Exhibit 10.5


 


Goldman,
Sachs & Co.


One
New York Plaza


New
York, NY 10004


 


April 30,
2009


To: Textron Inc.


40
Westminster Street


Providence,
RI 02903


Attention:
Chief Financial Officer


Telephone No.:     (401) 421-2800


Facsimile
No.:       (401) 457-3533


 


 


	
  Re:

  	
   

  	
  Additional Convertible Bond
  Hedge Transaction

  
	
  A/C:

  	
   

  	
  028320281

  
	
  Ref. No.:

  	
   

  	
  SDB1630442183

  



 


The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the
Transaction entered into between Goldman, Sachs & Co. (“Bank”) and Textron Inc. (“Counterparty”)
on the Trade Date specified below (the “Transaction”).
This letter agreement constitutes a “Confirmation”
as referred to in the ISDA Master Agreement specified below. This Confirmation
shall replace any previous agreements and serve as the final documentation for
the Transaction.


 


The definitions and provisions contained in
the 1996 ISDA Equity Derivatives Definitions (the “Equity
Definitions”), as
published by the International Swaps and Derivatives Association, Inc. (“ISDA”), are incorporated into this Confirmation. In the
event of any inconsistency between the Equity Definitions and this
Confirmation, this Confirmation shall govern. Certain defined terms used herein
have the meanings assigned to them in the Prospectus dated July 28, 2008,
as supplemented by the Prospectus Supplement dated April 29, 2009 (as so
supplemented, the “Prospectus”),
relating to the USD 540,000,000 principal amount of 4.50% Convertible Senior
Notes due 2013, (the “Convertible Notes”
and each USD 1,000 principal amount of Convertible Notes, a “Convertible Note”) issued by Counterparty pursuant to an
Indenture dated as of September 10, 1999, as supplemented by the
Supplemental Indenture (the “Supplemental Indenture”)
thereto to be dated May 5, 2009, between Counterparty and The Bank of New
York Mellon Trust Company, N.A., as trustee (as so supplemented, the “Indenture”). In the event of any inconsistency between the
terms defined in the Prospectus, the Indenture and this Confirmation, this
Confirmation shall govern. The parties acknowledge that this Confirmation is
entered into on the date hereof with the understanding that (i) definitions
set forth in the Indenture which are also defined herein by reference to the
Indenture and (ii) sections of the Indenture that are referred to herein
will conform to the descriptions thereof in the Prospectus. If any such
definitions in the Indenture or any such sections of the Indenture differ from
the descriptions thereof in the Prospectus, the descriptions thereof in the
Prospectus will govern for purposes of this Confirmation. The parties further
acknowledge that the Supplemental Indenture section numbers used herein are
based on the draft of the Supplemental Indenture last reviewed by Bank as of
the date of this Confirmation, and if any such section numbers are changed in
the Supplemental Indenture as executed, the parties will amend this
Confirmation in good faith to preserve the intent of the parties. For the
avoidance of doubt, references to the Indenture herein are references to the
Indenture as in effect on the date of its execution and if the Indenture is
amended following its execution, any such amendment will be disregarded for
purposes of this Confirmation unless the parties agree otherwise in writing.


 


Each party is hereby advised, and each such
party acknowledges, that the other party has engaged in, or refrained from
engaging in, substantial financial transactions and has taken other material
actions in reliance upon the parties’ entry into the Transaction to which this
Confirmation relates on the terms and conditions set forth below.


 


1.               This
Confirmation evidences a complete and binding agreement between Bank and
Counterparty as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall supplement, form a part of, and 


 


1

















 


be
subject to an agreement in the form of the 2002 ISDA Master Agreement (the “Agreement”) as if Bank and Counterparty had
executed an agreement in such form (but without any Schedule) on the Trade
Date. In the event of any inconsistency between provisions of that Agreement
and this Confirmation, this Confirmation will prevail for the purpose of the
Transaction to which this Confirmation relates. The parties hereby agree that
no Transaction other than the Transaction to which this Confirmation relates
shall be governed by the Agreement.


 


2.               The terms of
the particular Transaction to which this Confirmation relates are as follows:


 


	
  General
  Terms:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Trade Date:

  	
   

  	
  April 30, 2009

  
	
   

  	
   

  	
   

  
	
  Option Style:

  	
   

  	
  “Modified American”, as
  set forth under “Exercise and Valuation” below

  
	
   

  	
   

  	
   

  
	
  Option Type:

  	
   

  	
  Call

  
	
   

  	
   

  	
   

  
	
  Buyer:

  	
   

  	
  Counterparty

  
	
   

  	
   

  	
   

  
	
  Seller:

  	
   

  	
  Bank

  
	
   

  	
   

  	
   

  
	
  Shares:

  	
   

  	
  The common stock of Counterparty, par value USD
  0.125 per Share (Exchange symbol “TXT”)

  
	
   

  	
   

  	
   

  
	
  Number of Options:

  	
   

  	
  The number of “Option
  Securities” (as defined in the Underwriting Agreement (as defined below)) in
  denominations of USD 1,000 principal amount purchased by the
  Underwriters pursuant to the Underwriting Agreement on the “Option Closing
  Date” (as defined in the Underwriting Agreement) for such Option Securities
  (the “Option Closing Date”). For the
  avoidance of doubt, the Number of Options outstanding shall be reduced by
  each exercise of Options hereunder. In no event will the Number of Options be
  less than zero.

  
	
   

  	
   

  	
   

  
	
  Option Entitlement:

  	
   

  	
  As of any date, a number
  of Shares per Option equal to the Conversion Rate (as defined in the
  Supplemental Indenture, but without regard to any adjustments to the Conversion
  Rate pursuant to Section 9.03 or to Section 9.04(g) or
  (h) of the Supplemental Indenture), for each Convertible Note.

  
	
   

  	
   

  	
   

  
	
  Strike Price:

  	
   

  	
  As of any date, an amount
  in USD, rounded to the nearest cent (with 0.5 cents being rounded upwards),
  equal to USD 1,000 divided by
  the Option Entitlement.

  
	
   

  	
   

  	
   

  
	
  Applicable Percentage:

  	
   

  	
  50%

  
	
   

  	
   

  	
   

  
	
  Number of Shares:

  	
   

  	
  The product of the Number
  of Options and the Option Entitlement and the Applicable Percentage.

  
	
   

  	
   

  	
   

  
	
  Premium:

  	
   

  	
  USD 7,400,400

  
	
   

  	
   

  	
   

  
	
  Premium Payment Date:

  	
   

  	
  May 5, 2009

  



 


2

















 


	
  Exchange:

  	
   

  	
  The New York Stock
  Exchange

  
	
   

  	
   

  	
   

  
	
  Related Exchange(s):

  	
   

  	
  The principal
  exchange(s) for options contracts or futures contracts, if any, with
  respect to the Shares

  
	
   

  	
   

  	
   

  
	
  Exercise
  and Valuation:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exercise Date:

  	
   

  	
  Each Conversion Date.

  
	
   

  	
   

  	
   

  
	
  Conversion Date:

  	
   

  	
  Each “Conversion Date” (as
  defined in the Supplemental Indenture) for Convertible Notes.

  
	
   

  	
   

  	
   

  
	
  Relevant Convertible Notes:

  	
   

  	
  For any Conversion Date, a
  number of Convertible Notes equal to (i) the number of Convertible Notes
  in denominations of USD 1,000 principal amount submitted for conversion
  on such Conversion Date in accordance with the terms of the Indenture, minus (ii) the number of “Relevant Convertible Notes”
  (as defined in the Convertible Bond Hedge Transaction Confirmation dated
  April 29, 2009 between Bank and Counterparty (the “Initial
  Convertible Bond Hedge Confirmation”)) for such Conversion Date,
  if any; provided that if such number is less
  than zero, the number of Relevant Convertible Notes for such Conversion Date
  shall be zero.

  
	
   

  	
   

  	
   

  
	
  Required Exercise on Conversion Dates:

  	
   

  	
  On each Conversion Date
  for Convertible Notes, a number of Options (the “Exercisable
  Options”) equal to the number of Relevant Convertible Notes for
  such Conversion Date shall be automatically exercised, subject to Notice of
  Exercise and Notice of Settlement Method below.

  
	
   

  	
   

  	
   

  
	
  Exercise Period:

  	
   

  	
  The period from and
  excluding the Trade Date to and including the Expiration Date.

  
	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
  The earlier of
  (x) the last day on which any Convertible Notes remain outstanding and
  (y) the maturity date of the Convertible Notes (the “Convertible Maturity Date”).

  
	
   

  	
   

  	
   

  
	
  Scheduled Trading Day:

  	
   

  	
  As such term is defined in
  Section 1.02 of the Supplemental Indenture.

  
	
   

  	
   

  	
   

  
	
  Notice of Exercise:

  	
   

  	
  Notwithstanding anything
  to the contrary in the Equity Definitions, in order to exercise any Options,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)  if Physical
  Settlement applies, Counterparty must notify Bank in writing before
  5:00 p.m. (New York City time) on the second Scheduled Trading Day
  immediately following the Conversion Date for the Relevant Convertible Notes,
  which notice shall specify (i) the number of Exercisable Options and
  (ii) the Conversion Date; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)  if Low Cash
  Combination Settlement, High Cash Combination Settlement or Cash Settlement
  applies, Counterparty must notify Bank in writing before 5:00 p.m. (New
  York City time) on the Scheduled Trading Day immediately preceding the
  scheduled first day of the 

  



 


3

















 


	
   

  	
   

  	
  Settlement Period (as
  defined in the Supplemental Indenture) for the Relevant Convertible Notes,
  which notice shall specify (i) the number of Exercisable Options,
  (ii) the scheduled first day of the Settlement Period, and (iii) if
  Low Cash Combination Settlement or High Cash Combination Settlement applies,
  the fixed dollar amount per USD 1,000 of the principal amount of the Notes
  specified by Counterparty pursuant to Section 9.02(b)(3)(A) of the
  Supplemental Indenture (the “Specified Cash Amount”);

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  provided that with
  respect to Options relating to Relevant Convertible Notes with a Conversion
  Date on or following the fiftieth (50th) Scheduled Trading Day prior to the
  Convertible Maturity Date (the “Final Conversion Period”),
  such Notice of Exercise need only specify the number of Options being
  exercised and the Specified Cash Amount, if applicable.

  
	
   

  	
   

  	
   

  
	
  Settlement
  Terms:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Physical Settlement:

  	
   

  	
  Notwithstanding anything
  to the contrary in the Equity Definitions, means that Counterparty has
  elected to deliver only Shares to satisfy the Conversion Obligation (as
  defined in the Supplemental Indenture) in connection with the conversion of
  the Relevant Convertible Notes.

  
	
   

  	
   

  	
   

  
	
  Low Cash Combination Settlement:

  	
   

  	
  Means that (i) Counterparty
  has elected to deliver a combination of Shares and cash to satisfy the
  Conversion Obligation in connection with the conversion of the Relevant
  Convertible Notes and (ii) the Specified Cash Amount with respect to
  such conversion is equal to or less than USD 1,000.

  
	
   

  	
   

  	
   

  
	
  High Cash Combination Settlement:

  	
   

  	
  Means that
  (i) Counterparty has elected to deliver a combination of Shares and cash
  to satisfy the Conversion Obligation in connection with the conversion of the
  Relevant Convertible Notes and (ii) the Specified Cash Amount with
  respect to such conversion is greater than USD 1,000.

  
	
   

  	
   

  	
   

  
	
  Cash Settlement:

  	
   

  	
  Notwithstanding anything
  to the contrary in the Equity Definitions, means that Counterparty has
  elected to deliver only cash to satisfy the Conversion Obligation in
  connection with the conversion of the Relevant Convertible Notes.

  
	
   

  	
   

  	
   

  
	
  Notice of Settlement Method:

  	
   

  	
  Counterparty initially
  elects Low Cash Combination Settlement to settle its Conversion Obligation
  (as defined in the Supplemental Indenture). If Counterparty chooses to elect
  a different method of settlement, Counterparty must notify Bank of the newly
  chosen settlement method no later than the earlier of (i) 5:00 p.m.
  (New York City time) on the second Scheduled Trading Day immediately following
  the Conversion Date for the Relevant Convertible Notes to which the newly
  chosen settlement method is going to apply and (ii) 5:00 p.m. (New
  York City time) on the Scheduled Trading Day immediately preceding the Final
  Conversion Period; provided that
  it shall be a condition to Counterparty’s election of any such newly chosen
  settlement method that at the time of such election each

  



 


4

















 


	
   

  	
   

  	
  of Counterparty and its
  affiliates is not, and Counterparty hereby represents and covenants that at
  such time neither of them will be, in possession of any material non-public
  information with respect to Counterparty or the Shares.

  
	
   

  	
   

  	
   

  
	
  Settlement Date:

  	
   

  	
  Subject to the delivery of
  a Notice of Exercise and, to the extent applicable, a Notice of Settlement
  Method, to Bank, the date Shares and/or cash are required to be delivered
  with respect to the Relevant Convertible Notes under the terms of the
  Indenture.

  
	
   

  	
   

  	
   

  
	
  Delivery Obligation:

  	
   

  	
  In lieu of the obligations
  set forth in Sections 5.1 and 6.1 of the Equity Definitions, and subject to
  Notice of Exercise and Notice of Settlement Method above, in respect of an
  Exercise Date, Bank will deliver to Counterparty, on the related Settlement
  Date,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)  if Physical
  Settlement or Low Cash Combination Settlement applies, a number of Shares
  equal to the product of the Applicable Percentage and the aggregate number of
  Shares (and cash in lieu of fractional Shares, if any, resulting from
  rounding of such aggregate number of Shares based on the VWAP (as defined in
  the Supplemental Indenture) on the Conversion Date) that Counterparty would
  have been obligated to deliver to the holder(s) of the Relevant
  Convertible Notes had Counterparty elected to deliver a combination of Shares
  and cash to satisfy the Conversion Obligation pursuant to
  Section 9.02(b) of the Supplemental Indenture and with a Specified
  Cash Amount of USD 1,000, as determined by the Calculation Agent; provided that, in the case of Physical Settlement, the
  number of Shares delivered by Bank to Counterparty on the related Settlement
  Date shall not be greater than the product of (i) the Applicable
  Percentage and (ii) the excess of (x) the aggregate number of
  Shares that Counterparty is obligated to deliver to the holder(s) of the
  Relevant Convertible Notes pursuant to Section 9.02(b)(1) of the
  Supplemental Indenture over (y) the number of Shares equal to
  (a) the aggregate principal amount of the Relevant Convertible Notes divided by (b) the Last Reported Sale Price (as
  defined in the Supplemental Indenture) on the final Settlement Period Trading
  Day (as defined in the Supplemental Indenture) of the applicable Settlement
  Period as if Counterparty elected Low Cash Combination Settlement;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)  if High Cash
  Combination Settlement applies, (i) a number of Shares equal to the
  product of the Applicable Percentage and the aggregate number of Shares that
  Counterparty is obligated to deliver to the holder(s) of the Relevant
  Convertible Notes pursuant to Section 9.02(b)(3) of the Supplemental
  Indenture and (ii) an amount of cash equal to the product of the
  Applicable Percentage and the excess, if any, of (A) the amount of cash
  (including cash in lieu of fractional Shares, if any, resulting from rounding
  of such aggregate number of Shares based on the VWAP (as defined in the
  Supplemental Indenture and subject to the third immediately 

  



 


5

















 


	
   

  	
   

  	
  following paragraph) on
  the last day of the relevant Settlement Period) that Counterparty is
  obligated to deliver to the holder(s) of the Relevant Convertible Notes
  pursuant to Section 9.02(b)(3) of the Supplemental Indenture over
  (B) the principal amount of the Relevant Convertible Notes being
  converted on such Conversion Date; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)  if Cash Settlement
  Applies, an amount equal to the product of the Applicable Percentage and the
  excess, if any, of (i) the cash that Counterparty is obligated to
  deliver to the holder(s) of the Relevant Convertible Notes pursuant to
  Section 9.02(b)(2) of the Supplemental Indenture over (ii) the
  principal amount of the Relevant Convertible Notes being converted on such
  Conversion Date (in each case, such Shares and/or cash collectively, the “Convertible Obligation”);

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  provided that, in all
  cases, the Delivery Obligation shall be determined excluding any Shares or
  cash (including cash in lieu of fractional Shares) that Counterparty is
  obligated to deliver to holder(s) of the Relevant Convertible Notes as a
  direct or indirect result of any adjustments to the Conversion Rate pursuant
  to Section 9.03 or Section 9.04(g) or (h) of the
  Supplemental Indenture and any interest payment that Counterparty is
  obligated to deliver to holder(s) of the Relevant Convertible Notes. For
  the avoidance of doubt, in connection with each Exercise Date, if the Daily
  Conversion Value (as defined in the Supplemental Indenture) for each of the
  Settlement Period Trading Days (as defined in the Supplemental Indenture)
  occurring in the relevant Settlement Period that would be applicable if cash settlement
  applied, is less than or equal to 1/45th of USD 1,000, Bank will have no
  delivery obligation hereunder in respect of such Exercise Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Counterparty agrees that
  if, with respect to any Settlement Period Trading Day during any relevant Settlement
  Period, the per share volume-weighted average price as displayed under the
  heading “Bloomberg VWAP” on Bloomberg page TXT.N <equity> AQR is
  unavailable, Counterparty and the nationally recognized independent
  investment banking firm retained by Counterparty pursuant to the definition
  of VWAP in the Indenture shall consult with the Calculation Agent to
  determine the VWAP on such Settlement Period Trading Day.

  
	
   

  	
   

  	
   

  
	
  Notice of Delivery Obligation:

  	
   

  	
  As applicable and no later
  than the later of (a) the relevant Exercise Date and (b) the
  Exchange Business Day immediately following the last day of the Settlement
  Period, Counterparty shall give Bank notice of the final number of Shares
  and/or the amount of cash comprising the relevant Convertible Obligation; provided that, with respect to any Exercise Date occurring
  during the Final Conversion Period, Counterparty may provide Bank with a
  single notice of the aggregate number of Shares and/or the amount of cash
  comprising the Convertible Obligations for all such Exercise Dates (it being
  understood, for the avoidance of doubt, that the requirement of Counterparty
  to deliver such notice shall not limit 

  



 


6

















 


	
   

  	
   

  	
  Counterparty’s obligations
  with respect to Notice of Exercise, as set forth above, in any way).

  
	
   

  	
   

  	
   

  
	
  Settlement Currency:

  	
   

  	
  USD

  
	
   

  	
   

  	
   

  
	
  Other Applicable Provisions:

  	
   

  	
  The provisions of Sections
  6.6, 6.7, 6.8, 6.9 and 6.10 of the Equity Definitions will be applicable,
  except that all references in such provisions to “Physically-Settled” shall
  be read as references to “Low Cash Combination Settled” or “High Cash
  Combination Settled” to the extent Low Cash Combination Settlement or High
  Cash Combination Settlement is applicable. “Low Cash Combination Settled” or
  “High Cash Combination Settled” in relation to any Option means that Low Cash
  Combination Settlement or High Cash Combination Settlement is applicable to
  that Option.

  
	
   

  	
   

  	
   

  
	
  Failure to Deliver:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  3.   Additional Terms applicable to the Transaction:

  
	
   

  	
   

  	
   

  
	
  Adjustments applicable to the Transaction:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Potential Adjustment Events:

  	
   

  	
  Notwithstanding
  Section 9.1(e) of the Equity Definitions, a “Potential
  Adjustment Event” means any occurrence of any event or condition,
  as set forth in Section 9.04 of the Supplemental Indenture that would
  result in an adjustment to the Conversion Rate of the Convertible Notes; provided that in no event shall there be any adjustment
  hereunder as a result of an adjustment to the Conversion Rate pursuant to
  Section 9.03 or Section 9.04(g) or (h) of the
  Supplemental Indenture.

  
	
   

  	
   

  	
   

  
	
  Method of Adjustment:

  	
   

  	
  Calculation Agent
  Adjustment, and means that, notwithstanding Section 9.1(c) of the
  Equity Definitions, upon any adjustment to the Conversion Rate of the
  Convertible Notes pursuant to the Indenture (other than Section 9.03 and
  Sections 9.04(g) and (h) of the Supplemental Indenture), the
  Calculation Agent will make a corresponding adjustment to any one or more of
  the Strike Price, Number of Options, the Option Entitlement and any other
  variable relevant to the exercise, settlement or payment for the Transaction.

  
	
   

  	
   

  	
   

  
	
  Extraordinary
  Events applicable to the Transaction:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Merger Events:

  	
   

  	
  Notwithstanding
  Section 9.2(a) of the Equity Definitions, a “Merger
  Event” means the occurrence of any event or condition set forth in
  Section 9.05 of the Supplemental Indenture.

  
	
   

  	
   

  	
   

  
	
  Consequence of Merger Events:

  	
   

  	
  Notwithstanding
  Section 9.3 of the Equity Definitions, upon the occurrence of a Merger
  Event, the Calculation Agent shall make a corresponding adjustment in respect
  of any adjustment under the Indenture to any one or more of the nature of the
  Shares, Strike Price, Number of Options, the Option

  



 


7

















 


	
   

  	
   

  	
  Entitlement and any other
  variable relevant to the exercise, settlement or payment for the Transaction;
  provided however that such adjustment
  shall be made without regard to any adjustment to the Conversion Rate for the
  issuance of additional shares as set forth in Section 9.03 of the
  Supplemental Indenture.

  
	
   

  	
   

  	
   

  
	
  Nationalization and Insolvency:

  	
   

  	
  Cancellation and Payment

  
	
   

  	
   

  	
   

  
	
  4.   Calculation
  Agent:

  	
   

  	
  Bank; provided
  that all determinations made by the Calculation Agent shall be made in good
  faith and in a commercially reasonable manner. Following any calculation by
  the Calculation Agent hereunder and a prior written request by Counterparty,
  the Calculation Agent will provide to Counterparty by e-mail to the e-mail
  address provided by Counterparty in such prior written request a report (in a
  commonly used file format for the storage and manipulation of financial data)
  displaying in reasonable detail the basis for such calculation. For the
  avoidance of doubt, nothing in this provision will require Bank to provide
  its proprietary models to Counterparty.

  



 


5.               Account Details


 


(a)                                  Account for
payments to Counterparty:


 


JPMorgan
Chase


New
York, NY


Fed
Wire:  021000021


Swift
/ BIC:  CHASUS33


CHIP
No:  0002


CHIP
UID:  280099


Account
name:  Textron Inc.


Account
No:  9101013655


 


Account for delivery of
Shares to Counterparty:


 


To be provided by
Counterparty


 


(b)                                 Account for
payments to Bank:


 


Chase Manhattan Bank New York


For A/C Goldman, Sachs & Co.


A/C #930-1-011483


ABA:  021-000021


 


Account for delivery of
Shares from Bank:


 


To be provided by Bank


 


6.               Offices:


 


The Office of Counterparty for the
Transaction is:  Inapplicable,
Counterparty is not a Multibranch Party.


 


8
















 


The Office of Bank for the
Transaction is:  New York


 


Goldman, Sachs & Co.


One
New York Plaza


New
York, New York 10004


 


7.     Notices:  For purposes of this Confirmation:


 


(a)           Address for notices or
communications to Counterparty:


 


Textron Inc.


40
Westminster Street


Providence,
RI 02903


Attention:
Chief Financial Officer


	
  Telephone
  No.:

  	
  (401)
  421-2800

  
	
  Facsimile No.:

  	
  (401) 457-3533

  



 


(b)           Address for notices or
communications to Bank:


 


	
  To:

  	
  Goldman,
  Sachs & Co.

  
	
   

  	
  One New York
  Plaza

  
	
   

  	
  New York, NY
  10004

  
	
  Attn:

  	
  Serge Marquié,

  
	
   

  	
  Equity Capital
  Markets

  
	
  Telephone:

  	
  (212) 902-9779

  
	
  Facsimile:

  	
  (917) 977-4253

  
	
  Email:

  	
  marqse@am.ibd.gs.com

  



 


With a copy to:


 


	
  Attn:

  	
  Vijay Culas

  
	
   

  	
  Equity Capital
  Markets

  
	
  Telephone:

  	
  (212) 902-6247

  
	
  Facsimile:

  	
  (212) 428-1898

  
	
  Email:

  	
  vijay.culas@gs.com

  



 


And email notification to the following address:


Eq-derivs-notifications@am.ibd.gs.com


 


8.     Representations and
Warranties of Counterparty


 


The representations and
warranties made by Counterparty pursuant to the Underwriting Agreement (the “Underwriting Agreement”), dated as of April 29, 2009,
between Counterparty and J.P. Morgan Securities Inc. and Goldman, Sachs &
Co., as representatives of the underwriters party thereto (the “Underwriters”) on the “Option Closing Date” (as defined in
the Underwriting Agreement), are true and correct and are hereby deemed to be
repeated to Bank as if set forth herein. Counterparty hereby further represents
and warrants to Bank that:


 


(a)           Counterparty
has all necessary corporate power and authority to execute, deliver and perform
its obligations in respect of the Transaction; such execution, delivery and
performance have been duly authorized by all necessary corporate action on
Counterparty’s part; and this Confirmation has been duly and validly executed
and delivered by Counterparty and constitutes its valid and binding obligation,
enforceable against Counterparty in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally
and to general principles of equity, 


 


9

















 


including principles of
commercial reasonableness, good faith and fair dealing (whether considered in a
proceeding at law or in equity) and except that rights to indemnification and
contribution hereunder may be limited by federal or state securities laws or
public policy relating thereto.


 


(b)           Neither the execution and delivery of this
Confirmation nor the incurrence or performance of obligations of Counterparty
hereunder will conflict with or result in a breach of the certificate of
incorporation or by-laws (or any equivalent documents) of Counterparty, or any
applicable law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or any agreement or instrument to
which Counterparty or (to the extent such agreement is material to Counterparty
and its subsidiaries taken as a whole) any of its subsidiaries is a party or by
which Counterparty or (to such extent) any of its subsidiaries is bound or to
which Counterparty or (to such extent) any of its subsidiaries is subject, or
constitute a default under, or result in the creation of any lien under, any
such agreement or instrument.


 


(c)           No consent,
approval, authorization, or order of, or filing with, any governmental agency
or body or any court is required in connection with the execution, delivery or
performance by Counterparty of this Confirmation, except such as have been
obtained or made and such as may be required under the Securities Act of 1933,
as amended (the “Securities Act”)
or state securities laws.


 


(d)           It is an “eligible contract participant” (as such term
is defined in Section 1(a)(12) of the Commodity Exchange Act, as amended.


 


(e)           It is a “qualified institutional buyer” as defined in Rule 144A
under the Securities Act, or an “accredited investor” as defined under the
Securities Act.


 


(f)            Each of it and its affiliates is not, on the date
hereof, in possession of any material non-public information with respect to
Counterparty.


 


(g)           Counterparty represents that it is not subject to the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the assets used in the
Transaction (1) are not assets of any “plan” (as such term is defined in Section 4975
of the Internal Revenue Code (the “Code”))
subject to Section 4975 of the Code or any “employee benefit plan” (as
such term is defined in Section 3(3) of ERISA) subject to Title I of
ERISA, and (2) do not constitute “plan assets” within the meaning of
Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.


 


(h)           There is no law, rule, regulation or regulatory order
(collectively, “Adverse Laws”)
that, as a result of the ownership or control (whether direct, beneficial,
constructive or otherwise) of Shares by 
The Goldman Sachs Group, Inc. (“Bank
Parent”) or any person controlled directly or indirectly by Bank
Parent, would give rise to reporting or registration obligations or a
requirement to obtain prior approval from any person or entity on  Bank Parent or any such controlled person or
would result in a not insignificant adverse effect on Bank Parent or any such
controlled person, other than any Adverse Law that applies to the ownership of
equity positions generally without regard to the nature of the issuer’s
business (such as Sections 13 and 16 of the Exchange Act) or any Adverse Law
that applies solely as a result of the business, identity, place of business or
jurisdiction of organization of the holder of the common stock (such as the
Bank Holding Company Act of 1956, as amended).


 


(i)            Other than Textron Business Credit, Inc., which
is a “Rhode Island financial institution,” and Textron Financial Corporation,
which is a “Rhode Island bank holding company” but is not a bank holding
company under the Bank Holding Company Act of 1956, as amended, Counterparty is
not and does not control, directly or indirectly, a bank or bank holding
company or other financial institution regulated under federal or state banking
law.


 


10

















 


(j)            It has received, read and understands the OTC Options
Risk Disclosure Statement and a copy of the most recent disclosure pamphlet
prepared by The Options Clearing Corporation entitled “Characteristics and
Risks of Standardized Options”.  Each
party acknowledges and agrees to be bound by the Conduct Rules of the
Financial Industry Regulatory Authority, Inc. applicable to transactions
in options, and further agrees not to violate the position and exercise limits
set forth therein.


 


9.     Other Provisions:


 


(a)           Opinions. Counterparty shall deliver to Bank an
opinion of counsel (including an in-house lawyer of Counterparty), dated as of
the Trade Date, with respect to the matters set forth in Sections 8(a) through
(c) of this Confirmation.


 


(b)           No Reliance, etc. Each party represents that (i) it
is entering into the Transaction evidenced hereby as principal (and not as
agent or in any other capacity); (ii) neither the other party nor any of its
agents are acting as a fiduciary for it; (iii) it is not relying upon any
representations except those expressly set forth in the Agreement or this
Confirmation; (iv) it has not relied on the other party for any legal,
regulatory, tax, business, investment, financial, and accounting advice, and it
has made its own investment, hedging, and trading decisions based upon its own
judgment and upon any view expressed by the other party or any of its agents;
and (v) it is entering into the Transaction with a full understanding of
the terms, conditions and risks thereof and it is capable of and willing to
assume those risks.


 


(c)           Repurchase Notices. Counterparty shall, on any day on which
Counterparty effects any repurchase of Shares, promptly give Bank a written
notice of such repurchase (a “Repurchase
Notice”) on such day if following such repurchase, the quotient of (i) the
sum of (A) the Number of Shares for the Transaction and (B) the
aggregate number of Shares underlying any other convertible bond hedge transactions
between Bank and Counterparty, if any, divided
by (ii) the number of Counterparty’s outstanding Shares (such
quotient expressed as a percentage, the “Option
Equity Percentage”) would be (x) greater than 9.0% or (y) 0.5%
greater than the Option Equity Percentage included in the immediately preceding
Repurchase Notice. Counterparty agrees to indemnify and hold harmless Bank and
its affiliates and their respective officers, directors, employees, affiliates,
advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses
(including losses relating to Bank’s hedging activities as a consequence of
becoming, or of the risk of becoming, a Section 16 “insider”, including
without limitation, any forbearance from hedging activities or cessation of
hedging activities and any losses in connection therewith with respect to the
Transaction), claims, damages, judgments, liabilities and expenses (including
reasonable attorney’s fees), joint or several, which an Indemnified Person may
become subject to, as a result of Counterparty’s failure to provide Bank with a
Repurchase Notice on the day and in the manner specified in this paragraph, and
to reimburse, within 30 days, upon written request, each of such Indemnified
Persons for any reasonable legal or other expenses incurred in connection with
investigating, preparing for, providing testimony or other evidence in
connection with or defending any of the foregoing. If any suit, action,
proceeding (including any governmental or regulatory investigation), claim or
demand shall be brought or asserted against the Indemnified Person as a result
of Counterparty’s failure to provide Bank with a Repurchase Notice in
accordance with this paragraph, such Indemnified Person shall promptly notify
Counterparty in writing, and Counterparty, upon request of the Indemnified
Person, shall retain counsel reasonably satisfactory to the Indemnified Person
to represent the Indemnified Person and any others Counterparty may designate
in such proceeding and shall pay the fees and expenses of such counsel related
to such proceeding. Counterparty shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, Counterparty agrees
to indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Counterparty shall not, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of 


 


11

















 


which any Indemnified
Person is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding on terms reasonably satisfactory
to such Indemnified Person. If the indemnification provided for in this
paragraph is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then
Counterparty under such paragraph, in lieu of indemnifying such Indemnified
Person thereunder, shall contribute to the amount paid or payable by such
Indemnified Person as a result of such losses, claims, damages or liabilities.
The remedies provided for in this paragraph are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any
Indemnified Party at law or in equity. The indemnity and contribution
agreements contained in this paragraph shall remain operative and in full force
and effect regardless of the termination of the Transaction.


 


(d)           Regulation M. Counterparty is not on the Trade Date
engaged in a distribution, as such term is used in Regulation M under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any securities of Counterparty.  Counterparty shall not, until the second
Exchange Business Day immediately following the Trade Date, engage in any such
distribution.


 


(e)           No Manipulation. Counterparty is not entering into the
Transaction to create actual or apparent trading activity in the Shares (or any
security convertible into or exchangeable for the Shares) or to raise or
depress or otherwise manipulate the price of the Shares (or any security
convertible into or exchangeable for the Shares).


 


(f)            Number of Repurchased Shares. Counterparty represents that it could
have purchased Shares, in an amount equal to the product of the Number of
Options and the Option Entitlement, on the Exchange or otherwise, in compliance
with applicable law, its organizational documents and any orders, decrees and
contractual agreements binding upon Counterparty, on the Trade Date and the
Premium Payment Date.


 


(g)           Board Authorization. Each of the Transaction and the
issuance of the Convertible Notes was approved by its board of directors and
publicly announced, solely for the purposes stated in such board resolution and
public disclosure and, prior to any exercise of Options hereunder, Counterparty’s
board of directors will have duly authorized any repurchase of Shares pursuant
to the Transaction. Counterparty further represents that there is no internal
policy, whether written or oral, of Counterparty that would prohibit
Counterparty from entering into any aspect of the Transaction, including, but
not limited to, the purchases of Shares to be made pursuant hereto.


 


(h)           Transfer or Assignment. (i) Counterparty shall have the
right to transfer or assign its rights and obligations hereunder with respect
to all, but not less than all, of the Options hereunder (such Options, the “Transfer Options”); provided that such transfer or assignment
shall be subject to reasonable conditions that Bank may impose, including but
not limited, to the following conditions:


 


(A)          With respect to any Transfer Options, Counterparty
shall not be released from its notice and indemnification obligations pursuant
to Section 9(c) or any obligations under Section 9(r) or 9(v) of
this Confirmation;


 


(B)           Any Transfer Options shall only be transferred or
assigned to a third party that is a U.S. person (as defined in the Internal
Revenue Code of 1986, as amended);


 


(C)           Such transfer or assignment shall be effected on
terms, including any reasonable undertakings by such third party (including,
but not limited to, an undertaking with respect to compliance with applicable
securities laws in a manner that, in the reasonable judgment of Bank, will not
expose Bank to material risks under applicable securities laws) and execution
of any documentation and delivery of 


 


12

















 


legal opinions with
respect to securities laws and other matters by such third party and Counterparty,
as are requested and reasonably satisfactory to Bank;


 


(D)          Bank will not, as a result of such transfer and
assignment, be required to pay the transferee on any payment date an amount
under Section 2(d)(i)(4) of the Agreement greater than an amount that
Bank would have been required to pay to Counterparty in the absence of such
transfer and assignment;


 


(E)           An Event of Default, Potential Event of Default or
Termination Event will not occur as a result of such transfer and assignment;


 


(F)           Without limiting the generality of clause (B),
Counterparty shall cause the transferee to make such Payee Tax Representations
and to provide such tax documentation as may be reasonably requested by Bank to
permit Bank to determine that results described in clauses (D) and (E) will
not occur upon or after such transfer and assignment; and


 


(G)           Counterparty shall be responsible for all reasonable
costs and expenses, including reasonable counsel fees, incurred by Bank in
connection with such transfer or assignment.


 


(ii)           Bank may transfer or assign without any consent of
Counterparty its rights and obligations hereunder, in whole or in part, to any
of its affiliates whose obligations hereunder would be guaranteed by The
Goldman Sachs Group, Inc.; provided further
that Bank may transfer or assign all or any portion of its rights or
obligations under the Transaction without consent of Counterparty to any third
party with a rating for its long term, unsecured and unsubordinated
indebtedness equal to or better than the lesser of (1) the credit rating
of Bank at the time of the transfer and (2) A- by Standard and Poor’s
Rating Group, Inc. or its successor (“S&P”),
or A3 by Moody’s Investor Service, Inc. (“Moody’s”) or, if either S&P or Moody’s ceases to rate such
debt, at least an equivalent rating or better by a substitute agency rating
mutually agreed by Counterparty and Bank. If after Bank’s commercially
reasonable efforts, Bank is unable to effect a transfer or assignment on
pricing terms reasonably acceptable to Bank and within a time period reasonably
acceptable to Bank of a sufficient number of Options to reduce (1) Bank
Group’s “beneficial ownership” (within the meaning of Section 13 or Section 16
of the Exchange Act and rules promulgated thereunder) to 7.5% of Counterparty’s
outstanding Shares or less, (2) the Option Equity Percentage to 14.5% or
less, and (3) the Share Amount to the Post-Effective Limit (if any
applies) or less, Bank may designate any Exchange Business Day as an Early
Termination Date with respect to a portion (the “Terminated Portion”) of the Transaction, such that (1) Bank
Group’s “beneficial ownership” following such partial termination will be equal
to or less than 7.5%, (2) the Option Equity Percentage following such
partial termination will be equal to or less than 14.5%, and (3) the Share
Amount following such partial termination will be equal to or less than such
Post-Effective Limit. In the event that Bank so designates an Early Termination
Date with respect to a portion of the Transaction, a payment shall be made
pursuant to Section 6 of the Agreement as if (1) an Early Termination
Date had been designated in respect of a Transaction having terms identical to
the Transaction and a Number of Options equal to the Terminated Portion, (2) Counterparty
shall be the sole Affected Party with respect to such partial termination and (3) such
Transaction shall be the only Terminated Transaction (and, for the avoidance of
doubt, the provisions of paragraph 9(o) shall apply to any amount that is
payable by Bank to Counterparty pursuant to this sentence).  “Bank Group”
means Bank and each business unit of its affiliates subject to aggregation with
Bank under Section 13 or Section 16 of the Exchange Act and rules promulgated
thereunder.  The “Share Amount” as of any day is the number
of Shares that Bank and any person whose ownership position would be 


 


13

















 


aggregated
with that of Bank (Bank or any such person, a “Bank
Person”) under any law, rule, regulation or regulatory order that for any
reason becomes applicable to ownership of Shares after the Trade Date (“Applicable
Laws”), owns, beneficially owns, constructively owns, controls, holds the
power to vote or otherwise meets a relevant definition of ownership of under
the Applicable Laws, as determined by Bank in its reasonable discretion. The “Post-Effective Limit” means (x) the
minimum number of Shares that would give rise to reporting or registration
obligations or other requirements (including obtaining prior approval from any
person or entity) of a Bank Person, or would result in an adverse effect on a
Bank Person, under the Applicable Laws, as determined by Bank in its reasonable
discretion, minus (y) 1% of
the number of Shares outstanding.  If at
any time Bank determines, in its reasonable opinion based upon advice of
counsel, that as a result of Counterparty’s direct or indirect interest in, or
direct or indirect control of, either Textron Business Credit, Inc. or
Textron Financial Corporation, any state or federal laws are or have become
applicable to Bank’s ownership of Shares, then the Post-Effective Limit and the
Share Amount shall be determined as set forth above in the definitions of those
terms, irrespective of whether or not such laws have been applicable to
ownership of Shares on or prior to the Trade Date.


 


(i)            Staggered
Settlement. If upon advice of counsel with respect to
applicable legal and regulatory requirements, including any requirements
relating to Bank’s hedging activities hereunder, or due to inability to borrow
Shares to deliver to Counterparty at a rate of borrowing less than 35 basis
points, Bank reasonably determines that it would not be practicable or
advisable to deliver, or to acquire Shares to deliver, any or all of the Shares
to be delivered by Bank on the Settlement Date for the Transaction, Bank may,
by notice to Counterparty on or prior to any Settlement Date (a “Nominal Settlement Date”), elect to deliver
the Shares on two or more dates (each, a “Staggered
Settlement Date”) as follows:


 


(a)           in such notice,
Bank will specify to Counterparty the related Staggered Settlement Dates, which
Bank shall choose in a commercially reasonable manner, (the first of which will
be such Nominal Settlement Date and the last of which will be no later than the
twentieth (20th) Exchange Business Day following such Nominal Settlement Date)
and the number of Shares that it will deliver on each Staggered Settlement Date
on a payment versus delivery basis;


 


(b)           the aggregate
number of Shares that Bank will deliver to Counterparty hereunder on all such
Staggered Settlement Dates will equal the number of Shares that Bank would
otherwise be required to deliver on such Nominal Settlement Date; and


 


(c)           if the Physical
Settlement terms, the Low Cash Combination Settlement terms or the High Cash
Combination Settlement terms set forth above were to apply on the Nominal
Settlement Date, then the Physical Settlement terms, the Low Cash Combination
Settlement terms or the High Cash Combination Settlement terms, as the case may
be, will apply on each Staggered Settlement Date, except that the Shares will
be allocated among such Staggered Settlement Dates as specified by Bank in the
notice referred to in clause (a) above.


 


(j)            Damages. Neither party
shall be liable under Section 6.10 of the Equity Definitions for special,
indirect or consequential damages, even if informed of the possibility thereof,
except as specifically set forth otherwise herein.


 


(k)           Early
Unwind. In the event the sale of “Option Securities” (as defined
in the Underwriting Agreement) is not consummated with the Underwriters for any
reason or Counterparty fails to deliver to Bank opinions of counsel to
Counterparty as required pursuant to Section 9(a) by the close of
business in New York on May 5, 2009 or such later date as agreed upon by
the parties (May 5, 2009 or such later date the “Early Unwind Date”), the Transaction shall
automatically 


 


14

















 


terminate
(the “Early Unwind”), on the Early
Unwind Date and (i) the Transaction and all of the respective rights and
obligations of Bank and Counterparty under the Transaction shall be cancelled
and terminated and (ii) each party shall be released and discharged by the
other party from and agrees not to make any claim against the other party with
respect to any obligations or liabilities of the other party arising out of and
to be performed in connection with the Transaction either prior to or after the
Early Unwind Date; provided that,
other than to the extent the Early Unwind Date occurred as a result of the
breach of the Underwriting Agreement by the Underwriters, Counterparty shall
reimburse Bank, in cash or Shares, for any costs or expenses (including market
losses) relating to the unwinding of its or its affiliate’s hedging activities
in connection with the Transaction (including any loss or cost incurred as a
result of its terminating, liquidating, obtaining or reestablishing any hedge
or related trading position). Bank shall notify Counterparty of such amount and
Counterparty shall pay such amount in immediately available funds or deliver
Shares on the Early Unwind Date. Bank and Counterparty represent and
acknowledge to the other that, subject to the proviso included in this
paragraph, upon an Early Unwind, all obligations with respect to the
Transaction shall be deemed fully and finally discharged.


 


(l)            Reserved.


 


(m)          Additional
Provisions.


 


(i)            Section 9.6(a)(ii) of
the Equity Definitions is hereby amended by (1) deleting from the third
line thereof the word “or” after the word “official” and inserting a comma
therefor, and (2) deleting the period at the end of subsection (ii) thereof
and inserting the following words therefor “ or (C) at Bank’s option, the
occurrence of any of the events specified in Section 5(a)(vii) (1) through
(9) of the Agreement with respect to that Issuer.”


 


(ii)           Notwithstanding
Section 9.7 of the Equity Definitions, everything in the first paragraph
of Section 9.7(b) of the Equity Definitions after the words “Calculation
Agent” in the third line through the remainder of such Section 9.7 shall
be deleted and replaced with the following:


 


“based
on an amount representing the Calculation Agent’s determination of the fair
value to Counterparty of an option with terms that would preserve for
Counterparty the economic equivalent of any payment or delivery (assuming
satisfaction of each applicable condition precedent) by the parties in respect
of the relevant Transaction that would have been required after that date but
for the occurrence of the Option Value Event.”


 


(iii)          Notwithstanding
anything to the contrary in this Confirmation, if any of the following events
occurs, (1) Bank shall have the right to designate such an event an
Additional Termination Event and designate an Early Termination Date pursuant
to Section 6(b) of the Agreement, and (2) Counterparty shall be
deemed the sole Affected Party and the Transaction shall be deemed the sole
Affected Transaction:


 


(a)           At any time
during the period from and including the Trade Date, to and including the
Expiration Date, the Shares cease to be listed or quoted on the Exchange for
any reason (other than a Merger Event as a result of which the shares of common
stock underlying the Options are listed or quoted on the New York Stock
Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or their
respective successors) (each, a “Successor
Exchange”)) and are not immediately re-listed or quoted as of the
date of such de-listing on a Successor Exchange.


 


15
















 


(b)           Counterparty
amends, modifies, supplements or waives any term of the Indenture or the
Convertible Notes governing the principal amount, coupon, maturity, repurchase
obligation of Counterparty, redemption right of Counterparty, any term relating
to conversion of the Convertible Notes (including changes to the conversion
price, conversion settlement dates or conversion conditions), or any term that
would require consent of the holders of not less than 100% of the principal
amount of the Convertible Notes to amend, in each case without the prior
consent of Bank.


 


(c)           On or after the
Trade Date, a Change in Law (as defined in the 2002 Equity Derivatives
Definitions as published by ISDA (the “2002
Definitions”), with any reference in such definition to “Shares”
being replaced with references to “Hedge Position(s)” and without regard to
clause (Y) of such definition) shall have occurred.


 


(iv)          Notwithstanding
anything to the contrary in this Confirmation, the giving of any Notice of
Exercise shall constitute an Additional Termination Event hereunder with
respect to the number, if any, of Exercisable Options specified in such Notice
of Exercise as corresponding to a conversion of Relevant Convertible Notes in
compliance with Section 9.03 of the Supplemental Indenture. Upon receipt
of any such notice, Bank shall designate an Exchange Business Day as an Early
Termination Date (such day to occur as close as practicable, in Bank’s
commercially reasonable judgment, to the settlement date of the Relevant
Convertible Notes), with respect to the portion of the Transaction
corresponding to number of such Exercisable Options so specified. In lieu of
the provisions of “Delivery Obligation”, any payment and/or delivery hereunder
with respect to such conversion shall be calculated pursuant to Section 6
of the Agreement; where, for the purposes of such calculation, (A) Counterparty
shall be the sole Affected Party with respect to such Additional Termination
Event, (B) Bank shall be the party entitled to designate an Early Termination
Date pursuant to Section 6(b) of the Agreement; and (C) for the
avoidance of doubt, in determining the amount payable pursuant to Section 6
of the Agreement, the Calculation Agent (i) shall take into account the
time value of the Transaction with respect to the Expiration Date and (ii) shall
not take into account any adjustments to the Option Entitlement that result
from corresponding adjustments to the Conversion Rate pursuant to Section 9.03
of the Supplemental Indenture; provided
further that (A) in case of a partial termination, an Early Termination
Date shall be designated in respect of a Transaction having terms identical to
the Transaction and a Number of Options equal to the terminated portion and
such Transaction shall be the only Terminated Transaction; (B) any amount
payable by Bank to Counterparty shall be satisfied solely by delivery by Bank
to Counterparty of a number of Shares and cash in lieu of a fractional share
equal to such amount calculated pursuant to Section 6 divided by
a price per Share determined by the Calculation Agent; and (C) the number
of Shares deliverable in respect of such early termination by Bank to
Counterparty shall not be greater than the product of (x) the Applicable
Percentage and (y) the excess of (a) the total number of Shares
underlying the corresponding Relevant Convertible Notes (including the number
of Additional Shares (as defined in the Supplemental Indenture) resulting from
any adjustment set forth in Section 9.03 of the Supplemental Indenture)
over (b) the number of Shares equal in value to the aggregate principal
amount of the corresponding Relevant Convertible Notes, as determined by the
Calculation Agent in its sole reasonable discretion.


 


(vi)          For the avoidance of doubt, in determining the
Close-out Amount pursuant to Section 6(e) of the Agreement, the
Determining Party shall act in good faith and a commercially reasonable manner,
and, upon request, the Determining Party shall provide to the other party a
statement showing in reasonable detail, such calculations (including any
quotations, market data or information from internal sources used in making
such 


 


16

















 


calculation);
provided that the Determining Party
shall not be obligated to disclose any proprietary model used for such
calculation.


 


(n)           No
Collateral or Setoff. 
Notwithstanding any provision of the Agreement or any other agreement
between the parties to the contrary, the obligations of the Counterparty
hereunder are not secured by any collateral. Each party waives any and all
rights it may have to set-off delivery or payment obligations it owes to the
other party under the Transaction against any delivery or payment obligations
owed to it by the other party, whether arising under the Agreement, under any
other agreement between parties hereto, by operation of law or otherwise.
Notwithstanding anything to the contrary in the Equity Definitions,
Counterparty shall have no obligation to make any delivery or payment to Bank (i) pursuant
to Section 9.7 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of
the Agreement.


 


(o)           Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary
Events. If in respect of the Transaction, an amount is
payable by Bank to Counterparty (i) pursuant to Section 9.7 of the
Equity Definitions or (ii) pursuant to Sections 6(d) and 6(e) of
the Agreement (a “Payment Obligation”),
Counterparty may request Bank to satisfy any such Payment Obligation by the
Share Termination Alternative (as defined below) (except that Counterparty
shall not make such an election in a Merger Event, in which the consideration
to be paid to holders of Shares consists solely of cash, or an Event of Default
in which Counterparty is the Defaulting Party or a Termination Event in which
Counterparty is the Affected Party, other than an Event of Default of the type
described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of
the Agreement or a Termination Event of the type described in Section 5(b) of
the Agreement in each case that resulted from an event or events outside
Counterparty’s control) and shall give irrevocable telephonic notice to Bank,
confirmed in writing within one Currency Business Day, no later than 12:00 p.m.
New York local time on the Merger Date or the Early Termination Date, as
applicable; provided that if
Counterparty does not validly request Bank to satisfy its Payment Obligation by
the Share Termination Alternative, Bank shall have the right, in its sole
discretion, to satisfy its Payment Obligation by the Share Termination
Alternative, notwithstanding Counterparty’s election to the contrary.


 


	
  Share Termination
  Alternative:

  	
   

  	
  Applicable and means that
  Bank shall deliver to Counterparty the Share Termination Delivery Property on
  the date when the Payment Obligation would otherwise be due pursuant to
  Section 9.7 of the Equity Definitions or Section 6(d)(ii) and
  6(e) of the Agreement, as applicable (the “Share
  Termination Payment Date”), in satisfaction of the Payment
  Obligation in the manner reasonably requested by Counterparty free of
  payment.

  
	
   

  	
   

  	
   

  
	
  Share Termination Delivery
  Property:

  	
   

  	
  A number of Share
  Termination Delivery Units, as calculated by the Calculation Agent, equal to
  the Payment Obligation divided by
  the Share Termination Unit Price. The Calculation Agent shall adjust the
  Share Termination Delivery Property by replacing any fractional portion of a
  security therein with an amount of cash equal to the value of such fractional
  security based on the values used to calculate the Share Termination Unit
  Price.

  
	
   

  	
   

  	
   

  
	
  Share Termination Unit
  Price:

  	
   

  	
  The value to Bank of
  property contained in one Share Termination Delivery Unit on the date such
  Share Termination Delivery Units are to be delivered as Share Termination
  Delivery Property, as determined by the Calculation Agent in its discretion
  by commercially reasonable means and notified by the Calculation Agent to
  Bank at the time of notification of

  



 


17

















 


	
   

  	
   

  	
  the Payment Obligation.
  For the avoidance of doubt, the parties agree that in determining the Share
  Termination Delivery Unit Price the Calculation Agent may consider the
  purchase price paid in connection with the purchase of Share Termination
  Delivery Property.

  
	
   

  	
   

  	
   

  
	
  Share Termination Delivery
  Unit:

  	
   

  	
  One Share or, if a Merger
  Event has occurred and a corresponding adjustment to the Transaction has been
  made, a unit consisting of the number or amount of each type of property
  received by a holder of one Share (without consideration of any requirement
  to pay cash or other consideration in lieu of fractional amounts of any
  securities) in such Merger Event, as determined by the Calculation Agent.

  
	
   

  	
   

  	
   

  
	
  Failure to Deliver:

  	
   

  	
  Applicable

  
	
   

  	
   

  	
   

  
	
  Other applicable
  provisions:

  	
   

  	
  If Share Termination
  Alternative is applicable, the provisions of Sections 6.6, 6.7, 6.8, 6.9 and
  6.10 (as modified above) of the Equity Definitions will be applicable, except
  that all references in such provisions to “Physically-Settled” shall be read
  as references to “Share Termination Settled” and all references to “Shares”
  shall be read as references to “Share Termination Delivery Units”. “Share
  Termination Settled” in relation to the Transaction means that Share
  Termination Alternative is applicable to the Transaction.

  



 


(p)           Governing
Law; Exclusive Jurisdiction. For the Agreement and this
Confirmation, New York law (without reference to choice of law doctrine to the
extent inconsistent with choice of New York law).  Section 13(b) of the Agreement is
hereby amended by (i) deleting the words “non-exclusive” in Section 13(b)(i)(2) and
replacing them with the word “exclusive”, and (ii)  inserting after the
word “law” in Section 13(b)(iii) the words “and subject to Section 13(b)(i)(2)”.


 


(q)           Waiver
of Jury Trial. Each party waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of any
suit, action or proceeding relating to the Transaction. Each party (i) certifies
that no representative, agent or attorney of either party has represented,
expressly or otherwise, that such other party would not, in the event of such a
suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges
that it and the other party have been induced to enter into the Transaction, as
applicable, by, among other things, the mutual waivers and certifications
provided herein.


 


(r)            Registration. Counterparty
hereby agrees that if, in the good faith reasonable judgment of Bank, the
Shares (“Hedge Shares”) acquired
by Bank for the purpose of hedging its obligations pursuant to the Transaction
cannot be sold in the public market by Bank without registration under the
Securities Act, Counterparty shall, at its election, either (i) in order
to allow Bank to sell the Hedge Shares in a registered offering, make available
to Bank an effective registration statement under the Securities Act and enter
into an agreement, in form and substance satisfactory to Bank, substantially in
the form of an underwriting agreement for a registered secondary offering; provided however, that if Bank, in its
sole reasonable discretion, is not satisfied with access to due diligence
materials, the results of its due diligence investigation, or the procedures
and documentation for the registered offering referred to above, then clause (ii) or
clause (iii) of this paragraph shall apply at the election of
Counterparty, (ii) in order to allow Bank to sell the Hedge Shares in a
private placement, enter into a private placement agreement substantially
similar to private placement purchase agreements customary for private
placements of equity securities of similar size, in form and substance
satisfactory to Bank (in which case, the Calculation Agent shall make any
adjustments to the terms of the Transaction which are necessary, in its
reasonable 


 


18

















 


judgment,
to compensate Bank for any discount from the public market price of the Shares
incurred on the sale of Hedge Shares in a private placement), or (iii) purchase
the Hedge Shares from Bank at the Last Reported Sale Price on such Trading
Days, and in the amounts, requested by Bank.


 


(s)           Tax
Disclosure. Effective from the date of commencement of
discussions concerning the Transaction, Counterparty and each of its employees,
representatives, or other agents may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the Transaction
and all materials of any kind (including opinions or other tax analyses) that
are provided to Counterparty relating to such tax treatment and tax structure.


 


(t)            Status
of Claims in Bankruptcy. Bank acknowledges and
agrees that this Confirmation is not intended to convey to Bank rights with
respect to the Transaction that are senior to the claims of common stockholders
of Counterparty in any U.S. bankruptcy proceedings of Counterparty; provided that nothing herein shall limit
or shall be deemed to limit Bank’s right to pursue remedies in the event of a
breach by Counterparty of its obligations and agreements with respect to the
Transaction; provided, further,
that nothing herein shall limit or shall be deemed to limit Bank’s rights in
respect of any transactions other than the Transaction.


 


(u)           Securities
Contract; Swap Agreement. The parties hereto intend
for:  (a) the Transaction to be a “securities
contract” and a “swap agreement” and the Agreement to be a “master netting
agreement”, in each case as defined in the Bankruptcy Code (Title 11 of the
United States Code) (the “Bankruptcy Code”),
and the parties hereto to be entitled to the protections afforded by, among
other Sections, Sections 362(b)(6), 362(b)(7), 362(b)(27), 362(o), 546(e),
546(g), 546(j), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code; (b) a
party’s right to liquidate the Transaction and to exercise any other remedies
upon the occurrence of any Event of Default or Termination Event under the
Agreement with respect to the other party or any Extraordinary Event that
results in the termination or cancellation of any Transaction to constitute a “contractual
right” as described in the Bankruptcy Code; and (c) each payment and
delivery of cash, securities or other property hereunder to constitute a “margin
payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy
Code.


 


(v)           Additional
Provisions. Counterparty covenants and agrees that, as
promptly as practicable following the public announcement of any consolidation,
merger and binding share exchange to which Counterparty is a party, or any sale
of all or substantially all of Counterparty’s assets, in each case pursuant to
which the Shares will be converted into cash, securities or other property,
Counterparty shall notify Bank in writing of the types and amounts of
consideration that holders of Shares have elected to receive upon consummation
of such transaction or event (the date of such notification, the “Consideration Notification Date”); provided that in no event shall the
Consideration Notification Date be later than the date on which such
transaction or event is consummated.


 


(w)          Private
Placement Procedures. If, in the reasonable opinion of Bank based
upon advice of counsel, following any delivery of Shares to Bank pursuant to Section 9(k) “
Early Unwind”, such Shares would be in the hands of Bank subject to any
applicable restrictions with respect to any registration or qualification
requirement or prospectus delivery requirement for such Shares pursuant to any
applicable federal or state securities law (including, without limitation, any
such requirement arising under Section 5 of the Securities Act as a result
of such Shares being “restricted securities”, as such term is defined in Rule 144
under the Securities Act, or as a result of the sale of such Shares or Share
Termination Delivery Property being subject to paragraph (c) of Rule 145
under the Securities Act) (such Shares, “Restricted
Shares”), then delivery of such Restricted Shares shall be effected
pursuant to clause (i) below.


 


(i)            Delivery of
Restricted Shares by Counterparty shall be effected in customary private
placement procedures with respect to such Restricted Shares of similar size in
form and 


 


19

















 


substance
reasonably acceptable to Bank (a “Private
Placement Settlement”). The Private Placement Settlement of such
Restricted Shares shall include customary representations, covenants, blue sky
and other governmental filings and/or registrations, indemnities to Bank, due
diligence rights (for Bank or any designated buyer of the Restricted Shares by
Bank), opinions and certificates, and such other documentation as is customary
for private placement agreements, all reasonably acceptable to Bank. Bank shall
determine the appropriate discount applicable to such Restricted Shares in a
commercially reasonable manner and appropriately adjust the amount of such
Restricted Shares to be delivered to Bank hereunder; provided
that in no event such number shall be greater than 0.9 times the Number of
Shares (the “Maximum Amount”).
Notwithstanding the Agreement or this Confirmation, the date of delivery of
such Restricted Shares shall be the Exchange Business Day following notice by
Bank to Counterparty, of such applicable discount and the number of Restricted
Shares to be delivered pursuant to this clause (i).


 


(ii)           In the event
Counterparty shall not have delivered the full number of Restricted Shares
otherwise applicable as a result of the proviso above relating to the Maximum
Amount (such deficit, the “Deficit Restricted
Shares”), Counterparty shall be continually obligated to deliver,
from time to time until the full number of Deficit Restricted Shares have been
delivered pursuant to this paragraph, Restricted Shares when, and to the
extent, that (i) Shares are repurchased, acquired or otherwise received by
Counterparty or any of its subsidiaries after the Trade Date (whether or not in
exchange for cash, fair value or any other consideration), (ii) authorized
and unissued Shares reserved for issuance in respect of other transactions
prior to the Trade Date which prior to such date become no longer so reserved
and (iii) Counterparty additionally authorizes any unissued Shares that
are not reserved for other transactions. Counterparty shall immediately notify
Bank of the occurrence of any of the foregoing events (including the number of
Shares subject to clause (i), (ii) or (iii) and the corresponding
number of Restricted Shares to be delivered) and promptly deliver the
Applicable Percentage of the aggregate number of such Restricted Shares
thereafter.


 


(iii)          Without
limiting the generality of the foregoing, Counterparty agrees that any
Restricted Shares delivered to Bank, as purchaser of such Restricted Shares, (i) may
be transferred by and among Bank and its affiliates and Counterparty shall
effect such transfer without any further action by Bank and (ii) after the
period of 6 months from the Trade Date (or 1 year from the Trade Date if, at
such time, informational requirements of Rule 144(c) are not
satisfied with respect to Counterparty) has elapsed after any Settlement Date
for such Restricted Shares, Counterparty shall promptly remove, or cause the
transfer agent for such Restricted Shares to remove, any legends referring to
any such restrictions or requirements from such Restricted Shares upon request
by Bank (or such affiliate of Bank) to Counterparty or such transfer agent,
without any requirement for the delivery of any certificate, consent,
agreement, opinion of counsel, notice or any other document, any transfer tax
stamps or payment of any other amount or any other action by Bank (or such affiliate
of Bank).


 


If Counterparty shall fail to effectuate the
Private Placement Settlement as set forth in clause (i), then such failure
shall constitute an Event of Default with respect to which Counterparty shall
be the Defaulting Party.


 


(x)            Right to
Extend.  Bank may postpone any Exercise
Date or Settlement Date or any other date of valuation or delivery by Bank,
with respect to some or all of the relevant Options (in which event the
Calculation Agent shall make appropriate adjustments to the Delivery Obligation),
if Bank determines, in its reasonable discretion based on advice of counsel,
that such extension is reasonably necessary to preserve Bank’s hedging or hedge
unwind activity hereunder in light of existing liquidity conditions or to
enable Bank to effect purchases of Shares or Share Termination 


 


20

















 


Delivery Units in connection
with its hedging, hedge unwind or settlement activity hereunder in a manner
that would, if Bank were Counterparty or an affiliated purchaser of
Counterparty, be in compliance with applicable legal, regulatory or
self-regulatory requirements.


 


(y)           Dividends.  If at any time during the period from and
including the Trade Date, to but excluding the Expiration Date, (i) an
ex-dividend date for a regular quarterly cash dividend occurs with respect to
the Shares (an “Ex-Dividend Date”),
and that dividend is less than the Regular Dividend on a per Share basis or (ii) if
no Ex-Dividend date for a regular quarterly cash dividend occurs with respect
to the Shares in any quarterly dividend period of Counterparty, then the
Calculation Agent will make a corresponding adjustment to any one or more of
the Strike Price, Number of Options, Option Entitlement and/or any other
variable relevant to the exercise, settlement or payment for the Transaction to
preserve the fair value of the Options to Bank after taking into account such
dividend or lack thereof.  “Regular Dividend” shall mean USD 0.02 per
Share per quarter.


 


21

















 


Counterparty hereby agrees (a) to check this
Confirmation carefully and immediately upon receipt so that errors or
discrepancies can be promptly identified and rectified and (b) to confirm
that the foregoing (in the exact form provided by Bank) correctly sets forth
the terms of the agreement between Bank and Counterparty with respect to the
Transaction, by manually signing this Confirmation or this page hereof as
evidence of agreement to such terms and providing the other information
requested herein and immediately returning an executed copy to Equity
Derivatives Documentation Department, Facsimile No. (212) 428-1980/83.


 


	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  GOLDMAN,
  SACHS & CO.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Daniel W. Kopper

  
	
   

  	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accepted and confirmed

  	
   

  	
   

  	
   

  
	
  as of the Trade Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TEXTRON INC.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Mary F. Lovejoy

  	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  	
   

  	
   

  
	
  Name: Mary F. Lovejoy