Proposed Acquisition Transactions. (i) Except as provided in Section 6.1(c)(ii), from the Distribution Date until the first Business Day after the two-year anniversary of the Distribution Date, SpinCo shall not, and shall not permit any SpinCo Affiliate that is an Internal Distribution Company to, undertake (or enter into any agreement, understanding, arrangement, or substantial negotiations to undertake) any of the following transactions: (1) Enter into any Proposed Acquisition Transaction or, to the extent SpinCo has the right to prohibit any Proposed Acquisition Transaction, permit any Proposed Acquisition Transaction to occur (whether by (a) redeeming rights under a shareholder rights plan, (b) finding a tender offer to be a “permitted offer” under any such plan or otherwise causing any such plan to be inapplicable or neutralized with respect to any Proposed Acquisition Transaction, (c) approving any Proposed Acquisition Transaction, whether for purposes of any “fair price” or other provision of the organizational documents of SpinCo or Internal Distribution Company (as the case may be) or for any other purposes, (d) amending its organizational documents to declassify its board of directors or approving any such amendment, or otherwise). (2) Merge or consolidate with any other Person or liquidate or partially liquidate. (3) In a single transaction or series of transactions sell or transfer (other than sales or transfers of inventory in the ordinary course of business) (A) 25% or more of the gross assets (or, if less, 35% of the net assets) of the Active Trade or Business that was relied upon in the Tax Opinions for purposes of qualifying the Distribution or Internal Distribution (as the case may be) as having a Tax-Free Status, or (B) 25% or more of the consolidated gross assets (or, if less, 35% of the consolidated net assets) of SpinCo (or the Internal Distribution Company, as the case may be) and its Subsidiaries (the denominator of such percentages to be measured based on the fair market values as of the Distribution Date). (4) Redeem or otherwise repurchase (directly or through a SpinCo Affiliate) any stock, or rights to acquire stock, except (A) to the extent such repurchases satisfy Section 4.05(1)(b) of Revenue Procedure 96-30 (as in effect prior to the amendment of such Revenue Procedure by Revenue Procedure 2003-48), (B) pursuant to the Distribution-Related Redemptions, or pursuant to any other redemption or repurchase contemplated by the Reorganization Step Plan, (C) to the extent reasonably necessary to pay the total tax liability arising from the vesting of an Equity Award, or (D) through a net exercise of an Equity Award. (5) Amend its organizational documents, or take any other action, whether through a stockholder vote or otherwise, affecting the voting rights of its stock (including through the conversion of one class of stock into another class of stock). (6) Take any other action or actions (including any action or transaction that would be reasonably likely to be inconsistent with any representation made in the Representation Letters or the Tax Opinions) which in the aggregate (and taking into account any other transactions described in this Section 6.1(c)) would be reasonably likely to have the effect of causing or permitting one or more Persons (whether or not acting in concert) to acquire directly or indirectly stock representing a Fifty Percent or Greater Interest in any SpinCo Specified Entity, or otherwise jeopardize the Tax-Free Status of the Contribution, the Distribution, or any Internal Contribution or Internal Distribution. (ii) Any action that would otherwise be prohibited by Section 6.1(c)(i) may be taken by SpinCo or a SpinCo Affiliate if prior to taking such action: (A) SpinCo shall have requested that ParentCo obtain a Ruling from the IRS in accordance with Section 6.3(b) and Section 6.3(d) to the effect that such transaction will not affect the Tax-Free Status of the Contribution, the Distribution, and each Internal Contribution and Internal Distribution, and ParentCo shall have received such a Ruling in form and substance satisfactory to ParentCo in its sole and absolute discretion; (B) SpinCo shall provide ParentCo with an Unqualified Tax Opinion in form and substance satisfactory to ParentCo in its sole and absolute discretion (and in determining whether an opinion is satisfactory, ParentCo may consider, among other factors, the appropriateness of any underlying assumptions and management’s representations if used as a basis for the opinion, and ParentCo may determine that no opinion would be acceptable to ParentCo); or (C) ParentCo shall have waived the requirement to obtain such Ruling or Unqualified Tax Opinion. ParentCo shall not be required to take any action related to obtaining such a Ruling unless and until SpinCo has provided to ParentCo an opinion reasonably acceptable to ParentCo from a Tax Advisor to the effect that the outcome of the ruling process should be favorable. In all events, prior to obtaining the Unqualified Tax Opinion referred to above, SpinCo shall consult with ParentCo.
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Samples: Tax Matters Agreement (nVent Electric PLC), Tax Matters Agreement (PENTAIR PLC), Tax Matters Agreement (nVent Electric PLC)
Proposed Acquisition Transactions. (i) Except as provided in Section 6.1(c)(ii), from the Distribution Date until the first Business Day after the two-year anniversary of the Distribution Date, SpinCo shall not, and shall not permit any SpinCo Affiliate that is an Internal Distribution Company to, undertake (or enter into any agreement, understanding, arrangement, or substantial negotiations to undertake) any of the following transactions:
(1) Enter into any Proposed Acquisition Transaction or, to the extent SpinCo has the right to prohibit any Proposed Acquisition Transaction, permit any Proposed Acquisition Transaction to occur (whether by (a) redeeming rights under a shareholder rights plan, (b) finding a tender offer to be a “permitted offer” under any such plan or otherwise causing any such plan to be inapplicable or neutralized with respect to any Proposed Acquisition Transaction, (c) approving any Proposed Acquisition Transaction, whether for purposes of any “fair price” or other provision of the organizational documents of SpinCo or Internal Distribution Company (as the case may be) or for any other purposes, (d) amending its organizational documents to declassify its board of directors or approving any such amendment, or otherwise).
(2) Merge or consolidate with any other Person or liquidate or partially liquidate.
(3) In a single transaction or series of transactions sell or transfer (other than sales or transfers of inventory in the ordinary course of business) (A) 25% or more of the gross assets (or, if less, 35% of the net assets) of the Active Trade or Business that was relied upon in the Tax Opinions for purposes of qualifying the Distribution or Internal Distribution (as the case may be) as having a Tax-Free Status, or (B) 25% or more of the consolidated gross assets (or, if less, 35% of the consolidated net assets) of SpinCo (or the Internal Distribution Company, as the case may be) and its Subsidiaries (the denominator of such percentages to be measured based on the fair market values as of the Distribution Date).
(4) Redeem or otherwise repurchase (directly or through a SpinCo Affiliate) any stock, or rights to acquire stock, except (A) to the extent such repurchases satisfy Section 4.05(1)(b) of Revenue Procedure 96-30 (as in effect prior to the amendment of such Revenue Procedure by Revenue Procedure 2003-48), (B) pursuant to the Distribution-Related Redemptions, or pursuant to any other redemption or repurchase contemplated by the Reorganization Step Plan, (C) to the extent reasonably necessary to pay the total tax liability arising from the vesting of an Equity Award, or (D) through a net exercise of an Equity Award.
(5) Amend its organizational documents, or take any other action, whether through a stockholder vote or otherwise, affecting the voting rights of its stock (including through the conversion of one class of stock into another class of stock).
(6) Take any other action or actions (including any action or transaction that would be reasonably likely to be inconsistent with any representation made in the Representation Letters or the Tax Opinions) which in the aggregate (and taking into account any other transactions described in this Section 6.1(c)) would be reasonably likely to have the effect of causing or permitting one or more Persons (whether or not acting in concert) to acquire directly or indirectly stock representing a Fifty Percent or Greater Interest in any SpinCo Specified Entity, or otherwise jeopardize the Tax-Free Status of the Contribution, the Distribution, or any Internal Contribution or Internal Distribution.
(ii) Any action that would otherwise be prohibited by Section 6.1(c)(i) may be taken by SpinCo or a SpinCo Affiliate if prior to taking such action: (A) SpinCo shall have requested that ParentCo obtain a Ruling from the IRS in accordance with Section 6.3(b) and Section 6.3(d) to the effect that such transaction will not affect the Tax-Free Status of the Contribution, the Distribution, and each Internal Contribution and Internal Distribution, and ParentCo shall have received such a Ruling in form and substance satisfactory to ParentCo in its sole and absolute discretion; (B) SpinCo shall provide ParentCo with an Unqualified Tax Opinion in form and substance satisfactory to ParentCo in its sole and absolute discretion (and in determining whether an opinion is satisfactory, ParentCo may consider, among other factors, the appropriateness of any underlying assumptions and management’s representations if used as a basis for the opinion, and ParentCo may determine that no opinion would be acceptable to ParentCo); or (C) ParentCo shall have waived the requirement to obtain such Ruling or Unqualified Tax Opinion. ParentCo shall not be required to take any action related to obtaining such a Ruling unless and until SpinCo has provided to ParentCo an opinion reasonably acceptable to ParentCo from a Tax Advisor to the effect that the outcome of the ruling process should be favorable. In all events, prior to obtaining the Unqualified Tax Opinion referred to above, SpinCo shall consult with ParentCo.or
Appears in 1 contract
Samples: Tax Matters Agreement
