Members in proportion to their respective Percentage Interests.

(b) Tax Distributions. Notwithstanding the foregoing, following [***] and only with respect to any taxable year in which the Company does not liquidate or sell all or substantially all of its assets, upon payment in full of all outstanding principal of, and any accrued but unpaid interest on, any Cash Shortfall Loan, the Company shall make cash distributions to the Members in amounts sufficient to cause each Member to have received cumulative distributions under this Article 7 with respect to the prior taxable year at least equal to 41% of the Member’s distributive share of the lesser of (i) the Company’s net taxable income for such prior taxable year and (ii) the excess of (x) the cumulative amount of the Company’s net taxable income (as determined in accordance with Code Section 703(a)) for all taxable years over (y) the cumulative amount of the Company’s net taxable loss (as determined in accordance with Code Section 703(a)) for all taxable years (the “Tax Distribution Amount”), provided that (i) distributions under this Section 7.1(b) shall take into account (and be offset as appropriate by) any prior or concurrent distributions made under Section 7.1(a) and Section 7.1(c) of this Agreement with respect to the taxable year for which the distribution amount under this Section 7.1(b) is being determined and any corresponding provisions of the operating agreement for the Netherlands Joint Venture with respect to the taxable year for which the distribution amount under this Section 7.1(b) is being determined (for the avoidance of doubt, on any particular Tax Distribution Date (as defined in the next sentence), the Company shall only be required to make a distribution pursuant to this Section 7.1(b) in the event that (and only to the extent that) the Tax Distribution Amount for the prior taxable year exceeds the amount of cash distributed by the Joint Ventures pursuant to Section 7.1(a) and Section 7.1(c) hereof (and any corresponding provisions of the operating agreement for the Netherlands Joint Venture) with respect to the taxable year for which the distribution amount under this Section 7.1 (b) is being determined), (ii) all determinations of the Tax Distribution Amount shall not take into account any items of taxable income allocated to any Member pursuant to Section 704(c) of the Code, and (iii) in order to take into account changes in Federal, state, local or foreign tax rates, the Board may increase or decrease the applicable percentage rate. Subject to Section 4.3 and Section 4.4, the Tax Distribution Amount, if any, shall be paid within 60 days following the end of each Fiscal Year of the Company (the “Tax Distribution Date”).

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*** Note: Confidential treatment has been requested with respect to the information contained within the [***] marking. Such portions have been omitted from this filing and have been files separately with the Securities and Exchange Commission.

(c) Other Distributions. Except as set forth in Section 7.1(a) or Section 7.1(b), the Company shall have no obligation to distribute any cash or other property of the Company to the Members and the Board shall have sole discretion in determining whether to distribute any other cash or other property of the Company to the Members; provided, however, that any such distribution shall be made to the Members in proportion to their respective Adjusted Capital Account Balances.

(d) Distributions Upon Liquidation. Proceeds from the Liquidation of the assets of the Company shall be distributed to the Members in accordance with Section 12.2. Proceeds from the sale (or other conversion into cash) of all or substantially all of the assets of the Company shall be distributed to the Members in accordance with Section 12.2 as if such proceeds arose from the Liquidation of the assets of the Company.

(e) Distributions in Kind. No Member has any right to receive distributions other than in cash. However, the Board may in its reasonable discretion (subject to compliance with the procedures set forth in Article VI) elect to make distributions, entirely or in part, in property or assets of the Company other than cash and to the extent reasonably practicable, such non cash distributions shall be made to both Members. Property and assets distributed in kind shall be deemed to have been sold for their fair market value and distributed in accordance with Section 12.3.

(f) Limitation on Distributions. Notwithstanding the foregoing, a distribution shall not be made to a Member to the extent that such distribution would create an Adjusted Capital Account Deficit for such Member.

7.2 Withholding.

(a) The Company shall seek to qualify for and obtain exemptions from any provision of the Code or any provision of state, local or foreign tax law that would otherwise require the Company to withhold amounts from payments or distributions to the Members. If the Company does not obtain any such exemption, the Company is authorized to withhold from any payment or distribution to any Member any amounts that are required to be withheld pursuant to the Code or any provision of any state, local or foreign tax law that is binding on the Company. Any amount withheld and paid to the appropriate governmental authority with respect to any payment or distribution to any Member shall be treated as a distribution to the Member and credited against the amount of the payment or distribution to which the Member would otherwise be entitled. The Company shall timely pay to the appropriate governmental authority, any amount it withholds pursuant to this Section 7.2.