Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. ROWAN COMPANIES PLC (85408) 10-K published on Feb 27, 2019 at 1:31 pm
Reporting Period: Dec 30, 2018
The Transaction Agreement contains certain termination rights for both Rowan and Ensco including, among other things: (i) by Rowan or Ensco, if the other party breaches or fails to perform any of its representations, warranties or covenants in the Transaction Agreement that cannot be or is not cured in accordance with the terms of the Transaction Agreement and such breach constitutes a “material adverse effect”, (ii) by Rowan, in the event that the board of directors of Ensco makes an Adverse Recommendation Change (as defined in the Transaction Agreement) or upon any “willful breach” by Ensco of the non-solicitation covenant and (iii) by Ensco, in the event that the board of directors of Rowan makes an Adverse Recommendation Change (as defined in the
The foregoing description of the Transaction and the Transaction Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Transaction Agreement, a copy of which is included in Exhibit 2.1 as filed with the Form 8-K dated October 9, 2018, and the full text of the Deed of Amendment No. 1 to the Transaction Agreement, a copy of which is included as Exhibit 2.1 as filed with the Form 8-K filed January 29, 2019. The Transaction Agreement, as amended, has been referenced to provide investors with information regarding its terms. It is not intended to provide any other factual information about Rowan or Ensco. In particular, the assertions embodied in the representations and warranties contained in the Transaction Agreement are qualified by matters disclosed in certain of Rowan’s and Ensco’s filings with the SEC prior to the date of the Transaction Agreement and by information in confidential Disclosure Schedules provided by each of Rowan and Ensco to the other in connection with the signing of the Transaction Agreement. These confidential Disclosure Schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties and certain covenants set forth in the Transaction Agreement. The representations, warranties and covenants are also subject to materiality qualifications contained in the Transaction Agreement that may differ from what may be viewed as material by investors. Moreover, certain representations and warranties in the Transaction Agreement were used for the purposes of allocating risk between Rowan and Ensco rather than establishing matters as facts. Accordingly, the representations and warranties in the Transaction Agreement should not be relied on as characterizations of the actual state of facts about Rowan or Ensco. The Transaction Agreement should not be read alone, but should instead be read in conjunction with other information regarding the Company that is or will be contained in, or incorporated by reference into, the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other documents that the Company files or furnishes with the SEC.
In response to changes in our industry, we have implemented and are considering implementing initiatives to reduce costs and improve operational efficiencies. If we do not successfully manage these cost reduction activities, the expected efficiencies and benefits might be delayed or may not be realized, and our operations and business could be disrupted. In addition, there is the risk that such measures could negatively impact our business by reducing our ability to respond to a significant increase in demand for our services, erroneously omitting operational or financial controls, reducing our pool of talent, adversely affecting employee morale, distracting management, or slowing improvements in our services, any of which could adversely affect our business, financial condition and results of operations.
Certain of our shareholders may from time to time advance shareholder proposals or otherwise attempt to effect changes or acquire control over our business. Activist campaigns that contest or conflict with our strategic direction could have an adverse effect on our results of operations and financial condition. Responding to proxy contests and other actions by activist shareholders could disrupt our operations, be costly and time-consuming, and divert the attention of our Board and senior management from the pursuit of business strategies. In addition, perceived uncertainties as to our future direction may lead to the perception of a change in the direction of the business, instability or lack of continuity, which may be exploited by our competitors, cause customer and employee concerns, result in the loss of potential business opportunities, or make it more difficult to attract and retain qualified personnel. Such perceived uncertainties could negatively affect the trading price and volatility of our common stock.
The completion of the Transaction is subject to various closing conditions, including, among other things, (i) the sanction of a court-sanctioned scheme of arrangement by the High Court of Justice of England and Wales, (ii) the receipt of the required regulatory approval or elapse of the review period with respect thereto in the Kingdom of Saudi Arabia, (iii) the absence of legal restraints prohibiting or restraining the Transaction and (iv) the absence of any law or order reasonably expected to result in the dissolution of ARO, the sale or disposition of the Company’s interest in ARO, or the forfeiture or nationalization of the Company's interest in ARO or ARO’s assets. The Transaction is expected to close during the first half of 2019.
The Transaction Agreement contains certain termination rights for both Rowan and Ensco including, among other things: (i) by Rowan or Ensco, if the other party breaches or fails to perform any of its representations, warranties or covenants in the Transaction Agreement that cannot be or is not cured in accordance with the terms of the Transaction Agreement and such breach constitutes a “material adverse effect”, (ii) by Rowan, in the event that the board of directors of Ensco makes an Adverse Recommendation Change (as defined in the Transaction Agreement) or upon any “willful breach” by Ensco of the non-solicitation covenant and (iii) by Ensco, in the event that the board of directors of Rowan makes an Adverse Recommendation Change (as defined in the Transaction Agreement) or upon any “willful breach” by Rowan of the non-solicitation covenant. If the Transaction Agreement is terminated in accordance with clause (i), (ii) or (iii), then Rowan or Ensco, as the applicable terminating party, shall be required to pay the other a termination fee of $24.0 million (the “Termination Fee”).