The validity of the shares of UTC common stock offered hereby will be passed upon for UTC by Wachtell, Lipton, Rosen & Katz.
The financial statements of UTC and UTC managements assessment of the effectiveness of internal control over financial reporting (which
is included in Managements Report on Internal Control over Financial Reporting) incorporated in this proxy statement/prospectus by reference to UTCs Annual Report on Form
10-K
for the year ended
December 31, 2016 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
With respect to the unaudited financial information of UTC for the three-month periods ended March 31, 2017 and 2016, the three and
six-month
periods ended June 30, 2017 and 2016, and the three and nine-month periods ended September 30, 2017 and 2016, incorporated by reference in this proxy statement/prospectus, PricewaterhouseCoopers LLP
reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate reports dated April 28, 2017, July 28, 2017 and October 27, 2017 incorporated by
reference herein state that they did not audit and they do not express an opinion on that unaudited financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of
the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act for their report on the unaudited financial information because that report is not a report or
a part of the registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Securities Act.
The consolidated financial statements of Rockwell Collins and its subsidiaries, incorporated in this proxy statement/prospectus by reference
from Rockwell Collins Annual Report on
Form 10-K
for the fiscal year ended September 29, 2017, and the effectiveness of Rockwell Collins and its subsidiaries internal control over
financial reporting have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their reports, which are incorporated herein by reference. Such consolidated financial statements have been
so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
The
consolidated financial statements of B/E Aerospace, Inc. and subsidiaries, incorporated in this proxy statement/prospectus by reference from Rockwell Collins Current Report on
Form 8-K,
filed on April 13, 2017, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference. Such consolidated financial statements
have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
If the merger is
completed by early 2018, Rockwell Collins will become a wholly owned subsidiary of UTC and, consequently, will not hold an annual meeting of its shareowners in 2018. If the merger is not completed by early 2018 for any reason, then Rockwell Collins
expects to hold an annual meeting of its shareowners in 2018.
Shareowner proposals to be made at the 2018 Annual Meeting of Shareowners must have been received at Rockwell Collins
principal executive offices on or before August 17, 2017,
120 calendar days before the anniversary date of the mailing of Rockwell Collins proxy statement to shareowners in connection
with the 2017 Annual Meeting of Shareowners, in order to be eligible for inclusion in Rockwell Collins proxy statement and form of proxy relating to that meeting pursuant to
Rule 14a-8
under the
Exchange Act; provided, however, that if the date of the 2018 Annual Meeting of Shareowners has been changed by more than 30 days from February 2, 2018, then the deadline for inclusion is a reasonable time before Rockwell Collins begins to
print and send its proxy materials for that meeting. Rockwell Collins
by-laws
require that notice of shareowner proposals to be made at the 2018 Annual Meeting of Shareowners outside the processes of
Rule 14a-8
under the Exchange Act must have been submitted to Rockwell Collins no earlier than the close of business on September 5, 2017,
the
150th day prior to the first anniversary of the preceding years annual meeting and no later than the close of business on October 5, 2017, the 120th day prior to the first anniversary of the preceding years annual meeting;
provided, however, that if the date of the 2018 Annual Meeting of Shareowners is more than 30 days before or more than 60 days after such anniversary date, notice must be delivered no earlier than the close of business on the
150th day prior to the date of such annual meeting and no later than the close of business on the 120th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than
130 days prior to the date of such annual meeting, the 10th day following the date of such public announcement.
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and
annual reports with respect to two or more shareowners sharing the same address by delivering a single proxy statement or annual report, as applicable, addressed to those shareowners. As permitted by the Exchange Act, only one copy of this proxy
statement/prospectus is being delivered to Rockwell Collins shareowners residing at the same address, unless such shareowners have notified Rockwell Collins of their desire to receive multiple copies of the proxy statement/prospectus. This process,
which is commonly referred to as householding, potentially provides extra convenience for shareowners and cost savings for companies. If, at any time, you no longer wish to participate in householding and would prefer to receive a
separate proxy statement/prospectus, or if you are receiving multiple copies of this proxy statement/prospectus and wish to receive only one, please contact Rockwell Collins at the address identified below. Rockwell Collins will promptly deliver,
upon oral or written request, a separate copy of this proxy statement/prospectus to any Rockwell Collins shareowner residing at an address to which only one copy was mailed. Requests for additional copies should be directed to Rockwell Collins,
Inc., 400 Collins Road N.E., Cedar Rapids, Iowa 52498, Attn: Shareowner Relations, or contact Rockwell Collins by telephone at
(319) 295-4045.
Rockwell Collins and UTC file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and
copy any of this information at the SECs public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
or
202-942-8090
for further
information on the public reference room. The SEC also maintains an Internet website that contains reports, proxy statements and other information regarding issuers, including Rockwell Collins and UTC, who file electronically with the SEC. The
address of that site is
www.sec.gov
. The information contained on the SECs website is expressly not incorporated by reference into this proxy statement/prospectus.
In addition, the SEC allows Rockwell Collins and UTC to disclose important information to you by referring you to
other documents filed separately with the SEC. This information is considered to be a part of this proxy statement/prospectus, except for any information that is superseded by information included directly in this proxy statement/prospectus or
incorporated by reference subsequent to the date of this proxy statement/prospectus as described below.
This proxy statement/prospectus
incorporates by reference the documents listed below that Rockwell Collins and UTC have previously filed with the SEC. They contain important information about the companies and their financial condition.
In
addition, all documents filed by Rockwell Collins or UTC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (i) after the date of this proxy statement/prospectus and before the date of the special meeting or (ii) after the date of
the initial registration statement and prior to effectiveness of the registration statement (excluding in each case any current reports on Form 8-K to the extent disclosure is furnished and not filed) shall be deemed to be incorporated by reference
into this proxy statement/prospectus.
You can obtain any of the other documents listed above from the SEC, through the SECs website
at the address indicated above, or from Rockwell Collins or UTC, as applicable, by requesting them in writing or by telephone from the appropriate company at the following addresses and telephone numbers:
These documents are available from Rockwell Collins or UTC, as the case may be, without charge, excluding any
exhibits to them unless the exhibit is specifically listed as an exhibit to the registration statement of which this proxy statement/prospectus forms a part. You can also find information about Rockwell Collins and UTC at their Internet
websites at
www.rockwellcollins.com
and
www.utc.com
, respectively. Information contained on these websites does not constitute part of this proxy statement/prospectus.
You may also obtain documents incorporated by reference into this document relating to Rockwell Collins by requesting them in writing or by
telephone from Innisfree M&A Incorporated, Rockwell Collins proxy solicitor at the following address and telephone number:
If you are a shareowner of UTC or Rockwell Collins and would like to request documents, please do so
by [ ] to receive them before the Rockwell Collins special meeting. If you request any documents from Rockwell Collins or UTC, Rockwell Collins or UTC, as applicable, will
mail them to you by first class mail, or another equally prompt means, within one business day after Rockwell Collins or UTC, as the case may be, receives your request.
WHEREAS, each of Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the representations, warranties and covenants and subject to the conditions herein
contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
Section 3.2
Capitalization; Subsidiaries
.
(a) As of the close of business on September 1, 2017 (the
Company
Capitalization Date
), the authorized capital
stock of the Company consisted of (i) 1,000,000,000 shares of Company Common Stock, 174,981,559 of which were issued and outstanding (including outstanding Company Restricted Stock Awards representing 23,029 shares of Company Common Stock),
12,182,876 of which were held by the Company as treasury stock, and (ii) 25,000,000 shares of preferred stock of the Company, without par value, of which 2,500,000 have been designated as Series A Preferred Stock (
Company Preferred
Stock
), no shares of which were outstanding. There are no other classes of capital stock of the Company and no bonds, debentures, notes or other Indebtedness or securities of the Company having the right to vote (or convertible into or
exercisable for securities having the right to vote) on any matters on which holders of capital stock of the Company may vote authorized, issued or outstanding. As of the close of business on the Company Capitalization Date, there were (A) 3,490,677
shares of Company Common Stock subject to outstanding Company Stock Options with a weighted average exercise price of $71.59, (B) outstanding Company Restricted Stock Awards representing 23,029 shares of Company Common Stock, (C) outstanding
Company RSU Awards representing 881,116 shares of Company Common Stock, which amount may be increased to a maximum of 1,398,167 shares of Company Common Stock based on the satisfaction of performance conditions set forth in the applicable award
agreements, (D) outstanding Company DSU Awards representing 30,340 shares of Company Common Stock, (E) 2,407,778 shares of Company Common Stock reserved for future issuance under the Company ESPP and (F) 7,213,062 shares of Company Common Stock
reserved for future issuance under the Company Equity Plans. From the close of business on the Company Capitalization Date through the date of this Agreement, there have been no issuances of (I) any Company Common Stock, Company Preferred Stock
or any other equity or voting securities or interests in the Company other than issuances of shares of Company Common Stock pursuant to the exercise, vesting or settlement, as applicable, of the Company Equity Awards outstanding as of the close of
business on the Company Capitalization Date in accordance with the terms of such Company Equity Awards or under the Company ESPP, the Company
Non-US
Share Purchase Plans or the Company 401(k) Plan in
accordance with its terms or (II) any Company Equity Awards or any other equity or equity-based awards.
(b) All of the issued and
outstanding shares of Company Common Stock have been, and all of the shares of Company Common Stock that may be issued pursuant to the Company Equity Awards, the Company Equity Plans or the Company ESPP, the Company
Non-US
Share Purchase Plans or the Company 401(k) Plan will be, when issued in accordance with the respective terms thereof, duly authorized and validly issued and are, or will be when issued, fully paid,
nonassessable and free of preemptive rights. The Company has made available to Parent prior to the date of this Agreement accurate and complete copies of the Company Equity Plans and the forms of stock option, restricted stock and restricted stock
unit agreements evidencing the Company Equity Awards and no award agreement applicable to Company Equity Awards contains material terms that are not consistent with, or are in addition to, the terms of such forms. Each grant of Company Equity Awards
was made in accordance with the terms of the Company Equity Plans, the Exchange Act and all other applicable Laws, including the rules and regulations of the NYSE. All of the outstanding Company Common Stock has been sold pursuant to an effective
registration statement filed under the federal securities Laws or an appropriate exemption therefrom. No Subsidiary of the Company owns any capital stock of the Company.
(c) As of the date of this Agreement, other than as set forth in
Section 3.2(a)
, or, with respect to any foreign Subsidiary of the
Company, directors qualifying shares or similar arrangements required by applicable Law, there are no (i) existing options, warrants, calls, preemptive rights, subscriptions or other securities or rights, restricted stock awards,
restricted stock unit awards, convertible securities, agreements, arrangements or commitments of any kind obligating the Company or any of its Subsidiaries to issue, transfer, register or sell, or cause to be issued, transferred, registered or sold,
any shares of capital stock or other equity or voting securities or other equity interests of the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or other equity or voting securities or other equity
interests, or obligating the Company to grant, extend or enter into such options, warrants, calls, preemptive, subscriptions or other securities or rights, restricted stock awards, restricted stock unit awards, convertible securities, agreements,
arrangements or commitments,
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(ii) outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any capital stock or other equity or voting securities or other equity
interests of the Company or any of its Subsidiaries, or any securities representing the right to purchase or otherwise receive any capital stock or other equity or voting securities or other equity interests of the Company or any of its
Subsidiaries, (iii) stockholder agreements, voting trusts or similar agreements with any Person to which the Company or any of its Subsidiaries is party, including any such agreements or trusts (A) restricting the transfer of the capital
stock or other equity interests of the Company or any of its Subsidiaries or (B) affecting the voting rights of capital stock or other equity or voting securities or other equity interests of the Company or any of its Subsidiaries, or
(iv) outstanding or authorized equity or equity-based compensation awards, including any equity appreciation rights, security-based performance units, phantom stock, profit-participation or other security rights issued by the
Company or any of its Subsidiaries, or other agreements, arrangements or commitments of any character (contingent or otherwise) to which the Company or any of its Subsidiaries is party, in each case pursuant to which any Person is entitled to
receive any payment from the Company based in whole or in part on the value of any capital stock or other equity or voting securities or other equity interests of the Company or any of its Subsidiaries.
(d) Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and its
Subsidiaries, taken as a whole, the Company owns, beneficially and of record, directly or indirectly, all of the issued and outstanding company, partnership, corporate or similar (as applicable) ownership, voting or similar interests in each of its
Subsidiaries, free and clear of all Liens, and all company, partnership, corporate or similar (as applicable) ownership, voting or similar interests of each of the Subsidiaries are duly authorized and validly issued and are fully paid, nonassessable
and free of preemptive rights. Except for the direct or indirect Subsidiaries of the Company and investments in marketable securities and cash equivalents, or as would not be material to the Company and its Subsidiaries, taken as a whole, none of
the Company nor any of its Subsidiaries (i) owns directly or indirectly any shares of capital stock or other equity or voting securities or other equity interests, or any securities or obligations convertible into or exchangeable or exercisable
for such shares, securities or interests, in any Person or (ii) has any obligation or has made any commitment to acquire any shares of capital stock or other equity or voting securities or other equity interests in any Person or to provide
funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any Person.
Section 3.3
Authority Relative to Agreement
.
(a) The Company has all necessary corporate power and authority to execute, deliver and perform its obligations under this Agreement and,
subject (in the case of the Merger) to obtaining the Company Stockholder Approval, to consummate the transactions contemplated by this Agreement. The execution, delivery and performance of this Agreement by the Company, and the consummation by the
Company of the transactions contemplated by this Agreement, have been duly and validly authorized by all necessary corporate action by the Company, and (in the case of the Merger, except for the (i) receipt of the Company Stockholder Approval
and (ii) filing of the Certificate of Merger with the Delaware Secretary of State) no other corporate action or proceeding on the part of the Company is necessary to authorize the execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by the Company and, assuming due authorization, execution and delivery of this Agreement by the other
parties hereto, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that (A) such enforcement may be subject to applicable bankruptcy, insolvency (including all
Laws related to fraudulent transfers), reorganization, moratorium or other similar Laws, now or hereafter in effect, affecting creditors rights and remedies generally and (B) the remedies of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any Proceeding therefor may be brought.
(b) The Company Board has, by resolutions unanimously adopted by the Company Board, (i) approved this Agreement and the transactions
contemplated by this Agreement, (ii) determined that this Agreement and the
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transactions contemplated by this Agreement are advisable and in the best interests of the Company and the Companys stockholders, (iii) directed that the adoption of this Agreement be
submitted to a vote at the Company Stockholders Meeting and (iv) resolved to make the Company Recommendation;
provided
that any change, modification or rescission of such Company Recommendation by the Company Board in accordance
with this Agreement shall not be a breach of the representation in this clause (iv). As of the date of this Agreement, none of the aforesaid actions by the Company Board has been amended, rescinded or modified.
Section 3.4
Vote Required
. Assuming the accuracy of Parents and Merger Subs
representations and warranties in
Section 4.13
, the adoption of this Agreement and the approval of the Merger by the affirmative vote of the holders of at least a majority of the outstanding shares of Company Common Stock entitled to
vote thereon at the Company Stockholders Meeting (the
Company Stockholder Approval
) is the only vote of holders of securities of the Company that is required in connection with the consummation by the Company of the
transactions contemplated by this Agreement; it being understood that in connection with the Company Stockholder Approval, the Company will also submit for the vote of its stockholders at the Company Stockholders Meeting only an advisory vote
regarding merger-related compensation and a customary proposal regarding adjournment of the Company Stockholders Meeting.
Section 3.5
No Conflict; Required Filings and Consents
.
(a) Neither the execution and delivery of this Agreement by the
Company nor the consummation by the Company of the transactions contemplated by this Agreement, nor compliance by the Company with any of the applicable terms or provisions of this Agreement, will (i) violate any provision of the Companys
Certificate of Incorporation or Bylaws or the certificate of incorporation or bylaws (or equivalent organizational documents) of any Subsidiary of the Company, (ii) assuming that the Consents, registrations, declarations, filings and notices
referenced in
Section 3.5(b)
have been obtained or made and (in the case of the Merger) the Company Stockholder Approval has been received, conflict with or violate any Law applicable to the Company or any of its Subsidiaries or by which
any property or asset of the Company or any of its Subsidiaries is bound or affected or (iii) violate, conflict with or result in any breach of any provision of, or loss of any benefit, or constitute a default (with or without notice or lapse
of time, or both) under, give rise to any right of termination, acceleration (other than pursuant to any Company Benefit Plan) or cancellation of or require the Consent of, notice to or filing with any third party pursuant to any of the terms or
provisions of any Contract to which the Company or any of its Subsidiaries is a party or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, or result in the creation of a Lien, other than any Permitted
Lien, upon any of the property or assets of the Company or any of its Subsidiaries, other than, in the case of clause (i) with respect to the certificate of incorporation or bylaws (or equivalent organizational documents) of any Subsidiary of
the Company, clause (ii) and clause (iii), any such conflict, violation, breach, default, termination, acceleration, cancellation or Lien that (A) has not had, and would not reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect and (B) would not reasonably be expected to, individually or in the aggregate, impair in any material respect the ability of the Company to perform its obligations under this Agreement or to consummate the
Merger, or prevent or materially delay the consummation of any of the Merger and the other transactions contemplated by this Agreement.
(b) No consent, approval, license, permit, waiver, order or authorization (a
Consent
) of, registration, declaration or
filing with or notice to any Governmental Authority is required to be obtained or made by or with respect to the Company or any of its Subsidiaries in connection with the execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated by this Agreement, other than (i) applicable requirements of and filings with the SEC under the Exchange Act or the Securities Act (including the filing with the SEC of the Form
S-4
and the Proxy Statement), (ii) the filing of the Certificate of Merger with the Delaware Secretary of State, (iii) applicable requirements under foreign qualification, state securities or blue
sky laws of various states, (iv) compliance with applicable rules and regulations of the NYSE and any other applicable stock exchanges or marketplaces, (v) such other items required solely by reason of the participation and identity
of Parent in the transactions contemplated by this Agreement, (vi) compliance with and filings or
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notifications under the HSR Act and any other applicable United States or foreign competition, antitrust, merger control or investment Laws or Laws that provide for review of national security or
defense matters (together with the HSR Act,
Antitrust Laws
) and (vii) such other Consents, registrations, declarations, filings or notices the failure of which to be obtained or made (A) has not had, and would not
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and (B) would not reasonably be expected to, individually or in the aggregate, impair in any material respect the ability of the Company to
perform its obligations under this Agreement or to consummate the Merger, or prevent or materially delay the consummation of any of the Merger and the other transactions contemplated by this Agreement.
Section 3.6
Company SEC Documents; Financial Statements
.
(a) Since September 30, 2015, each of the Company and the Applicable Company Subsidiary has timely filed with (or furnished to) the SEC
all forms, reports, schedules, statements, exhibits and other documents (including exhibits, financial statements and schedules thereto and all other information incorporated therein and amendments and supplements thereto) required by it to be filed
(or furnished) under the Exchange Act or the Securities Act (collectively, the
Company SEC Documents
). As of its filing (or furnishing) date or, if amended prior to the date of this Agreement, as of the date of the last such
amendment, each Company SEC Document complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be. As of its filing date or, if amended prior to the date of this Agreement, as of
the date of the last such amendment, each Company SEC Document filed pursuant to the Exchange Act did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make
the statements made therein, in light of the circumstances under which they were made, not misleading. Each Company SEC Document that is a registration statement, as amended or supplemented, if applicable, filed pursuant to the Securities Act, as of
the date such registration statement or amendment became effective prior to the date of this Agreement, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to
make the statements made therein not misleading. As of the date of this Agreement, there are no amendments or modifications to the Company SEC Documents that were required to be filed with (or furnished to) the SEC prior to the date of this
Agreement, but that have not yet been filed with (or furnished to) the SEC. No Subsidiary of the Company is subject to the periodic reporting requirements of the Exchange Act. All of the audited financial statements and unaudited interim financial
statements of the Company and the Applicable Company Subsidiary included in the Company SEC Documents (i) comply in all material respects with the applicable accounting requirements and with the published rules and regulations of the SEC with
respect thereto, (ii) have been prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto and except, in the case of the unaudited interim statements, as may be
permitted under Form
10-Q
of the Exchange Act) and (iii) fairly present in all material respects the financial position, the stockholders equity, the results of operations and cash flows of the
Company and its consolidated Subsidiaries or the Applicable Company Subsidiary and its consolidated Subsidiaries, as applicable, as of the times and for the periods referred to therein (except as may be indicated in the notes thereto and subject, in
the case of unaudited interim financial statements, to normal and recurring
year-end
adjustments).
(b) Prior to the date of this Agreement, the Company has furnished to Parent complete and correct copies of all comment letters from the SEC
since September 30, 2015 through the date of this Agreement with respect to any of the Company SEC Documents, together with all written responses of the Company or the Applicable Company Subsidiary thereto. As of the date of this Agreement,
there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to any of the Company SEC Documents, and, to the Knowledge of the Company, none of the Company SEC Documents are subject to ongoing SEC
review.
(c) The Company is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act and the
applicable listing and governance rules and regulations of the NYSE.
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(d) The Company maintains a system of internal control over financial reporting (as defined in
Rules
13a-15(f)
and
15d-15(f)
of the Exchange Act) designed to provide reasonable assurance regarding the reliability of the Companys financial reporting and the
preparation of financial statements for external purposes in conformity with GAAP. The Company has evaluated the effectiveness of the Companys internal control over financial reporting and, to the extent required by applicable Law, presented
in any applicable Company SEC Document that is a report on Form
10-K
or Form
10-Q
or any amendment thereto its conclusions about the effectiveness of the internal
control over financial reporting as of the end of the period covered by such report or amendment based on such evaluation. The Company has no significant deficiencies or material weaknesses (as such terms are defined in
Auditing Standard No. 5 of the Public Company Accounting Oversight Board, as in effect on the date of this Agreement) in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the
Companys ability to record, process, summarize and report financial information. Since September 30, 2013, there has been and is no fraud, whether or not material, that involves senior management or other employees who have a significant
role in the Companys internal control over financial reporting.
(e) The Company maintains disclosure controls and procedures (as
defined in Rules
13a-15(e)
and
15d-15(e)
of the Exchange Act) designed to ensure that all information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such information is accumulated and communicated to the Companys
management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the chief executive officer and chief financial officer of the Company required under the Exchange Act with respect to such reports.
(f) To the Knowledge of the Company, as of the date of this Agreement, there are no SEC inquiries or investigations, other inquiries or
investigations by Governmental Authorities or internal investigations pending or threatened, in each case regarding any accounting practices of the Company or any of its Subsidiaries or any malfeasance by any director or executive officer of the
Company or any of its Subsidiaries. Since September 30, 2015 through the date of this Agreement, there have been no material internal investigations regarding accounting, auditing or revenue recognition discussed with, reviewed by or initiated
at the direction of the chief executive officer, chief financial officer, chief accounting officer or general counsel of the Company or, to the Knowledge of the Company, the Applicable Company Subsidiary, the Company Board or any committee thereof,
or, to the Knowledge of the Company, the board of directors of the Applicable Company Subsidiary or any committee thereof.
(g) Each of
the principal executive officer of the Company and the principal financial officer of the Company (or each former principal executive officer of the Company and each former principal financial officer of the Company, as applicable) has made all
certifications required by Rule
13a-14
or
15d-14
under the Exchange Act and Sections 302 and 906 of the Sarbanes-Oxley Act with respect to the Company SEC Documents, and
the statements contained in such certifications are true and accurate. For purposes of this Agreement, principal executive officer and principal financial officer shall have the meanings given to such terms in the
Sarbanes-Oxley Act. The Company does not have, and has not arranged any, outstanding extensions of credit to directors or executive officers within the meaning of Section 402 of the Sarbanes-Oxley Act.
(h) Since September 30, 2015, (i) neither the Company nor any of its Subsidiaries has received any written or, to the Knowledge of the
Company, oral complaint, allegation, assertion or claim regarding accounting, internal accounting controls, auditing practices, procedures, methodologies or methods of the Company or any of its Subsidiaries, or unlawful accounting or auditing
matters with respect to the Company or any of its Subsidiaries and (ii) no attorney representing the Company or any of its Subsidiaries, whether or not employed by the Company or any of its Subsidiaries, has reported evidence of a violation of
securities Laws, breach of fiduciary duty or similar violation by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents to the Company Board or any committee thereof or to the general counsel
A-14
or chief executive officer of the Company pursuant to the rules of the SEC adopted under Section 307 of the Sarbanes-Oxley Act, except, in each case, as has not been, and would not
reasonably be expected to be, individually or in the aggregate, materially adverse to the Company and its Subsidiaries, taken as a whole.
(i) Neither the Company nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any joint venture,
off-balance
sheet partnership or any similar Contract (including any Contract or arrangement relating to any transaction or relationship between or among the Company and any of its Subsidiaries, on the one hand, and
any unconsolidated affiliate, on the other hand), including any structured finance, special purpose or limited purpose entity or Person, or any
off-balance
sheet arrangements (as defined in
Item 303(a) of Regulation
S-K
under the Securities Act), where the result, purpose or effect of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, the
Company or any of its Subsidiaries in the Company SEC Documents (including any audited financial statements and unaudited interim financial statements of the Company included therein).
Section 3.7
Absence of Certain Changes or Events
. Since September 30, 2016 through the date of
this Agreement, (a) except in connection with the transactions contemplated by this Agreement, the respective businesses of the Company and its Subsidiaries have been conducted in the ordinary course of business consistent with past practice,
(b) neither the Company nor any of its Subsidiaries has taken any action that, if taken after the date of this Agreement, would constitute a breach of
clause (g)
,
(i)
,
(j)
,
(o)
,
(q)
,
(r)
or (x) (in the
case of (x), to the extent relating to any of the foregoing clauses) of
Section 5.1
, and (c) there has not been any event, circumstance, occurrence, effect, fact, development or change that has had, or would reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 3.8
No
Undisclosed Liabilities
. Except for liabilities or obligations (a) as (and to the extent) reflected, disclosed or reserved against in the Companys balance sheets (or the notes thereto) included in the Companys Annual Report on
Form
10-K
filed with the SEC on November 15, 2016 or the Companys Quarterly Report on Form
10-Q
filed with the SEC on July 28, 2017, (b) incurred in
the ordinary course of business consistent with past practice since September 30, 2016, (c) incurred in connection with the transactions contemplated by this Agreement or (d) that have not had, and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, none of the Company or any of its Subsidiaries has any liabilities or obligations of any nature, whether or not accrued, contingent, absolute or otherwise and whether or not
required to be reflected on a consolidated balance sheet of the Company (or the notes thereto) in accordance with GAAP.
Section 3.9
Litigation
. As of the date of this Agreement, there is no Proceeding pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries or any asset or property of the Company or any of
its Subsidiaries, and neither the Company nor any of its Subsidiaries nor any asset or property of the Company or any of its Subsidiaries is subject to a continuing Order, in each case, that (a) has had, or would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect or (b) would reasonably be expected to, individually or in the aggregate, impair in any material respect the ability of the Company to perform its obligations under this
Agreement or to consummate the Merger, or prevent or materially delay the consummation of any of the Merger and the other transactions contemplated by this Agreement.
Section 3.10
Permits; Compliance with Laws
.
(a) (i) The Company and its Subsidiaries are in possession of all franchises, grants, licenses, permits, easements, variances, exemptions,
consents, certificates, approvals, registrations, clearances, orders and other authorizations necessary for the Company and its Subsidiaries to own, lease and operate their respective properties and assets and to carry on their respective businesses
as now being conducted, under and pursuant to all applicable Laws (the
Company Permits
), (ii) all such Company Permits are in full force and effect and (iii) as of the date of this Agreement, no suspension, cancellation,
withdrawal or revocation thereof is pending or,
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to the Knowledge of the Company, threatened, except where the failure to be in possession of, failure to be in full force and effect or the suspension, cancellation, withdrawal or revocation
thereof (a) has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and (b) would not reasonably be expected to, individually or in the aggregate, impair in any
material respect the ability of the Company to perform its obligations under this Agreement or to consummate the Merger, or prevent or materially delay the consummation of any of the Merger and the other transactions contemplated by this Agreement.
(b) Since December 31, 2015, the Company and its Subsidiaries have been and are in compliance with (i) all applicable Laws and
(ii) all Company Permits, except where any failure to be in such compliance (a) has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and (b) would not
reasonably be expected to, individually or in the aggregate, impair in any material respect the ability of the Company to perform its obligations under this Agreement or to consummate the Merger, or prevent or materially delay the consummation of
any of the Merger and the other transactions contemplated by this Agreement.
(c) Since December 31, 2015, through the date of this
Agreement, none of the Company or any of its Subsidiaries or, to the Knowledge of the Company, any of their respective directors, officers or employees, has received any written or, to the Knowledge of the Company, oral notification from a
Governmental Authority asserting that the Company or any of its Subsidiaries is not in compliance with, or is under investigation with respect to any failure to comply with, any Laws or Company Permits, except where any failure to be in such
compliance (a) has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and (b) would not reasonably be expected to, individually or in the aggregate, impair in any
material respect the ability of the Company to perform its obligations under this Agreement or to consummate the Merger, or prevent or materially delay the consummation of any of the Merger and the other transactions contemplated by this Agreement.
Section 3.11
Information Supplied
. None of the information supplied or to be supplied by or on
behalf of the Company or any of its Subsidiaries for inclusion or incorporation by reference in (a) the Form
S-4
to be filed with the SEC by Parent in connection with the registration under the Securities
Act of the shares of Parent Common Stock to be issued in the Merger (as amended or supplemented from time to time, the
Form
S-4
) will, at the time the Form
S-4
is filed with the SEC, at any time it is amended or supplemented or at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein, in light of the circumstances under which they are made, not misleading and (b) the proxy statement to be sent to the stockholders of the Company relating to the Company Stockholders Meeting (as amended
or supplemented from time to time, the
Proxy Statement
) will, at the date it, or any amendment or supplement to it, is mailed to stockholders of the Company and at the time of the Company Stockholders Meeting, contain any
untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading (except that no representation or warranty is made by the Company
regarding such portions thereof that relate expressly to Parent or any of its Subsidiaries, including Merger Sub, or to statements made therein based on information supplied by or on behalf of Parent or any of its Subsidiaries (including Merger Sub)
for inclusion or incorporation by reference therein). The Proxy Statement will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations promulgated thereunder.
Section 3.12
Employee Benefit Plans; Labor
.
(a)
Section 3.12(a) of the Company Disclosure Letter
sets forth a true and complete list, as of the date of this Agreement, of
each material Company Benefit Plan. With respect to each material U.S. Plan, the Company has made available to Parent a true and complete copy of such material U.S. Plan and all amendments thereto (including a written description of the material
provisions of each unwritten material U.S. Plan), (ii) each trust, insurance, annuity or other funding Contract, (iii) the most recent financial statements and actuarial or other
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valuation reports, (iv) the most recent annual report on Form 5500, (v) the most recent determination letter (or, if applicable, advisory or opinion letter) from the IRS, (vi) the most
recent summary plan description and any material modification and (vii) all material notices given to such U.S. Plan, the Company or any Company ERISA Affiliate by the IRS, United States Department of Labor, Pension Benefit Guarantee
Corporation or other Governmental Authority since December 31, 2015.
(b) Except as has not had, and would not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect, (i) each of the Company Benefit Plans has been established, adopted, operated, maintained and administered in accordance with its terms and applicable Laws, including
ERISA and the Code, (ii) all payments and contributions required to be made under the terms of any Company Benefit Plan and applicable Laws have been timely made or accrued or otherwise adequately reserved (as of the date of this Agreement and
as of the Closing) to the extent required by and in accordance with GAAP and (iii) none of the Company or any of its Subsidiaries or, to the Knowledge of the Company, any third party, has engaged in any
non-exempt
prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) with respect to any Company Benefit Plan that would result in the imposition of
any liability to the Company or any of its Subsidiaries.
(c) Each Company Benefit Plan intended to be qualified under Section 401(a) of
the Code has either received a favorable determination letter from the IRS with respect to such Company Benefit Plan as to its qualified status under the Code, or with respect to a prototype Company Benefit Plan, the prototype sponsor has received a
favorable IRS opinion letter, or the Company Benefit Plan or prototype sponsor has remaining a period of time under applicable Code regulations or pronouncements of the IRS in which to apply for such a letter and make any amendments necessary to
obtain a favorable determination or opinion as to the qualified status of each such Company Benefit Plan. To the Knowledge of the Company, no event has occurred since the most recent determination or opinion letter or application therefor relating
to any such Company Benefit Plan and no condition exists that has adversely affected, or would reasonably be expected to adversely affect, the qualified status of any such Company Benefit Plan or result in the imposition of any liability, penalty or
tax under ERISA or the Code that is, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole.
(d) Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect,
neither the Company nor any Company ERISA Affiliate operates, maintains, contributes to, is required to contribute to or sponsors (or has in the past six (6) years established, operated, maintained, contributed to, was required to contribute to
or sponsored) (i) a multiemployer plan (as defined in Section 3(37) of ERISA), (ii) a multiple employer plan (within the meaning of Section 413(c) of the Code), or (iii) a multiple employer welfare
arrangement (within the meaning of Section 3(40) of ERISA). With respect to each Company Benefit Plan that constitutes a single employer plan (within the meaning of Section 4001(a)(15) of ERISA) to which the Company, any of
its Subsidiaries or any Company ERISA Affiliate made, or was required to make, contributions during the six years prior to the date hereof: (A) there does not now exist, nor do any circumstances exist that would reasonably be expected to result
in, any accumulated funding deficiency within the meaning of Section 412 of the Code or Section 302 of ERISA, whether or not waived, or any liability under Section 4971 of the Code; (B) the Company has provided to Parent the most
recent actuarial valuation report and the facts and assumptions stated therein are true and correct in all material respects; (C) no reportable event within the meaning of Section 4043(c) of ERISA for which the reporting requirement has not
been waived has occurred, and the consummation of the Merger will not result in the occurrence of any such reportable event; (D) all premiums to the Pension Benefit Guaranty Corporation (
PBGC
) have been timely paid in full;
(E) no liability or contingent liability (including liability pursuant to Section 4069 of ERISA) under Title IV of ERISA has been, or is reasonably expected to be, incurred by the Company, any of its Subsidiaries, or any Company ERISA
Affiliate; (F) the PBGC has not instituted or threatened to commence proceedings to terminate any such Company Benefit Plan, or to cause a Lien to be imposed in respect thereof, and, to the Knowledge of the Company, no condition exists that
presents a risk that such proceedings will be instituted or which would constitute grounds under Section 4042 of ERISA for the
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termination of, or the appointment of a trustee to administer, any such Company Benefit Plan, and (G) no such Company Benefit Plan has failed to meet the minimum funding standard under
Section 412 of the Code or Section 302 of ERISA, whether or not waived.
(e) Except as has not had, and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect, as of the date of this Agreement there are no pending, or, to the Knowledge of the Company, threatened Proceedings, disputes or claims (other than routine claims
for benefits) against or affecting any Company Benefit Plan, by any employee or beneficiary covered under such Company Benefit Plan, as applicable, or otherwise involving such Company Benefit Plan.
(f) Neither the execution or delivery of nor performance of the Companys obligations under this Agreement nor the consummation of the
Merger will, either alone or in conjunction with any other event (including any termination of employment upon or following the consummation of the Merger), (i) entitle any current or former director or employee of, or individual service provider
to, the Company or any of its Subsidiaries to any payment or benefit (or result in the funding of any such payment or benefit), except as expressly provided in this Agreement, (ii) increase the amount or value of any benefit or compensation
otherwise payable or required to be provided to any such director, employee or individual service provider, (iii) accelerate the time of payment, funding or vesting of amounts due any such director, employee or individual service provider,
(iv) result in any excess parachute payment (within the meaning of Section 280G of the Code) becoming due to any current or former employee or other individual service provider of the Company or any of its Subsidiaries, or
(v) limit or restrict the right of Parent, the Surviving Corporation, the Company or any of its Subsidiaries to merge, amend or terminate any Company Benefit Plan (other than any requirement to obtain the signature of a counterparty to amend,
modify or terminate such Company Benefit Plan).
(g) Except as has not had, and would not reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect, none of the Company or any of its Subsidiaries has any obligations for post-termination health, welfare or life insurance benefits under any Company Benefit Plan (other than for continuation
coverage required to be provided pursuant to Section 4980B of the Code) or coverage in which the full cost of such benefit is borne entirely by the former employee (or such former employees eligible dependents or beneficiaries).
(h) Except for labor-related agreements, arrangements or understandings entered into or applicable on the national and/or sector level, as of
the date of this Agreement, neither the Company nor any of its Subsidiaries is a party to or otherwise bound by any Labor Agreement, nor is any such Labor Agreement presently being negotiated, nor, to the Knowledge of the Company, are there any
employees of the Company or any of its Subsidiaries represented by a labor or trade union, labor organization or works council. Except as would not be material to the Company and its Subsidiaries, taken as a whole, as of the date of this Agreement,
to the Knowledge of the Company, there are no labor union organizing activities, representation campaigns, certification proceedings or petitions seeking a representation proceeding pending or threatened by or with respect to any of the employees of
the Company or any of its Subsidiaries. Since December 31, 2015 through the date of this Agreement, there has not been any, and there are no pending or, to the Knowledge of the Company, threatened strikes, walkouts, lockouts, slowdowns or other
labor stoppages against or affecting the Company or its Subsidiaries that have had, or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(i) Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect,
each Foreign Plan (i) has been established, operated, maintained and administered in compliance with its terms and operated in compliance with all applicable Laws; (ii) if required to be registered or approved by a
non-U.S.
Governmental Authority, has been registered or approved and has been maintained in good standing with applicable regulatory authorities, and, to the Knowledge of the Company, no event has occurred since the
date of the most recent approval or application therefor relating to any such Foreign Plan that would reasonably be expected to adversely affect any such approval or good standing;
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(iii) that is intended to qualify for special Tax treatment meets all requirements for such treatment; (iv) if required to be fully funded or fully insured, is fully funded or fully
insured on an ongoing and termination or solvency basis (determined using reasonable actuarial assumptions) in compliance with applicable Laws; and (v) is not subject to any pending or, to the Knowledge of the Company, threatened claims by or
on behalf of any participant in any Foreign Plan, or otherwise involving any such Foreign Plan or the assets of any Foreign Plan, other than routine claims for benefits.
(j) The Company and its Subsidiaries are, and since December 31, 2015 have been, in compliance with the terms of the Company Benefit
Plans, any applicable Labor Agreement and all applicable Laws respecting or relating to recruitment, employment and employment practices, and agency and other workers, including all Laws respecting terms and conditions of employment, health and
safety, wages and hours, child labor, immigration, employment discrimination, disability rights or benefits, equal opportunity, plant closures and layoffs, affirmative action, workers compensation, labor relations, employee leave issues and
unemployment insurance, except where failure to comply has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(k) Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect,
the Company and its Subsidiaries have been in compliance with all Laws applicable to contractors or subcontractors (in each case, as defined by Executive Order 11246).
Section 3.13
Taxes
.
(a) The Company and each of its Subsidiaries have (i) timely filed or caused to be timely filed (taking into account any extension of
time within which to file) all material Tax Returns required to be filed by any of them, and all such filed Tax Returns (taking into account all amendments thereto) are true, complete and accurate in all material respects and (ii) paid all
material Taxes due and owing (whether or not shown on such Tax Returns), except, in the case of clause (ii) hereof, with respect to Taxes contested in good faith by appropriate Proceedings and for which adequate reserves or accruals have been
established (as of the date of this Agreement and as of the Closing) in accordance with GAAP.
(b) (i) The unpaid Taxes of the Company and
its Subsidiaries did not, as of the date of their most recent consolidated financial statements included in the Company SEC Documents prior to the date of this Agreement, materially exceed the reserve or accrual for Tax liability (excluding any
reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of such consolidated financial statements (rather than in any notes thereto) and (ii) since the date of such financial
statements, none of the Company or any of its Subsidiaries has incurred any material liability for Taxes outside the ordinary course of business or otherwise inconsistent with past custom and practice.
(c) (i) There are no pending, threatened in writing or ongoing audits, examinations, investigations or other Proceedings by any Governmental
Authority in respect of material Taxes of or with respect to the Company or any of its Subsidiaries; (ii) no deficiency for material Taxes has been assessed or asserted in writing by any Governmental Authority against the Company or any of its
Subsidiaries, except for deficiencies which have been satisfied by payment, settled or withdrawn, or which are being contested in good faith by appropriate Proceedings and for which adequate reserves or accruals have been established (as of the date
of this Agreement and as of the Closing) in accordance with GAAP; (iii) none of the Company or any of its Subsidiaries has waived any statute of limitations with respect to material Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency; and (iv) no written claim has been made by any Governmental Authority in a jurisdiction where the Company or any of its Subsidiaries does not currently file a Tax Return that it is or may be liable for a material
amount of Taxes in such jurisdiction, nor has any such assertion been threatened or proposed in writing and received by the Company or any of its Subsidiaries.
(d) All Taxes that the Company or any of its Subsidiaries are or were required by Law to withhold or collect have been duly and timely
withheld or collected in all material respects from payments made to its
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respective employees, independent contractors, creditors, stockholders or other third parties and, have been timely paid to the proper Governmental Authority or other Person or properly set aside
in accounts for this purpose.
(e) None of the Company or any of its Subsidiaries has ever been a member of a consolidated, combined or
unitary Tax group (other than such a group the common parent of which is the Company or any of its Subsidiaries, the Applicable Company Subsidiary or any of its Subsidiaries, KLX or any of its Subsidiaries, or Automation or any of its Subsidiaries),
and none of the Company or any of its Subsidiaries has any liability for Taxes of any other Person (other than Taxes of the Company or any Subsidiary) under Treasury Regulations
Section 1.1502-6
(or any
similar provision of foreign, state or local law), as a transferee or successor, by Contract or otherwise.
(f) Except with respect to the
KLX Tax Sharing Agreement and the Automation Tax Allocation Agreement, none of the Company or any of its Subsidiaries is a party to or is bound by any Tax sharing, Tax allocation or Tax indemnification agreement or arrangement (other than such an
agreement or arrangement exclusively between or among the Company and its Subsidiaries or customary Tax indemnification provisions in commercial Contracts entered into in the ordinary course of business, the principal subject matter of which is not
Taxes) that will not be terminated on or before the Closing Date without any future liability or obligations to the Company or its Subsidiaries. The Company and its Subsidiaries have complied in all material respects with each of the KLX Tax Sharing
Agreement and the Automation Tax Allocation Agreement, and no material claims are pending against the Company or any of its Subsidiaries under either agreement.
(g) There are no Liens for a material amount of Taxes on any of the assets of the Company or any of its Subsidiaries other than Permitted
Liens.
(h) None of the Company or any of its Subsidiaries has participated in or been a party to a transaction that constitutes a
listed transaction that is required to be reported to the IRS pursuant to Section 6011 of the Code and applicable Treasury Regulations thereunder.
(i) Within the last two (2) years, none of the Company or any of its Subsidiaries has been a party to any transaction intended to qualify
under Section 355 of the Code.
Section 3.14
Material Contracts
.
(a)
Section 3.14(a) of the Company Disclosure Letter
sets forth a complete and correct list, as of the date of this Agreement, of
each Company Material Contract, a complete and correct copy of each of which has been made available to Parent prior to the date of this Agreement. For purposes of this Agreement,
Company Material Contract
shall mean any Contract
(other than any Company Benefit Plan) to which the Company or any of its Subsidiaries is a party or to or by which any asset or property of the Company or any of its Subsidiaries is bound or affected, except for this Agreement, that:
(i) is a Contract (other than a purchase order) with a vendor or supplier that provided or provides, as applicable, for
aggregate payments from the Company and its Subsidiaries of more than $50,000,000 in the past 12 months or $250,000,000 over the remaining life of such Contract (it being understood that the Company is not making any representation or warranty as to
the actual amount of future payments to be paid under any such Contract);
(ii) is a Contract (other than a purchase order)
with a customer that provided or provides, as applicable, for aggregate payments to the Company and its Subsidiaries of more than $100,000,000 in the past 12 months or $500,000,000 over the remaining life of such Contract (it being understood that
the Company is not making any representation or warranty as to the actual amount of future payments to be paid under any such Contract);
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(iii) constitutes a material contract (as such term is defined in
item 601(b)(10) of Regulation
S-K
under the Securities Act) of the Company and its Subsidiaries, taken as a whole, and is required to be filed with the SEC;
(iv) is a joint venture, shareholder or similar Contract that is material to the operation of the Company and its Subsidiaries,
taken as a whole;
(v) is a Contract (other than those solely between or among the Company and any of its wholly owned
Subsidiaries) relating to Indebtedness for borrowed money of the Company or any of its Subsidiaries (whether outstanding or as may be incurred) in an amount in excess of $25,000,000;
(vi) is an agreement under which the Company or any of its Subsidiaries has granted any Person registration rights (including
demand and piggy-back registration rights);
(vii) is a Contract with any Governmental Authority, any prime contractor of a
Governmental Authority in its capacity as a prime contractor or any subcontractor with respect to any such Contract that, in each case, provided or provides, as applicable, for aggregate payments to the Company and its Subsidiaries of more than
$100,000,000 in the past 12 months or $500,000,000 over the remaining life of such Contract (it being understood that the Company is not making any representation or warranty as to the actual amount of future payments to be paid under any such
Contract);
(viii) is a
non-competition
or other Contract that materially limits
(A) the manner, lines of business or localities in which any business of the Company and its Subsidiaries, taken as a whole, is or has a right to be conducted or (B) the types of businesses that the Company and its Subsidiaries conduct or
have a right to conduct;
(ix) is a Contract relating to the acquisition or disposition of any business, operations or
assets (whether by merger, sale of stock, sale of assets, consolidation or otherwise) entered into within the past three (3) years, for aggregate actual and/or contingent consideration under such Contract in excess of $100,000,000, or which has
continuing or contingent obligations that would reasonably be expected to be in excess of $10,000,000;
(x) is or includes
a license, consent to use,
non-assertion,
coexistence or similar Contract concerning Intellectual Property Rights or software of or used by the Company or any of its Subsidiaries (other than
non-customized
software subject to customary shrink-wrap or click-through type Contracts) and (A) provides for annual payments of more than $50,000,000 or (B) other than to a
customer or supplier in the ordinary course of business consistent with past practice (unless the Contract contains change of control or similar triggers that would materially alter, add to or impact the license terms therein as a result
of this Agreement or the transactions contemplated herein), grants an exclusive license or similar exclusive right to use to the Company or any of its Subsidiaries or to any third party and is material to the Company and its Subsidiaries, taken as a
whole;
(xi) is material to the Company and its Subsidiaries, taken as a whole, that provides for single source
supply to the Company or any of its Subsidiaries;
(xii) provides for (A) material exclusivity rights for the benefit
of a third party, (B) a guarantee of availability of supply or services by the Company or its Subsidiaries for a period greater than twenty four (24) months that is material to the Company and its Subsidiaries, taken as a whole, or (C)
most favored nation rights that are material to the Company and its Subsidiaries, taken as a whole;
(xiii) is
a Contract that contains a put, call, right of first refusal, right of first negotiation, right of first offer, redemption, repurchase or similar right pursuant to which the Company or any of its Subsidiaries would be required to purchase or sell,
as applicable, any material equity interests, businesses, lines of business, divisions, joint ventures, partnerships or other assets of any Person; or
(xiv) provides for the Company or its Subsidiaries to indemnify or hold harmless any other Person entered into outside of the
ordinary course of business consistent with past practice, that would reasonably be expected to impose on the Company or any of its Subsidiaries a liability in excess of $10,000,000.
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(b) Except as has not had, and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, (i) none of the Company or any of its Subsidiaries is in breach of or default (or, with the giving of notice or lapse of time or both, would be in default) under the terms of, and none has taken any
action resulting in the termination of, acceleration of performance required by, or resulting in a right of termination or acceleration under, any Company Material Contract, (ii) as of the date of this Agreement, to the Knowledge of the
Company, no other party to any Company Material Contract is in breach of or default (or, with the giving of notice or lapse of time or both, would be in default) under the terms of, and none has taken any action resulting in the termination of,
acceleration of performance required by, or resulting in a right of termination or acceleration under, any Company Material Contract and (iii) each Company Material Contract is (A) a valid and binding obligation of the Company or its
Subsidiary that is a party thereto, as applicable, and, to the Knowledge of the Company, the other parties thereto (
provided
that (I) such enforcement may be subject to applicable bankruptcy, insolvency (including all Laws related to
fraudulent transfers), reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors rights and remedies generally and (II) the remedies of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of the court before which any Proceeding therefor may be brought), and (B) in full force and effect.
Section 3.15
Intellectual Property and Information Technology
.
(a) Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, materially adverse to the Company
and its Subsidiaries, taken as a whole, the applications for and registrations of Intellectual Property Rights owned by the Company or its Subsidiaries are (i) free and clear of all Liens (other than Permitted Liens) and (ii) in effect,
subsisting and, to the Knowledge of the Company, valid. Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, materially adverse to the Company and its Subsidiaries, taken as a whole, (A) all
assignments to the Company or any of its Subsidiaries of Intellectual Property Rights issued by, registered with, renewed by or the subject of a pending application before any Governmental Authority or Internet domain name registrar that are owned
by the Company or such Subsidiary have been properly executed and recorded, where applicable, (B) as of the date of this Agreement, there are no inventorship challenges, opposition or nullity proceedings, post-grant reviews or similar
proceedings declared, commenced or provoked or, to the Knowledge of the Company, threatened with respect to any patents included in the Intellectual Property Rights that are owned by the Company or any of its Subsidiaries, and (C) as of the
date of this Agreement, there is no Proceeding pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries concerning the ownership, validity, registrability or enforceability of any Intellectual Property
Rights owned by the Company or any of its Subsidiaries or, to the Knowledge of the Company, used in the respective businesses of the Company and its Subsidiaries.
(b) Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, materially adverse to the Company
and its Subsidiaries, taken as a whole, the Company and its Subsidiaries own, validly license or have the right to use in the manner currently used, all patents, trademarks, trade names, copyrights, Internet domain names, service marks,
know-how,
trade secrets and other intellectual property rights, and any registrations and applications therefor (the
Intellectual Property Rights
), that are used in the respective businesses of
the Company and its Subsidiaries. Without limiting the foregoing, (i) the Company is the sole owner of the applications and registrations listed on
Section 3.15(b)(i) of the Company Disclosure Letter
, (ii) as of the date
hereof, there is no pending or, to the Knowledge of the Company, threatened Proceeding challenging such ownership rights and (iii) to the Knowledge of the Company, as of the date hereof, no third Person is using such marks in a material and
unauthorized manner in the fields set forth on
Section 3.15(b)(iii) of the Company Disclosure Letter
.
(c) Except as has not
been, and would not reasonably be expected to be, individually or in the aggregate, materially adverse to the Company and its Subsidiaries, taken as a whole, (i) the conduct of the respective businesses of the Company and its Subsidiaries as
currently conducted does not infringe upon,
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misappropriate or otherwise violate any Intellectual Property Rights of any other Person, and (ii) as of the date of this Agreement, there is no claim for any such infringement,
misappropriation or other violation pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries, and (iii) to the Knowledge of the Company, as of the date of this Agreement, no other Person is
infringing, misappropriating or otherwise violating any Intellectual Property Right owned by or used in the respective businesses of the Company or any of its Subsidiaries.
(d) Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, materially adverse to the Company
and its Subsidiaries, taken as a whole, (i) the Company and its Subsidiaries have taken commercially reasonable measures to protect the confidentiality of all trade secrets of the Company or any of its Subsidiaries and (ii) to the
Knowledge of the Company, there has been no unauthorized or improper use or disclosure thereof.
(e) Except as has not been, and would not
reasonably be expected to be, individually or in the aggregate, materially adverse to the Company and its Subsidiaries, taken as a whole, since December 31, 2014, there have been no security breaches of, unauthorized access to or use of,
failures or unplanned outages in, or other adverse integrity or security events affecting the IT Assets of the Company and its Subsidiaries or any other Persons to the extent used by or on behalf of the Company or its Subsidiaries (or, in each case
information and transactions stored or contained therein or transmitted thereby).
(f) Except as has not been, and would not reasonably be
expected to be, individually or in the aggregate, materially adverse to the Company or its Subsidiaries, taken as a whole, (i) the Company and each of its Subsidiaries have taken commercially reasonable measures to protect all Personal Data in
its and their possession against unauthorized access or use, misuse, loss or damage and (ii) the Company and its Subsidiaries have since December 31, 2014 complied with all applicable Laws, as well as their own rules, policies and
procedures, relating to privacy, data protection and the collection, retention, protection, transfer, use and processing of all Personal Data, and, to the Knowledge of the Company, there has been no unauthorized access to or use of, misuse of, loss
of or damage to any such Personal Data.
Section 3.16
Real and Personal Property
.
(a) Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect,
the Company and its Subsidiaries (as applicable) have (i) good title to, or valid leasehold interests in, all of their respective properties and assets, free and clear of all Liens, except for Permitted Liens, and (ii) exclusive possession
of all Company Leased Real Property, other than any use and occupancy rights granted to third party owners, tenants or licensees pursuant to agreements with respect to such Company Leased Real Property, entered into in the ordinary course of
business. Other than as constitutes a Permitted Lien, neither the Company nor any of its Subsidiaries is a lessor or grantor under any material lease or other instrument granting to any other Person any right to the possession, lease, occupancy or
enjoyment of any material real property owned by the Company or any of its Subsidiaries or any material portion thereof.
(b) Each lease,
sublease or license for Company Leased Real Property is a valid and binding obligation of the Company or any of its Subsidiaries that is a party thereto, as applicable, and to the Knowledge of the Company, the other parties thereto, except as has
not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect;
provided
that (i) such enforcement may be subject to applicable bankruptcy, insolvency (including all Laws
related to fraudulent transfers), reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors rights and remedies generally and (ii) the remedies of specific performance and injunctive relief and
other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any Proceeding therefor may be brought.
(c) As of the date of this Agreement, except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect, none of the Company or any of its
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Subsidiaries has received any written communication from, or given any written communication to, or to the Knowledge of the Company, received or given any other type of communication from or to,
any other party to a lease for Company Leased Real Property or any lender, alleging that the Company, any of its Subsidiaries or such other party, as the case may be, is in default under such lease.
(d) Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect
(i) no Person, other than the Company or a Subsidiary of the Company, possesses, uses or occupies all or any portion of any real property owned or leased by the Company or any of its Subsidiaries, (ii) there are no outstanding options or
rights of first refusal to purchase any real property owned by the Company or any of its Subsidiaries or any interest therein and (iii) as of the date hereof, there are no pending or, to the Knowledge of the Company, threatened Proceedings to
take all or any portion of any real property owned or leased by the Company or any interest therein by eminent domain or any condemnation proceeding (or the jurisdictional equivalent thereof) or any sale or disposition in lieu thereof.
Section 3.17
Environmental
.
(a) Except as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect:
(i) the Company and its Subsidiaries are and, since December 31, 2012, have been in compliance with all applicable
Environmental Laws, including possessing and complying with the terms of all Company Permits required for their operations under applicable Environmental Laws;
(ii) as of the date of this Agreement, there is no Proceeding or Order pending or, to the Knowledge of the Company, threatened
pursuant to or relating to any Environmental Law against the Company or any of its Subsidiaries;
(iii) as of the date of
this Agreement, none of the Company or any of its Subsidiaries has received notice or a request for information alleging that the Company or any of its Subsidiaries or any of their respective predecessors has been or is in actual or potential
violation of any applicable Environmental Law or otherwise may be liable under any applicable Environmental Law, which violation or liability is unresolved;
(iv) there have been no Releases of Hazardous Materials on or underneath any location that have resulted in or are reasonably
likely to result in an obligation by the Company or any of its Subsidiaries to remediate such Releases pursuant to applicable Environmental Law or otherwise have resulted in or are reasonably likely to result in liability to the Company or any of
its Subsidiaries pursuant to applicable Environmental Law;
(v) any asbestos, asbestos-containing material or presumed
asbestos-containing material that is on or part of any real property, plant, building or facility currently owned, leased or operated primarily by the Company or any of its present or past Subsidiaries or any of their respective predecessors is and,
with respect to any real property, plant, building or facility formerly owned, leased or operated by the Company or any of its present or past Subsidiaries or any of their respective predecessors, was during time of such ownership, lease or
operation, managed according to the current legal standards governing such material, and its presence or condition does not violate any Environmental Law; and
(vi) none of the products manufactured, distributed or sold by the Company or any of its present or past Subsidiaries or any of
their respective predecessors contained asbestos or asbestos-containing material.
Section 3.18
Customers and Suppliers
. None of the ten (10) largest customers (by revenue) of the businesses of the Company and its Subsidiaries during the twelve (12) months prior to the date of this Agreement or the ten (10) largest
suppliers (by cost) of the businesses of the Company and its Subsidiaries during the twelve (12) months prior to the date of this Agreement has since September 30, 2016 through the date of this Agreement (a) canceled or otherwise
terminated, or to the Knowledge of the Company, threatened to cancel or otherwise
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terminate, its relationship with the Company or any of its Subsidiaries, (b) materially decreased, or to the Knowledge of the Company or any of its Subsidiaries, threatened to materially
decrease the quantity of products or services purchased from or sold to, respectively, the Company or any of its Subsidiaries, outside of ordinary course fluctuations in business from the placing and fulfillment of Contracts, (c) demanded,
requested or received from the Company or any of its Subsidiaries any material concessions with respect to any existing or proposed Contracts or programs which, in the aggregate, would reasonably be expected to be materially adverse to the Company
or its Subsidiaries, taken as a whole, or (d) been engaged in a material dispute with the Company or any of its Subsidiaries, in the case of each of clauses (a) (with respect to threatened matters), (b), (c) and (d), other than to the extent in
the ordinary course of business consistent with past practice. Lists of all customers and suppliers referred to in this
Section 3.18
have been made available to Parent prior to the date of this Agreement.
Section 3.19
Product Warranty; Aviation Regulation Compliance
. Except as has not had, and would not
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (a) each product manufactured, sold, leased or delivered by the Company or any of its Subsidiaries, since December 31, 2013, has been in
substantial conformity with all applicable contractual specifications and all express and implied warranties made by the Company or any of its Subsidiaries (except to the extent
non-conformity
is consented to
by a customer), and neither the Company nor any of its Subsidiaries has any liability for replacement or repair thereof or other damages in connection therewith, (b) the Company and each of its Subsidiaries (i) is in compliance with all
applicable Laws prescribed by the U.S. Federal Aviation Administration (
FAA
) under Title 14 of the Code of Federal Regulations and similar Laws prescribed by foreign aviation authorities (such Laws, including those prescribed by
the FAA, collectively,
Aviation Regulations
), (ii) since December 31, 2015, has not violated or made voluntary disclosures with respect to potential violations of any Aviation Regulations, or, since December 31, 2013
through the date of this Agreement, has not been subject to an investigation with respect to potential violations of any Aviation Regulations, and (iii) has not been cited by the FAA or foreign aviation authorities for any material
discrepancies or violations during inspections or audits since December 31, 2015, and (c) the Company has not received any Air Worthiness Directives (as such term is defined in the Federal Aviation Regulations, 14 C.F.R. § 39, as
amended) issued by the FAA (or, with respect to such issuances by any foreign aviation Governmental Authority, the foreign equivalent thereof) pursuant to which a known safety deficiency was found in any of the products of the Company or any of its
Subsidiaries at any time since December 31, 2015, and no such Air Worthiness Directives are pending.
Section 3.20
Foreign Corrupt Practices Act; Anti-Corruption
.
(a) Since December 31, 2012, none of the Company or its Subsidiaries, nor, to the Knowledge of the Company, any director, officer,
employee or agent of the Company, has directly or indirectly made, offered to make, attempted to make, or accepted any contribution, gift, bribe, rebate, payoff, influence payment, kickback or other payment to or from any Person, private or public,
regardless of what form, whether in money, property or services, in violation of the FCPA, the U.S. Travel Act, the U.K. Bribery Act 2010, the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or
any other applicable Law relating to anti-corruption or anti-bribery (collectively, the
Anti-Corruption Laws
).
(b)
Neither the Company nor any of its Subsidiaries, as of the date of this Agreement, (i) to the Knowledge of the Company, is under external or internal investigation for any material violation of the Anti-Corruption Laws, (ii) has received
any notice or other communication (in writing or otherwise) from any Governmental Authority regarding any material violation of, or failure to comply with, any Anti-Corruption Laws or (iii) to the Knowledge of the Company, is the subject of any
internal complaint, audit or review process regarding a material violation of the Anti-Corruption Laws.
(c) The Company and its
Subsidiaries maintain an adequate system or systems of internal controls reasonably designed to (i) ensure compliance with the Anti-Corruption Laws and (ii) prevent and detect violations of the Anti-Corruption Laws.
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(d) Except as has not been, and would not reasonably be expected to be, individually or in the
aggregate, material to the Company and its Subsidiaries, taken as a whole, since December 31, 2012, neither the Company nor any of its Subsidiaries has made any disclosure (voluntary or otherwise) to any Governmental Authority with respect to
any alleged irregularity, misstatement or omission or other potential violation or liability arising under or relating to any Anti-Corruption Laws.
Section 3.21
Customs and International Trade Laws; Sanctions
.
(a) Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and its
Subsidiaries, taken as a whole, (i) since December 31, 2012, the Company and its Subsidiaries have been in compliance with all applicable Customs & International Trade Laws, and (ii) as of the date of this Agreement, there
are no unresolved formal claims concerning the liability of any of the Company or its Subsidiaries under such Laws. Without limiting the foregoing, except as has not been, and would not reasonably be expected to be, individually or in the aggregate,
material to the Company and its Subsidiaries, taken as a whole, (A) at all times since December 31, 2012, the Company and its Subsidiaries and, to the Knowledge of the Company, Persons acting on their behalf, have obtained all import and
export licenses and all other Customs & International Trade Authorizations, (B) since December 31, 2012, no Governmental Authority has imposed any civil or criminal fine, penalty, seizure, forfeiture, revocation of a
Customs & International Trade Authorization, debarment or denial of future Customs & International Trade Authorizations against any of the Company or its Subsidiaries or any of their respective directors, officers or, to the
Knowledge of the Company, employees or agents, of the Company or any of its Subsidiaries (in their capacity as such) in connection with any actual or alleged violation of any applicable Customs & International Trade Laws, and (C) since
December 31, 2012 through the date of this Agreement, there have been no written claims, written requests for information, the initiation of any Proceedings or, to the Knowledge of the Company, investigations by a Governmental Authority with
respect to the Companys and its Subsidiaries Customs & International Trade Authorizations and compliance with applicable Customs & International Trade Laws.
(b) Neither the Company nor any of its Subsidiaries, and no director, officer or, to the Knowledge of the Company, employee thereof,
(i) is a Sanctioned Person or (ii) as of the date of this Agreement, has pending or, to the Knowledge of the Company, threatened claims against it, him or her with respect to applicable Sanctions.
(c) Each of the Company and its Subsidiaries, and each director, officer and, to the Knowledge of the Company, other employee thereof,
(i) is and, since December 31, 2012, has been, in compliance in all material respects with all applicable Sanctions and (ii) has in place adequate controls and systems reasonably designed to ensure compliance with applicable Sanctions
in each of the jurisdictions in which the Company or any of its Subsidiaries do business.
(d) Except as has not been, and would not
reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole, since December 31, 2012, neither the Company nor any of its Subsidiaries has made any disclosure (voluntary or
otherwise) to any Governmental Authority with respect to any alleged irregularity, misstatement or omission or other potential violation or liability arising under or relating to any Customs & International Trade Laws or applicable
Sanctions.
Section 3.22
Government Contracts
; Government Bids
.
(a) Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, materially adverse to the Company
and its Subsidiaries, taken as a whole, each Company Government Contract was legally awarded, is binding on the Company or its Subsidiaries, as applicable, party thereto, and is in full force and effect, and no Company Government Contract or offer,
quotation, bid or proposal to sell products or services made by the Company or any of its Subsidiaries to any Governmental Authority or any prime contractor that would be material to the Company and its Subsidiaries, taken as a whole (a
Government
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Contract Bid
) is currently the subject of bid or award protest proceedings. The Company and its Subsidiaries have complied and are in compliance in all material respects with the
terms and conditions of each Company Government Contract and Government Contract Bid as required, including all clauses, provisions and requirements incorporated expressly by reference or by operation of Law therein.
(b) Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, materially adverse to the Company
and its Subsidiaries, taken as a whole, since December 31, 2015, neither the Governmental Authority nor any prime contractor or subcontractor has notified the Company or any of its Subsidiaries in writing that the Company or any of its
Subsidiaries has, or is alleged to have, breached or violated in any material respect any Law, representation, certification, disclosure, clause, provision or requirement pertaining to any Company Government Contract and Government Contract Bid.
(c) Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, materially adverse to the
Company and its Subsidiaries, taken as a whole, since December 31, 2015, no costs incurred by the Company or any of its Subsidiaries pertaining to any Company Government Contract have been proposed for disallowance or deemed finally disallowed
in writing by a Governmental Authority, and no material payment due to the Company or any of its Subsidiaries pertaining to any Company Government Contract has been withheld or set off, nor has any claim been made to withhold or set off money.
(d) Since December 31, 2015, except as has not been, and could not reasonably be expected to be, individually or in the aggregate,
materially adverse to the Company and its Subsidiaries, taken as a whole, (i) none of the Company, any of its Subsidiaries or any of their respective Principals (as defined in Federal Acquisition Regulation
52.209-5)
has been debarred, suspended or excluded, or to the Knowledge of the Company, proposed for debarment, suspension or exclusion, from participation in or the award of Contracts or subcontracts for or
with any Governmental Authority or doing business with any Governmental Authority, (ii) through the date of this Agreement, none of the Company or any of its Subsidiaries has received any request to show cause (excluding for this purpose
ineligibility to bid on certain contracts due to generally applicable bidding requirements), (iii) none of the Company or any of its Subsidiaries, to the Knowledge of the Company, is the subject of a finding of
non-compliance,
nonresponsibility or ineligibility for government contracting, (iv) none of the Company or any of its Subsidiaries is for any reason listed on the List of Parties Excluded from Federal
Procurement and Nonprocurement Programs, (v) neither the Company nor any of its Subsidiaries, nor any of the respective directors, officers, employees or Principals (as defined in Federal Acquisition Regulation
52.209-5),
nor to the Knowledge of the Company, any consultants or agents of the Company or any of its Subsidiaries, is or has been under administrative, civil or criminal investigation, indictment or
information by any Governmental Authority with respect to the award or performance of any Company Government Contract, the subject of any actual or, to the Knowledge of the Company, threatened in writing, whistleblower or qui
tam lawsuit, or audit or investigation of the Company or any of its Subsidiaries with respect to any Company Government Contract, including any alleged material irregularity, misstatement or omission arising thereunder or relating thereto, and
(vi) neither the Company nor any of its Subsidiaries has made any voluntary disclosure (A) to any Governmental Authority with respect to any alleged material irregularity, misstatement, omission, fraud or price mischarging, or other
violation of Law, arising under or relating to a Company Government Contract or (B) under the Federal Acquisition Regulation mandatory disclosure or payment provisions to any Governmental Authority and, to the Knowledge of the Company, there
are no facts that would require mandatory disclosure thereunder.
(e) Except as would not reasonably be expected to be, individually or in
the aggregate, materially adverse to the Company or its Subsidiaries, taken as a whole, (i) the cost accounting system and business systems (as defined in Defense Federal Acquisition Regulation Supplement 242.7001 &
252.242-7005)
of the Company and its Subsidiaries and the associated entries reflected in the financial records of the Company and its Subsidiaries with respect to Company Government Contracts and Government
Contract Bids are and, since December 31, 2015, have been in compliance with Law and have not been determined by the United States governments Defense Contract Audit Agency or Defense Contract Management Agency to be inadequate or
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disapproved for accumulating and billing costs under Company Government Contracts and (ii) since December 31, 2015, to the Knowledge of the Company, (A) there has been no finding
of fraud or any claim of any liability as a result of defective pricing, labor mischarging or improper payments on the part of the Company or any of its Subsidiaries, (B) no cost incurred by the Company or any of its Subsidiaries has been
formally questioned, challenged, or disallowed, nor is any such cost the subject of any investigation, other than routine audit, by a Governmental Authority and (C) no money due to the Company or any of its Subsidiaries pertaining to a Company
Government Contract has been withheld or offset nor has any claim been made to withhold or offset money, and, subject to applicable rate approvals, each of the Company and its Subsidiaries, as applicable, is entitled to all progress payments
received with respect thereto.
Section 3.23
Insurance
. Except as has not had, and would not
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect (a) the Company and its Subsidiaries have paid, or caused to be paid, all premiums due under all insurance policies of the Company and its
Subsidiaries, and all such insurance policies are in full force and effect, and (b) as of the date of this Agreement, none of the Company or any of its Subsidiaries has received written notice (i) that they are in default with respect to
any obligations under such policies or (ii) of cancellation or termination with respect to any such policies, or refusal or denial of any coverage, reservation of rights or rejection of any claim under any such policies, in each case that is
held by, or for the benefit of, the Company or any of its Subsidiaries.
Section 3.24
Takeover
Statutes
. The approval by the Company Board of this Agreement, the Merger and the other transactions contemplated by this Agreement represents all the action necessary to render inapplicable to this Agreement, the Merger and the transactions
contemplated by this Agreement the provisions of Section 203 of the DGCL.
Section 3.25
Brokers
. No investment banker, broker or finder other than J.P. Morgan Securities LLC and Citigroup Global Markets, Inc., the fees and expenses of which will be paid by the Company, is entitled to any investment banking, brokerage,
finders or similar fee or commission in connection with this Agreement or the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company or any of its Affiliates. True, correct and complete copies
of all the engagement letters between the Company and each of J.P. Morgan Securities LLC and Citigroup Global Markets, Inc. have been made available to Parent prior to the date of this Agreement.
Section 3.26
Opinion of Financial Advisors
. The Company Board has received the opinions of J.P.
Morgan Securities LLC and Citigroup Global Markets, Inc., dated as of the date of this Agreement, each to the effect that, as of such date and based upon and subject to the limitations, qualifications and assumptions set forth therein, the Merger
Consideration is fair, from a financial point of view, to the holders of shares of Company Common Stock (other than the Company, Parent, their respective wholly owned Subsidiaries and holders of Dissenting Shares). Promptly after the date of this
Agreement, true, correct and complete copies of such opinions will be made available to Parent for informational purposes only.
Section 3.27
Applicable Company Subsidiary Acquisition
. As of the Applicable Company Subsidiary Acquisition Closing, there were no waivers in accordance with the terms of the Applicable Subsidiary Acquisition Agreement by any party
to such agreement of the conditions to the closing set forth in Sections 6.1, 6.2 and 6.3 of the Applicable Company Subsidiary Acquisition Agreement.
Section 3.28
No Other Representations or Warranties
. Except for the representations and warranties
contained in this
Article III
, neither the Company nor any other Person on behalf of the Company makes any express or implied representation or warranty with respect to the Company or any of its Subsidiaries or any other information
provided to Parent or Merger Sub in connection with the transactions contemplated by this Agreement, including the accuracy, completeness or timeliness thereof. The Company acknowledges that, except for the representations and warranties contained
in
Article IV
of this Agreement, none of Parent or Merger Sub or any of their respective Affiliates or Representatives or any other Person makes (and the Company is not relying
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on) any representation or warranty, express or implied, to the Company in connection with the Merger and the other transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as disclosed in (i) the Parent SEC Documents filed with (or furnished to) the SEC by Parent on or after December 31, 2016 and
prior to the date of this Agreement (but in each case excluding any risk factor disclosure contained under the heading Risk Factors (other than any factual information contained therein) or in any forward-looking statements
legend or in any similarly
non-specific,
cautionary, predictive or forward-looking statements) and to the extent publicly available on EDGAR or (ii) the Parent Disclosure Letter, Parent and Merger Sub
hereby, jointly and severally, represent and warrant to the Company as follows:
Section 4.1
Organization; Qualification
. Each of Parent and Merger Sub is a corporation duly organized and validly existing under the laws of the State of Delaware and has the requisite corporate power and authority to conduct its business as it is now
being conducted and to own, lease and operate its properties and assets in the manner in which its properties and assets are currently operated, except where the failure to be so validly existing and authorized (a) has not been, and would not
reasonably be expected to be, individually or in the aggregate, materially adverse to Parent and its Subsidiaries, taken as a whole, and (b) would not reasonably be expected to, individually or in the aggregate, impair in any material respect
the ability of Parent or Merger Sub to perform its respective obligations under this Agreement or to consummate the Merger, or prevent or materially delay the consummation of any of the Merger and the other transactions contemplated by this
Agreement. Each of Parent and Merger Sub is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the character or location of the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where the failure to be so duly qualified or licensed and in good standing (a) has not had, and would not reasonably be expected to have, individually or in the aggregate,
a Parent Material Adverse Effect and (b) would not reasonably be expected to, individually or in the aggregate, impair in any material respect the ability of Parent or Merger Sub to perform its respective obligations under this Agreement or to
consummate the Merger, or prevent or materially delay the consummation of any of the Merger and the other transactions contemplated by this Agreement. Accurate and complete copies of the Parent Organizational Documents, as in effect on the date of
this Agreement, have been made available to the Company prior to the date of this Agreement. The Parent Organizational Documents are currently in effect, and neither Parent nor Merger Sub, as applicable, is in violation of any of the provisions
thereof.
Section 4.2
Capitalization; Subsidiaries
.
(a) As of the close of business on the August 30, 2017 (the
Parent
Capitalization Date
), the authorized capital
stock of Parent consisted of (i) 4,000,000,000 shares of Parent Common Stock, 1,452,811,555 of which were issued and outstanding (including 0 shares of Parent Common Stock subject to Parent Equity Awards in the form of compensatory restricted stock
awards) and 654,259,004 of which were held by Parent as treasury stock, and (ii) 250,000,000 shares of preferred stock, par value $1.00 per share, of Parent, no shares of which were outstanding. There are no other classes of capital stock of Parent
and no bonds, debentures, notes or other Indebtedness or securities of Parent having the right to vote (or convertible into or exercisable for securities having the right to vote) on any matters on which holders of capital stock of Parent may vote
authorized, issued or outstanding. As of the close of business on the Parent Capitalization Date, there were (A) outstanding options and stock appreciation rights relating to 35,734,448 shares of Parent Common Stock and (B) outstanding
Parent Equity Awards (other than options, stock appreciation rights and compensatory restricted stock awards relating to Parent Common Stock) representing 4,613,424 shares of Parent Common Stock.
(b) All of the issued and outstanding shares of Parent Common Stock have been, and all of the shares of Parent Common Stock that may be issued
pursuant to the Parent Equity Awards or the Parents Long-Term
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Incentive Plan, as amended from time to time, or other compensation plans of Parent will be, when issued in accordance with the respective terms thereof, duly authorized and validly issued, and,
along with the shares of Parent Common Stock issuable pursuant to this Agreement, are, or will be when issued, fully paid, nonassessable and free of preemptive rights. All of the outstanding Parent Common Stock has been sold pursuant to an effective
registration statement filed under the federal securities Laws or an appropriate exemption therefrom.
(c) Other than (1) issuances
of shares of Parent Common Stock pursuant to the exercise or settlement, as applicable, of the Parent Equity Awards outstanding as of the close of business on the Parent Capitalization Date or under other compensation plans of Parent in accordance
with their terms or (2) the grant or issuance of Parent Equity Awards since the Parent Capitalization Date in the ordinary course of business consistent with past practice, as of the date of this Agreement, other than as set forth in
Section 4.2(a)
, there are no (i) existing options, warrants, calls, preemptive rights, subscriptions or other securities or rights, restricted stock awards, restricted stock unit awards, convertible securities, agreements,
arrangements or commitments of any kind obligating Parent to issue, transfer, register or sell, or cause to be issued, transferred, registered or sold, any shares of capital stock of Parent or securities convertible into or exchangeable for such
shares, or obligating Parent to grant, extend or enter into such options, warrants, calls, preemptive, subscriptions or other securities or rights, restricted stock awards, restricted stock unit awards, convertible securities, agreements,
arrangements or commitments, (ii) outstanding obligations of Parent to repurchase, redeem or otherwise acquire any capital stock of Parent or any securities representing the right to purchase or otherwise receive any capital stock of Parent,
(iii) stockholder agreements, voting trusts or similar agreements with any Person to which Parent is a party (A) restricting the transfer of the capital stock of Parent or (B) affecting the voting rights of capital stock of Parent or
other equity or voting securities or other equity interests of Parent, or (iv) outstanding or authorized equity or equity-based compensation awards, including any equity appreciation rights, security-based performance units, phantom
stock, profit-participation or other security rights issued by Parent, or other agreements, arrangements or commitments of any character (contingent or otherwise) to which Parent is party, in each case pursuant to which any Person is entitled to
receive any payment from Parent based in whole or in part on the value of any capital stock of Parent.
(d) All of the issued and
outstanding capital stock of Merger Sub is, and at the Effective Time will be, owned by Parent or a direct or indirect wholly owned Subsidiary of Parent. Merger Sub has no outstanding options, warrants, rights or any other agreements pursuant to
which any Person other than Parent may acquire any equity security of Merger Sub.
(e) The number of shares of authorized Parent Common
Stock that have not been issued, subscribed for or otherwise committed to be issued is at least equal to the number of shares of Parent Common Stock to be issued pursuant to this Agreement.
Section 4.3
Authority Relative to Agreement
.
(a) Each of Parent and Merger Sub have all necessary corporate power and authority to execute, deliver and perform their respective
obligations under this Agreement and to consummate the transactions contemplated by this Agreement. The execution, delivery and performance of this Agreement by Parent and Merger Sub, and the consummation by Parent and Merger Sub of the transactions
contemplated by this Agreement, have been duly and validly authorized by all necessary corporate action by Parent and Merger Sub, and (in the case of the Merger, except for the filing of the Certificate of Merger with the Delaware Secretary of
State) no other corporate action or proceeding on the part of Parent or Merger Sub is necessary to authorize the execution, delivery and performance of this Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub of the
transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by each of Parent and Merger Sub and, assuming due authorization, execution and delivery of this Agreement by the other parties hereto, constitutes a
legal, valid and binding obligation of each of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency
(including all Laws related to fraudulent
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transfers), reorganization, moratorium or other similar Laws, now or hereafter in effect, affecting creditors rights and remedies generally and (ii) the remedies of specific
performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any Proceeding therefor may be brought.
(b) The Parent Board and the Merger Sub Board have, by resolutions unanimously adopted thereby, approved this Agreement and the transactions
contemplated by this Agreement. As of the date of this Agreement, none of the aforesaid actions by the Parent Board or the Merger Sub Board have been amended, rescinded or modified. Parent or a Subsidiary of Parent, acting in its capacity as the
sole stockholder of Merger Sub, has approved and adopted this Agreement.
Section 4.4
No Vote
Required
. Assuming the accuracy of the representations and warranties in
Section 3.2
and compliance by the Company with
Section 5.1(c)
, no vote of the stockholders of Parent or the holders of any other securities of
Parent is required by any Law or by the Parent Organizational Documents in connection with the consummation of the transactions contemplated by this Agreement.
Section 4.5
No Conflict; Required Filings and Consents
.
(a) Neither the execution and delivery of this Agreement by Parent and Merger Sub nor the consummation by Parent and Merger Sub of the
transactions contemplated by this Agreement, nor compliance by Parent and Merger Sub with any of the applicable terms or provisions of this Agreement, will (i) violate any provision of the Parent Organizational Documents or the certificate of
incorporation or bylaws (or equivalent organizational documents) of any Subsidiary of Parent, (ii) assuming that the Consents, registrations, declarations, filings and notices referenced in
Section 4.5(b)
have been obtained or made,
conflict with or violate any Law applicable to Parent or any of its Subsidiaries or by which any property or asset of Parent or any of its Subsidiaries is bound or affected or (iii) violate, conflict with or result in any breach of any
provision of, or loss of any benefit, or constitute a default (with or without notice or lapse of time, or both) under, give rise to any right of termination, acceleration or cancellation of or require the Consent of, notice to or filing with any
third party pursuant to any of the terms or provisions of any Contract to which Parent or any of its Subsidiaries is a party or by which any property or asset of Parent or any of its Subsidiaries is bound or affected, or result in the creation of a
Lien, other than any Permitted Lien, upon any of the property or assets of Parent or Merger Sub, other than, in the case of clause (i) with respect to the certificate of incorporation or bylaws (or equivalent organizational documents) of any
Subsidiary of Parent (other than Merger Sub), clause (ii) and clause (iii), any such conflict, violation, breach, default, termination, acceleration, cancellation or Lien that (A) has not had, and would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect and (B) would not reasonably be expected to, individually or in the aggregate, impair in any material respect the ability of the Parent or Merger Sub to perform its respective
obligations under this Agreement or to consummate the Merger, or prevent or materially delay the consummation of any of the Merger and the other transactions contemplated by this Agreement.
(b) No Consent of, registration, declaration or filing with or notice to any Governmental Authority is required to be obtained or made by or
with respect to Parent or any of its Subsidiaries in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated by this Agreement, other than (i) applicable requirements of and
filings with the SEC under the Exchange Act or the Securities Act (including the filing with the SEC of the Form
S-4
and the Proxy Statement), (ii) the filing of the Certificate of Merger with the Delaware
Secretary of State, (iii) applicable requirements under foreign qualification, state securities or blue sky laws of various states, (iv) compliance with applicable rules and regulations of the NYSE and any other applicable
stock exchanges or marketplaces, (v) such other items required solely by reason of the participation and identity of the Company in the transactions contemplated by this Agreement, (vi) compliance with and filings or notifications under
Antitrust Laws and (vii) such other Consents, registrations, declarations, filings or notices the failure of which to be obtained or made (A) has not had, and would not reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect and
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(B) would not reasonably be expected to, individually or in the aggregate, impair in any material respect the ability of Parent or Merger Sub to perform its respective obligations under this
Agreement or to consummate the Merger, or prevent or materially delay the consummation of any of the Merger and the other transactions contemplated by this Agreement.
Section 4.6
Parent SEC Documents; Financial Statements
.
(a) Since December 31, 2016, Parent has timely filed with (or furnished to) the SEC all forms, reports, schedules, statements, exhibits
and other documents (including exhibits, financial statements and schedules thereto and all other information incorporated therein and amendments and supplements thereto) required by it to be filed (or furnished) under the Exchange Act or the
Securities Act (collectively, the
Parent SEC Documents
). As of its filing (or furnishing) date or, if amended prior to the date of this Agreement, as of the date of the last such amendment, each Parent SEC Document complied in all
material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be. As of its filing date or, if amended prior to the date of this Agreement, as of the date of the last such amendment, each Parent SEC
Document filed pursuant to the Exchange Act did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. Each Parent SEC Document that is a registration statement, as amended or supplemented, if applicable, filed pursuant to the Securities Act, as of the date such registration statement or
amendment became effective prior to the date of this Agreement, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein not
misleading. As of the date of this Agreement, there are no amendments or modifications to Parent SEC Documents that were required to be filed with (or furnished to) the SEC prior to the date of this Agreement, but that have not yet been filed with
(or furnished to) the SEC. No Subsidiary of Parent is subject to the periodic reporting requirements of the Exchange Act. All of the audited financial statements and unaudited interim financial statements of Parent included in Parent SEC Documents
(i) comply in all material respects with the applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, (ii) have been prepared in accordance with GAAP applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto and except, in the case of the unaudited interim statements, as may be permitted under Form
10-Q
of the Exchange Act) and
(iii) fairly present in all material respects the financial position, the stockholders equity, the results of operations and cash flows of Parent and its consolidated Subsidiaries as of the times and for the periods referred to therein
(except as may be indicated in the notes thereto and subject, in the case of unaudited interim financial statements, to normal and recurring
year-end
adjustments).
(b) Prior to the date of this Agreement, Parent has furnished to the Company complete and correct copies of all comment letters from the SEC
since December 31, 2016 through the date of this Agreement with respect to any of the Parent SEC Documents, together with all written responses of Parent thereto. As of the date of this Agreement, there are no outstanding or unresolved comments
in comment letters received from the SEC staff with respect to any of Parent SEC Documents, and, to the Knowledge of Parent, none of Parent SEC Documents are subject to ongoing SEC review.
(c) Parent is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act and the applicable listing and
governance rules and regulations of the NYSE.
(d) Parent maintains a system of internal control over financial reporting (as defined in
Rules
13a-15(f)
and
15d-15(f)
of the Exchange Act) designed to provide reasonable assurance regarding the reliability of Parents financial reporting and the
preparation of financial statements for external purposes in conformity with GAAP. Parent has evaluated the effectiveness of Parents internal control over financial reporting and, to the extent required by applicable Law, presented in any
applicable Parent SEC Document that is a report on Form
10-K
or Form
10-Q
or any amendment thereto its conclusions about the effectiveness of the internal control over
financial reporting as of the end of the period covered by such report or amendment based on such evaluation. Parent has
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no significant deficiencies or material weaknesses (as such terms are defined in Auditing Standard No. 5 of the Public Company Accounting Oversight Board, as in
effect on the date of this Agreement) in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect Parents ability to record, process, summarize and report financial information. Since
December 31, 2013, there has been and is no fraud, whether or not material, that involves senior management or other employees who have a significant role in Parents internal control over financial reporting.
(e) Parent maintains disclosure controls and procedures (as defined in
Rules 13a-15(e)
and
15d-15(e)
of the Exchange Act) designed to ensure that all information required to be disclosed by Parent in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC, and that all such information is accumulated and communicated to Parents management as appropriate to allow timely decisions regarding required disclosure and to
make the certifications of the chief executive officer and chief financial officer of Parent required under the Exchange Act with respect to such reports.
(f) To the Knowledge of Parent, as of the date of this Agreement, there are no SEC inquiries or investigations, other inquiries or
investigations by Governmental Authorities or internal investigations pending or threatened, in each case regarding any accounting practices of Parent or any of its Subsidiaries or any malfeasance by any director or executive officer of Parent or
any of its Subsidiaries. Since December 31, 2016 through the date of this Agreement, there have been no material internal investigations regarding accounting, auditing or revenue recognition discussed with, reviewed by or initiated at the
direction of the chief executive officer, chief financial officer, chief accounting officer or general counsel of Parent, the Parent Board or any committee thereof.
(g) Each of the principal executive officer of Parent and the principal financial officer of Parent (or each former principal executive
officer of Parent and each former principal financial officer of Parent, as applicable) has made all certifications required by Rule
13a-14
or
15d-14
under the Exchange
Act and Sections 302 and 906 of the Sarbanes-Oxley Act with respect to Parent SEC Documents, and the statements contained in such certifications are true and accurate. Parent does not have, and has not arranged, any outstanding extensions of
credit to directors or executive officers within the meaning of Section 402 of the Sarbanes-Oxley Act.
(h) Since
December 31, 2016, (i) neither Parent nor any of its Subsidiaries has received any written or, to the Knowledge of Parent, oral complaint, allegation, assertion or claim regarding accounting, internal accounting controls, auditing practices,
procedures, methodologies or methods of Parent or any of its Subsidiaries, or unlawful accounting or auditing matters with respect to Parent or any of its Subsidiaries and (ii) no attorney representing Parent or any of its Subsidiaries, whether
or not employed by Parent or any of its Subsidiaries, has reported evidence of a violation of securities Laws, breach of fiduciary duty or similar violation by Parent or any of its Subsidiaries or any of their respective officers, directors,
employees or agents to the Parent Board or any committee thereof or to the general counsel or chief executive officer of Parent pursuant to the rules of the SEC adopted under Section 307 of the Sarbanes-Oxley Act, except, in each case, as has
not been, and would not reasonably be expected to be, individually or in the aggregate, materially adverse to Parent and its Subsidiaries, taken as a whole.
(i) Neither Parent nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any joint venture,
off-balance
sheet partnership or any similar Contract (including any Contract or arrangement relating to any transaction or relationship between or among Parent and any of its Subsidiaries, on the one hand, and any
unconsolidated affiliate, on the other hand), including any structured finance, special purpose or limited purpose entity or Person, or any
off-balance
sheet arrangements (as defined in Item 303(a)
of Regulation
S-K
under the Securities Act), where the result, purpose or effect of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, Parent or any of its
Subsidiaries in Parent SEC Documents (including any audited financial statements and unaudited interim financial statements of Parent included therein).
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Section 4.7
Absence of Certain Changes or Events
.
Since December 31, 2016 through the date of this Agreement, (a) except in connection with the transactions contemplated by this Agreement, the respective businesses of Parent and its Subsidiaries have been conducted in the ordinary course
of business consistent with past practice and (b) there has not been any event, circumstance, occurrence, effect, fact, development or change that has had, or would reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect.
Section 4.8
No Undisclosed Liabilities
. Except for liabilities or
obligations (a) as (and to the extent) reflected, disclosed or reserved against in Parents balance sheets (or the notes thereto) included in Parents Annual Report on Form
10-K
filed with the
SEC on February 9, 2017 or the Companys Quarterly Report on Form
10-Q
filed with the SEC on July 28, 2017, (b) incurred in the ordinary course of business consistent with past practice
since December 31, 2016, (c) incurred in connection with the transactions contemplated by this Agreement or (d) that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse
Effect, none of Parent or any of its Subsidiaries has any liabilities or obligations of any nature, whether or not accrued, contingent, absolute or otherwise and whether or not required to be reflected on a consolidated balance sheet of Parent (or
the notes thereto) in accordance with GAAP.
Section 4.9
Litigation
. As of the date of this
Agreement, there is no Proceeding pending or, to the Knowledge of Parent, threatened against Parent or any of its Subsidiaries or any asset or property of Parent or any of its Subsidiaries, and neither Parent nor any of its Subsidiaries nor any
asset or property of Parent or any of its Subsidiaries is subject to a continuing Order, in each case, that (a) has had, or would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect or
(b) would reasonably be expected to, individually or in the aggregate, impair in any material respect the ability of Parent or Merger Sub to perform its respective obligations under this Agreement or to consummate the Merger, or prevent or
materially delay the consummation of any of the Merger and the other transactions contemplated by this Agreement.
Section 4.10
Permits; Compliance with Laws
.
(a) (i) Parent and its Subsidiaries are in possession of all material
franchises, grants, licenses, permits, easements, variances, exemptions, consents, certificates, approvals, registrations, clearances, orders and other authorizations necessary for Parent and its Subsidiaries to own, lease and operate their
respective properties and assets and to carry on their respective businesses as now being conducted under and pursuant to all applicable Laws (the
Parent Permits
), (ii) all such Parent Permits are in full force and effect and
(iii) as of the date of this Agreement, no suspension, cancellation, withdrawal or revocation thereof is pending or, to the Knowledge of Parent, threatened, except where the failure to be in possession of, failure to be in full force and effect
or the suspension, cancellation, withdrawal or revocation thereof (a) has not had, and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect and (b) would not reasonably be expected
to, individually or in the aggregate, impair in any material respect the ability of Parent or Merger Sub to perform its respective obligations under this Agreement or to consummate the Merger, or prevent or materially delay the consummation of any
of the Merger and the other transactions contemplated by this Agreement.
(b) Since December 31, 2015, Parent and its Subsidiaries
have been and are in compliance with (i) all applicable Laws and (ii) all Parent Permits, except where any failure to be in such compliance (a) has not had, and would not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect and (b) would not reasonably be expected to, individually or in the aggregate, impair in any material respect the ability of Parent or Merger Sub to perform its respective obligations under this
Agreement or to consummate the Merger, or prevent or materially delay the consummation of any of the Merger and the other transactions contemplated by this Agreement.
(c) Since December 31, 2015 through the date of this Agreement, none of Parent or any of its Subsidiaries or, to the Knowledge of Parent,
any of their respective directors, officers or employees, has received any written or, to the Knowledge of Parent, oral notification from a Governmental Authority asserting that Parent
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or any of its Subsidiaries is not in compliance with, or is under investigation with respect to any failure to comply with, any Laws or Parent Permits, except where any failure to be in such
compliance (a) has not had, and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect and (b) would not reasonably be expected to, individually or in the aggregate, impair in any
material respect the ability of Parent or Merger Sub to perform its respective obligations under this Agreement or to consummate the Merger, or prevent or materially delay the consummation of any of the Merger and the other transactions contemplated
by this Agreement.
Section 4.11
Information Supplied
. None of the information supplied or to
be supplied by or on behalf of Parent or any of its Subsidiaries for inclusion or incorporation by reference in (a) the Form
S-4
will, at the time the Form
S-4
is
filed with the SEC, at any time it is amended or supplemented or at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein, in light of
the circumstances under which they are made, not misleading and (b) the Proxy Statement will, at the date it, or any amendment or supplement to it, is mailed to stockholders of the Company and at the time of the Company Stockholders
Meeting, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading (except that no representation or warranty is
made by Parent regarding such portions thereof that relate expressly to the Company or any of its Subsidiaries, or to statements made therein based on information supplied by or on behalf of the Company or any of its Subsidiaries for inclusion or
incorporation by reference therein). The Proxy Statement will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations promulgated thereunder.
Section 4.12
Brokers
. No investment banker, broker or finder other than Morgan Stanley &
Co. LLC, the fees and expenses of which will be paid by Parent, is entitled to any investment banking, brokerage, finders or similar fee or commission in connection with this Agreement or the transactions contemplated by this Agreement based
upon arrangements made by or on behalf of Parent or any of its Affiliates (including Merger Sub).
Section 4.13
Share Ownership
. None of Parent, Merger Sub or any of their respective Affiliates has
been, (a) at any time during the three (3) years preceding the date of this Agreement, an interested stockholder of the Company, as defined in Section 203 of the DGCL or (b) an Interested Shareowner or
Affiliate or Associate of an Interested Shareowner (each as defined in the Certificate of Incorporation).
Section 4.14
Financing
. Parent has delivered to the Company true and complete fully executed copies
of (a) the commitment letter, dated as of September 4, among Parent and Morgan Stanley Senior Funding, Inc., Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, HSBC Bank USA, National Association and HSBC
Securities (USA) Inc. (the
Commitment Letter
) and (b) the fee letter, dated as of September 4, 2017, among Parent and Morgan Stanley Senior Funding, Inc., Bank of America, N.A., Merrill, Lynch, Pierce, Fenner &
Smith Incorporated, HSBC Bank USA, National Association and HSBC Securities (USA) Inc. (as redacted to remove the fee amounts, pricing caps and the rates and amounts included in the market flex, the
Redacted Fee
Letter
), in each case, including all exhibits, term sheets, schedules, annexes and amendments to such letters in effect as of the date of this Agreement (collectively, the
Debt Letters
), pursuant to which and subject to
the terms and conditions thereof each of the Initial Lenders party thereto have severally committed to lend the amounts set forth therein to Parent (the provision of such funds as set forth therein, but subject to the provisions of
Section
5.15
(the
Financing
)) for the purposes set forth in such Debt Letters. The Debt Letters have not been amended, restated or otherwise modified or waived prior to the execution and delivery of this
Agreement, and the respective commitments contained in the Debt Letters have not been withdrawn, rescinded, amended, restated or otherwise modified in any respect prior to the execution and delivery of this Agreement. As of the date of this
Agreement, the Debt Letters are in full force and effect and constitute the legal, valid and binding obligation of each of Parent and, to the knowledge of Parent, the other parties thereto, subject in each case to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting generally the enforcement of creditors rights and subject to general principles of equity. As of the date of this Agreement, there are no conditions precedent or contingencies related to the
funding of the full amount of the
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Financing pursuant to the Debt Letters, other than as expressly set forth in the Debt Letters. Subject to the terms and conditions of the Debt Letters, the net proceeds contemplated from the
Financing, together with cash on hand and amounts available to be drawn on the Parent Revolving Credit Facilities are, and together with any other committed financing that replaces or supplements the Financing consistent with the terms set forth in
Section
5.15
on the Closing Date will be, sufficient for the satisfaction of all of Parents obligations under this Agreement, including the payment of the Cash Consideration portion of the Merger Consideration and all
fees and expenses to be incurred in connection therewith. As of the date of this Agreement, no event has occurred which, with or without notice, lapse of time or both, would constitute a breach or default on the part of Parent under the Debt Letters
or, to the knowledge of Parent, any other party to the Debt Letters. As of the date of this Agreement there are no side letters or other agreements that impose conditions or contingencies to the funding of the full amount of the Financing other than
as expressly set forth in the Debt Letters. Parent has fully paid all commitment fees or other fees required to be paid prior to the date of this Agreement in connection with the Financing. As of the date of this Agreement, assuming the conditions
to the obligations of Parent to consummate the Merger have been satisfied or waived, Parent has no reason to believe that any of the conditions to the Financing will not be satisfied, nor does Parent have knowledge, as of the date of this Agreement,
that the Financing will not be made available to Parent on the Closing Date in accordance with the terms of the Debt Letters. The obligations of Parent and Merger Sub hereunder are not subject to any condition regarding Parents, Merger
Subs or any other Persons ability to obtain financing for the Merger and the other transactions contemplated by this Agreement.
Section 4.15
No Other Representations or Warranties
. Except for the representations and warranties
contained in this
Article
IV
, none of Parent, Merger Sub nor any other Person on behalf of Parent or Merger Sub makes any express or implied representation or warranty with respect to Parent or any of its Subsidiaries or
any other information provided to the Company in connection with the transactions contemplated by this Agreement, including the accuracy, completeness or timeliness thereof. Each of Parent and Merger Sub acknowledges that, except for the
representations and warranties contained in
Article
III
of this Agreement, none of the Company or any of its Affiliates or Representatives or any other Person makes (and Parent and Merger Sub are not relying on) any
representation or warranty, express or implied, to Parent or Merger Sub in connection with the Merger and the other transactions contemplated by this Agreement.
ARTICLE V
COVENANTS AND AGREEMENTS
Section 5.1
Conduct of Business by the Company Pending the Merger
. The Company covenants and agrees
that, between the date of this Agreement and the earlier of the Effective Time and the date, if any, on which this Agreement is terminated in accordance with
Section 7.1
, except (i) as may be required by Law, (ii) as may be
agreed in writing by Parent (which consent, in the case of
Section 5.1(a)(ii)
and
(iii)
,
(e)
,
(f)
,
(i)
,
(j)
,
(k)
,
(l)
,
(m)
,
(n)
,
(o)
,
(p)
,
(r)
,
(s)
,
(t)
,
(u)
and
(v)
, shall not be unreasonably withheld, delayed or conditioned), (iii) as may be expressly contemplated or required pursuant to this Agreement or (iv) as set forth on
Section 5.1 of the Company
Disclosure Letter
, (A) the Company shall, and shall cause its Subsidiaries to, conduct the business of the Company and its Subsidiaries in the ordinary course of business and in a manner consistent with past practice and, to the extent
consistent therewith, use reasonable best efforts to preserve its assets and business organization and maintain its existing relationships with material customers, suppliers, distributors, regulators and business partners, and to keep available the
services of key employees, and (B) the Company shall not, and shall cause its Subsidiaries not to, directly or indirectly:
(a) amend
(i) the Certificate of Incorporation, (ii) the Bylaws or (iii) such equivalent organizational or governing documents of any of its Subsidiaries, in the case of such documents of any of its Subsidiaries, in a manner that would be
materially adverse to Parent or Merger Sub or would, or would reasonably be expected to, have the effect of delaying or preventing the consummation of any of the Merger or the other transactions contemplated by this Agreement;
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(b) split, reverse split, combine, subdivide, reclassify, redeem, repurchase or otherwise acquire
or amend the terms of the Companys or any of its Subsidiaries capital stock, or other equity or voting securities or other equity interests, or any options, warrants, convertible securities or other rights of any kind to acquire any
shares of the Companys or any of its Subsidiaries capital stock or other equity or voting securities or other equity interests;
provided
that the Company may repurchase or otherwise acquire shares in connection with (i) the
acceptance of shares of Company Common Stock as payment for the per share exercise price of the Company Stock Options or as payment for Taxes incurred in connection with the exercise, vesting and/or settlement of Company Equity Awards, in each case
in accordance with the applicable Company Equity Plan or (ii) the forfeiture of Company Equity Awards;
(c) issue, sell, pledge,
dispose of, encumber, grant or authorize the same with respect to, any shares of the Companys or its Subsidiaries capital stock, or other equity or voting securities or other equity interests, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of the Companys or any of its Subsidiaries capital stock or other equity or equity-based compensation, or other equity or voting securities or other equity interests;
provided
that the Company may issue the foregoing (i) upon the settlement of any Company Stock Option, Company RSU Award, or Company DSU Award outstanding as of the date of this Agreement, (ii) pursuant to the terms of the Company
ESPP, the Company
Non-US
Share Purchase Plans or the Company 401(k) Plan in effect immediately prior to the date of this Agreement or (iii) to the extent permitted by
Section 5.1(e)
;
(d) except with respect to the regular quarterly cash dividends of up to $0.33 per share, with record and payment dates for such dividends
consistent with past practice (except as otherwise provided in
Section 5.20
), declare, set aside, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the
Companys or any of its Subsidiaries capital stock or other equity interests, other than cash dividends and distributions paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or any direct or indirect
wholly owned Subsidiary of the Company;
(e) except to the extent required pursuant to any Company Benefit Plan or Labor Agreement as in
effect on the date of this Agreement, (i) establish, adopt, enter into any new, amend, terminate, or take any action to accelerate rights under, any Company Benefit Plan or plan, program, policy, practice, agreement or arrangement that would be
a Company Benefit Plan if it had been in effect on the date of this Agreement; (ii) grant or pay, or commit to grant or pay, any bonus, incentive or profit-sharing award or payment; (iii) increase, or commit to increase, the amount of the
wages, salary, bonuses, commissions, fringe benefits, severance or other compensation (including equity or equity-based compensation, whether payable in stock, cash or other property), benefits or remuneration payable to any current or former
employee or director of, or individual service provider to, the Company or any Subsidiary of the Company, except for increases in base salaries or hourly rates of pay of employees (other than executive officers) in the ordinary course of business
and consistent with past and competitive market practices, including in connection with promotions permitted by
Section 5.1(f)
, in an amount not to exceed (x) for any single employee, $20,000 and (y) for all increases in the
aggregate, 4% of the aggregate annual cost of base salaries and hourly rates of pay for all employees of the Company measured as of immediately prior to the date hereof; (iv) take any action (other than actions contemplated by this Agreement)
to accelerate any payment or benefit, the vesting of any equity or equity-based award or the funding of any payment or benefit, payable or to become payable to any current or former employee or director of, or individual service provider to, the
Company or any Subsidiary of the Company; (v) enter into any employment, severance, change in control, retention, individual consulting or similar agreement with any current or former employee or director of, or individual service provider to,
the Company or any Subsidiary of the Company (other than offer letters in the ordinary course of business and consistent with past practice that provide for
at-will
employment (or employment, if
at-will
employment is not permitted by applicable Law in the relevant jurisdiction) without any severance (other than severance pursuant to the Rockwell Collins Inc. Severance Pay Plan as in effect from time to
time), retention or change in control benefits for newly hired employees or individual service providers who are hired to the extent permitted by
Section 5.1(f)
); (vi) communicate with employees of the Company or any Subsidiary of the Company
regarding the compensation,
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benefits or other treatment they will receive following the Effective Time, unless such communications are consistent with the terms provided herein; or (vii) except as may be required by
GAAP, materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan, make any voluntary contributions to a Company Benefit Plan or materially change the manner in which
contributions to such plans are made or the basis on which such contributions are determined;
(f) hire, engage, promote or terminate
(other than for cause) any employee or other individual service provider who is or would be entitled to receive annual base compensation of $250,000 or more;
(g) make any loan or advance (other than travel and similar advances to its employees in the ordinary course of business) to any employee of
the Company or any of its Subsidiaries in excess of $50,000 in the aggregate;
(h) forgive any loans or advances to any officers,
employees or directors of the Company or its Subsidiaries, or any of their respective Affiliates, or change its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise;
(i) acquire (including by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership, limited
liability company, joint venture, other business organization, business or assets of any other Person constituting a business or any portion of a business for consideration in excess of $50,000,000 in the aggregate;
(j) sell, pledge, dispose of, transfer, abandon, lease, license, mortgage, incur any Lien (other than Permitted Liens) (including pursuant to
a sale-leaseback transaction or an asset securitization transaction) on or otherwise transfer or encumber any portion of the tangible or intangible assets, business, properties or rights of the Company or any of its Subsidiaries (other than licenses
of Intellectual Property Rights to customers or suppliers in their capacities as such in the ordinary course of business consistent with past practice) having a fair market value in excess of $25,000,000 individually or $75,000,000 in the aggregate,
except (i) sales of inventory and accounts receivable in the ordinary course of business and consistent with past practice, (ii) transfers solely among the Company and its direct or indirect wholly owned Subsidiaries,
(iii) disposition of obsolete tangible assets or expired inventory or (iv) with respect to immaterial leases, licenses or other similar grants of real property, any immaterial grant, amendment, extension, modification, or renewal in the
ordinary course of business and in a manner consistent with past practice;
(k) (i) except as set forth in
Section 5.1(k) of the
Company Disclosure Letter
, redeem, pay, discharge or satisfy any Indebtedness that has a repayment cost, make whole amount, prepayment penalty or similar obligation (other than Indebtedness incurred by the Company or its direct or
indirect wholly owned Subsidiaries and owed to the Company or its direct or indirect wholly owned Subsidiaries) or (ii) cancel any material Indebtedness (individually or in the aggregate) or, except in the ordinary course of business and in a
manner consistent with past practice, settle, waive or amend any claims or rights of substantial value;
(l) (i) except as between or
among the Company and/or one or more direct or indirect wholly owned Subsidiaries of the Company, incur, create, assume or otherwise become liable for any Indebtedness for borrowed money or issue or sell any debt securities or options, warrants,
calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries except for Indebtedness under the Existing Revolving Credit Agreement or commercial paper program in connection with the ordinary course operations
of the business, (ii) except in the ordinary course of business and in a manner consistent with past practice, incur or assume any other form of Indebtedness, and (iii) except in the ordinary course of business and in a manner consistent
with past practice to customers, suppliers or, to the extent required by the applicable joint venture agreement as in effect on the date hereof and made available to Parent, joint ventures of the Company or any of its Subsidiaries, make any loans,
advances or capital contributions to, or investments in, any other Person;
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(m) terminate, enter into, agree to any material amendment, supplement or modification of or
renew or waive any material rights under any Company Material Contract, any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement or any Contract relating to material Company Leased
Real Property, in each case other than (i) in the ordinary course of business and a manner consistent with past practice or (ii) to implement capital expenditures permitted under
Section 5.1(p)
; provided that (A) the
foregoing clauses (i) and (ii) shall not apply to any Contract (I) of the type described in
Section 3.14(a)(viii)
or
(xii) (clauses (A) or (C) only)
, (II) that would or would purport to bind or apply to Parent or
its Subsidiaries or their respective businesses or assets (other than the Company and its Subsidiaries and their respective businesses and assets) following the Effective Time, (III) that requires or provides for consent, acceleration,
termination or any other material right or consequence triggered in whole or in part by the Merger or (IV) that contains, involves or is conditioned upon provisions or terms that, individually or in the aggregate, would reasonably be expected
to have a materially adverse impact on the Companys and its Subsidiaries rights or obligations relating to, or expected financial return with respect to, any already existing Contracts or programs of the Company and its Subsidiaries with
the counterparty to the Contract subject to this clause (A) (or any of its Affiliates), and (B) if any Contract (or group of related Contracts) to which the foregoing clause (i) or clause (ii) apply (i.e., so that the consent of
Parent is not required pursuant to this clause (m)) would reasonably be expected to provide for aggregate payments to or from the Company or any of its Subsidiaries in excess of $500,000,000 over the life of the Contract (or related group), the
Company shall have first consulted in good faith with, and considered in good faith the views of, Parent regarding the Companys intended action with respect to such Contract (or related group) and, if Parent objects within a reasonable time
thereafter, shall not take any such action unless the Chief Executive Officer of the Company shall have first engaged in good faith discussions and consultation with the Chief Executive Officer of Parent regarding the applicable Contract (or related
group) and such intended action, and Parents objections with respect thereto;
(n) modify, extend or enter into any Labor Agreement,
except (i) as required pursuant to an applicable Contract in effect as of the date of this Agreement or (ii) where such actions are made in the ordinary course of business on terms (A) consistent with past practice, (B) that
provide for a contract term that is no longer than the term of the expiring Labor Agreement, and (C) that do not impose an additional obligation that would have a materially adverse impact on the financial position of the business unit or units
supported by the applicable Labor Agreement;
(o) make any material change to its methods of financial accounting, except as required by
GAAP (or any interpretation thereof), Regulation
S-X
of the Exchange Act or a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar
organization);
(p) make any capital expenditures that, together with all other capital expenditures of the Company and its Subsidiaries,
exceed by more than 10%, the budgeted amounts set forth in
Section 5.1(p) of the Company Disclosure Letter
for the respective periods set forth therein;
(q) write up, write down or write off the book value of any material assets, except to the extent required by GAAP;
(r) release, compromise, assign, settle or agree to settle any Proceeding (excluding (i) any Proceeding relating to Taxes, which shall be
governed exclusively by
clause (v)
and (ii) any Proceeding governed by
Section 5.18
), other than settlements that result solely in monetary obligations of the Company or its Subsidiaries (without the admission of
wrongdoing or a nolo contendere or similar plea, the imposition of injunctive or other equitable relief, or restrictions on the future activity or conduct, by, of or on Parent, the Company or any of their respective Subsidiaries) involving payment
by the Company or any of its Subsidiaries of (A) amounts not in excess of the amounts specifically reserved in accordance with GAAP with respect to such Proceeding on the Companys consolidated financial statements for the quarterly period
ending June 30, 2017, or (B) an amount not greater than $5,000,000 individually or $75,000,000 in the aggregate;
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(s) fail to use commercially reasonable efforts to maintain in effect the existing material
insurance policies covering the Company and its Subsidiaries and their respective properties, assets and businesses;
(t) implement or
effect any facility closing;
(u) cancel, dedicate to the public, disclaim, forfeit, reexamine or abandon or allow to lapse (except with
respect to patents expiring in accordance with their terms) any material Intellectual Property Rights;
(v) (i) make, change or revoke any
material Tax election or change any material aspect of its method of Tax accounting; (ii) file any material amendment to a material Tax Return; (iii) settle or compromise any audit or Proceeding with respect to Tax matters in an amount in
excess of $2,000,000 individually or $20,000,000 in the aggregate; (iv) other than in the ordinary course of business, agree to an extension or waiver of the statute of limitations with respect to U.S. federal Taxes or material
non-U.S.
Taxes; (v) enter into any closing agreement within the meaning of Section 7121 of the Code (or any similar provision of state, local or
non-U.S.
Law) with respect to any material Tax or request any material Tax ruling, (provided that any closing agreement settling an audit or Proceeding that is otherwise permitted under clause (iii) hereof shall not be prohibited by this clause (v)); or
(vi) surrender any right to claim a material Tax refund;
(w) merge or consolidate the Company or any of its Subsidiaries with any
Person or adopt a plan of complete or partial liquidation, dissolution, recapitalization or other reorganization of the Company or any of its Subsidiaries (
provided
, that with respect to mergers, consolidations, liquidations, dissolutions,
recapitalizations or other reorganizations involving solely direct or indirect wholly owned Subsidiaries of the Company, Parents consent shall not be unreasonably withheld, conditioned or delayed); or
(x) enter into any Contract to do, authorize or adopt any resolutions approving, or announce an intention to do, any of the foregoing.
Section 5.2
Conduct of Business by Parent Pending the Merger
. Parent covenants and agrees that,
between the date of this Agreement and the earlier of the Effective Time and the date, if any, on which this Agreement is terminated in accordance with
Section 7.1
, except (i) as may be required by Law, (ii) as may be agreed in
writing by the Company (which consent shall not be unreasonably withheld, delayed or conditioned), (iii) as may be expressly contemplated or required pursuant to this Agreement or (iv) as set forth in
Section 5.2 of the Parent
Disclosure Letter
, Parent shall not, directly or indirectly:
(a) amend the Parent Organizational Documents in a manner that would be
materially or disproportionately (relative to other holders of Parent Common Stock) adverse to the Companys stockholders or would, or would reasonably be expected to, have the effect of delaying or preventing the consummation of any of the
Merger or the other transactions contemplated by this Agreement;
(b) repurchase or otherwise acquire Parent Common Stock, unless
(i) in the ordinary course of business and in a manner consistent with past practice (it being understood that the foregoing shall not restrict Parent from repurchasing or otherwise acquiring shares in connection with the acceptance of shares
as payment for the exercise price of equity awards or as payment for Taxes incurred in connection with the exercise, vesting and/or settlement of equity awards, or the forfeiture of equity awards) or (ii) not effected prior to the Closing;
(c) except with respect to quarterly cash dividends paid in the ordinary course consistent with past practice (subject to increase by no more
than fifteen percent (15%) on a quarterly basis), declare with a record date that is prior to the Closing or pay prior to the Closing any dividend or other distribution payable in cash, stock, property or otherwise, with respect to its capital stock
or other equity interests;
(d) adopt a plan of complete or partial liquidation or dissolution with respect to Parent;
(e) adjust, split, combine, subdivide or reclassify Parents capital stock; or
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(f) enter into any Contract to do, authorize or adopt any resolutions approving, or announce an
intention to do, any of the foregoing.
Section 5.3
Preparation of the Form
S-4
and the Proxy Statement; Company Stockholders
Meeting
.
(a) As promptly as
reasonably practicable after the execution of this Agreement, (i) the Company, (with Parents reasonable cooperation) shall prepare and file with the SEC the Proxy Statement in preliminary form and (ii) Parent (with the Companys
reasonable cooperation) shall prepare and file with the SEC a registration statement on
Form S-4,
in which the Proxy Statement will be included as a prospectus, in connection with the registration under
the Securities Act of the Parent Common Stock to be issued in the Merger. Each of Parent and the Company shall use its reasonable best efforts to (A) cause the
Form S-4
and the Proxy Statement to
comply with the applicable rules and regulations promulgated by the SEC, (B) have the Form
S-4
declared effective under the Securities Act as promptly as practicable after such filing (including by
responding to comments from the SEC), and, prior to the effective date of the Form
S-4,
take all action reasonably required to be taken under any applicable state securities Laws in connection with the
issuance of Parent Common Stock in connection with the Merger (the
Parent Stock Issuance
) and (C) keep the Form
S-4
effective through the Closing Date in order to permit the
consummation of the Merger. Each of Parent and the Company shall furnish all information as may be reasonably requested by the other in connection with any such action and the preparation, filing and distribution of the Form
S-4
and the Proxy Statement. As promptly as practicable after the Form
S-4
shall have become effective, the Company shall use its reasonable best efforts to cause the Proxy
Statement to be mailed to its stockholders. No filing of, or amendment or supplement to, the Form
S-4
will be made by Parent, and no filing of, or amendment or supplement to, the Proxy Statement will be made
by the Company, in each case without providing the other party with a reasonable opportunity to review and comment (which comments shall be considered by the applicable party in good faith) thereon if reasonably practicable;
provided
that,
without limiting
Section 5.9
, with respect to documents filed by a party which are incorporated by reference in the Form
S-4
or the Proxy Statement, this right to review and comment shall apply
only with respect to information relating to the other party or such other partys business, financial condition or results of operations. If, at any time prior to the Effective Time, any information relating to Parent or the Company or any of
their respective Affiliates, directors or officers, should be discovered by Parent or the Company which should be set forth in an amendment or supplement to either the Form
S-4
or the Proxy Statement, so that
either such document would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, the party that discovers
such information shall promptly notify the other parties hereto and an appropriate amendment or supplement describing such information shall be prepared and, following a reasonable opportunity for the other party (and its counsel) to review and
comment on such amendment or supplement, promptly filed with the SEC and, to the extent required by applicable Law, disseminated to the stockholders of the Company. Subject to applicable Law, each party shall notify the other promptly of the time
when the Form
S-4
has become effective, of the issuance of any stop order or suspension of the qualification of the Parent Common Stock issuable in connection with the Merger for offering or sale in any
jurisdiction, or of the receipt of any comments from the SEC or the staff of the SEC and of any request by the SEC or the staff of the SEC for amendments or supplements to the Proxy Statement or the Form
S-4
or for additional information and shall supply each other with copies of all correspondence between either party or any of its Representatives, on the one hand, and the SEC or its staff, on the other hand, with respect to the Proxy Statement, the
Form
S-4
or the Merger.
(b) Subject to the earlier termination of this Agreement in accordance
with
Section 7.1
, the Company shall, as soon as practicable following the effectiveness of the
Form S-4,
duly call, set a record date for, give notice of, convene (on a date selected by the
Company in consultation with Parent, which date shall be within, subject to adjournment or postponement as provided below, sixty (60) days of the effectiveness of the Form
S-4)
and hold a meeting of its
stockholders (the
Company Stockholders Meeting
) for the purpose of seeking the Company Stockholder Approval, and shall submit such proposal to such holders at the Company Stockholders Meeting and shall not submit any
other proposal to such holders in connection with the Company Stockholders Meeting (other than an advisory vote regarding merger-related compensation and a customary proposal regarding
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adjournment of the Company Stockholders Meeting) without the prior written consent of Parent. Notwithstanding anything to the contrary contained in this Agreement, the Company shall not
adjourn or postpone the Company Stockholders Meeting without Parents prior written consent;
provided
that without Parents prior written consent, the Company may adjourn or postpone the Company Stockholders Meeting
(i) after consultation with Parent, to the extent necessary to ensure that any supplement or amendment to the Proxy Statement or Form
S-4
required by Law is provided to the stockholders of the Company
within a reasonable amount of time in advance of the Company Stockholders Meeting or (ii) if there are not sufficient affirmative votes in person or by proxy at such meeting to constitute a quorum at the Company Stockholders Meeting
or to obtain the Company Stockholder Approval, to allow reasonable additional time for solicitation of proxies for purposes of obtaining a quorum or the Company Stockholder Approval,
provided
that unless agreed to in writing by Parent,
(x) any such adjournment or postponement shall be for a period of no more than 10 Business Days each, and (y) the Company shall only be permitted to effect up to two (2) such adjournments or postponements pursuant to this clause (ii)
(in the aggregate); provided, further, that no postponement contemplated by this clause (ii) shall be permitted if it would require a change to the record date for the Company Stockholders Meeting;
provided
, further, that, if
requested by Parent, the Company shall effect an adjournment or postponement of the Company Stockholders Meeting under the circumstances contemplated by this clause (ii) for a period of up to (10) Business Days each (
provided
,
that Parent shall only make up to two (2) such requests, and no such request for a postponement shall be permitted if it would require a change in the record date for the Company Stockholders Meeting). If the Company Board has not made a
Company Adverse Recommendation Change in accordance with
Section 5.6
, the Company shall, through the Company Board, make the Company Recommendation, and shall include such Company Recommendation in the Proxy Statement, and use its
reasonable best efforts to (A) solicit from its stockholders proxies in favor of the adoption of this Agreement and (B) take all other action necessary or advisable to secure the Company Stockholder Approval. Notwithstanding any Company
Adverse Recommendation Change, unless this Agreement is terminated in accordance with its terms, the obligations of the parties hereunder shall continue in full force and effect and such obligations shall not be affected by the commencement, public
proposal, public disclosure or communication to the Company of any Company Acquisition Proposal (whether or not a Company Superior Proposal).
Section 5.4
Appropriate Action; Consents; Filings
.
(a) Subject to the terms and conditions of this Agreement, the parties hereto will cooperate with each other and use (and will cause their
respective Subsidiaries to use) their respective reasonable best efforts to consummate the transactions contemplated by this Agreement and to cause the conditions to the Merger set forth in
Article VI
to be satisfied as promptly as
reasonably practicable, including using reasonable best efforts to accomplish the following as promptly as reasonably practicable: (i) the obtaining of all actions or
non-actions,
consents, approvals,
registrations, waivers, permits, authorizations, orders, expirations or terminations of waiting periods and other confirmations from any Governmental Authority or other Person that are or may become necessary, proper or advisable in connection with
the consummation of the transactions contemplated by this Agreement, including the Merger; (ii) the preparation and making of all registrations, filings, forms, notices, petitions, statements, submissions of information, applications and other
documents (including filings with Governmental Authorities) that are or may become necessary, proper or advisable in connection with the consummation of the transactions contemplated by this Agreement, including the Merger; (iii) the taking of
all steps as may be necessary, proper or advisable to obtain an approval from, or to avoid a Proceeding by, any Governmental Authority or other Person in connection with the consummation of the transactions contemplated by this Agreement, including
the Merger; (iv) the defending of any lawsuits or other Proceedings, whether judicial or administrative, challenging this Agreement or that would otherwise prevent or delay the consummation of the transactions contemplated by this Agreement,
including the Merger, performed or consummated by each party in accordance with the terms of this Agreement, including seeking to have any stay, temporary restraining order or injunction entered by any court or other Governmental Authority vacated
or reversed; and (v) the execution and delivery of any additional instruments that are or may become reasonably necessary, proper or advisable to consummate the transactions contemplated by this Agreement, including the Merger, and to carry out
fully the purposes of this Agreement. Each of the parties hereto shall, in consultation
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and cooperation with the other parties and as promptly as reasonably practicable, make its respective filings under the HSR Act and any Antitrust Law as set forth on
Section 6.1(d) of the
Parent Disclosure Letter
, and make any other applications and filings as reasonably determined by the Company and Parent under other applicable Antitrust Laws with respect to the transactions contemplated by this Agreement, as promptly as
practicable, but in no event later than as required by Law. Neither the Company nor Parent will withdraw any such filings or applications without the prior written consent of the other party. Parent shall pay all filing fees and other charges for
the filings required under any Antitrust Law by the Company and Parent. Notwithstanding anything to the contrary contained in this Agreement, without the prior written consent of Parent, none of the Company or any of its Subsidiaries or Affiliates
will grant or offer to grant any accommodation or concession (financial or otherwise), or make any payment, to any third party in connection with seeking or obtaining its consent to the transactions contemplated by this Agreement.
(b) In connection with and without limiting the efforts referenced in
Section 5.4(a)
, each of the parties hereto will
(i) furnish to the other such necessary information and reasonable assistance as the other may request in connection with the preparation of any governmental filings, submissions or other documents; (ii) give the other reasonable prior
notice of any such filing, submission or other document and, to the extent reasonably practicable, of any communication with or from any Governmental Authority regarding the transactions contemplated by this Agreement, and permit the other to review
and discuss in advance, and consider in good faith the views, and secure the participation, of the other in connection with any such filing, submission, document or communication; and (iii) cooperate in responding as promptly as reasonably
practicable to any investigation or other inquiry from a Governmental Authority or in connection with any Proceeding initiated by a Governmental Authority or private party, including informing the other party as soon as practicable of any such
investigation, inquiry or Proceeding, and consulting in advance, to the extent practicable, before making any presentations or submissions to a Governmental Authority, or, in connection with any Proceeding initiated by a private party, to any other
Person. In addition, each of the parties hereto will give reasonable prior notice to and consult with the other in advance of any meeting, conference or substantive communication with any Governmental Authority, or, in connection with any Proceeding
by a private party, with any other Person, and to the extent not prohibited by applicable Law or by the applicable Governmental Authority or other Person, and to the extent reasonably practicable, not participate or attend any meeting or conference,
or engage in any communication, with any Governmental Authority or such other Person in respect of the transactions contemplated by this Agreement without the other party, and in the event one party is prohibited from, or unable to participate,
attend or engage in, any such meeting, conference or communication, keep such party apprised with respect thereto. Each party shall furnish to the other copies of all filings, submissions, correspondence and communications between it and its
Affiliates and their respective Representatives, on the one hand, and any Governmental Authority or members of any Governmental Authoritys staff (or any other Person in connection with any Proceeding initiated by a private party), on the other
hand, with respect to the transactions contemplated by this Agreement. Each party may, as it deems advisable and necessary, reasonably designate material provided to the other party as Outside Counsel Only Material, and also may
reasonably redact the material as necessary to (A) remove personally sensitive information, (B) remove references concerning the valuation of the Company and its Subsidiaries or Parent and its Subsidiaries conducted in connection with the
approval and adoption of this Agreement and the negotiations and investigations leading thereto, (C) comply with contractual arrangements, (D) prevent the loss of a legal privilege or (E) comply with applicable Law.
(c) The parties shall consult with each other with respect to obtaining all permits and Consents necessary to consummate the transactions
contemplated by this Agreement, including the Merger.
(d) In furtherance of and without limiting the efforts referenced in
Section 5.4(a)
, Parent and the Company (if requested by Parent), along with their respective Subsidiaries and Affiliates, shall take any and all steps necessary to avoid or eliminate each and every impediment under any Antitrust Law that
may be asserted by any Governmental Authority so as to enable the consummation of the Merger as promptly as practicable, and in any event prior to the Termination Date, including (i) proposing, negotiating, committing to and effecting, by
consent decree, hold separate orders, or otherwise, to sell, divest, hold separate, lease, license, transfer, dispose
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of, otherwise encumber or impair or take any other action with respect to Parents or any of its Affiliates ability to own or operate any assets, properties, businesses or product
lines of Parent or any of its Affiliates or any assets, properties, businesses or product lines of the Company or any of its Affiliates and (ii) in the event that any permanent or preliminary injunction or other Order is entered or becomes
reasonably foreseeable to be entered in any Proceeding that would make consummation of the Merger unlawful or that would otherwise prevent or delay consummation of the Merger, taking any and all steps (including the posting of a bond or the taking
of the steps contemplated by clause (i) above) necessary to vacate, modify or suspend such injunction or Order; provided, that no party hereto shall be required pursuant to this
Section 5.4
to commit to or effect any action that is
not conditioned upon the consummation of the Merger and, for the avoidance of doubt, the Company shall not, unless requested to do so by Parent, commit to or effect any action contemplated above in this
Section 5.4(d)
. Notwithstanding
anything in this Agreement to the contrary, Parent is not required to commit to or effect (A) any sale, divestiture, lease, holding separate pending a sale or other transfer or disposal or (B) any other restriction or action contemplated
by this
Section 5.4(d)
if (I) in the case of clause (A), such action would require the sale, divestiture, lease, holding separate pending a sale or other transfer or disposal of any assets, properties, businesses or product lines of
Parent, the Company or any of their respective Affiliates or Subsidiaries representing, in the aggregate, more than $850,000,000 of annual revenue generated (x) during the fiscal year ended December 31, 2016 (in the case of assets,
properties, businesses or product lines of Parent or its Affiliates or Subsidiaries), (y) during the fiscal year ended September 30, 2016 (in the case of assets, properties, businesses or product lines of the Company or its Affiliates or
Subsidiaries (other than assets, properties, businesses or product lines that were, prior to the Applicable Company Subsidiary Acquisition Closing, of the Applicable Company Subsidiary or its Subsidiaries)) or (z) during the fiscal year ended
December 31, 2016 (in the case of assets, properties, businesses or product lines that were, prior to the Applicable Company Subsidiary Acquisition Closing, of the Applicable Company Subsidiary or its Subsidiaries), or (II) in the case of
clause (B), such restriction or action, individually or taken together with all sales, divestitures, leases, holding separate pending a sale, transfers, disposals and other restrictions and actions contemplated by this
Section 5.4(d)
, in the
aggregate would or would reasonably be expected to have a materially adverse impact on the Company, Parent or their respective Subsidiaries or Affiliates, in each case measured on a scale relative to the size of the Company and its Subsidiaries,
taken as a whole (without giving effect to the Merger), or on the expected benefits to Parent of the Merger (either of clause (I) or clause (II), an
Unacceptable Condition
).
(e) Each of the parties agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this
Agreement in accordance with
Section 7.1
, it shall not, and shall ensure that none of their Subsidiaries shall, consummate, enter into any agreement providing for, or announce, any investment, acquisition, divestiture or other business
combination that would reasonably be expected to materially delay or prevent the consummation of the transactions contemplated by this Agreement.
Section 5.5
Access to Information; Confidentiality
. The Company shall (and shall cause each of its
Subsidiaries to) afford reasonable access to Parents Representatives, during normal business hours and upon reasonable notice, throughout the period from the date of this Agreement to the Effective Time (or until the earlier termination of
this Agreement in accordance with
Section 7.1
), to the personnel, advisors, properties, books and records of the Company and its Subsidiaries and, during such period, shall (and shall cause each of its Subsidiaries to) furnish reasonably
promptly to such Representatives all information concerning the business, properties and personnel of the Company and its Subsidiaries, and to provide copies thereof, as may reasonably be requested;
provided
that nothing herein shall require
the Company or any of its Subsidiaries to disclose any information to Parent or Merger Sub if such disclosure would, in the reasonable judgment of the Company, (a) violate applicable Law or the provisions of any agreement to which the Company
or any of its Subsidiaries is a party or (b) jeopardize any attorney-client or other legal privilege;
provided
,
further
, that in each such case, the Company shall cooperate with Parent to enable Parent and Parents
Representatives to enter into appropriate confidentiality, joint defense or similar documents or arrangements so that Parent and Parents Representatives may have access to such information. No investigation or access permitted pursuant to this
Section 5.5
shall affect or be deemed to modify any representation, warranty, covenant or agreement made by the Company hereunder. All information furnished by the Company, its Subsidiaries and the Companys officers, employees
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and other Representatives pursuant to this
Section 5.5
shall be kept confidential in accordance with the Confidentiality Agreement. Notwithstanding anything herein to the contrary,
the parties hereby agree and acknowledge that the standstill and similar restrictions in the Confidentiality Agreement shall not apply upon the execution and delivery of this Agreement to the extent required to permit any action contemplated hereby
and in accordance herewith and solely until any valid termination of this Agreement in accordance with its terms.
Section 5.6
No Solicitation by the Company
.
(a) From the date of this Agreement until the earlier of the Effective Time
and the termination of this Agreement in accordance with
Section 7.1
, except as provided in
Section 5.6(b)
or
Section 5.6(d)
, (i) the Company shall, and shall cause its Subsidiaries, and its and their respective
officers and directors to, immediately cease, and shall instruct and use its reasonable best efforts to cause its and their respective other Representatives to immediately cease, and cause to be terminated all existing discussions, negotiations and
communications with any Persons or entities with respect to any Company Acquisition Proposal (other than the transactions contemplated by this Agreement), (ii) the Company shall not, and shall not authorize, and shall use its reasonable best efforts
not to permit, any of its Representatives to, directly or indirectly through another Person, (A) initiate, seek, solicit, knowingly facilitate, knowingly encourage (including by way of furnishing any
non-public
information) or knowingly induce or knowingly take any other action which would reasonably be expected to lead to a Company Acquisition Proposal, (B) engage in negotiations or discussions with,
or provide any
non-public
information or
non-public
data to, any Person (other than Parent or any of its Representatives) relating to or for the purpose of encouraging
or facilitating, any Company Acquisition Proposal or grant any waiver or release under any standstill, confidentiality or other similar agreement (except that if the Company Board determines in good faith that the failure to grant any waiver or
release would be inconsistent with its fiduciary duties under applicable Law, the Company may waive any such standstill provision in order to permit a third party to make and pursue a Company Acquisition Proposal) or (C) resolve to do any of
the foregoing, (iii) the Company shall not provide and shall, within one (1) Business Day of the date of this Agreement, terminate access of any third party to any data room (virtual or actual) containing any of information of the Company
or any of its Subsidiaries and (iv) within one (1) Business Day of the date of this Agreement, the Company shall demand the return or destruction of all confidential,
non-public
information and
materials that have been provided to third parties that have entered into confidentiality agreements relating to a possible Company Acquisition Proposal with the Company or any of its Subsidiaries.
(b) Notwithstanding
Section 5.6(a)
, at any time prior to obtaining the Company Stockholder Approval, if the Company receives a
bona fide written Company Acquisition Proposal from a third party that was not initiated, sought, solicited, knowingly facilitated, knowingly encouraged, knowingly induced or otherwise procured in violation of this Agreement, then the Company may
(i) contact the Person or any of its Representatives who has made such Company Acquisition Proposal solely to clarify the terms of such Company Acquisition Proposal so that the Company Board (or any committee thereof) may inform itself about
such Company Acquisition Proposal, (ii) furnish information concerning its business, properties or assets to such Person or any of its Representatives pursuant to a confidentiality agreement with confidentiality terms that, taken as a whole,
are not materially less favorable to the Company than those contained in the Confidentiality Agreement (provided, that if any such confidentiality agreement does not contain standstill provisions, or contains standstill provisions that are more
favorable to such other Person than those contained in the Confidentiality Agreement, the Company shall promptly (and in any case within twenty-four (24) hours) provide Parent notice thereof and a copy of such provisions, if any, and upon such
notice, the Confidentiality Agreement shall be deemed to be automatically (and permanently) amended hereby and without further action of the parties to delete the standstill provisions therein or conform the provisions thereof with such more
favorable provisions, as applicable) and (iii) negotiate and participate in discussions and negotiations with such Person or any of its Representatives concerning such Company Acquisition Proposal, in the case of clauses (ii) and (iii), if
the Company Board determines in good faith, after consultation with outside financial advisors and outside legal counsel, that such Company Acquisition Proposal constitutes or is reasonably likely to constitute or result in a Company Superior
Proposal. The Company shall (A) promptly (and in any case within twenty-four (24) hours)
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provide Parent notice (I) of the receipt of any Company Acquisition Proposal, which notice shall include a complete, unredacted copy of all written proposals, written indications of interest
and/or draft agreements relating to, and/or other written materials that describe any of the terms and conditions of, such Company Acquisition Proposal, and (II) of any inquiries, proposals or offers received by, any requests for
non-public
information from, or any discussions or negotiations initiated or continued (or sought to be initiated or continued) with, the Company or any of its Representatives concerning a Company Acquisition
Proposal, and disclose the identity of the other party (or parties) and the material terms of such inquiry, offer, proposal or request and, in the case of written materials that describe any of the terms and conditions of such inquiry, offer,
proposal or request, provide copies of such materials, (B) promptly (and in any case within twenty-four (24) hours) make available to Parent all material
non-public
information, including copies of
all written materials, made available by the Company to such party but not previously made available to Parent and (C) keep Parent informed on a reasonably prompt basis (and, in any case, within twenty-four (24) hours of any significant
development) of the status and material details (including amendments and proposed amendments) of any such Company Acquisition Proposal or other inquiry, offer, proposal or request, providing to Parent copies of any additional or revised written
proposals, written indications of interest and/or draft agreements relating to such Company Acquisition Proposal or other inquiry, offer, proposal or request, and/or other written materials that describe any of the terms and conditions of such
Company Acquisition Proposal or other inquiry, offer, proposal or request. The Company agrees that it and its Subsidiaries will not enter into any agreement with any Person that prohibits the Company from providing any information to Parent in
accordance with this
Section 5.6
.
(c) Except as permitted by
Section 5.6(d)
or
Section 5.6(e)
,
neither the Company Board nor any committee thereof shall (i) withdraw, qualify or modify, or publicly propose to withdraw, qualify or modify, the Company Recommendation, in each case in a manner adverse to Parent or Merger Sub,
(ii) approve, authorize, declare advisable or recommend any Company Acquisition Proposal or (iii) adopt or approve, or publicly propose to adopt or approve, or allow the Company or any of its Subsidiaries to execute or enter into, any
binding or
non-binding
letter of intent, agreement in principle, memorandum of understanding, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other
agreement, commitment, arrangement or understanding contemplating or otherwise in connection with, or that is intended to or would reasonably be expected to lead to, any Company Acquisition Proposal (other than a confidentiality agreement permitted
by
Section 5.6(b)
) (any action described in the foregoing clauses (i) and (ii) of this sentence being referred to as a
Company Adverse Recommendation Change
).
(d) If, at any time prior to the receipt of the Company Stockholder Approval, the Company Board receives a Company Acquisition Proposal that
the Company Board determines in good faith, after consultation with its outside financial advisors and outside legal counsel, constitutes a Company Superior Proposal that was not initiated, sought, solicited, knowingly facilitated, knowingly
encouraged, knowingly induced or otherwise procured in violation of this Agreement, the Company Board may (i) effect a Company Adverse Recommendation Change or (ii) cause the Company to terminate this Agreement pursuant to
Section 7.1(c)(ii)
in order to enter into a definitive agreement providing for such Company Superior Proposal if, in each case, (A) the Company Board determines in good faith, after consultation with its outside financial advisors
and outside legal counsel, that the failure to take such action would be inconsistent with its fiduciary duties under applicable Law, (B) the Company has notified Parent in writing that it intends to effect a Company Adverse Recommendation
Change pursuant to this
Section 5.6(d)
or terminate this Agreement pursuant to
Section 7.1(c)(ii)
, (C) the Company has provided Parent a copy of the proposed definitive agreements and other proposed transaction documentation
between the Company and the Person making such Company Superior Proposal, if any, (D) for a period of four (4) days following the notice delivered pursuant to clause (B) of this
Section 5.6(d)
, the Company shall have
discussed and negotiated in good faith and made the Companys Representatives available to discuss and negotiate in good faith (in each case to the extent Parent desires to negotiate) with Parents Representatives any proposed
modifications to the terms and conditions of this Agreement or the transactions contemplated by this Agreement so that the failure to take such action would no longer be inconsistent with the Company Boards fiduciary duties under applicable
Law (it being understood and agreed that any amendment to any material term or condition of any Company Superior Proposal shall require a new notice and a new negotiation period that shall
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expire on the later to occur of (I) two (2) days following delivery of such new notice from the Company to Parent and (II) the expiration of the original four
(4)-day
period described in clause (D) above), and (E) no earlier than the end of such negotiation period, the Company Board shall have determined in good faith, after consultation with its outside
financial advisors and outside legal counsel, and after considering the terms of any proposed amendment or modification to this Agreement, that (x) the Company Acquisition Proposal that is the subject of the notice described in clause
(B) above still constitutes a Company Superior Proposal and (y) the failure to take such action would still be inconsistent with its fiduciary duties under applicable Law;
provided
that any purported termination of this Agreement
pursuant to this sentence shall be void and of no force and effect unless the Company shall have paid Parent the Company Termination Fee in accordance with
Section 7.3(a)
prior to or substantially concurrently with such termination.
(e) Other than in connection with a Company Superior Proposal (which shall be subject to
Section 5.6(d)
and shall not be subject
to this
Section 5.6(e)
), prior to obtaining the Company Stockholder Approval, the Company Board may, in response to a Company Intervening Event, take any action prohibited by clause (i) of
Section 5.6(c)
, only if
(i) the Company Board determines in good faith, after consultation with its outside financial advisors and outside legal counsel, that the failure to take such action would be inconsistent with its fiduciary duties under applicable Law,
(ii) the Company has notified Parent in writing that it intends to effect such a Company Adverse Recommendation Change pursuant to this
Section 5.6(e)
(which notice shall specify the facts and circumstances providing the basis of
the Company Intervening Event and for the Company Boards determination to effect a Company Adverse Recommendation Change in reasonable detail), (iii) for a period of four (4) days following the notice delivered pursuant to clause
(ii) of this
Section 5.6(e)
, the Company shall have discussed and negotiated in good faith and made the Companys Representatives available to discuss and negotiate in good faith (in each case to the extent Parent desires to
negotiate) with Parents Representatives any proposed modifications to the terms and conditions of this Agreement or the transactions contemplated by this Agreement so that the failure to take such action would no longer be inconsistent with
the Company Boards fiduciary duties under applicable Law (it being understood and agreed that any material change to the relevant facts and circumstances shall require a new notice and a new negotiation period that shall expire on the later to
occur of (A) two (2) days following delivery of such new notice from the Company to Parent and (B) the expiration of the original four
(4)-day
period described above in this clause (iii)), and
(iv) no earlier than the end of such negotiation period, the Company Board shall have determined in good faith, after consultation with its outside financial advisors and outside legal counsel, and after considering the terms of any proposed
amendment or modification to this Agreement, that the failure to take such action would still be inconsistent with its fiduciary duties under applicable Law.
(f) Nothing contained in this Agreement shall prohibit the Company or the Company Board from (i) disclosing to its stockholders a
position contemplated by Rules
14d-9
and
14e-2(a)
promulgated under the Exchange Act, or from issuing a stop, look and listen statement pending disclosure of
its position thereunder, or (ii) making any disclosure to its stockholders if the Company Board determines in good faith, after consultation with its outside legal counsel, that the failure of the Company Board to make such disclosure would be
inconsistent with its fiduciary duties under applicable Law;
provided
that (A) in no event shall this
Section 5.6(f)
affect the obligations specified in
Section 5.6(d)
or
5.6(e)
(or to the consequences
thereof in accordance with this Agreement) or the definition of Company Adverse Recommendation Change and (B) any such disclosure (other than issuance by the Company of a stop, look and listen or similar communication of the type
contemplated by
Rule 14d-9(f)
under the Exchange Act) that addresses or relates to the approval, recommendation or declaration of advisability by the Company Board with respect to this Agreement or a
Company Acquisition Proposal shall be deemed to be a Company Adverse Recommendation Change unless the Company Board in connection with such communication publicly states that its recommendation with respect to this Agreement has not changed.
Section 5.7
Directors
and Officers
Indemnification and
Insurance
.
(a) Parent and Merger Sub agree that all rights to indemnification and exculpation from liabilities, including advancement
of expenses, for acts or omissions occurring at or prior to the Effective Time now
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existing in favor of the current or former directors or officers of the Company (the
D&O Indemnified Parties
) as provided in the Certificate of Incorporation, the Bylaws or
any indemnification Contract between such directors or officers and the Company (in each case, as in effect on, and, in the case of any indemnification Contracts, to the extent made available to Parent prior to, the date of this Agreement) shall
survive the Merger and shall continue in full force and effect. For a period of six (6) years from the Effective Time, the Surviving Corporation shall, and Parent shall cause the Surviving Corporation to, maintain in effect the exculpation,
indemnification and advancement of expenses equivalent to the provisions of the Certificate of Incorporation and Bylaws as in effect immediately prior to the Effective Time with respect to acts or omissions occurring prior to the Effective Time and
shall not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any D&O Indemnified Parties;
provided
that all rights to indemnification in respect of any claim made for
indemnification within such period shall continue until the disposition of such action or resolution of such claim. From and after the Effective Time, Parent shall guarantee and stand surety for, and shall cause the Surviving Corporation to honor,
in accordance with their respective terms, each of the covenants contained in this
Section 5.7
.
(b) Prior to the Effective
Time, the Company shall or, if the Company is unable to, Parent shall cause the Surviving Corporation as of or after the Effective Time to, purchase a six (6)-year prepaid tail policy, with terms, conditions, retentions and limits of
liability that are no less favorable than the coverage provided under the Companys existing policies of directors and officers liability insurance and fiduciary liability insurance, with respect to matters arising on or before the
Effective Time (including in connection with this Agreement and the transactions or actions contemplated by this Agreement), and Parent shall cause such policy to be maintained in full force and effect, for its full term, and cause all obligations
thereunder to be honored by the Surviving Corporation, and no other party shall have any further obligation to purchase or pay for insurance hereunder;
provided
that the Company shall not pay, and the Surviving Corporation shall not be
required to pay, in excess of 300% of the last annual premium paid by the Company prior to the date of this Agreement in respect of such tail policy. If the Company or the Surviving Corporation for any reason fail to obtain such
tail insurance policies prior to, as of or after the Effective Time, Parent shall, for a period of six (6) years from the Effective Time, cause the Surviving Corporation to maintain in effect the current policies of directors
and officers liability insurance and fiduciary liability insurance maintained by the Company with respect to matters arising on or before the Effective Time;
provided
that after the Effective Time, Parent shall not be required to pay
annual premiums in excess of 300% of the last annual premium paid by the Company prior to the date of this Agreement in respect of the coverage required to be obtained pursuant hereto, but in such case shall purchase as much coverage as reasonably
practicable for such amount.
(c) The covenants contained in this
Section 5.7
are intended to be for the benefit of, and shall
be enforceable by, each of the D&O Indemnified Parties and their respective heirs and shall not be deemed exclusive of any other rights to which any such Person is entitled, whether pursuant to Law, contract or otherwise.
(d) In the event that Parent or the Surviving Corporation or any of their respective successors or assigns (i) consolidates with or
merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each
such case, proper provision shall be made so that the successors or assigns of Parent or the Surviving Corporation, as the case may be, shall assume the obligations set forth in this
Section 5.7
.
Section 5.8
Notification of Certain Matters
. Subject to applicable Law, the Company shall give
prompt notice to Parent, and Parent shall give prompt notice to the Company, of (a) the occurrence or
non-occurrence
of any event whose occurrence or
non-occurrence,
as the case may be, would reasonably be expected to cause, in the case of the Company, any condition set forth in
Section 6.2
not to be satisfied, or in the case of Parent, any
condition set forth in
Section 6.3
not to be satisfied, at any time from the date of this Agreement to the Effective Time, (b) any notice or other communication received by such party from any Governmental Authority in
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connection with this Agreement, the Merger or the other transactions contemplated by this Agreement, or from any Person alleging that the consent of such Person is or may be required in
connection with the Merger or the other transactions contemplated by this Agreement, if the subject matter of such notice or other communication or the failure of such party to obtain such consent would reasonably be expected to be material to the
Company, the Surviving Corporation or Parent and (c) any claims, investigations or Proceedings commenced or, to such partys Knowledge, threatened in writing against, relating to or involving or otherwise affecting such party (including
its board of directors) or any of its Subsidiaries that relate to this Agreement, the Merger or the other transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to the contrary, no such notification shall, in and of
itself, affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties hereunder.
Section 5.9
Public Disclosure
. So long as this Agreement is in effect, neither Parent, nor the
Company, nor any of their respective Affiliates, will disseminate any press release or other public announcement or disclosure concerning this Agreement, the Merger or the other transactions contemplated by this Agreement, except as may be required
by Law or the rules of a national securities exchange or to the extent disclosed in or consistent with the Proxy Statement or the Form
S-4,
without the prior consent of each of the other parties hereto, which
consent shall not be unreasonably withheld, conditioned or delayed. The parties have agreed to the text of the joint press release announcing the execution of this Agreement. Notwithstanding the foregoing, (a) without prior consent of the other
parties, each party may disseminate information substantially consistent with information included in a press release or other document previously approved for external distribution by the other parties, or is otherwise not subject to such approval,
in each case, pursuant to the first sentence of this
Section 5.9
, and (b) this
Section 5.9
shall not apply to (i) any press release or other public announcement or disclosure in connection with any Company Adverse
Recommendation Change effected by the Company Board in accordance with this Agreement or (ii) any press release or other public announcement or disclosure by the Company or Parent of any information concerning this Agreement, the Merger or the
other transactions contemplated by this Agreement in connection with a determination by the Company in accordance with
Section 5.6(b)
or
Section 5.6(d)
that a Company Acquisition Proposal constitutes, or may constitute, a
Company Superior Proposal or any dispute between the parties regarding this Agreement, the Merger or the transactions contemplated by this Agreement;
provided
, that in the case of either of clauses (i) or (ii), to the extent not
prohibited by applicable Law, the disclosing party gives the other party reasonable advance notice of (including the contents of) its intended release, announcement or disclosure.
Section 5.10
Employee Benefits; Labor
.
(a) For purposes of this
Section 5.10
, (i) the term
Covered Employees
shall mean employees who are actively
employed by or on a legally protected or approved leave of absence from the Company or any of its Subsidiaries immediately prior to the Effective Time; and (ii) the term
Continuation Period
shall mean the period beginning at
the Effective Time and ending on the first anniversary of the Effective Time.
(b) Except as set forth on
Section 5.10(b) of the
Company Disclosure Letter
or where applicable Law or the provisions of a Labor Agreement require more favorable treatment, during the Continuation Period, Parent shall, or shall cause a Subsidiary of Parent to, provide to the Covered Employees
for so long as such Covered Employees remain employees of Parent or any of its Subsidiaries during the Continuation Period, compensation (such term to include salary or base rate of compensation, annual cash bonus opportunities, commissions and
severance) and benefits that are substantially comparable in value, in the aggregate, to the compensation (excluding any retention, change of control, transaction or similar bonuses) and benefits (excluding any defined benefit pension plan but
including any retiree medical and life insurance benefits) being provided by the Company or its Subsidiaries to Covered Employees immediately prior to the Effective Time.
(c) In the event any Covered Employee first becomes eligible to participate under any Parent Benefit Plan following the Effective Time, Parent
shall, or shall cause a Subsidiary of Parent to use commercially reasonable efforts to (i) waive any preexisting condition exclusions and waiting periods with respect to
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participation and coverage requirements applicable to any Covered Employee under any Parent Benefit Plan providing medical, dental or vision benefits to the same extent such limitation would have
been waived or satisfied under any similar Company Benefit Plan the Covered Employee participated in immediately prior to coverage under the Parent Benefit Plan; and (ii) provide each Covered Employee with credit for any copayments,
out-of-pocket
requirements and deductibles paid prior to the Covered Employees coverage under any Parent Benefit Plan during the plan year in which such Covered Employee
first becomes eligible to participate under such Parent Benefit Plan, to the same extent such credit was given under any similar Company Benefit Plan that Covered Employee participated in immediately prior to coverage under the Parent Benefit Plan,
in satisfying any applicable
co-payment,
deductible or
out-of-pocket
requirements under the Parent Benefit Plan for the plan year
in such Covered Employee first becomes eligible to participate under such Parent Benefit Plan.
(d) As of the Effective Time, Parent shall
recognize, or shall cause a Subsidiary of Parent to recognize, all service of each Covered Employee prior to the Effective Time, to the Company (or any predecessor entities of the Company or any of its Subsidiaries) for vesting and eligibility
purposes (but not for benefit accrual purposes under any defined benefit pension plan) and for purposes of determining future vacation accruals and severance amounts to the same extent as such Covered Employee received, immediately before the
Effective Time, credit for such service under any similar Company Benefit Plan in which such Covered Employee participated immediately prior to the Effective Time;
provided
that service of each Covered Employee prior to the Effective Time
shall not be recognized for the purpose of any entitlement to participate in, or receive benefits with respect to, any
(i) non-elective
employer contributions under any plan of Parent under Section 401(k)
of the Code, (ii) Parent retiree medical program in which any Covered Employee participates after the Effective Time or (iii) any Parent Benefit Plan that is grandfathered or frozen or for which similarly situated employees of Parent and
its Affiliates do not receive service credit. In no event shall anything contained in this
Section 5.10
result in any duplication of benefits for the same period of service.
(e) Parent shall cause the Surviving Corporation to perform the Companys obligations under the agreements set forth on
Section 5.10(e) of the Company Disclosure Letter
.
(f) The Company and its Subsidiaries shall use reasonable best efforts to
satisfy all legal or contractual requirements to provide notice to, or carry out any consultation procedure with, any employee or groups of employees of the Company or any of its Subsidiaries, or any labor or trade union, labor organization or works
council, which is representing any employee of the Company or any of its Subsidiaries, in connection with the transactions contemplated by this Agreement.
(g) The Company shall amend the Rockwell Collins Master Trust Deferred Compensation and
Non-Qualified
Savings and
Non-Qualified
Pension Plan (the
Trust Agreement
), the Rockwell Collins
Non-Qualified
Savings Plan, the Rockwell Collins
Non-Qualified
Pension Plan, the Rockwell Collins Deferred Compensation Plan, the Rockwell Collins 2005
Non-Qualified
Retirement
Savings Plan, the Rockwell Collins 2005
Non-Qualified
Pension Plan, and the Rockwell Collins 2005 Deferred Compensation Plan to the extent necessary to (i) remove any funding obligation that would
otherwise be triggered by the Merger, (ii) cause the grantor trust governed by the Trust Agreement to remain revocable following the Closing, and (iii) to remove any provisions requiring the appointment of a third party administrator as a
result of the Merger.
(h) No later than thirty (30) days following the execution of this Agreement (provided that Parent shall
consider in good faith any reasonable request by the Company for extension of such period by up to thirty (30) days), the Company shall provide Parent with copies of all material documents embodying and relating to each material Foreign Plan,
including the Foreign Plan document, all amendments thereto and all related trust documents, the most recent summary plan description, the most recent actuarial valuation report, and the most recent tax return filing, in each case, to the extent
applicable.
(i) No later than sixty (60) days following the execution of this Agreement (provided that Parent shall consider in good
faith any reasonable request by the Company for extension of such period by up to thirty (30) days), the Company shall provide Parent with copies of all Labor Agreements.
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(j) The parties hereto acknowledge and agree that all provisions contained in this
Section 5.10
with respect to employees of the Company and its Subsidiaries are included for the sole benefit of the respective parties hereto and shall not create any right (i) in any other Person, including employees, former
employees, any participant or any beneficiary thereof, in any Company Benefit Plan, or (ii) to continued employment with the Company, Parent or their respective Subsidiaries or Affiliates. Notwithstanding anything in this
Section 5.10
to the contrary, nothing in this Agreement, whether express or implied, shall be treated as an amendment or other modification of any Company Benefit Plan or any other employee benefit plans of the Company, Parent or any of
their respective Subsidiaries or Affiliates or shall prohibit Parent or any of its Subsidiaries or Affiliates from amending or terminating any employee benefit plan.
Section 5.11
Merger Sub
. Parent will take all actions necessary to (a) cause Merger Sub to
perform its obligations under this Agreement and to consummate the Merger on the terms and conditions set forth in this Agreement and (b) ensure that Merger Sub prior to the Effective Time shall not conduct any business, incur or guarantee any
Indebtedness or make any investments, other than incident to its obligations under this Agreement or the transactions contemplated hereby.
Section 5.12
Rule
16b-3
Matters
. Prior to the Effective
Time, Parent and the Company shall take all such steps as may be reasonably necessary or advisable (to the extent permitted under applicable Law and
no-action
letters issued by the SEC) to cause any
dispositions of Company Common Stock (including derivative securities with respect to Company Common Stock) or acquisitions of Parent Common Stock (including derivative securities with respect to Parent Common Stock) resulting from the transactions
contemplated by this Agreement by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company or will become subject to such reporting requirements with respect to Parent, to be
exempt under Rule
16b-3
promulgated under the Exchange Act, to the extent permitted by applicable Law.
Section 5.13
Treatment of Existing
Debt
. If requested in writing by Parent at least five
(5) Business Days prior to the Closing Date, the Company will use reasonable best efforts to deliver to Parent prior to the Closing Date, an executed copy of a customary payoff letter from the administrative agent under the Existing Revolving
Credit Agreement and/or the Existing Term Loan Credit Agreement, in form and substance reasonably satisfactory to Parent relating to the repayment in full of all obligations thereunder and the termination of all commitments in connection therewith.
Section 5.14
Stock Exchange Listing
. Parent shall use its reasonable best efforts to cause the
shares of Parent Common Stock to be issued in connection with the Merger to be approved for listing on the NYSE, subject to official notice of issuance, at or prior to the Effective Time.
Section 5.15
Financing
and Financing Cooperation
.
(a) Parent shall, and shall cause its Subsidiaries to, use reasonable best efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things reasonably necessary to consummate the Financing or any Substitute Financing in an amount sufficient, together with cash on hand, amounts available to be drawn on the Parent Revolving Credit Facilities, and any other
committed financing that replaces or supplements the Financing consistent with the terms set forth in this
Section 5.15
, to consummate the Merger and the other transactions contemplated hereby no later than the Closing, including, to the
extent necessary to consummate the Merger and such other transactions, using reasonable best efforts to (i) (A) maintain in effect the Debt Letters and in all material respects comply with all of their respective obligations thereunder and
(B) negotiate, enter into and deliver definitive agreements with respect to the Financing reflecting the terms contained in the Debt Letters (or with other terms agreed by Parent and the Financing Parties, subject to the restrictions on
amendments of the Debt Letters set forth below), so that such agreements are in effect no later than the Closing, and (ii) satisfying on a timely basis all the conditions to the Financing and the definitive agreements related thereto that are
in Parents (or its Subsidiaries) control. In the event that all conditions set forth in
Sections 6.1
and
6.2
have been satisfied or waived or, upon funding of the Financing, shall have been satisfied or waived, Parent
shall, and shall cause its
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Subsidiaries to, use reasonable best efforts to cause the Persons providing the Financing (the
Financing Parties
) to fund on the Closing Date the Financing, to the extent the
proceeds thereof are required to consummate the Merger and the other transactions contemplated hereby. Parent shall pay, or cause to be paid, as the same shall become due and payable, all fees and other amounts under the Debt Letters.
(b) Parent will keep the Company reasonably informed on a timely basis of the status of Parents efforts to obtain the Financing and to
satisfy the conditions thereof, including providing copies of any amendment, modification or replacement of the Debt Letters (which may be redacted in a customary manner) and shall give the Company prompt notice of any fact, change, event or
circumstance that is reasonably likely to have, individually or in the aggregate, a material adverse impact on the Financing necessary for the satisfaction of all of Parents obligations under this Agreement, including the payment of the Cash
Consideration portion of the Merger Consideration and all fees and expenses to be incurred in connection therewith. Parent may amend, modify, replace, terminate, assign or agree to any waiver under the Debt Letters without the prior written approval
of the Company, provided, that Parent shall not, without the Companys prior written consent, permit any such amendment, replacement, modification, assignment, termination or waiver to be made to, or consent to any waiver of, any provision of
or remedy under the Debt Letters which would (i) reduce the aggregate cash amounts of the Financing (including by increasing the amount of fees to be paid or original issue discount) unless the aggregate amount of the Financing following such
reduction, together with cash on hand, amounts available to be drawn on the Parent Revolving Credit Facilities and other financial resources of Parent on the Closing Date, is sufficient to consummate the Merger and the other transactions
contemplated hereby (it being understood that any such reduction in such amounts in accordance with the terms of such Debt Letter shall be permitted) or (ii) impose new or additional conditions to the Financing or otherwise expand, amend,
modify or waive any of the conditions to the Financing in a manner that in any would reasonably be expected to (A) materially delay or make less likely the funding of the Financing (or satisfaction of the conditions to the Financing) on the
Closing Date, (B) materially adversely impact the ability of Parent to enforce its rights against the Financing Parties or any other parties to the Debt Letters or the definitive agreements with respect thereto or (C) materially adversely
affect the ability of Parent or any of its Subsidiaries to timely consummate the Merger and the other transactions contemplated hereby; provided, that notwithstanding the foregoing, Parent may modify, supplement or amend the Debt Letters to
(1) add lenders, lead arrangers, bookrunners, syndication agents or similar entities that have not executed the Debt Letters as of the date of this Agreement and (2) implement or exercise any market flex provisions contained in
the Debt Letters. In the event that new commitment letters and/or fee letters are entered into in accordance with any amendment, replacement, supplement or other modification of the Debt Letters permitted pursuant to this
Section 5.15
,
such new commitment letters and/or fee letters shall be deemed to be the Debt Letters for all purposes of this Agreement and references to Financing herein shall include and mean the financing contemplated by the Debt Letters
as so amended, replaced, supplemented or otherwise modified, as applicable. Parent shall promptly deliver to the Company copies of any termination, amendment, modification, waiver or replacement of the Debt Letters. If funds in the amounts set forth
in the Debt Letters, or any portion thereof, become unavailable, Parent shall, and shall cause its Subsidiaries to, as promptly as practicable following the occurrence of such event (x) notify the Company in writing thereof and (y) use
reasonable best efforts to obtain substitute financing, including, as applicable, a commitment to provide such substitute financing (on terms and conditions that are not materially less favorable to Parent, taken as a whole, than the terms and
conditions as set forth in the Debt Letters, taking into account any market flex provisions thereof) sufficient, together with cash on hand, amounts available to be drawn on the Parent Revolving Credit Facilities and other financial
resources of Parent on the Closing Date, to enable Parent and its Subsidiaries to consummate the Merger and the other transactions contemplated hereby in accordance with the terms hereof (the
Substitute Financing
) and, promptly
after execution thereof, deliver to the Company true, complete and correct copies of the new commitment letter and the related fee letters (in redacted form removing only the fee amounts, pricing caps, the rates and amounts included in the
market flex) or related definitive financing documents with respect to such Substitute Financing. Upon obtaining any commitment for any such Substitute Financing, such financing shall be deemed to be a part of the Financing
and any commitment letter for such Substitute Financing shall be deemed to be the Debt Letters for all purposes of this Agreement.
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(c) Without limiting the generality of
Section 5.4
, prior to the Closing, the Company
shall, and shall cause its Subsidiaries to, and shall use its reasonable best efforts to cause its and their respective Representatives to, on a timely basis, upon the reasonable request of Parent, provide reasonable cooperation in connection with
any debt or equity financing in connection with the Merger and the other transactions contemplated by this Agreement, including the following:
(i) furnishing, or causing to be furnished, to Parent (A) audited consolidated balance sheets and related statements of
income, stockholders equity and cash flows of the Company for the three most recently completed fiscal years of the Company ended at least sixty (60) days prior to the Closing Date prepared in accordance with GAAP, (B) audited
consolidated balance sheets and related statements of income, stockholders equity and cash flows of the Applicable Company Subsidiary for the fiscal year ended on December 31, 2016 prepared in accordance with GAAP, and (C) unaudited
consolidated balance sheets and related unaudited statements of income, stockholders equity and cash flows of the Company for each subsequent fiscal quarter of the Company ended at least forty (40) days before the Closing Date (other than
the fourth quarter of any fiscal year) prepared in accordance with GAAP (subject to normal
year-end
adjustments and the absence of footnotes) and reviewed (AS 4105) by the Companys accountants (with such
review including a review of the financial statements for the corresponding period in the previous fiscal year); it being understood and agreed that any such financial statements that have been filed with the SEC shall be deemed to have been
furnished to Parent for purposes of this clause (i);
(ii) providing to Parent, to the extent reasonably available,
(A) financial statements, financial data and other information regarding the Company and its Subsidiaries reasonably necessary for Parents preparation of any pro forma financial information of the type required by Regulation
S-X
and Regulation
S-K
under the Securities Act for a registered public offering of debt and/or equity securities (including any pro forma financial information so required
relating to the transactions contemplated by the Applicable Company Subsidiary Acquisition Agreement) or as otherwise necessary to permit the Companys independent accountants to issue customary comfort letters including as to
customary negative assurance in connection therewith to the applicable underwriters, initial purchasers or placement agents in connection with any issuance of securities in a capital markets transaction comprising part of such financing and
(B) such other financial and other information relating to the Company and its Subsidiaries customary or reasonably necessary for the completion of such financing to the extent reasonably requested by Parent to assist Parent in the preparation
of customary offering or confidential information memoranda or otherwise to be used in connection with the marketing or consummation of the financing in connection with the Merger and the other transactions contemplated by this Agreement or to
comply with applicable Law in connection with such financing;
(iii) using reasonable best efforts to secure the consent of
the independent accountants of the Company and its Subsidiaries (including the Applicable Company Subsidiary) to use their audit reports with respect to the financial statements furnished pursuant to
Section 5.15(c)(i)
in any
registration statement of Parent filed with the SEC relating to such financing or in accordance with applicable law;
(iv)
using reasonable best efforts to cause the Companys and its Subsidiaries (including the Applicable Company Subsidiarys) independent accountants to (A) reasonably participate in drafting sessions and accounting due diligence
sessions in connection with such financing and (B) provide customary comfort letters (including negative assurance comfort) with respect to financial information related to the Company and its Subsidiaries (including the Applicable
Company Subsidiary), to the extent such comfort letters are required to be delivered to the applicable underwriters, initial purchasers or placement agents in connection with any issuance of securities in a capital markets transaction comprising
part of such financing;
(v) providing reasonable assistance to Parent in its preparation of customary (in each case)
rating agency presentations, road show materials, bank information memoranda, projections, prospectuses, bank syndication materials, credit agreements, offering memoranda, private placement memoranda, definitive financing documents (as well as
customary certificates) and similar or related documents customarily
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prepared in connection with financings of the type described in this
Section 5.15
, and which may incorporate by reference periodic and current reports filed by the Company (and/or the
Applicable Company Subsidiary) with the SEC;
(vi) reasonably cooperating with customary marketing efforts of Parent for
the financing, including using reasonable best efforts to cause its management team, with appropriate seniority and expertise, to assist in preparation for and to participate in a reasonable number of meetings, presentations, road shows, due
diligence sessions, drafting sessions, and sessions with rating agencies, in each case, upon reasonable notice and at mutually agreeable dates and times;
(vii) delivering to Parent, no later than three (3) Business Days prior to the Closing Date, any materials and
documentation about the Company and its Subsidiaries required under applicable know your customer and anti-money laundering Laws (including the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001), to the extent requested by the Financing Source Parties or Parent no less than nine (9) Business Days prior to the Closing Date;
(viii) informing Parent promptly in writing if the Company Board or a committee thereof, the Companys chief financial
officer or any other executive officer of the Company concludes that any previously issued financial statements of the Company or any of its Subsidiaries (including the Applicable Company Subsidiarys) included or intended to be used in
connection with the financing should no longer be relied upon;
(ix) informing Parent promptly in writing if any member of
the Company Board, the Companys chief financial officer or any other executive officer of the Company shall have knowledge of any facts as a result of which a restatement of any of the Companys or its Subsidiaries (including the
Applicable Company Subsidiarys) financial statements is required or reasonably likely; and
(x) cooperating with
Parent to the extent reasonably requested in writing by Parent in connection with (A) providing customary authorization letters to Parents financing sources and (B) the payoff, redemption, satisfaction and discharge, amendment or
modification of existing Indebtedness of the Company and its Subsidiaries (any of the foregoing an
Existing Debt Modification
), whether in the form of any amendment, tender offer, exchange offer, redemption, satisfaction and
discharge, consent solicitation, or otherwise;
provided
that (I) neither the Company nor any of its Affiliates shall be required to pay any
commitment or other similar fee or incur any liability in connection with any financing to be obtained by Parent or its Subsidiaries in connection with the transactions contemplated by this Agreement or any Existing Debt Modification, except such
expenses for which Parent is obligated to reimburse the Company or, if reasonably requested by the Company, for which funds that are actually necessary to pay such expenses are provided in advance by Parent to the Company, (II) the attachment
of any Lien to any assets of the Company or any of its Subsidiaries related to such financing shall be subject to the consummation of the Closing, (III) no director or officer of the Company or any of its Affiliates shall be required to execute
any agreement, certificate, document or instrument with respect to such financing or any Existing Debt Modification that would be effective prior to the Closing (other than certifications of the financial statements and customary authorization
letters), and none of the Company or any of its Affiliates or any Persons who are directors or managers of the Company or any such Affiliates shall be required to adopt any resolution to approve or authorize any such financing or any Existing Debt
Modification, (IV) any required cooperation shall not unreasonably interfere with the ongoing operations of the Company or its Affiliates and (V) neither the Company nor any of its Affiliates or any of their respective Representatives
shall be required to take or cause to be taken any action pursuant to this
Section
5.15
that (1) would cause any representation or warranty in this Agreement to be breached by the Company or any of its Subsidiaries;
(2) would conflict with the organizational documents of the Company or its Subsidiaries or any Laws; (3) would result in a material violation or breach of, or a default (with or without notice, lapse of time, or both) under, any material
contract to which the Company or any of its Subsidiaries is a party; (4) would require providing access
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to or disclosing information that would jeopardize any attorney-client privilege of the Company or any of its Subsidiaries; (5) would require preparing any projections or pro forma financial
statements; or (6) would require delivering or causing to be delivered any opinion of counsel or solvency certificate. The Company, its controlled Affiliates and their respective Representatives shall be indemnified and held harmless by Parent
from and against any and all liabilities, losses, damages, claims, costs, expenses, interest, awards, judgments and penalties suffered or incurred by them in connection with such financing and any Existing Debt Modification to the fullest extent
permitted by Law and with appropriate contribution to the extent such indemnification is not available, other than to the extent any such liabilities, losses, damages, claims, costs, expenses, interest, awards, judgments or penalties are the result
of the gross negligence, bad faith or willful misconduct of the Company, its Affiliates or their respective Representatives, or such Persons material breach of this Agreement, or with respect to any material misstatement or omission in
information provided hereunder by any of the foregoing Persons for use in connection herewith or with the financing and Parent shall promptly after termination of this Agreement in accordance with
Section
7.1
(other than
any termination pursuant to
Section
7.1(c)(ii)
,
Section
7.1(d)(i)
or
Section
7.1(d)(ii)
), upon written request by the Company, reimburse the Company or any of its
controlled Affiliates for all reasonable and documented
out-of-pocket
costs or expenses actually incurred by each such Person in connection with such financing, whether
or not the Merger is consummated or this Agreement is terminated. Each of Parent and Merger Sub acknowledges and agrees that the obtaining of any such financing is not a condition to the Closing and that in no event shall (x) the receipt by, or
availability to, Parent, Merger Sub or any of their respective Affiliates of any funds or financing or (y) any Existing Debt Modification be a condition to any of Parents or Merger Subs obligations under this Agreement.
(d) All
non-public
information regarding the Company or its Subsidiaries obtained by Parent or its
Representatives, in each case pursuant to this
Section 5.15
, shall be kept confidential in accordance with the Confidentiality Agreement;
provided
that such information may be disclosed (i) to prospective lenders and
investors during syndication and marketing of the financing that enter into confidentiality arrangements customary for financing transactions of the same type as such financing (including customary click-through confidentiality
undertakings), (ii) on a confidential basis to rating agencies and (iii) in the case of any financing consisting of securities, to the extent required by applicable securities Laws. The Company hereby consents to the reasonable use of the
Companys and its Affiliates trademarks, service marks and logos solely in connection with the financing for the Merger and the other transactions contemplated by this Agreement; provided that such trademarks, service marks and logos are
used solely in a manner that is not intended to or reasonably likely to harm or disparage the Company or its Affiliates or the reputation or goodwill of the Company or its Affiliates.
Section 5.16
Stock Exchange Delisting; Deregistration
. Prior to the Effective Time, the Company
shall cooperate with Parent and use its reasonable best efforts, in accordance with applicable rules and policies of the NYSE, to facilitate the commencement of the delisting of the Company and of the shares of Company Common Stock from the NYSE as
promptly as practicable after the Effective Time. Prior to the Effective Time, the Company shall not voluntarily delist the Company Common Stock from the NYSE.
Section 5.17
State Takeover Laws
. If any state takeover statute becomes or is deemed to become
applicable to the Company or the Merger or the other transactions contemplated by this Agreement, then the Company Board shall take any and all actions within the Companys control as are permitted under applicable Law and necessary to
eliminate or, if it is not possible to eliminate, then to minimize the effects of such statutes on the foregoing.
Section 5.18
Transaction Litigation
. The Company shall give Parent notice, as soon as possible, of any (x) stockholder Proceeding brought by any stockholder of the Company or (y) Proceeding brought by any of the parties set
forth on
Section 5.18 of the Company Disclosure Letter
or any of their respective Affiliates, in each case against the Company and/or its directors or executive officers relating to or in connection with the Merger or the other
transactions contemplated by this Agreement, whether commenced prior to or after the execution and delivery of this Agreement. Subject to entry into a customary joint defense agreement, Parent shall have the right to participate in the defense of
any such Proceeding. The Company may not compromise or settle or offer to
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compromise or settle any such Proceeding commenced prior to or after the date of this Agreement against the Company or any of its directors or executive officers by any such Persons relating to
this Agreement, the Merger, any other transaction contemplated by this Agreement or otherwise, without the prior written consent of Parent, such consent in the case of an action contemplated by clause (x) above, not to be unreasonably withheld
conditioned or delayed.
Section 5.19
Resignations
. Prior to the Effective Time, upon
Parents request, the Company shall use commercially reasonable efforts to cause any director of the Company to execute and deliver a letter effectuating his or her resignation as a director of such entity effective as of the Effective Time.
Section 5.20
Dividend Record Dates
. The Company shall coordinate with Parent to designate the
record dates and payment dates for the Companys quarterly dividends to coincide with the record dates and payment dates for Parents quarterly dividends, it being the intention of the parties that holders of Parent Common Stock and
Company Common Stock shall not receive dividends twice for any one calendar quarter.
Section 5.21
Intellectual Property Matters
. The Company shall comply with reasonable requests of Parent and its Subsidiaries (at Parents expense) in an effort to obtain consent to register and such other reasonable assistance as may be necessary
from Rockwell Automation, Inc. and/or Rockwell International Corporation to facilitate registration of the marks set forth on
Section
3.15(b)(i) of the Company Disclosure Letter
in the name of the Company in any
jurisdiction as reasonably requested by Parent.
ARTICLE VI
CONDITIONS TO THE MERGER
Section 6.1
Conditions to the Obligations of Each Party
. The respective obligations of each party
to consummate the Merger are subject to the satisfaction or (to the extent permitted by Law) waiver by the Company and Parent at or prior to the Closing of the following conditions:
(a) the Company shall have obtained the Company Stockholder Approval;
(b) the Parent Stock Issuance shall have been approved for listing on the NYSE, subject to official notice of issuance;
(c) the Form
S-4
shall have become effective under the Securities Act and shall not be the subject of
any stop order or any Proceedings by or before the SEC seeking a stop order;
(d) (i) any applicable waiting period (and any extension
thereof) under the HSR Act relating to the consummation of the Merger shall have expired or early termination thereof shall have been granted and (ii) any authorization or consent from a Governmental Authority required to be obtained with
respect to the Merger under any Antitrust Law as set forth on
Section 6.1(d) of the Parent Disclosure Letter
shall have been obtained and shall remain in full force and effect, in each case without the imposition, individually or in the
aggregate, of an Unacceptable Condition; and
(e) no Governmental Authority of competent jurisdiction shall have issued or entered any
Order after the date of this Agreement, and no Law shall have been enacted or promulgated after the date of this Agreement, in each case, that (whether temporary or permanent) is then in effect and has the effect of (i) enjoining or otherwise
prohibiting the consummation of the Merger (a
Restraint
) or (ii) resulting, individually or in the aggregate, in an Unacceptable Condition.
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Section 6.2
Conditions to Obligations of Parent and Merger
Sub to Effect the Merger
. The obligations of Parent and Merger Sub to effect the Merger are subject to the satisfaction or (to the extent permitted by Law) waiver by Parent at or prior to the Closing of the following additional conditions:
(a) each of the representations and warranties of the Company (i) contained in
Sections 3.2(a)
,
3.2(c)(i)
,
(c)(ii)
and
(c)(iv)
(in each such clause of
Section 3.2(c)
, with respect to the Company and the securities thereof or equity interests therein) and
3.7(c)
shall be true and correct in all respects (other than, in the case of
Sections
3.2(a)
and
3.2(c)(i)
,
(c)(ii)
and
(c)(iv)
(in each such clause of
Section 3.2(c)
, with respect to the Company and the securities thereof or equity interests therein),
de minimis
inaccuracies) as of the Closing
Date as though made on and as of such date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such representations and warranties shall be so true and correct as of such specific date
only), (ii) contained in the first and last sentences of
Section 3.2(b)
,
Section 3.3
,
Section 3.4
,
Section 3.24
,
Section 3.25
,
Section 3.26
and
Section 3.27
(together with the Sections of this Agreement referred to in clause (i), the
Company Fundamental Representations
) shall be true and correct in all material respects, without giving effect to any materiality or Company
Material Adverse Effect qualifications therein, as of the Closing Date as though made on and as of such date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such representations
and warranties shall be so true and correct as of such specific date only) and (iii) contained in this Agreement (other than the Company Fundamental Representations), without giving effect to any materiality or Company Material Adverse
Effect qualifications therein, shall be true and correct as of the Closing Date as though made on and as of such date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such
representations and warranties shall be so true and correct as of such specific date only), except where the failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had, and would not
reasonably be expected to have, a Company Material Adverse Effect;
(b) the Company shall have performed or complied in all material
respects with its obligations required under this Agreement to be performed or complied with on or prior to the Closing;
(c) since the
date of this Agreement, there shall not have been any event, circumstance, occurrence, effect, fact, development or change that has had, or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect;
and
(d) Parent shall have received a certificate signed by an executive officer of the Company certifying as to the matters set forth in
Section 6.2(a)
,
Section 6.2(b)
and
Section 6.2(c)
.
Section 6.3
Conditions to Obligation of the Company to Effect the Merger
. The obligation of the Company to effect the Merger is subject to the satisfaction or (to the extent permitted by Law) waiver by the Company at or prior to the Closing of the
following additional conditions:
(a) each of the representations and warranties of Parent and Merger Sub (i) contained in
Sections
4.2(a)
and
4.7(b)
shall be true and correct in all respects (other than, in the case of
Section 4.2(a)
,
de minimis
inaccuracies) as of the Closing Date as though made on and as of such date (except to the extent such
representations and warranties are expressly made as of a specific date, in which case such representations and warranties shall be so true and correct as of such specific date only), (ii) contained in the first sentence of
Section 4.2(b)
,
Sections 4.2(c)(i)
,
(c)(ii)
and
(c)(iv)
,
Section 4.2(d)
, Section
4.3
, Section
4.4
and
Section 4.12
(together with the Sections of this Agreement referred to
in clause (i), the
Parent Fundamental Representations
) shall be true and correct in all material respects, without giving effect to any materiality or Parent Material Adverse Effect qualifications therein, as of the
Closing Date as though made on and as of such date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such representations and warranties shall be so true and correct as of such specific
date only) and (iii) contained in this Agreement (other than the Parent Fundamental Representations), without giving effect to any materiality or Parent Material Adverse Effect qualifications therein, shall be true and correct as of
the Closing Date as though made on and as of such date (except to the extent such representations and warranties are
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expressly made as of a specific date, in which case such representations and warranties shall be so true and correct as of such specific date only), except where the failure of such
representations and warranties to be true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Parent Material Adverse Effect;
(b) Parent and Merger Sub shall have performed or complied in all material respects with each of their respective obligations required under
this Agreement to be performed or complied with on or prior to the Closing;
(c) since the date of this Agreement there shall not have
been any event, circumstance, occurrence, effect, fact, development or change that has had, or would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect; and
(d) the Company shall have received a certificate signed by an executive officer of Parent certifying as to the matters set forth in
Section 6.3(a)
,
Section 6.3(b)
and
Section 6.3(c)
.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1
Termination
. Notwithstanding anything contained in this Agreement to the contrary, this
Agreement may be terminated at any time prior to the Effective Time, whether before or after the Company Stockholder Approval is obtained (except as otherwise expressly noted), as follows:
(a) by mutual written consent of each of Parent and the Company;
(b) by either Parent or the Company, if:
(i) the Merger shall not have been consummated on or before 5:00 p.m. (New York time) on the first anniversary of the date
of this Agreement (the
Termination Date
);
provided
that if, on the Termination Date, any of the conditions to the Closing set forth in
Section 6.1(d)
or
Section 6.1(e)
(in the case of clause (i)
thereof, to the extent any such Restraint is in respect of an Antitrust Law) shall not have been fulfilled but all other conditions to the Closing either have been fulfilled or would be fulfilled if the Closing were to occur on such date, then the
Termination Date shall automatically, without any action on the part of the parties hereto, be extended to the eighteen-month anniversary of the date of this Agreement, and such date shall become the Termination Date for purposes of this
Agreement;
provided
,
further
, that the right to terminate this Agreement pursuant to this
Section 7.1(b)(i)
shall not be available to any party if a material breach by such party of any of its obligations under this
Agreement has been the principal cause of or principally resulted in the failure of the Closing to have occurred on or before the Termination Date;
(ii) (A) prior to the Effective Time, any Governmental Authority of competent jurisdiction shall have issued or entered any
Order after the date of this Agreement or any Law shall have been enacted or promulgated after the date of this Agreement that has the effect of permanently restraining, enjoining or otherwise prohibiting the Merger, and in the case of such an
Order, such Order shall have become final and
non-appealable,
or (B) any authorization or consent from a Governmental Authority required to be obtained pursuant to
Section 6.1(d)
shall have
been denied and such denial shall have become final and
non-appealable;
provided
that the right to terminate this Agreement under this
Section 7.1(b)(ii)
shall not be available to a party if
a material breach by such party of its obligations under
Section 5.4
has been the principal cause of or principally resulted in the issuance of such Order or the denial of such Consent; or
(iii) the Company Stockholder Approval shall not have been obtained upon a vote taken thereon at the Company Stockholders
Meeting duly convened therefor or at any adjournment or postponement thereof;
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(c) by the Company if:
(i) Parent or Merger Sub shall have breached or failed to perform any of their respective representations, warranties,
covenants or other agreements set forth in this Agreement, which breach or failure to perform (A) would result in the failure of a condition set forth in
Section 6.3(a)
or
Section 6.3(b)
and (B) is not capable of
being cured by Parent or Merger Sub, as applicable, by the Termination Date or, if capable of being cured, shall not have been cured by Parent or Merger Sub on or before the earlier of (x) the Termination Date and (y) the date that is
thirty (30) calendar days following the Companys delivery of written notice to Parent of such breach or failure to perform;
provided
that the Company shall not have the right to terminate this Agreement pursuant to this
Section 7.1(c)(i)
if the Company is then in material breach of any of its obligations under this Agreement so as to result in the failure of a condition set forth in
Section 6.2(b)
; or
(ii) at any time prior to receipt of the Company Stockholder Approval, in order for the Company to enter into a definitive
agreement with respect to a Company Superior Proposal to the extent permitted by, and subject to the applicable terms and conditions of,
Section 5.6(d)
;
provided
that prior to or substantially concurrently with such termination,
the Company pays or causes to be paid to Parent the Company Termination Fee; or
(d) by Parent if:
(i) the Company shall have breached or failed to perform any of its representations, warranties, covenants or other agreements
set forth in this Agreement, which breach or failure to perform (A) would result in the failure of a condition set forth in
Section 6.2(a)
or
Section 6.2(b)
and (B) is not capable of being cured by the Company by
the Termination Date or, if capable of being cured, shall not have been cured by the Company on or before the earlier of (x) the Termination Date and (y) the date that is thirty (30) calendar days following Parents delivery of
written notice to the Company of such breach or failure to perform;
provided
that Parent shall not have the right to terminate this Agreement pursuant to this
Section 7.1(d)(i)
if Parent or Merger Sub is then in material breach of
any of its obligations under this Agreement so as to result in the failure of a condition set forth in
Section 6.3(b)
; or
(ii) at any time prior to the receipt of the Company Stockholder Approval, (A) the Company Board shall have made a Company
Adverse Recommendation Change, (B) the Company or the Company Board shall have failed to include in the Proxy Statement the Company Recommendation or (C) the Company or the Company Board, as applicable, shall have (I) materially
violated or breached any of its obligations under
Section 5.6(a)
, (II) failed to publicly reaffirm the Company Recommendation within ten (10) Business Days of receipt of a written request by Parent to provide such reaffirmation
following receipt by the Company of a Company Acquisition Proposal that is publicly announced and not withdrawn (which request by Parent may only be given once with respect to each such Company Acquisition Proposal;
provided
, that Parent may
make another written request to which this clause (II) shall apply in the event of any publicly disclosed change to the price or other material terms of such Company Acquisition Proposal) or (III) failed to recommend against any Company
Acquisition Proposal that is a tender or exchange offer subject to Regulation 14D under the Exchange Act (in a Solicitation/Recommendation Statement on Schedule
14D-9,
if such statement is required to be filed
or is otherwise filed), within ten (10) Business Days after the commencement (within the meaning of Rule
14d-2
under the Exchange Act) of such tender or exchange offer.
Section 7.2
Effect of Termination
. In the event that this Agreement is terminated and the Merger
abandoned pursuant to
Section 7.1
, written notice thereof shall be given by the terminating party to the other party, specifying the provisions hereof pursuant to which such termination is made, and this Agreement shall forthwith become
null and void and of no effect without liability on the part of any party hereto, and all rights and obligations of any party hereto shall cease;
provided
that no such termination shall relieve any party hereto of any liability or damages
resulting from any intentional breach of its obligations under this Agreement prior to such termination or fraud, in which case the aggrieved party shall be entitled to all rights and remedies available at law
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or in equity, including liability for damages determined taking into account all relevant factors, including the loss of benefit of the Merger to the party, any lost stockholder premium, any lost
synergies, the time value of money, and any benefit to the breaching party or its stockholders arising from such intentional breach or fraud; and
provided
,
further
, that the Confidentiality Agreement, this
Section 7.2
, the
penultimate sentence of
Section 5.15(c)
,
Section 5.21
,
Section 7.3
,
Section 7.4
,
Section 7.5
and
Article VIII
shall survive any termination of this Agreement pursuant to
Section 7.1
. For purposes of this Agreement, intentional breach shall mean an action or omission taken or omitted to be taken that the breaching party intentionally takes (or fails to take) and knows would, or knows would
reasonably be expected to, cause a material breach of this Agreement.
Section 7.3
Termination
Fees
.
(a) If this Agreement is terminated by:
(i) (A) Parent pursuant to
Section 7.1(d)(i)
on the basis of a breach of a covenant or agreement contained in this
Agreement or (B) either Parent or the Company pursuant to
Section 7.1(b)(i)
or
Section 7.1(b)(iii)
and in any such case (I) after the execution of this Agreement and prior to such termination (or prior to the
Company Stockholders Meeting in the case of termination pursuant to
Section 7.1(b)(iii)
), a Company Acquisition Proposal shall have been publicly disclosed (or, in the case of termination pursuant to
Section 7.1(b)(i)
or
Section 7.1(d)(i)
, otherwise made known to the Company Board) and not withdrawn (publicly, if publicly disclosed) and (II) within twelve (12) months after such termination, any Company Acquisition Proposal is consummated or
the Company enters into a definitive agreement with respect to any Company Acquisition Proposal (regardless of when or whether such transaction is consummated) (
provided
that for purposes of this
Section 7.3(a)(i)(B)
, the
references to twenty percent (20%) in the definition of Company Acquisition Proposal shall be deemed to be references to fifty percent (50%));
(ii) the Company pursuant to
Section 7.1(c)(ii)
; or
(iii) Parent pursuant to
Section 7.1(d)(ii)
;
then, in any such case, the Company shall pay, or cause to be paid, to Parent the Company Termination Fee.
Any payments required to be made under this
Section
7.3(a)
shall be made by wire transfer of
same-day
funds to the account or accounts designated by Parent, (A) in the case of
clause (i)
above, on the same day as the earlier of any consummation of, or entry into a definitive agreement with
respect to, the transaction contemplated therein, (B) in the case of
clause (ii)
above, immediately prior to or substantially concurrently with such termination and (C) in the case of
clause (iii)
above, promptly,
but in no event later than two (2) Business Days after the date of such termination.
(b) In the event this Agreement is terminated
by either Parent or the Company pursuant to
Section 7.1(b)(iii)
, then the Company shall pay Parent (by wire transfer of immediately available funds) the reasonable and documented
out-of-pocket
costs and expenses, including all fees and expenses incurred in connection with the financing of the transactions contemplated by this Agreement and the fees and expenses of counsel,
accountants, investment bankers, experts and consultants, incurred by Parent and Merger Sub in connection with this Agreement and the transactions contemplated by this Agreement in an amount not to exceed $50,000,000 (the
Parent
Expenses
); provided that any payment of the Parent Expenses shall not affect Parents right to receive any Company Termination Fee otherwise due under
Section 7.3(a)
, but shall reduce, on a
dollar-for-dollar
basis, any Company Termination Fee that becomes due and payable under
Section 7.3(a)
.
(c) Notwithstanding anything to the contrary set forth in this Agreement, the parties agree that in no event shall the Company be required to
pay the Company Termination Fee on more than one occasion.
(d) Notwithstanding anything to the contrary set forth in this Agreement,
Parents right to receive payment from the Company of the Company Termination Fee pursuant to
Section 7.3(a)
and/or the right to
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receive payment of the Parent Expenses pursuant to
Section 7.3(b)
, shall, in circumstances in which the Company Termination Fee or Parent Expenses (as applicable) are payable
hereunder and are paid in full, constitute the sole and exclusive monetary remedy (other than (i) in the event of fraud or an intentional breach by the Company of this Agreement and (ii) Parents right, notwithstanding having received
the Parent Expenses, to receive the Company Termination Fee less the Parent Expenses in the circumstances expressly contemplated in
Section 7.3(a)
) of Parent and Merger Sub against the Company and its Subsidiaries and any of their
respective former, current or future general or limited partners, stockholders, members, managers, directors, officers, employees, agents, Representatives or assignees (collectively, the
Company Related Parties
) for all losses and
damages suffered as a result of the failure of the transactions contemplated by this Agreement to be consummated or for a breach or failure to perform hereunder or otherwise, and upon payment of such amounts when so payable, none of the Company
Related Parties shall have any further liability or obligation relating to or arising out of this Agreement or the transactions contemplated by this Agreement (except that the Company shall also be obligated with respect to any amounts owing
pursuant to
Section 7.3(e)
).
(e) Each of the parties hereto acknowledges that (i) the agreements contained in this
Section 7.3
are an integral part of the transactions contemplated by this Agreement, and (ii) without these agreements, the parties would not enter into this Agreement; accordingly, if the Company fails to timely pay the Company
Termination Fee or the Parent Expenses pursuant to this
Section 7.3
and, in order to obtain such payment, Parent commences a suit that results in a judgment against the Company for the payment of the Company Termination Fee or the Parent
Expenses set forth in this
Section 7.3
, the Company shall pay Parent its costs and expenses in connection with such suit (including reasonable attorneys fees), together with interest on such amount at an annual rate equal to the
prime rate as published in
The Wall Street Journal
in effect on the date such payment was required to be made through the date such payment was actually received, or such lesser rate as is the maximum permitted by applicable Law.
Section 7.4
Amendment
. This Agreement may be amended by mutual agreement of the parties hereto in
writing at any time before or after receipt of the Company Stockholder Approval;
provided
, that after the Company Stockholder Approval has been obtained, there shall not be any amendment that by applicable Law or in accordance with the rules
of any stock exchange requires further approval by the stockholders of the Company or Parent, as applicable, without such further approval of such stockholders nor any amendment or change not permitted under applicable Law; provided further that no
amendment to or waiver of any of
Section
7.4
,
8.8(c)
,
8.9
,
8.11(c)
,
8.13
and
8.15
(collectively, the
Financing Source Party Provisions
) that is materially adverse to the
Financing Source Parties shall be effective without the written consent of the Financing Source Parties.
Section 7.5
Extension; Waiver
. At any time prior to the Effective Time, subject to applicable Law,
any party hereto may (a) extend the time for the performance of any obligation or other act of any other party hereto, (b) waive any inaccuracy in the representations and warranties of the other party contained herein or in any document
delivered pursuant hereto and (c) waive compliance with any agreement or condition contained herein.
Any such extension or waiver shall only be valid if set forth in an instrument in writing signed by the party or parties to be bound
thereby. Notwithstanding the foregoing, no failure or delay by the Company, Parent or Merger Sub in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further
exercise of any other right hereunder. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1
Non-Survival
of Representations and Warranties
.
The representations, warranties and agreements in this Agreement and in any certificate delivered pursuant hereto shall terminate at the Effective
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Time;
provided
that this
Section 8.1
shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Effective Time.
Section 8.2
Expenses
. Except as expressly set forth herein (including
Section 5.4
and
Section 7.3
), all expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be paid by the party incurring such expenses, whether or not the Merger is consummated.
Section 8.3
Notices
. All notices, consents and other communications hereunder shall be in writing
and shall be given (and shall be deemed to have been duly given upon receipt) by hand delivery, by prepaid overnight courier (providing written proof of delivery) or by confirmed facsimile transmission or electronic mail, addressed as follows:
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if to Parent or Merger Sub:
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United Technologies Corporation
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10 Farm Springs Road
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Farmington, Connecticut 06032
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Phone:
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(860)
728-7601
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Fax:
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(860)
728-7862
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Email:
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Charles.Gill@utc.com
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Attention:
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Charles D. Gill
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Executive Vice President and General Counsel
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with a copy (which shall not constitute notice) to:
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Wachtell, Lipton, Rosen & Katz
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51 West 52nd Street
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New York, New York 10019
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Phone:
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(212)
403-1000
|
Fax:
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(212)
403-2000
|
Email:
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JRCammaker@wlrk.com;
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EJLee@wlrk.com
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Attention:
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Joshua R. Cammaker
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Edward J. Lee
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if to the Company:
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Rockwell Collins, Inc.
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400 Collins Road N.E.
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Cedar Rapids, IA 52498
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Phone:
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(319)
263-0212
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Fax:
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(319)
295-3599
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Email:
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Robert.Perna@rockwellcollins.com
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Attention:
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Robert Perna
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Senior Vice President, General Counsel & Secretary
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with a copy (which shall not constitute notice) to:
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Skadden, Arps, Slate, Meagher & Flom LLP
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155 North Wacker Drive
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Chicago, Illinois 60606
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Phone:
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(312)
407-0700
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Fax:
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(312)
407-0411
|
Email:
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Charles.Mulaney@skadden.com;
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Richard.Witzel@skadden.com
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Attention:
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Charles W. Mulaney, Jr.
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Richard C. Witzel, Jr.
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or to such other address, electronic mail address or facsimile number for a party as shall be specified in a
notice given in accordance with this
Section
8.3
;
provided
that any notice received by facsimile transmission or electronic mail or otherwise at the addressees location on any Business Day after 5:00 P.M.
(addressees local time) or on any day that is not a Business Day shall be deemed to have been received at 9:00 A.M. (addressees local time) on the next Business Day;
provided
,
further
, that notice of any change to the
address or any of the other details specified in or pursuant to this
Section
8.3
shall not be deemed to have been received until, and shall be deemed to have been received upon, the later of the date specified in such
notice or the date that is five (5) Business Days after such notice would otherwise be deemed to have been received pursuant to this
Section
8.3
.
Section 8.4
Interpretation; Certain Definitions
.
(a) The parties have participated collectively in the negotiation and drafting of this Agreement. In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted collectively by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
(b) The words hereof, herein, hereby, hereunder and herewith and
words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement. References to articles, sections, paragraphs, exhibits, annexes and schedules are to the articles, sections and paragraphs of,
and exhibits, annexes and schedules to, this Agreement, unless otherwise specified, and the table of contents and headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words include, includes or including are used in this Agreement, they shall be deemed to be followed by the phrase without limitation. Words describing the singular number shall
be deemed to include the plural and vice versa, words denoting any gender shall be deemed to include all genders, words denoting natural persons shall be deemed to include business entities and vice versa and references to a Person are also to its
permitted successors and assigns. The term or is not exclusive. The word extent in the phrase to the extent shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply
if. The phrases the date of this Agreement and the date hereof and terms or phrases of similar import shall be deemed to refer to September 4, 2017, unless the context requires otherwise. References to any
information or document being made available or furnished (other than to the SEC) and words of similar import shall include such information or document having been posted to the online data room hosted on behalf of the
Company by Merrill Corporation at https://us1.merrillcorp.com/bidder/index_frame.do?projectId=226117 and such documents that have been filed as exhibits to the Company SEC Documents, in each case, prior to the date of this Agreement. Terms defined
in the text of this Agreement have such meaning throughout this Agreement, unless otherwise indicated in this Agreement, and all terms defined in this Agreement shall have the meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein. Any Law defined or referred to herein or in any agreement or instrument that is referred to herein shall mean such Law as from time to time amended, modified or supplemented, including (in the case
of statutes) by succession of comparable successor Laws (
provided
that for purposes of any representations and warranties contained in this Agreement that are made as of a specific date or dates, references to any statute shall be deemed to
refer to such statute, as amended, and to any rules or regulations promulgated thereunder, in each case, as of such date). All references to dollars or $ refer to currency of the United States. For the purposes of this
Agreement, to the extent any provision of this Agreement refers to the Company and/or its Subsidiaries or otherwise any Subsidiaries of the Company, such references shall include the Applicable Company Subsidiary, and as of or in the context of any
time or period of time prior to the Applicable Company Subsidiary Acquisition Closing, such references shall include the Applicable Company Subsidiary and its Subsidiaries as of and/or during such time or period; provided that KLX and its
Subsidiaries shall not be included in any reference to the Company and/or its Subsidiaries for purposes of this Agreement.
Section 8.5
Severability
. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms,
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provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner
in order that the Merger be consummated as originally contemplated to the fullest extent possible.
Section 8.6
Assignment
. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether by operation of Law or otherwise) without the prior written consent of the other parties hereto, except that Merger Sub may assign any or all of its rights, interests and obligations
hereunder to one or more direct or indirect wholly owned Subsidiaries of Parent, or a combination thereof so long as such assignment would not delay, impair or prevent consummation of the Merger or otherwise have a Parent Material Adverse Effect and
Parent continues to remain liable for all of such obligations as if no such assignment had occurred. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their
respective permitted successors and assigns. Any attempted assignment in violation of this Section
8.6 shall be null and void.
Section 8.7
Entire Agreement
. This Agreement (including the
exhibits, annexes and appendices hereto), together with the Confidentiality Agreement, the Company Disclosure Letter and the Parent Disclosure Letter, constitutes the entire agreement, and supersedes all other prior agreements and understandings,
both written and oral, among the parties, or any of them, with respect to the subject matter hereof.
Section 8.8
No Third-Party Beneficiaries
. This Agreement is not intended to and shall not confer
upon any Person other than the parties hereto any rights or remedies hereunder;
provided
, that it is specifically intended that (a) the D&O Indemnified Parties (solely with respect to
Section 5.7
and this
Section 8.8
from and after the Effective Time), (b) from and after the Effective Time, the holders of Company Common Stock and Company Equity Awards (solely with respect to
Article II
) and (c) the Financing Source
Parties (solely with respect to the Financing Source Party Provisions) are each intended third-party beneficiaries hereof.
Section 8.9
Governing Law
. This Agreement and all Proceedings (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or the actions of Parent, Merger Sub or the Company in the negotiation,
administration, performance and enforcement hereof, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to any choice or conflict of laws provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Delaware, except that, notwithstanding the foregoing, subject in all respects to the provisions of any other agreement
(including any commitment letter or definitive agreement relating to any Financing) between any Financing Source Party and any Party hereto, all matters relating to any action or claim against any Financing Source Party, and all matters relating to
the interpretation, construction, validity and enforcement (whether at law, in equity, in contract, in tort, or otherwise) against any of the Financing Source Parties in anyway relating to the Debt Letters or the performance thereof or the
Financing, shall be exclusively governed by, and construed in accordance with, the Laws of the State of New York.
Section 8.10
Specific Performance
. The parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that any party hereto does not perform the
provisions of this Agreement (including failing to take such actions as are required of it hereunder to consummate this Agreement) in accordance with its specified terms or otherwise breach such provisions.
Accordingly, the parties
acknowledge and agree that, prior to any termination of this Agreement in accordance with
Section 7.1
, the parties shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity. Each of the parties agrees that it will not oppose the granting of an injunction, specific performance and
other equitable relief on the basis that any other party has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity. Any party seeking an injunction or injunctions to
prevent breaches of this Agreement and to
A-64
enforce specifically the terms and provisions of this Agreement shall not be required to provide any bond or other security in connection with any such order or injunction.
Section 8.11
Consent to Jurisdiction
.
(a) Each of the parties hereto hereby, with respect to any legal claim or Proceeding arising out of this Agreement or the transactions
contemplated by this Agreement, (i) expressly and irrevocably submits, for itself and with respect to its property, generally and unconditionally, to the exclusive jurisdiction of the Delaware Court of Chancery and any appellate court therefrom
within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware), (ii) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such courts, (iii) agrees that it will not bring any claim or Proceeding relating to this Agreement or the transactions contemplated by this Agreement except in such courts and
(iv) irrevocably waives, to the fullest extent it may legally and effectively do so, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, any objection which it may now or hereafter have to the laying of venue
of any claim or Proceeding arising out of or relating to this Agreement. Notwithstanding the foregoing, each of Parent, Merger Sub and the Company agrees that a final and nonappealable judgment in any Proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.
(b) Each party irrevocably consents to
the service of process in any claim or Proceeding with respect to this Agreement and the transactions contemplated by this Agreement or for recognition and enforcement of any judgment in respect hereof brought by any other party hereto made by
mailing copies thereof by registered or certified United States mail, postage prepaid, return receipt requested, to its address as specified in or pursuant to
Section 8.3
and such service of process shall be sufficient to confer personal
jurisdiction over such party in such claim or Proceeding and shall otherwise constitute effective and binding service in every respect.
(c) Notwithstanding anything to the contrary in this Agreement, each party agrees that it will not bring or support any action, cause of
action, claim, cross-claim or third party claim of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against the Financing Source Parties in any way relating to this Agreement or any of the
transactions contemplated by this Agreement, including any dispute arising out of or relating in any way to the Financing or the performance thereof, in any forum other than any state or Federal court sitting in the county of New York.
Section 8.12
Counterparts
. This Agreement may be executed in multiple counterparts, all of which
shall together be considered one and the same agreement. Delivery of an executed signature page to this Agreement by electronic transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.
Section 8.13
WAIVER OF JURY TRIAL
. EACH OF PARENT, MERGER SUB AND THE COMPANY HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT, MERGER SUB OR THE COMPANY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF (INCLUDING ANY ACTION OR PROCEEDING AGAINST THE FINANCING SOURCE PARTIES ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED HEREBY, THE FINANCING OR THE PERFORMANCE OF SERVICES WITH RESPECT
THERETO).
Section 8.14
Certificates
. In executing any certificate or other documentation in
connection with this Agreement, directors, officers and employees of Parent and the Company are acting in their corporate capacities and are not assuming personal liability in connection therewith.
Section 8.15
Waiver of Claims Against Financing Source Parties
. The Company agrees, on behalf of
itself and its Affiliates, that none of the Financing Source Parties shall have any liability to the Company or its
A-65
Affiliates (other than Parent and its Subsidiaries) relating to or arising out of this Agreement or the transactions contemplated by this Agreement, including the financing of the transactions
contemplated by this Agreement, whether at law or equity, in contract, in tort or otherwise, and that neither the Company nor any of its Affiliates (other than Parent and its Subsidiaries) will have any rights or claims against any Financing Source
Parties under this Agreement and any other agreement contemplated by, or entered into in connection with, the transactions contemplated by this Agreement, including any commitments by the Financing Source Parties in respect of financing the
transactions contemplated by this Agreement. For the avoidance of doubt, nothing in this
Section 8.15
shall modify or alter the rights of Parent under any commitment letter, engagement letter or definitive financing document in
connection with the transactions contemplated by this Agreement between or among Parent and any of its Subsidiaries and any Financing Source Party entered into in connection with or as contemplated by this Agreement, and in the event of a conflict
between the foregoing and any provision in any commitment letter, engagement letter or any such definitive financing documentation, as applicable, the provisions of such commitment letter, engagement letter or definitive financing documentation, as
applicable, shall govern and control.
[
Remainder of page intentionally left blank; signature pages follow.
]
A-66
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be executed
as of the date first written above by their respective officers thereunto duly authorized.
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UNITED TECHNOLOGIES CORPORATION
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By:
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/s/ Gregory J. Hayes
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Name:
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Gregory J. Hayes
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Title:
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Chairman and Chief Executive Officer
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[
Signature Page to Merger Agreement
]
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RIVETER MERGER SUB CORP.
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By:
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/s/ Gregory J. Hayes
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Name:
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Gregory J. Hayes
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Title:
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Chief Executive Officer and President
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[
Signature Page to Merger
Agreement
]
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ROCKWELL COLLINS, INC.
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By:
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/s/ Robert K. Ortberg
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Name:
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Robert K. Ortberg
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Title:
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Chairman, President and Chief Executive Officer
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[
Signature Page to Merger
Agreement
]
APPENDIX A
DEFINITIONS
As used in
this Agreement, the following terms shall have the following meanings:
Affiliate
shall mean, with respect to any
Person, any individual, partnership, corporation, entity or other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, the first Person specified.
Applicable Company Subsidiary
shall mean B/E Aerospace, Inc.
Applicable Company Subsidiary Acquisition Agreement
shall mean that certain Agreement and Plan of Merger, dated as of
October 23, 2016, by and among the Company, Quarterback Merger Sub Corp. and the Applicable Company Subsidiary.
Applicable
Company Subsidiary Acquisition Closing
shall mean the Closing, as defined in the Applicable Company Subsidiary Acquisition Agreement.
Automation
shall mean Rockwell Automation Inc., a Delaware corporation.
Automation Tax Allocation Agreement
shall mean the Tax Allocation Agreement dated as of June 29, 2001 by and between
the Company and Automation.
Business Day
shall mean any day other than a Saturday, Sunday or a day on which all
banking institutions in New York, New York are authorized or obligated by Law or executive order to close.
Code
shall
mean the Internal Revenue Code of 1986, as amended.
Company 401(k) Plan
shall mean the Rockwell Collins Retirement
Savings Plan and all applicable
sub-plans
thereof, as amended from time to time.
Company
Acquisition Proposal
shall mean a proposal or offer from any Person providing for any (i) merger, consolidation, share exchange, business combination, recapitalization or similar transaction involving the Company, pursuant to which
any such Person (including such Persons or resulting companys direct or indirect stockholders) would own or control, directly or indirectly, twenty percent (20%) or more of the voting power of the Company, (ii) sale or other
disposition, directly or indirectly, of assets of the Company (including the capital stock or other equity interests of any of its Subsidiaries) and/or any Subsidiary of the Company representing twenty percent (20%) or more of the consolidated
assets, revenues or net income of the Company and its Subsidiaries, taken as a whole, (iii) issuance or sale or other disposition of capital stock or other equity interests representing twenty percent (20%) or more of the voting power of the
Company, (iv) tender offer, exchange offer or any other transaction or series of transactions in which any Person would acquire, directly or indirectly, beneficial ownership or the right to acquire beneficial ownership of capital stock or other
equity interests representing twenty percent (20%) or more of the voting power of the Company or (v) any related combination of the foregoing.
Company Benefit Plan
shall mean (i) each employee benefit plan (as such term is defined in
Section 3(3) of ERISA), whether written or unwritten, that the Company, any of its Subsidiaries or any Company ERISA Affiliate adopted, maintains, sponsors, participates in, is a party or contributes to or with respect to which the Company or
any of its Subsidiaries could reasonably be expected to have any liability; and (ii) each other employment or employee benefit plan, program, practice, policy, arrangement or agreement, whether written or unwritten, including any equity option,
equity purchase, equity appreciation right or other equity or equity-based
Appendix A-1
incentive, cash bonus or incentive compensation, employment, change in control, retention, retirement or supplemental retirement, deferred compensation, profit-sharing, unemployment, severance,
termination pay, welfare, hospitalization or medical, life, accidental death and dismemberment, long- or short-term disability, fringe benefit or other similar compensation or employee benefit plan, program, practice, policy, arrangement or
agreement for any current or former employee or director of, or other individual service provider to, the Company or any of its Subsidiaries that does not constitute an employee benefit plan (as defined in Section 3(3) of ERISA,
whether or not ERISA applies), that the Company or any of its Subsidiaries adopted, maintains, sponsors, participates in, is a party or contributes to, or with respect to which the Company or any of its Subsidiaries could reasonably be expected to
have any liability; provided, that in no event shall a Company Benefit Plan include any plan, program, arrangement or practice that is implemented, administered or operated by a Governmental Authority.
Company Disclosure Letter
shall mean the disclosure letter delivered by the Company to Parent simultaneously with the
execution of this Agreement.
Company Equity Awards
shall mean the Company Stock Options, Company Restricted Stock
Awards, Company RSU Awards and Company DSU Awards.
Company Equity Plan
shall mean the Rockwell Collins, Inc. 2015
Long-Term Incentives Plan, as amended from time to time, the B/E Aerospace, Inc. 2005 Long-Term Incentive Plan, as amended from time to time and assumed by the Company, the Rockwell Collins, Inc. 2006 Long-Term Incentives Plan, as amended from time
to time, and the Rockwell Collins, Inc. Directors Stock Plan, as amended from time to time, and any other equity or equity-based plan, program, or arrangement of the Company or any of its Subsidiaries or any predecessor thereof, other than the
Company ESPP, the Company
Non-US
Share Purchase Plans or the Company 401(k) Plan.
Company ERISA Affiliate
shall mean any Person under common control with the Company within the meaning of Section 414(b),
Section 414(c), Section 414(m) or Section 414(o) of the Code, and the regulations issued thereunder.
Company ESPP
shall mean the Rockwell Collins, Inc. 2013 Employee Stock Purchase Plan, as amended from time to time.
Company
Government
Contract
shall mean a Contract with any Governmental Authority, any prime contractor of a Governmental Authority in its capacity as a prime contractor or any subcontractor with respect to any such Contract.
Company Intervening Event
shall mean a material event or circumstance that was not known to the Company Board on the date
of this Agreement (or if known, the consequences of which were not known to the Company Board as of the date of this Agreement), which event or circumstance, or any consequence thereof, becomes known to the Company Board prior to the Company
Stockholder Approval;
provided
, that in no event shall any inquiry, offer or proposal that constitutes or would reasonably be expected to lead to a Company Acquisition Proposal constitute a Company Intervening Event.
Company Leased Real Property
shall mean any real property which the Company or any of its Subsidiaries leases,
subleases or licenses an interest in real property from any other Person (whether as a tenant, subtenant or pursuant to other occupancy arrangements).
Company Material Adverse Effect
shall mean any event, circumstance, occurrence, effect, fact, development or change that
has a material adverse effect on the business, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole;
provided
that none of the following (or the results thereof) shall constitute or be taken into
account in determining whether a Company Material Adverse Effect shall have occurred: (i) changes in general economic, financial market, regulatory, business, financial,
Appendix A-2
political, geopolitical, credit or capital market conditions, including interest or exchange rates; (ii) general changes or developments in any of the industries or markets in which the
Company or any of its Subsidiaries operate; (iii) changes in any applicable Laws or accounting regulations or principles or interpretations thereof; (iv) any change in the price or trading volume of the Companys securities or other
financial instruments or change in the Companys credit rating, in and of itself (
provided
that the facts or occurrences giving rise to or contributing to such change that are not otherwise excluded from the definition of Company
Material Adverse Effect may constitute or be taken into account in determining whether a Company Material Adverse Effect has occurred); (v) any failure by the Company to meet its internal or published projections, budgets, plans or forecasts
of its revenues, earnings or other financial performance or results of operation or any published analyst or other third-party estimates or expectations of the Companys revenue, earnings or other financial performance or results of operations
for any period, in and of itself (
provided
that the facts or occurrences giving rise to or contributing to such failure that are not otherwise excluded from the definition of Company Material Adverse Effect may constitute or be
taken into account in determining whether a Company Material Adverse Effect has occurred); (vi) acts of war (whether or not declared), hostilities, military actions or acts of terrorism, or any escalation or worsening of the foregoing, weather
related events, fires, natural disasters or any other acts of God; (vii) any action taken or (to the extent the relevant action is expressly permitted by the terms of this Agreement) not taken at the express written request of Parent after the
date of this Agreement; or (viii) the identity of Parent and, other than with respect to a representation or warranty contained in this Agreement to the extent that the purpose of such representation or warranty is to address the consequences
resulting from the execution and delivery of this Agreement or the consummation of the Merger or the performance of obligations under this Agreement, the execution of this Agreement, the public announcement, pendency or consummation of the Merger or
the other transactions contemplated by this Agreement (including, to the extent resulting from the foregoing, any effect on any of the Companys or any of its Subsidiaries relationships with their respective customers, suppliers or
employees);
provided
, further, that, the exceptions in clauses (i) through (iii) and (vi) shall not apply to the extent the events, circumstances, occurrences, effects, facts, developments or changes set forth in such clauses have a
disproportionate impact on the Company and its Subsidiaries, taken as a whole, relative to the other participants in the industries in which the Company and its Subsidiaries operate.
Company
Non-US
Share Purchase Plans
shall mean, collectively, (i) the Rockwell
Collins UK Employee Share Purchase Plan, as amended from time to time and (ii) the Rockwell Collins Employee Savings Plan (
Plan dEpargne dEntreprise
(PEE)), as amended from time to time, that the Company sponsors
in France.
Company Recommendation
shall mean the recommendation of the Company Board that the stockholders of the
Company adopt this Agreement and approve the Merger.
Company Superior Proposal
shall mean a bona fide written Company
Acquisition Proposal (
provided
that for purposes of this definition, references to twenty percent (20%) or more in the definition of Company Acquisition Proposal shall be deemed to be references to more than
fifty percent (50%)), which the Company Board determines in good faith (i) to be reasonably likely to be consummated if accepted and (ii) to be more favorable to the Companys stockholders from a financial point of view than the
Merger and the other transactions contemplated by this Agreement, in each case, taking into account at the time of determination all relevant circumstances, including the various legal, financial and regulatory aspects of the proposal, all the terms
and conditions of such proposal and this Agreement, and any changes to the terms of this Agreement offered by Parent in response to such Company Acquisition Proposal.
Company Termination Fee
shall mean $695,000,000.
Confidentiality Agreement
shall mean the confidentiality agreement, dated May 24, 2017, between Parent and the
Company.
Contract
shall mean any binding written contract, subcontract, lease, sublease, conditional sales contract,
purchase order, sales order, license, indenture, note, bond, loan, arrangement, commitment, instrument, understanding, permit, concession, franchise, commitment, partnership, limited liability company or other agreement.
Appendix A-3
Control
shall mean 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 voting securities or partnership or other interests, by Contract or otherwise. The terms Controlling and Controlled by
shall have correlative meanings.
Customs
& International Trade Authorizations
shall mean any
and all licenses, registrations and approvals required pursuant to the Customs & International Trade Laws for the lawful export or import of goods, software, technology, technical data, services and international financial transactions.
Customs
& International Trade Laws
shall mean the applicable export control, import, customs
and trade, anti-bribery, and anti-boycott Laws of any jurisdiction in which the Company or any of its Subsidiaries is incorporated or does business, including the UK Bribery Act 2010, the Tariff Act of 1930, as amended, and other applicable Laws
administered or enforced by the U.S. Department of Commerce, U.S. International Trade Commission, U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement, and their predecessor or successor agencies; the Export Administration
Act of 1979, as amended; the Export Administration Regulations, including related restrictions with regard to transactions involving Persons on the U.S. Department of Commerce Denied Persons List, Unverified List or Entity List; the Arms Export
Control Act, as amended; the International Traffic in Arms Regulations, including related restrictions with regard to transactions involving Persons on the Debarred List; the anti-boycott Laws administered by the U.S. Department of Commerce; and the
anti-boycott Laws administered by the U.S. Department of the Treasury.
Delaware Secretary of State
shall mean the
Secretary of State of the State of Delaware.
Domestic Revolving Credit Agreement
shall mean that certain
U.S.$2,200,000,000 Revolving Credit Agreement dated as of August 5, 2016 among Parent, as borrower, the lenders named therein, the agent named therein and JPMorgan Chase Bank, N.A., as administrative agent, as amended, amended and restated,
supplemented or otherwise modified from time to time.
Environmental Laws
shall mean all applicable Laws relating to
pollution or protection of the environment, natural resources or, as it relates to exposure to Hazardous Materials, human health and safety, including Laws relating to Releases of Hazardous Materials and the manufacture, processing, distribution,
use, treatment, storage, Release, transport or handling of Hazardous Materials, including the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.),
the Safe Drinking Water Act (42 U.S.C. § 3000(f) et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Oil Pollution Act of 1990 (33 U.S.C. § 2701 et seq.),
the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.), the Endangered Species Act of 1973 (16 U.S.C. § 1531 et seq.), and other similar foreign, state and local Laws.
Equity Award Exchange Ratio
shall mean the sum of (i) the quotient (rounded to four decimal places) obtained by
dividing (x) the Cash Consideration by (y) the Parent Stock Price and (ii) the Exchange Ratio.
ERISA
shall mean the Employee Retirement Income Security Act of 1974, as amended.
Exchange Act
shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Exchange Ratio
shall mean
(i) if the Parent Stock Price is an amount equal to or greater than $124.37, 0.37525, (ii) if the Parent Stock Price is an amount greater than $107.01 but less than $124.37, an amount equal to the quotient obtained by dividing (A) $46.67 by
(B) the Parent Stock Price, and (iii) if the Parent Stock Price is equal to or less than $107.01, 0.43613 (in each case, rounded to five decimal places).
Appendix A-4
Existing Revolving Credit Agreement
shall mean that certain Five-Year Credit
Agreement dated as of December 16, 2016 among the Company, as borrower, JPMorgan Chase Bank, N.A., as administrative agent and the other lenders and agents party thereto.
Existing Term Loan Credit Agreement
shall mean that certain $1,500,000,000 Term Loan Credit Agreement dated as of
December 16, 2016 among the Company, as borrower, JPMorgan Chase Bank, N.A., as administrative agent and the other lenders and agents party thereto.
FCPA
shall mean the U.S. Foreign Corrupt Practices Act of 1977, as amended.
Financing Source Parties
means any Person (other than Parent or any of its Affiliates), including the Financing Parties,
that has committed to provide or arrange or otherwise entered into agreements in connection with providing the Financing or any portion thereof or other financings in connection with the transactions contemplated hereby, and the parties to any
joinder agreements, indentures or credit agreements entered pursuant thereto or relating thereto, each together with their respective former, current and future equityholders, controlling persons, Representatives, Affiliates, members, managers,
general or limited partners or successors or assignees of such Persons and/or their respective Affiliates, successors and assigns.
Foreign Plan
shall mean each Company Benefit Plan that primarily covers current or former employees, directors or
individual service providers of the Company or any of its Subsidiaries based outside of the United States and/or that is subject to any Law other than U.S., federal, state or local law (other than any plan or program that is required by statute or
maintained by a Governmental Authority to which the Company or any of its Affiliates contributes pursuant to applicable Law).
GAAP
shall mean the United States generally accepted accounting principles.
Global Revolving Credit Agreement
shall mean that certain U.S.$2,150,000,000 Revolving Credit Agreement dated as of
August 5, 2016 among Parent, as borrower, the lenders named therein, the agent named therein and HSBC Bank PLC, as administrative agent, as amended, amended and restated, supplemented or otherwise modified from time to time.
Governmental Authority
shall mean any federal, state, local, domestic, foreign or supranational government, or any
governmental, regulatory, judicial or administrative authority, agency, commission or instrumentality.
Hazardous
Materials
shall mean any material, substance, chemical or waste (or combination thereof) that (i) is listed, defined, designated, regulated or classified as hazardous, toxic, radioactive, dangerous, a pollutant, a contaminant,
petroleum, oil or words of similar meaning or effect under any Law relating to pollution, waste, the environment, or natural resources or (ii) can form the basis of any liability under any Law relating to pollution, waste or the environment, or
natural resources.
HSR Act
shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
rules and regulations thereunder.
Indebtedness
shall mean (i) any indebtedness or other obligation for borrowed
money, whether current, short-term or long-term and whether secured or unsecured, (ii) any indebtedness evidenced by a note, bond, debenture or other Security or similar instrument, (iii) any liabilities or obligations with respect to
interest rate, currency or commodity swaps, collars, caps, hedging obligations or any Contract designated to protect a Person against fluctuations in interest rates, currency exchange rates or commodity prices, (iv) any capitalized lease
obligations, (v) any direct or contingent obligations under letters of credit, bankers acceptances, bank guarantees, surety bonds and similar instruments, each to the extent drawn upon and paid, (vi) any obligation to pay the
deferred purchase price of property or services (other than trade accounts payable in the ordinary course
Appendix A-5
of business) and (vii) guarantees in respect of clauses (i) through (vi), including guarantees of another Persons Indebtedness or any obligation of another Person which is secured
by assets of the Company or any of its Subsidiaries or Parent or any of its Subsidiaries, as applicable.
IRS
shall
mean the United States Internal Revenue Service.
IT Assets
shall mean computers, computer software, firmware,
middleware, servers, workstations, routers, hubs, switches, data communications lines and other information technology equipment or systems.
KLX
shall mean KLX, Inc., a Delaware corporation.
KLX Tax Sharing Agreement
shall mean the Tax Sharing and Indemnification Agreement, dated as of December 15, 2014, by
and between KLX and the Applicable Company Subsidiary, as amended as of the date of the Applicable Company Subsidiary Acquisition Agreement.
Knowledge
shall mean the actual knowledge of the officers and employees of the Company set forth on
Appendix A of the
Company Disclosure Letter
, or the officers and employees of Parent set forth on
Appendix A of the Parent Disclosure Letter
, as applicable, in each case after reasonable inquiry by each such person.
Labor Agreement
shall mean (i) any collective bargaining agreement, or (ii) any other labor-related agreement,
arrangement or understanding (other than agreements, arrangements or understandings the terms of which are set forth by applicable Law) that restricts the movement of work (other than as provided by applicable Law) or has a material financial impact
on the applicable business unit or units subject to such agreement, arrangement or understanding, in each case, with a labor or trade union, or labor organization or works council that is recognized by the Company.
Law
shall mean any domestic, federal, state, municipal, local, national, supranational or foreign statute or law (whether
statutory or common law), constitution, code, ordinance, rule, regulation, order, writ, judgment, decree, binding directive (including those of any applicable self-regulatory organization), arbitration award, agency requirement or any other
enforceable requirement of any Governmental Authority.
Lien
shall mean liens, claims, mortgages, encumbrances,
pledges, security interests, easements, options, hypothecations, conditional sales agreements, adverse claims of ownership or use, title defects, easements, right of way or charges of any kind.
NYSE
shall mean New York Stock Exchange.
OFAC
shall mean the Office of Foreign Assets Control of the U.S. Department of the Treasury or any successor agency or
office.
Order
shall mean any decree, order, judgment, injunction, writ, stipulation, award, temporary restraining
order or other order in any Proceeding by or with any Governmental Authority.
Parent Benefit Plan
shall mean
(i) each material employee benefit plan (as such term is defined in Section 3(3) of ERISA), whether written or unwritten, that Parent, any of its Subsidiaries or any Parent ERISA Affiliate adopted, maintains, sponsors,
participates in, is a party or contributes to or with respect to which Parent or any of its Subsidiaries could reasonably be expected to have any material liability; and (ii) each other material employment or employee benefit plan, program,
practice, policy, arrangement or agreement, whether written or unwritten, including any equity option, equity purchase, equity appreciation right or other equity or equity-based incentive, cash bonus or incentive compensation, employment, change in
control, retention, retirement or supplemental retirement, deferred compensation, profit-sharing, unemployment, severance, termination pay, welfare, hospitalization or medical, life, accidental death and dismemberment, long- or short-term
disability,
Appendix A-6
fringe benefit or other similar compensation or employee benefit plan, program, practice, policy, arrangement or agreement for any current or former employee or director of, or other individual
service provider to, Parent or any of its Subsidiaries that does not constitute an employee benefit plan (as defined in Section 3(3) of ERISA), that Parent or any of its Subsidiaries adopted, maintains, sponsors, participates in, is
a party or contributes to, or with respect to which Parent or any of its Subsidiaries could reasonably be expected to have any liability.
Parent Disclosure Letter
shall mean the disclosure letter delivered by Parent to the Company simultaneously with the
execution of this Agreement.
Parent Equity Awards
shall mean compensatory options to purchase Parent Common Stock,
compensatory stock appreciation rights relating to Parent Common Stock, compensatory restricted stock awards relating to Parent Common Stock, compensatory restricted stock unit awards relating to Parent Common Stock, compensatory performance shares
relating to Parent Common Stock, and compensatory deferred stock units relating to Parent Common Stock.
Parent ERISA
Affiliate
shall mean any Person under common control with Parent within the meaning of Section 414(b), Section 414(c), Section 414(m) or Section 414(o) of the Code, and the regulations issued thereunder.
Parent Material Adverse Effect
shall mean any event, circumstance, occurrence, effect, fact, development or change that has
a material adverse effect on the business, financial condition or results of operations of Parent and its Subsidiaries, taken as a whole;
provided
that none of the following (or the results thereof) shall constitute or be taken into account
in determining whether a Parent Material Adverse Effect shall have occurred: (i) changes in general economic, financial market, regulatory, business, financial, political, geopolitical, credit or capital market conditions, including interest or
exchange rates; (ii) general changes or developments in any of the industries or markets in which Parent or any of its Subsidiaries operate; (iii) changes in any applicable Laws or accounting regulations or principles or interpretations
thereof; (iv) any change in the price or trading volume of Parents securities or other financial instruments or change in Parents credit rating, in and of itself (
provided
that the facts or occurrences giving rise to or
contributing to such change that are not otherwise excluded from the definition of Parent Material Adverse Effect may constitute or be taken into account in determining whether a Parent Material Adverse Effect has occurred); (v) any
failure by Parent to meet its internal or published projections, budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operation or any published analyst or other third party estimates or expectations of
Parents revenue, earnings or other financial performance or results of operations for any period, in and of itself (
provided
that the facts or occurrences giving rise to or contributing to such failure that are not otherwise excluded
from the definition of Parent Material Adverse Effect may constitute or be taken into account in determining whether a Parent Material Adverse Effect has occurred); (vi) acts of war (whether or not declared), hostilities, military
actions or acts of terrorism, or any escalation or worsening of the foregoing, weather related events, fires, natural disasters or any other acts of God; (vii) any action taken or (to the extent the relevant action is expressly permitted by the
terms of this Agreement) not taken at the express written request of the Company after the date of this Agreement; or (viii) the identity of the Company and, other than with respect to a representation or warranty contained in this Agreement to
the extent that the purpose of such representation or warranty is to address the consequences resulting from the execution and delivery of this Agreement or the consummation of the Merger or the performance of obligations under this Agreement, the
execution of this Agreement, the public announcement, pendency or consummation of the Merger or the other transactions contemplated by this Agreement (including, to the extent resulting from the foregoing, any effect on any of Parents or any
of its Subsidiaries relationships with their respective customers, suppliers or employees);
provided
, further, that, the exceptions in clauses (i) through (iii) and (vi) shall not apply to the extent the events, circumstances,
occurrences, effects, facts, developments or changes set forth in such clauses have a disproportionate impact on Parent and its Subsidiaries, taken as a whole, relative to the other participants in the industries in which Parent and its Subsidiaries
operate.
Appendix A-7
Parent Organizational Documents
shall mean the certificate of incorporation
and bylaws, each as amended as of the date of this Agreement, of each of Parent and Merger Sub.
Parent Revolving Credit
Facilities
means the revolving credit facility provided to Parent pursuant the Domestic Revolving Credit Agreement and the revolving credit facility provided to Parent pursuant to the Global Revolving Credit Agreement.
Parent Stock Price
shall mean the average of the VWAPs of Parent Common Stock on each of the twenty (20) consecutive
Trading Days ending immediately prior to the Closing Date.
Permitted Lien
shall mean (i) any Lien for Taxes not
yet due or that are being contested in good faith by appropriate Proceedings and for which adequate accruals or reserves have been established (as of the date of this Agreement and as of the Closing), in accordance with GAAP, (ii) statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen, repairmen and other similar Liens incurred in the ordinary course of business, or that are not yet due or that are being contested in good faith by appropriate
Proceedings and for which adequate accruals or reserves have been established (as of the date of this Agreement and as of the Closing), in accordance with GAAP, (iii) Liens incurred or deposits made in the ordinary course of business in
connection with workers compensation, unemployment insurance or other types of social security or foreign equivalents, (iv) zoning, building codes, and other land use Laws regulating the use or occupancy of leased real property or the
activities conducted thereon that are imposed by any Governmental Authority having jurisdiction over such leased real property and that are not violated in any material respect by the current use and operation of such leased real property or the
operation of the business of the Company and its Subsidiaries, (v) with respect to real estate, Liens or other imperfections of title, if any, that do not, individually or in the aggregate, materially affect the continued ownership, rights to,
use and/or operation (as applicable) of the applicable property in the conduct of business of a Person and its Subsidiaries as currently conducted, and (vi) in the case of Intellectual Property Rights, licenses to customers or suppliers in
their capacities as such in the ordinary course of business consistent with past practice.
Person
shall mean an
individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a Governmental Authority.
Personal Data
shall mean any information about an identifiable individual that alone or in combination with other
information could be used to identify an individual, including: (i) a natural persons name, street address, telephone number,
e-mail
address, photograph, social security number, social insurance
number or tax identification number, drivers license number, passport number, credit card number, bank information, or customer or account number, biometric identifiers or any other piece of information that allows the identification of or
contact with a natural person and for greater certainty includes all such information with respect to employees and (ii) any (A) persistent identifier, such as IP address or machine I.D. associated with an individual, (B) Protected Health
Information (as such term is defined in the Health Insurance Portability and Accountability Act of 1996, as amended) or (C) Nonpublic Personal Information (as such term is defined in Gramm-Leach-Bliley Act, as amended). Personal
Data also includes any information not listed above if such information is defined as personal data, personally identifiable information, individually identifiable health information, protected health
information, or personal information under any applicable Law.
Proceedings
shall mean legal,
administrative, arbitral or other proceedings, suits, actions, investigations, examinations, claims, audits, hearings, charges, complaints, indictments, litigations or examinations.
Release
shall mean any actual or threatened release, spill, emission, discharge, leaking, pumping, injection, deposit,
disposal, dispersal, leaching or migration of Hazardous Materials, including the movement of Hazardous Materials through or in the air, soil, surface water, groundwater or real property.
Representative
shall mean, with respect to any Person, such Persons Affiliates and its and their respective officers,
directors, managers, partners, employees, accountants, counsel, financial advisors, consultants and other advisors or representatives and financing sources (with respect to Parent, including the Financing Source Parties).
Appendix A-8
Sanctioned Country
shall mean, at any time, a country or territory which is
itself the subject or target of comprehensive Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and Syria).
Sanctioned Person
shall mean (i) any Person listed in any Sanctions-related list of designated Persons maintained by
OFAC or the U.S. Department of State, the United Nations Security Council, the European Union or Her majestys Treasury of the United Kingdom, or any European Union member state, (ii) any Person located, organized or resident in a
Sanctioned Country or (iii) any Person 50% or more owned or otherwise controlled by any such Person or Persons described in the foregoing clauses (i) and (ii).
Sanctions
shall mean economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time
by the U.S. government through OFAC or the U.S. Department of State, the United Nations Security Council, the European Union or any European Union member state, Her Majestys Treasury of the United Kingdom.
Sarbanes-Oxley Act
shall mean the Sarbanes-Oxley Act of 2002, as amended.
SEC
shall mean the United States Securities and Exchange Commission.
Securities Act
shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
Security
shall mean, with respect to any Person, any series of common stock, preferred stock and any other equity
securities or capital stock of such Person (including interests convertible into or exchangeable or exercisable for any equity interest in any such series of common stock, preferred stock, and any other equity securities or capital stock of such
Person), however described and whether voting or
non-voting.
Subsidiary
of a
Person shall mean any other Person with respect to which the first Person (i) has the right to elect a majority of the board of directors or other Persons performing similar functions or (ii) beneficially owns more than fifty percent (50%)
of the voting stock (or of any other form of voting or controlling equity interest in the case of a Person that is not a corporation), in each case, directly or indirectly through one or more other Persons.
Tax
or
Taxes
shall mean any and all U.S. federal, state, local and foreign taxes, fees, levies, duties,
tariffs, imposts, and other similar charges (together with any and all interest, penalties and additions to tax) imposed by any Governmental Authority, including taxes or other charges on or with respect to income, franchises, windfall or other
profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers compensation, unemployment compensation, or net worth, and taxes or other charges in the nature of excise, withholding, ad valorem,
stamp, transfer, value added, or gains taxes.
Tax Returns
shall mean returns, reports, declarations, claims for refund
and information statements, including any schedule or attachment thereto, with respect to Taxes filed or required to be filed with the IRS or any other Governmental Authority.
Trading Day
shall mean any day on which the NYSE is open for trading;
provided
that a Trading Day only
includes those days that have a scheduled closing time of 4:00 PM New York City time.
Treasury Regulations
shall
mean regulations promulgated by the IRS under the Code.
U.S. Plan
shall mean each Company Benefit Plan that is not a
Foreign Plan.
VWAP
shall mean, for any Trading Day, the volume-weighted average price per share of Parent Common Stock
on the NYSE (as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually selected by the Company and Parent).
Appendix A-9
Exhibit A
Form of Certificate of Incorporation of the Surviving Corporation
CERTIFICATE OF INCORPORATION
OF
ROCKWELL COLLINS, INC.
ARTICLE I
The name of the corporation (which is hereinafter referred to as the Corporation) is:
Rockwell Collins, Inc.
ARTICLE
II
The address of the Corporations registered office in the State of Delaware is c/o The Corporation Trust Company, The
Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County of New Castle, State of Delaware 19801. The name of the Corporations registered agent at such address is The Corporation Trust Company.
ARTICLE III
The purpose
of the Corporation shall be to engage in any lawful act or activity for which corporations may be organized and incorporated under the General Corporation Law of the State of Delaware.
ARTICLE IV
Section 1. The Corporation shall be authorized to issue one thousand (1,000) shares of capital stock, all of which shall be shares of
common stock, $0.01 par value (Common Stock).
Section 2. Except as otherwise provided by law, the Common Stock shall
have the exclusive right to vote for the election of directors and for all other purposes. Each share of Common Stock shall have one vote, and the Common Stock shall vote together as a single class.
ARTICLE V
Unless and
except to the extent that the
By-Laws
of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot.
ARTICLE VI
In
furtherance and not in limitation of the powers conferred by law, the Board of Directors of the Corporation (the Board) is expressly authorized and empowered to make, alter and repeal the
By-Laws
of the Corporation by a majority vote at any regular or special meeting of the Board or by written consent, subject to the power of the stockholders of the Corporation to alter or repeal any
By-Laws
made by
the Board.
ARTICLE VII
The Corporation reserves the right at any time from time to time to amend, alter, change or repeal any provision contained in this Certificate
of Incorporation, and any other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever
nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article.
ARTICLE VIII
No director
of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the directors duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal benefit. No repeal or modification of this paragraph, directly or by adoption of an inconsistent provision of this Certificate of Incorporation, by the stockholders of the Corporation
shall be effective with respect to any cause of action, suit, claim or other matter that, but for this paragraph, would accrue or arise prior to such repeal or modification.
ANNEX B
September 4, 2017
The Board
of Directors
Rockwell Collins, Inc.
400 Collins Road N.E.
Cedar Rapids, IA 52498
Members of the Board of Directors:
You have requested our opinion as to the fairness, from a financial point of view, to the holders of common stock, par value $0.01 per share (the
Company Common Stock), of Rockwell Collins, Inc. (the Company) of the consideration to be paid to such holders in the proposed merger (the Transaction) of the Company with a wholly-owned subsidiary of United
Technologies Corporation (the Acquiror). Pursuant to the Agreement and Plan of Merger, dated as of September 4, 2017 (the Agreement), among the Company, the Acquiror and its subsidiary, Riveter Merger Sub Corp. (Merger
Sub), the Company will become a direct or indirect wholly-owned subsidiary of the Acquiror, and each outstanding share of Company Common Stock, other than (i) shares of Company Common Stock held in treasury or held directly by the
Acquiror or Merger Sub immediately prior to the closing of the Transaction, (ii) Company Common Stock held by any wholly owned subsidiary of the Company or any wholly owned subsidiary of the Acquiror (other than Merger Sub) and
(iii) Dissenting Shares (as defined in the Agreement), will be converted into the right to receive consideration per share equal to $93.33 in cash (the Cash Consideration) and that number of shares (and cash in lieu of any fraction
thereof) of common stock, par value $1.00 per share, of the Acquiror (the Acquiror Common Stock), equal to (a) if the Parent Stock Price (as defined in the Merger Agreement) is an amount equal to or greater than $124.37, 0.37525;
(b) if the Parent Stock Price is an amount greater than $107.01 but less than $124.37, an amount equal to the quotient obtained by dividing (x) $46.67 by (y) the Parent Stock Price; and (c) if the Parent Stock Price is equal to or less
than $107.01, 0.43613 (in each case rounded to five decimal places) (together with the Cash Consideration, the Consideration).
In connection
with preparing our opinion, we have (i) reviewed the Agreement; (ii) reviewed certain publicly available business and financial information concerning the Company and the industry in which it operates; (iii) compared the proposed
financial terms of the Transaction with the publicly available financial terms of certain transactions involving companies we deemed relevant and the consideration paid for such companies; (iv) compared the financial and operating performance
of the Company with publicly available information concerning certain other companies we deemed relevant and reviewed the current and historical market prices of the Company Common Stock and certain publicly traded securities of such other
companies; (vi) reviewed certain internal financial analyses and forecasts prepared by or at the direction of the management of the Company relating to the Companys business; and (vii) performed such other financial studies and
analyses and considered such other information as we deemed appropriate for the purposes of this opinion.
In addition, we have held discussions with
certain members of the management of the Company and the Acquiror with respect to certain aspects of the Transaction, and the past and current business operations of the Company and the Acquiror, the financial condition and future prospects and
operations of the Company and the Acquiror, the effects of the Transaction on the financial condition and future prospects of the Company and the Acquiror, and certain other matters we believed necessary or appropriate to our inquiry.
In giving our opinion, we have relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or
discussed with us by the Company and the Acquiror or otherwise reviewed by or for us. We have not independently verified any such information or its accuracy or completeness
B-1
and, pursuant to our engagement letter with the Company, we did not assume any obligation to undertake any such independent verification. We have not conducted or been provided with any valuation
or appraisal of any assets or liabilities, nor have we evaluated the solvency of the Company or the Acquiror under any state or federal laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts
provided to us or derived therefrom, we have assumed that they have been reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by management as to the expected future results of operations and
financial condition of the Company to which such analyses or forecasts relate. We express no view as to such analyses or forecasts or the assumptions on which they were based. We have also assumed that the Transaction and the other transactions
contemplated by the Agreement will have the tax consequences described in discussions with, and materials furnished to us by, representatives of the Company, and will be consummated as described in the Agreement. We have also assumed that the
representations and warranties made by the Company and the Acquiror in the Agreement and the related agreements are and will be true and correct in all respects material to our analysis. We are not legal, regulatory or tax experts and have relied on
the assessments made by advisors to the Company with respect to such issues. We have further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the Transaction will be obtained
without any adverse effect on the Company or the Acquiror or on the contemplated benefits of the Transaction.
Our opinion is necessarily based on
economic, market and other conditions as in effect on, and the information made available to us as of, the date hereof. It should be understood that subsequent developments may affect this opinion and that we do not have any obligation to update,
revise, or reaffirm this opinion. Our opinion is limited to the fairness, from a financial point of view, of the Consideration to be paid to the holders of the Company Common Stock in the proposed Transaction and we express no opinion as to the
fairness of any consideration paid in connection with the Transaction to the holders of any other class of securities, creditors or other constituencies of the Company or as to the underlying decision by the Company to engage in the Transaction.
Furthermore, we express no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the Transaction, or any class of such persons relative to the Consideration to be paid to the
holders of the Company Common Stock in the Transaction or with respect to the fairness of any such compensation
.
We are expressing no opinion herein as to the price at which the Company Common Stock or the Acquiror Common Stock will trade at
any future time.
We have acted as financial advisor to the Company with respect to the proposed Transaction and will receive a fee from the Company for
our services, a substantial portion of which will become payable only if the proposed Transaction is consummated. In addition, the Company has agreed to indemnify us for certain liabilities arising out of our engagement. During the two years
preceding the date of this letter, we and our affiliates have had commercial or investment banking relationships with the Company and the Acquiror, for which we and such affiliates have received customary compensation. Such services during such
period have included acting as joint lead arranger and joint bookrunner on the Companys facility agreement in December 2016, acting as bookrunner on an offering of debt securities by the Company in March 2017, acting as financial advisor to
the Company on its acquisition of B/E Aerospace in April 2017, acting as sole lead arranger and bookrunner on the Companys facility agreement in April 2017, and acting as joint lead arranger and joint bookrunner on the Companys facility
agreement in April 2017; acting as financial advisor to the Acquiror on the sale of Sikorsky Aircraft in November 2015, acting as bookrunner on an offering of debt securities by the Acquiror in February 2016, acting as sole lead arranger and joint
bookrunner on the Acquirors facility agreement in August 2016, acting as bookrunner on an offering of debt securities by the Acquiror in October 2016, and acting as bookrunner on an offering of debt securities by the Acquiror in May 2017.
During such period, we and our affiliates have provided treasury services and asset management services to the Acquiror for customary compensation. In addition, our commercial banking affiliate is an agent bank and a lender under outstanding credit
facilities of the Company and the Acquiror, for which it receives customary compensation or other financial benefits. In addition, we and our affiliates hold, on a proprietary basis, less than 1% of the outstanding common stock of each of the
Company and the Acquiror. In the ordinary course of our businesses, we and our affiliates may actively trade the debt and equity securities or financial instruments (including derivatives, bank loans or other obligations) of the Company
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or the Acquiror for our own account or for the accounts of customers and, accordingly, we may at any time hold long or short positions in such securities or other financial instruments.
On the basis of and subject to the foregoing, it is our opinion as of the date hereof that the Consideration to be paid to the holders of the Company Common
Stock in the proposed Transaction is fair, from a financial point of view, to such holders.
The issuance of this opinion has been approved by a fairness
opinion committee of J.P. Morgan Securities LLC. This letter is provided to the Board of Directors of the Company (in its capacity as such) in connection with and for the purposes of its evaluation of the Transaction. This opinion does not
constitute a recommendation to any shareholder of the Company as to how such shareholder should vote with respect to the Transaction or any other matter. This opinion may not be disclosed, referred to, or communicated (in whole or in part) to any
third party for any purpose whatsoever except with our prior written approval. This opinion may be reproduced in full in any proxy or information statement mailed to shareholders of the Company but may not otherwise be disclosed publicly in any
manner without our prior written approval.
Very truly yours,
J.P. MORGAN SECURITIES LLC
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ANNEX C
388 Greenwich Street
New York, NY 10013
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September 4, 2017
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The Board of Directors
Rockwell
Collins, Inc.
400 Collins Road N.E.
Cedar Rapids, IA 52498
Members of the Board:
You have requested our opinion as to
the fairness, from a financial point of view, to the holders of the common stock of Rockwell Collins, Inc. (the Company) of the Merger Consideration (defined below) to be received by such holders pursuant to the terms and subject to the
conditions set forth in an Agreement and Plan of Merger, dated as of September 4, 2017 (the Merger Agreement) by and among United Technologies Corporation (Parent), Riveter Merger Sub Corp., a wholly owned subsidiary of
Parent (Merger Sub), and the Company. As more fully described in the Merger Agreement, (i) Merger Sub will be merged with and into the Company, with the Company surviving as a direct or indirect wholly owned subsidiary of Parent
(the Merger) and (ii) each outstanding share of the common stock, par value $0.01 per share, of the Company (Company Common Stock), other than (a) treasury stock or Company Common Stock held directly by Parent or
Merger Sub immediately prior to the closing of the Merger, (b) Company Common Stock held by any wholly owned subsidiary of the Company or any wholly owned subsidiary of Parent (other than Merger Sub) and (c) Dissenting Shares (as defined
in the Merger Agreement), will be converted into the right to receive $93.33 in cash (the Cash Consideration) and that number of shares (and cash in lieu of any fraction thereof) of common stock, par value $1.00 per share, of Parent (the
Parent Common Stock), equal to (a) if the Parent Stock Price (as defined in the Merger Agreement) is an amount equal to or greater than $124.37, 0.37525; (b) if the Parent Stock Price is an amount greater than $107.01 but less than
$124.37, an amount equal to the quotient obtained by dividing (x) $46.67 by (y) the Parent Stock Price; and (c) if the Parent Stock Price is equal to or less than $107.01, 0.43613 (in each case rounded to five decimal places) (together
with the Cash Consideration, the Merger Consideration).
In arriving at our opinion, we reviewed the Merger Agreement and held discussions
with certain senior officers, directors and other representatives and advisors of the Company concerning the businesses, operations and prospects of the Company. We examined certain publicly available business and financial information relating to
the Company as well as certain financial forecasts and other information and data relating to the Company which were provided to or discussed with us by the management of the Company. We reviewed the financial terms of the Merger as set forth in the
Merger Agreement in relation to, among other things: current and historical market prices and trading volumes of Company Common Stock; the historical and projected earnings and other operating data of the Company; and the capitalization and
financial condition of the Company. We considered, to the extent publicly available, the financial terms of certain other transactions which we considered relevant in evaluating the Merger and analyzed certain financial, stock market and other
publicly available information relating to the businesses of other companies whose operations we considered relevant in evaluating those of the Company. In addition to the foregoing, we conducted such other analyses and examinations and considered
such other information and financial, economic and market criteria as we deemed appropriate in arriving at our opinion. The issuance of our opinion has been authorized by our fairness opinion committee.
Separately, we also held discussions with certain senior officers and other representatives and advisors of Parent concerning the businesses, operations and
prospects of Parent. In addition, we examined certain publicly available business and financial information relating to Parent as well as other information and data relating to Parent which were provided to or discussed with us by the management of
the Company and Parent, including
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information relating to the potential strategic implications and operational benefits (including the amount thereof) anticipated by the management of the Company and Parent to result from the
Merger, as well as certain pro forma financial effects of the Merger on Parent. We reviewed the financial terms of the Merger as set forth in the Merger Agreement in relation to, among other things: current and historical market prices and trading
volumes of Parent Common Stock; the historical and projected earnings based on summary consensus estimates and other operating data of Parent; and the capitalization and financial condition of Parent.
In rendering our opinion and in respect of the other matters described herein, we have assumed and relied, without independent verification, upon the accuracy
and completeness of all financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with us and upon the assurances of the management of the Company that they are not aware of any relevant
information that has been omitted or that remains undisclosed to us. With respect to financial forecasts relating to the Company and other information and data relating to the Company and Parent provided to or otherwise reviewed by or discussed with
us, we have been advised by the management of the Company and Parent, as applicable, that such forecasts and other information and data were reasonably prepared on bases reflecting the best currently available estimates and judgments of the
management of the Company and Parent, as applicable, as to the future financial performance of the Company and Parent, the potential strategic implications and operational benefits anticipated to result from the Merger and the other matters covered
thereby, and have assumed, with your consent, that the financial results (including the potential strategic implications and operational benefits anticipated to result from the Merger) reflected in such forecasts and other information and data will
be realized in the amounts projected.
We have assumed, with your consent, that the Merger will be consummated in accordance with its terms, without
waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary regulatory or third party approvals, consents and releases for the Merger, no delay, limitation, restriction or
condition will be imposed that would have an adverse effect on the Company, Parent or the contemplated benefits of the Merger. We are not expressing any opinion as to what the value of the Parent Common Stock actually will be when issued pursuant to
the Merger or the price at which the Parent Common Stock will trade at any time. We have not made or been provided with an independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of the Company or Parent nor have
we made any physical inspection of the properties or assets of the Company or Parent. We were informed by the Company that it had contacted certain parties to solicit indications of interest prior to our engagement. Our opinion does not address the
underlying business decision of the Company to effect the Merger, the relative merits of the Merger as compared to any alternative business strategies that might exist for the Company or the effect of any other transaction in which the Company might
engage. We also express no view as to, and our opinion does not address, the fairness (financial or otherwise) of the amount or nature or any other aspect of any compensation to any officers, directors or employees of any parties to the Merger, or
any class of such persons, relative to the Merger Consideration. Our opinion is necessarily based upon information available to us, and financial, stock market and other conditions and circumstances existing, as of the date hereof.
Citigroup Global Markets Inc. has acted as financial advisor to the Company in connection with the proposed Merger and will receive a fee for such services, a
significant portion of which is contingent upon the consummation of the Merger. We and our affiliates in the past have provided, and currently provide, services to the Company unrelated to the proposed Merger, for which services we and such
affiliates have received and expect to receive compensation, including, without limitation, during the two year period prior to the date hereof, having acted in March 2017 as joint bookrunner in connection with the issuance of $300,000,000 1.950%
Notes due 2019, $1,100,000,000 2.800% Notes due 2022, $950,000,000 3.200% Notes due 2024, $1,300,000,000 3.500% Notes due 2027 and $1,000,000,000 4.350% Notes due 2047; having acted in December 2016 as joint bookrunner on a $1.5 billion term
loan facility; having acted in December 2016 as joint bookrunner on a $1.5 billion revolving credit agreement; and having acted in February 2016 as joint bookrunner on a $200 million revolving credit agreement. In addition, we and our
affiliates in the past have provided, and currently provide, services to Parent and certain of its affiliates, unrelated to the proposed Merger, for which services we and such affiliates have received and expect to receive compensation, including,
without limitation, during the two year
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period prior to the date hereof, having acted in May 2017 as joint bookrunner in connection with the issuance of $1,000,000,000 1.900% Notes due 2020, $500,000,000 2.300% Notes due 2022,
$800,000,000 2.800% Notes due 2024, $1,100,000,000 3.125% Notes due 2027 and $600,000,000 4.050% Notes due 2047; having acted in October 2016 as joint bookrunner in connection with the issuance of $650,000,000 1.500% Notes due 2019, $750,000,000
1.950% Notes due 2021, $1,150,000,000 2.650% Notes due 2026, $1,100,000,000 3.750% Notes due 2046 and $350,000,000 Floating Rate Notes due 2019; having acted in August 2016 as joint bookrunner on a $2.2 billion revolving credit facility; and
having acted in February 2016 as joint bookrunner in connection with the issuance of 950,000,000 1.125% Notes due 2021, 500,000,000 1.875% Notes due 2026 and 750,000,000 Floating Rate Notes due 2018. In the ordinary course of our
business, we and our affiliates may actively trade or hold the securities of the Company and Parent for our own account or for the account of our customers and, accordingly, may at any time hold a long or short position in such securities. In
addition, we and our affiliates (including Citigroup Inc. and its affiliates) may maintain relationships with the Company, Parent and their respective affiliates.
Our advisory services and the opinion expressed herein are provided for the information of the Board of Directors of the Company in its evaluation of the
proposed Merger, and our opinion is not intended to be and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act on any matters relating to the proposed Merger.
Based upon and subject to the foregoing, our experience as investment bankers, our work as described above and other factors we deemed relevant, we are of the
opinion that, as of the date hereof, the Merger Consideration is fair, from a financial point of view, to the holders of the Company Common Stock.
Very
truly yours,
CITIGROUP GLOBAL MARKETS INC.
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ANNEX D
Section 262 of the General Corporation Law of the State of Delaware
8 Del.C. § 262
§ 262. Appraisal rights
(a) Any stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to
subsection (d) of this section with respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither
voted in favor of the merger or consolidation nor consented thereto in writing pursuant to § 228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholders shares of stock under the
circumstances described in subsections (b) and (c) of this section. As used in this section, the word stockholder means a holder of record of stock in a corporation; the words stock and share mean and
include what is ordinarily meant by those words; and the words depository receipt mean a receipt or other instrument issued by a depository representing an interest in 1 or more shares, or fractions thereof, solely of stock of a
corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or series
of stock of a constituent corporation in a merger or consolidation to be effected pursuant to § 251 (other than a merger effected pursuant to § 251(g) of this title and, subject to paragraph (b)(3) of this section,
§ 251(h) of this title), § 252, § 254, § 255, § 256, § 257, § 258, § 263 or § 264 of this title:
(1) Provided, however, that, except as expressly provided in § 363(b) of this title, no appraisal rights under this
section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of the meeting of stockholders to
act upon the agreement of merger or consolidation, were either: (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares
of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in § 251(f) of this title.
(2) Notwithstanding paragraph (b)(1) of this section, appraisal rights under this section shall be available for the
shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 255, 256, 257, 258, 263 and 264 of this
title to accept for such stock anything except:
a. Shares of stock of the corporation surviving or resulting from such
merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or
depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or held of
record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository receipts described in the
foregoing paragraphs (b)(2)a. and b. of this section; or
d. Any combination of the shares of stock, depository
receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a., b. and c. of this section.
(3) In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 251(h),
§ 253 or § 267 of this title is not owned by the parent immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation.
(4) In the event of an amendment to a corporations certificate of incorporation contemplated by § 363(a) of
this title, appraisal rights shall be available as contemplated by § 363(b) of this title, and the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall apply as nearly as
practicable, with the word amendment substituted for the words merger or consolidation, and
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the word corporation substituted for the words constituent corporation and/or surviving or resulting corporation.
(c) Any corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares
of any class or series of its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of the assets of the
corporation. If the certificate of incorporation contains such a provision, the provisions of this section, including those set forth in subsections (d), (e), and (g) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for
approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for notice of such meeting (or such members who received notice in accordance
with § 255(c) of this title) with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) of this section that appraisal rights are available for any or all of the shares of the constituent
corporations, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Each stockholder electing to demand the appraisal of such
stockholders shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholders shares. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholders shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder
electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each
constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to § 228, § 251(h), § 253, or
§ 267 of this title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series
of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent
corporation, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Such notice may, and, if given on or after the effective date of the
merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice or, in the case of a merger
approved pursuant to § 251(h) of this title, within the later of the consummation of the offer contemplated by § 251(h) of this title and 20 days after the date of mailing of such notice, demand in writing from the surviving or
resulting corporation the appraisal of such holders shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such
holders shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or
consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting
corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice or, in the case of a
merger approved pursuant to § 251(h) of this title, later than the later of the consummation of the offer contemplated by § 251(h) of this title and 20 days following the sending of the first notice, such second notice need only
be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holders shares in
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accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been
given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be
not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice
is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the merger or consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) of this section hereof and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of Chancery demanding a determination of the value of
the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named
party shall have the right to withdraw such stockholders demand for appraisal and to accept the terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or consolidation, any stockholder who has
complied with the requirements of subsections (a) and (d) of this section hereof, upon written request, shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation a statement setting forth
the aggregate number of shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such written statement shall be mailed to the
stockholder within 10 days after such stockholders written request for such a statement is received by the surviving or resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under
subsection (d) of this section hereof, whichever is later. Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee on behalf of such person
may, in such persons own name, file a petition or request from the corporation the statement described in this subsection.
(f) Upon
the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition
was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting
corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place
fixed for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved
by the Court, and the costs thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the
Court shall determine the stockholders who have complied with this section and who have become entitled to appraisal rights. The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by
certificates to submit their certificates of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder. If immediately before the merger or consolidation the shares of the class or series of stock of the constituent corporation as to which appraisal rights are available were listed on a national securities exchange, the Court shall
dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless (1) the total number of shares entitled to appraisal exceeds 1% of the outstanding shares of the class or series eligible for
appraisal, (2) the value of the consideration provided in the merger or consolidation for such total number of shares exceeds $1 million, or (3) the merger was approved pursuant to § 253 or § 267 of this title.
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(h) After the Court determines the stockholders entitled to an appraisal, the appraisal
proceeding shall be conducted in accordance with the rules of the Court of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive of any
element of value arising from the accomplishment or expectation of the merger or consolidation, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the Court shall take into
account all relevant factors. Unless the Court in its discretion determines otherwise for good cause shown, and except as provided in this subsection, interest from the effective date of the merger through the date of payment of the judgment shall
be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the merger and the date of payment of the judgment. At
any time before the entry of judgment in the proceedings, the surviving corporation may pay to each stockholder entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as provided herein only upon the sum of
(1) the difference, if any, between the amount so paid and the fair value of the shares as determined by the Court, and (2) interest theretofore accrued, unless paid at that time. Upon application by the surviving or resulting corporation
or by any stockholder entitled to participate in the appraisal proceeding, the Court may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an appraisal. Any stockholder whose
name appears on the list filed by the surviving or resulting corporation pursuant to subsection (f) of this section and who has submitted such stockholders certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the surrender to the
corporation of the certificates representing such stock. The Courts decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a corporation of this State or of any
state.
(j) The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the
circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys fees and the
fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal.
(k) From and after the
effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this section shall be entitled to vote such stock for any purpose or to receive payment of dividends or other
distributions on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be
filed within the time provided in subsection (e) of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholders demand for an appraisal and an acceptance of the
merger or consolidation, either within 60 days after the effective date of the merger or consolidation as provided in subsection (e) of this section or thereafter with the written approval of the corporation, then the right of such stockholder
to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the
Court deems just; provided, however that this provision shall not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholders demand for appraisal
and to accept the terms offered upon the merger or consolidation within 60 days after the effective date of the merger or consolidation, as set forth in subsection (e) of this section.
(l) The shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation.
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