EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
by and between
HE HOLDINGS, INC.
and
RAYTHEON COMPANY
Dated as of January 16, 1997
TABLE OF CONTENTS
Page
ARTICLE 1
THE MERGER....................... 2
Section 1.1. The Merger................................ 2
Section 1.2. Effective Time............................ 3
Section 1.3. Effects of The Merger..................... 3
Section 1.4. Certificate of Incorporation and By-laws. 3
Section 1.5. Boards, Committees and Officers........... 3
Section 1.6. Additional Actions........................ 4
ARTICLE 2
CONVERSION OF SECURITIES............... 4
Section 2.1. Conversion of Capital Stock............... 4
Section 2.2. Exchange of Certificates.................. 5
(a) Exchange Agent............................ 5
(b) Exchange Procedures....................... 5
(c) Distributions With Respect to
Unexchanged Shares...................... 6
(d) No Further Ownership Rights in
Raytheon Common Stock................... 7
Section 2.3. No Fractional Share Certificates.......... 7
(a) Determination of Excess Shares............ 7
(b) Common Shares Trust....................... 7
(c) Distribution to Holders of Fractional
Xxxxxx Class B Common Stock............. 8
Section 2.4. Exchange Fund and Common Shares Trust
Matters................................. 8
(a) No Liability.............................. 8
(b) Investment of Exchange Fund............... 8
(c) Withholding Rights........................ 8
(d) Termination of Exchange Fund and
Common Shares Trust..................... 9
Section 2.5. Treatment of Raytheon Stock Options....... 9
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF XXXXXX.. 9
Section 3.1. Organization and Standing................. 10
Section 3.2. Subsidiaries.............................. 10
Section 3.3. Corporate Power and Authority............. 11
Section 3.4. Capitalization of Xxxxxx.................. 11
Section 3.5. Conflicts, Consents and Approvals......... 12
Section 3.6. Xxxxxx Financial Statements............... 13
Section 3.7. Registration Statement.................... 14
Section 3.8. Compliance with Law....................... 14
Section 3.9. Litigation................................ 15
Section 3.10. Taxes..................................... 15
Section 3.11. Absence of Certain Changes................ 16
Section 3.12. Undisclosed Liabilities................... 17
Section 3.13. Environmental Matters..................... 17
Section 3.14. Employee Benefits......................... 18
Section 3.15. Brokerage and Finder's Fees............... 20
Section 3.16. Opinion of Financial Advisor.............. 20
Section 3.17. Board and Stockholder Approval............ 20
Section 3.18. DGCL Section 203 and State Takeover Laws.. 20
Section 3.19. Permits................................... 21
Section 3.20. Restrictive Agreements.................... 21
Section 3.21. Real Estate............................... 21
Section 3.22. Employees................................. 22
Section 3.23. Certain Retirement Assets................. 22
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF RAYTHEON..... 22
Section 4.1. Organization and Standing................. 23
Section 4.2. Subsidiaries.............................. 23
Section 4.3. Corporate Power and Authority............. 24
Section 4.4. Capitalization of Raytheon................ 24
Section 4.5. Conflicts, Consents and Approvals......... 25
Section 4.6. Raytheon SEC Documents.................... 25
Section 4.7. Registration Statement.................... 27
Section 4.8. Compliance with Law....................... 27
Section 4.9. Litigation................................ 28
Section 4.10. Taxes..................................... 28
Section 4.11. Absence of Certain Changes................ 29
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Section 4.12. Undisclosed Liabilities................... 29
Section 4.13. Environmental Matters..................... 29
Section 4.14. Employee Benefits......................... 30
Section 4.15. Brokerage and Finder's Fees............... 31
Section 4.16. Opinion of Financial Advisor.............. 32
Section 4.17. Board Recommendation...................... 32
Section 4.18. Voting Requirements....................... 32
Section 4.19. DGCL Section 203 and State Takeover Laws.. 32
Section 4.20. Permits................................... 33
Section 4.21. Restrictive Agreements.................... 33
Section 4.22. Real Estate............................... 33
Section 4.23. Employees................................. 33
Section 4.24. Shareholder Rights Plan................... 34
ARTICLE 5
COVENANTS OF THE PARTIES.................. 34
Section 5.1. Mutual Covenants.......................... 34
(a) General................................... 34
(b) HSR Act................................... 34
(c) Tax-Free Treatment........................ 35
(d) NYSE Listing.............................. 36
(e) Letters of Accountants.................... 36
(f) Public Announcements...................... 36
(g) Access.................................... 36
(h) Indemnification........................... 37
(i) Expenses.................................. 38
(j) Preparation of SEC Documents.............. 38
(k) No Solicitation........................... 38
(l) Additional Agreements..................... 40
(m) Blue Sky.................................. 40
(n) Notification of Certain Matters........... 40
Section 5.2. Covenants of Xxxxxx....................... 40
(a) Conduct of Xxxxxx' Operations............. 40
(b) Notification of Certain Matters........... 42
(c) Debt...................................... 42
(d) Adoption of Rights Plan................... 43
Section 5.3. Covenants of Raytheon..................... 43
(a) Raytheon Stockholders Meeting............. 43
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(b) Conduct of Raytheon's Operations.......... 43
(c) Notification of Certain Matters........... 44
(d) Affiliates................................ 45
(e) Raytheon Securities Law Filings........... 45
ARTICLE 6
CONDITIONS....................... 46
Section 6.1. Mutual Conditions......................... 46
Section 6.2. Conditions to Obligations of Raytheon..... 48
Section 6.3. Conditions to Obligations of Xxxxxx....... 48
ARTICLE 7
TERMINATION AND AMENDMENT............... 49
Section 7.1. Termination............................... 49
Section 7.2. Effect of Termination..................... 51
Section 7.3. Amendment................................. 53
Section 7.4. Extension; Waiver......................... 53
ARTICLE 8
MISCELLANEOUS..................... 54
Section 8.1. No Survival of Representations and
Warranties.............................. 54
Section 8.2. Notices................................... 54
Section 8.3. Interpretation; Absence of Presumption.... 55
Section 8.4. Counterparts.............................. 56
Section 8.5. Entire Agreement; Severability............ 56
Section 8.6. Definitions of "subsidiary" and
"significant subsidiary"................ 57
Section 8.7. Third Party Beneficiaries................. 57
Section 8.8. Governing Law............................. 57
Section 8.9. Specific Performance...................... 57
Section 8.10. Assignment................................ 58
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EXHIBITS
Exhibit A - Form of Amended and Restated Certificate of
Incorporation of Xxxxxx
Exhibit B - Form of Amended and Restated By-laws of Xxxxxx
Exhibit C - Form of GM Implementation Agreement
Exhibit D - Form of Agreement and Plan of Merger with respect
to the Xxxxxx Distribution
Exhibit E - Directors/Officers of the Surviving Corporation
Exhibit F - Form of Affiliate Letter
Exhibit G - Form of Raytheon Tax Opinion
Exhibit H - Form of Xxxxxx Tax Opinion
Exhibit I - Form of Raytheon Tax Letter
Exhibit J - Form of Xxxxxx Tax Letter
Exhibit K - Terms for Rights Plan
SCHEDULES
Xxxxxx Disclosure Schedule
Section 3.2 Subsidiaries
Section 3.4 Capitalization of Xxxxxx
Section 3.5 Conflicts, Consents & Approvals
Section 3.6 Xxxxxx Financial Statements
Section 3.9 Litigation
Section 3.10 Taxes
Section 3.11 Absence of Certain Changes
Section 3.12 Undisclosed Liabilities
Section 3.13 Environmental Matters
Section 3.14(d) Certain Employee Benefit Plans
Section 3.14(h) Certain Employee Benefit Plans and Agreements
Section 3.20 Restrictive Agreements
Section 3.21 Real Estate
Section 3.22 Employees
Section 5.2(a) Covenants of Xxxxxx (Conduct of Xxxxxx'
Operations)
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Raytheon Disclosure Schedule
Section 4.2 Subsidiaries
Section 4.4 Capitalization of Raytheon
Section 4.5 Conflicts, Consents & Approvals
Section 4.6 Raytheon Financial Statements
Section 4.9 Litigation
Section 4.10 Taxes
Section 4.11 Absence of Certain Changes
Section 4.12 Undisclosed Liabilities
Section 4.13 Environmental Matters
Section 4.14(a) Employee Benefit Plans and Agreements
Section 4.14(c) Employee Benefit Plans Subject to Sections
4063, 4064 or 4202 of ERISA
Section 4.21 Restrictive Agreements
Section 4.23 Employees
Section 5.3(b) Covenants of Raytheon (Conduct of Raytheon's
Operations)
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement")
is made and entered into as of January 16, 1997, by and between
HE Holdings, Inc., a Delaware corporation ("Xxxxxx"), and
Raytheon Company, a Delaware corporation ("Raytheon").
WHEREAS, Xxxxxx and Raytheon desire to combine
Raytheon's business with the Defense Business (as defined in
the Separation Agreement (as hereinafter defined), the "Defense
Business"), through a merger pursuant to which Raytheon shall
merge (the "Merger") with and into Xxxxxx, with Xxxxxx as the
surviving corporation, and each share of Raytheon Common Stock
(as defined herein) outstanding at the Effective Time (as
defined herein) will be converted into a share of Xxxxxx Class
B Common Stock (as defined herein) as more fully provided
herein; and
WHEREAS, prior to the Effective Time, Xxxxxx shall
adopt the restated certificate of incorporation and restated
by-laws attached as Exhibits A and B, respectively, which
provide for, among other things, a recapitalization of the
outstanding capital stock of Xxxxxx into Class A common stock,
par value $0.01 per share ("Xxxxxx Class A Common Stock"), and
provide also for a Class B common stock, par value $0.01 per
share ("Xxxxxx Class B Common Stock"); and
WHEREAS, as a condition to entering into this
Agreement, Raytheon has required that Xxxxxx be, at the time of
consummation of the Merger, an independent, publicly owned
company, comprising the Defense Business; and
WHEREAS, concurrently with the execution and delivery
of this Agreement, General Motors Corporation ("GM"), a
Delaware corporation and the indirect parent of Xxxxxx, and
Raytheon are entering into an Implementation Agreement dated as
of the date hereof, in the form attached as Exhibit C (the "GM
Implementation Agreement"), setting forth, among other things,
the rights and obligations of GM with respect to the execution
and delivery of the Xxxxxx Distribution Agreement (as defined
below); and
WHEREAS, prior to the Effective Time, subject to the
satisfaction or waiver of the conditions set forth in the GM
Implementation Agreement, GM and a wholly owned subsidiary of
GM to be designated by GM ("Merger Sub") will enter into an
Agreement and Plan of Merger, in the form attached as Exhibit D
or with such changes thereto as are permitted pursuant to the
GM Implementation Agreement (the "Xxxxxx Distribution
Agreement"), and immediately prior to the Effective Time, shall
consummate the GM Transactions (as defined therein, the "GM
Transactions") in accordance with the terms and subject to the
conditions thereof. Pursuant to the Xxxxxx Distribution
Agreement, Merger
Sub shall merge with and into GM, with GM as the surviving
corporation (the "GM Merger"), and, pursuant thereto, among
other things, holders of shares of common stock, par value $1
2/3 per share, of GM (the "GM $1 2/3 Common Stock") and of
Class H common stock, par value $0.10 per share, of GM (the "GM
Class H Common Stock") will receive in accordance with the
Xxxxxx Distribution Ratio (as defined in the GM Implementation
Agreement) a distribution of shares of Xxxxxx Class A Common
Stock on account of their holdings of such GM $1 2/3 Common
Stock and GM Class H Common Stock, such that, prior to the
consummation of the Merger, such shares of Xxxxxx Class A
Common Stock shall represent the entire equity interest in
Xxxxxx; and
WHEREAS, the parties intend that (a) the Merger
constitute a tax-free "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and (b) certain of the transactions contemplated
by the Xxxxxx Distribution Agreement qualify as tax-free spin-
offs within the meaning of Sections 355 and 368(a)(1)(D) of the
Code; and
WHEREAS, the respective Boards of Directors of GM,
Xxxxxx and Raytheon have determined that the Merger is
desirable and in the best interests of their respective common
stockholders and, by resolutions duly adopted, the respective
Boards of Directors of Xxxxxx and Raytheon have approved and
adopted this Agreement and the respective Boards of Directors
of GM and Raytheon have approved and adopted the GM
Implementation Agreement;
NOW, THEREFORE, in consideration of the premises and
the representations, warranties, covenants and agreements
contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
ARTICLE 1
THE MERGER
Section 1.1. The Merger. Upon the terms and subject
to the conditions hereof, and in accordance with the provisions
of the Delaware General Corporation Law (the "DGCL"), Raytheon
shall be merged with and into Xxxxxx as soon as practicable
following the satisfaction or waiver of the conditions set
forth in Article 6. Following the Merger, the separate
corporate existence of Raytheon shall cease and Xxxxxx shall
continue its existence
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under the laws of the State of Delaware. Xxxxxx, in its
capacity as the corporation surviving the Merger, is
hereinafter sometimes referred to as the "Surviving
Corporation".
Section 1.2. Effective Time. The Merger shall be
consummated by filing with the Secretary of State of the State
of Delaware (the "Delaware Secretary of State") a certificate
of merger (the "Certificate of Merger") in such form as is
required by and executed in accordance with the DGCL. The
Merger shall become effective (the "Effective Time") when the
Certificate of Merger has been filed with the Delaware
Secretary of State or at such later time as shall be specified
in the Certificate of Merger, which shall be immediately
following the consummation of the GM Merger. Prior to the
filing referred to in this Section 1.2, a closing shall be held
at the New York offices of Weil, Gotshal & Xxxxxx LLP, or such
other place as Xxxxxx and Raytheon may agree on a date (the
"Closing Date") mutually agreed to by Xxxxxx and Raytheon.
Section 1.3. Effects of The Merger. The Merger
shall have the effects set forth in Section 259 of the DGCL.
Section 1.4. Certificate of Incorporation and By-
laws. Unless the same already shall have been adopted, the
Certificate of Merger shall provide that at the Effective Time
(i) the Certificate of Incorporation of the Surviving
Corporation shall be the certificate of incorporation attached
as Exhibit A (except as regards the corporate name), (ii) the
By-laws of the Surviving Corporation shall be the By-laws
attached as Exhibit B and (iii) the corporate name of the
Surviving Corporation shall be "Raytheon Company."
Section 1.5. Boards, Committees and Officers. At
the Effective Time, the Board of Directors, committees of the
Board of Directors, composition of such committees (including
chairmen thereof) and certain officers of the Surviving
Corporation (as indicated on Exhibit E) shall be as set forth
on Exhibit E until the earlier of the resignation or removal of
any individual listed on or designated in accordance with
Exhibit E or until their respective successors are duly
appointed or elected and qualified, as the case may be. Xxxxxx
shall create, effective from and after the Effective Time, the
following three new committees: a Management Transition
Committee which shall be responsible for supervising and
implementing the integration of the businesses, facilities,
functions and employees of Xxxxxx, Raytheon and the Defense
Systems and Electronics business of Texas Instruments
Incorporated to be acquired by Raytheon, which shall be chaired
by an individual who prior to the Effective Time is an
executive officer of Xxxxxx; a Board Transition Committee which
shall be responsible for resolving issues relating to such
integration at the Board of Directors level; and a Defense
Business Executive Council which shall supervise and manage the
combined defense businesses of Xxxxxx, Raytheon and the Defense
Systems and Electronics
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business of Texas Instruments Incorporated to be acquired by
Raytheon, on an ongoing basis and shall serve as a vehicle for
planning, communication and decision making on issues involving
such combined businesses. The composition of such committees
also shall be as set forth on Exhibit E until the earlier of
the resignation or removal of any individual listed on or
designated in accordance with Exhibit E or until their
respective successors are duly appointed or elected and
qualified, as the case may be. If any officer listed on or
appointed in accordance with Exhibit E ceases to be a full-time
employee of Xxxxxx or Raytheon prior to the Effective Time, or
if any director, committee member or committee chairman listed
or designated on Exhibit E is not available to serve as such at
the Effective Time, the parties shall agree upon another person
to serve in such person's stead. On or prior to the Effective
Time, Xxxxxx, to the extent necessary, shall deliver to
Raytheon evidence of the resignations of the directors of
Xxxxxx not so designated to be continuing to serve as directors
of the Surviving Corporation, such resignations to be effective
as of the Effective Time.
Section 1.6. Additional Actions. If, at any time
after the Effective Time, the Surviving Corporation shall
consider or be advised that any further deeds, assignments or
assurances in law or any other acts are necessary or desirable
to (a) vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation its right, title or interest in, to or
under any of the rights, properties or assets of Raytheon or
Xxxxxx, or (b) otherwise carry out the provisions of this
Agreement, Raytheon and its directors and officers shall be
deemed to have granted to the Surviving Corporation an
irrevocable power of attorney to execute and deliver all such
deeds, assignments or assurances in law and to take all acts
necessary, proper or desirable to vest, perfect or confirm
title to and possession of such rights, properties or assets in
the Surviving Corporation and otherwise to carry out the
provisions of this Agreement, and the directors and officers of
the Surviving Corporation are authorized in the name of Xxxxxx
or Raytheon, as the case may be, or otherwise to take any and
all such action.
ARTICLE 2
CONVERSION OF SECURITIES
Section 2.1. Conversion of Capital Stock. At the
Effective Time, by virtue of the Merger and without any action
on the part of Xxxxxx, Raytheon, any holder of Xxxxxx Class A
Common Stock, any holder of Raytheon Common Stock or any other
person:
(a) Subject to Section 2.3 below, each whole share
of Xxxxxx Class A Common Stock that is issued and outstanding
immediately prior to the Effective Time shall
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remain outstanding and shall be unchanged after the Merger, and
each fractional share of Xxxxxx Class A Common Stock that is
issued and outstanding immediately prior to the Effective Time
shall be converted into and represent an equivalent fractional
share of Xxxxxx Class B Common Stock (which shall be sold by
the Exchange Agent as provided in Section 2.3 below). For
purposes of determining whether a holder of Xxxxxx Class A
Common Stock immediately prior to the Effective Time holds a
fractional share of Xxxxxx Class A Common Stock, all shares of
Xxxxxx Class A Common Stock held by such holder shall be
aggregated;
(b) Each share of common stock, par value $1.00 per
share, of Raytheon ("Raytheon Common Stock") issued and
outstanding immediately prior to the Effective Time shall be
converted into and represent one share of Xxxxxx Class B Common
Stock; and
(c) Each share of capital stock of Raytheon held in
the treasury of Raytheon or owned by any wholly-owned
subsidiary of Raytheon shall be cancelled and retired and no
payment shall be made in respect thereof.
Section 2.2. Exchange of Certificates.
(a) Exchange Agent. Following the Effective Time,
Xxxxxx shall deposit with the exchange agent mutually agreed to
and designated by Xxxxxx and Raytheon (the "Exchange Agent"),
as required for exchange in accordance with this Section 2.2,
certificates representing shares of Xxxxxx Class B Common Stock
issuable pursuant to Section 2.1 in exchange for outstanding
shares of Raytheon Common Stock and cash, as required for
payments pursuant to Section 2.2(c) below (such shares of
Xxxxxx Class B Common Stock, together with any cash deposited
with the Exchange Agent pursuant to this Section 2.2, being
hereinafter referred to as the "Exchange Fund.")
(b) Exchange Procedures. As soon as practicable
after the Effective Time, the Exchange Agent, pursuant to the
terms of an exchange agent agreement to be entered into with
Xxxxxx prior to the Effective Time, shall mail to each holder
of record of a certificate or certificates (the "Certificates")
which immediately prior to the Effective Time represented
outstanding shares of Raytheon Common Stock whose shares were
converted into shares of Xxxxxx Class B Common Stock pursuant
to Section 2.1(b): (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form
and have such other provisions as Xxxxxx and Raytheon may
specify), and (ii) instructions for effecting the surrender of
the Certificates in exchange for certificates representing
shares of Xxxxxx Class B Common Stock. Upon surrender of a
Certificate for cancellation to the
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Exchange Agent, together with a duly executed letter of
transmittal, the holder of such Certificate shall be entitled
to receive in exchange therefor (x) a certificate representing
that number of shares of Xxxxxx Class B Common Stock which such
holder has the right to receive pursuant to Section 2.1 and (y)
a check representing the unpaid dividends and distributions, if
any, which such holder has the right to receive pursuant to the
provisions of this Article, after giving effect to any required
withholding tax pursuant to Section 2.4(c) below, and the
shares represented by the Certificate so surrendered shall
forthwith be cancelled. No interest will be paid or accrued on
unpaid dividends and distributions, if any, payable to holders
of Raytheon Common Stock ("Raytheon Stockholders"). In the
event of a transfer of ownership of shares of Raytheon Common
Stock which is not registered on the transfer records of
Raytheon, a certificate representing the proper number of
shares of Xxxxxx Class B Common Stock, together with a check
for the cash to be paid in lieu of unpaid dividends and
distributions, if any, may be issued to such transferee if the
Certificate representing such shares of Raytheon Common Stock
held by such transferee is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect
such transfer and to evidence that any applicable stock
transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.2, each Certificate shall be
deemed at any time after the Effective Time to represent that
number of whole shares of Xxxxxx Class B Common Stock into
which the shares of Raytheon Common Stock formerly represented
by such Certificate shall have been converted, together with
the right to receive any unpaid dividends and distributions.
(c) Distributions With Respect to Unexchanged
Shares. Notwithstanding any other provisions of this
Agreement, no dividends or other distributions declared or made
after the Effective Time with respect to shares of Xxxxxx Class
B Common Stock having a record date after the Effective Time
shall be paid to the holder of any unsurrendered Certificate,
until the holder shall surrender such Certificate as provided
in this Section 2.2. Subject to the effect of Applicable Law
(as defined herein), following surrender of any such
Certificate, there shall be paid to the holder of the
certificates representing whole shares of Xxxxxx Class B Common
Stock issued in exchange therefor, without interest, (i)
promptly following such surrender, the amount of dividends or
other distributions with a record date after the Effective Time
theretofore payable with respect to such whole shares of Xxxxxx
Class B Common Stock and not paid, less the amount of any
withholding taxes which may be required thereon pursuant to
Section 2.4(c) below, and (ii) at the appropriate payment date
subsequent to surrender, the amount of dividends or other
distributions with a record date after the Effective Time but
prior to surrender and a payment date subsequent to surrender
payable with respect to such whole shares of Xxxxxx Class B
Common Stock, less the amount of any withholding taxes which
may be required thereon.
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(d) No Further Ownership Rights in Raytheon Common
Stock. All shares of Xxxxxx Class B Common Stock issued upon
surrender of Certificates in accordance with the terms hereof
(including any cash paid pursuant to this Article 2) shall be
deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Raytheon Common Stock represented
thereby, and from and after the Effective Time there shall be
no further registration of transfers of shares of Raytheon
Common Stock on the stock transfer books of Raytheon. If,
after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, they shall be cancelled
and exchanged as provided in this Section 2.2.
Section 2.3. No Fractional Share Certificates.
(a) Determination of Excess Shares. As promptly as
practicable following the Effective Time, the Exchange Agent
shall determine the aggregate number of fractional shares of
Xxxxxx Class A Common Stock converted into Xxxxxx Class B
Common Stock pursuant to Section 2.1(a) (such aggregate number
of shares being herein called the "Excess Shares"). Following
the Effective Time, the Exchange Agent, as agent for the
holders of GM Common Stock, shall sell the Excess Shares at
then prevailing prices on the New York Stock Exchange, Inc.
(the "NYSE"), all in the manner provided in subsection (b) of
this Section 2.3.
(b) Common Shares Trust. The sale of the Excess
Shares by the Exchange Agent shall be executed on the NYSE
through one or more member firms of the NYSE and shall be
executed in round lots to the extent practicable. The Exchange
Agent shall use all reasonable efforts to complete the sale of
the Excess Shares as promptly following the Effective Time as,
in the Exchange Agent's reasonable judgment, is practicable
consistent with obtaining the best execution of such sales in
light of prevailing market conditions. Until the net proceeds
of such sale or sales have been distributed to the holders of
Xxxxxx Class B Common Stock constituting Excess Shares, the
Exchange Agent will hold such proceeds in trust for the holders
of such Xxxxxx Class B Common Stock (the "Common Shares
Trust"). The Surviving Corporation shall pay all commissions,
transfer taxes and other out-of-pocket transaction costs,
including the expenses and compensation of the Exchange Agent,
incurred in connection with such sale of the Excess Shares.
The Exchange Agent shall determine the portion of the Common
Shares Trust to which each holder of such fractional interests
in Xxxxxx Class B Common Stock shall be entitled, if any, by
multiplying the amount of the aggregate net proceeds comprising
the Common Shares Trust by a fraction the numerator of which is
the amount of fractional share interests to which such holder
of Xxxxxx Class B Common Stock is entitled and the denominator
of which is the aggregate amount of fractional share interests
to which all such holders of Xxxxxx Class B Common Stock are
entitled.
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(c) Distribution to Holders of Fractional Xxxxxx
Class B Common Stock. As soon as practicable after the
determination of the amount of cash, if any, to be paid to
holders of Xxxxxx Class B Common Stock with respect to any
fractional share interests, the Exchange Agent shall make
available such amounts, net of any required withholding, to
such holders of Xxxxxx Class B Common Stock, subject to and in
accordance with the terms of this Agreement.
Section 2.4. Exchange Fund and Common Shares Trust
Matters.
(a) No Liability. None of any party hereto, the
Exchange Agent or the Surviving Corporation shall be liable to
any person in respect of any shares of Xxxxxx Class B Common
Stock (or dividends or distributions with respect thereto) or
cash from the Exchange Fund or the Common Shares Trust
delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any
Certificates shall not have been surrendered prior to seven
years after the Effective Time (or immediately prior to such
earlier date on which any cash, any dividends or distributions
with respect to whole shares of Xxxxxx Class B Common Stock in
respect of such Certificate would otherwise escheat to or
become the property of any Governmental Authority (as defined
herein)), any such cash, dividends or distributions in respect
of such Certificate shall, to the extent permitted by
Applicable Law (as defined in Section 3.8 hereof), become the
property of the Surviving Corporation, free and clear of all
claims or interest of any person previously entitled thereto.
(b) Investment of Exchange Fund. The Exchange Agent
shall invest any cash included in the Exchange Fund and the
Common Shares Trust, as directed by the Surviving Corporation,
on a daily basis. Any interest and other income resulting from
such investments shall be paid to the Surviving Corporation
from time to time as the Surviving Corporation may request.
(c) Withholding Rights. The Exchange Agent, on
behalf of the Surviving Corporation, shall be entitled to
deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Raytheon Common
Stock and to any holder of fractional interests in Xxxxxx Class
B Common Stock as set forth in Section 2.3 above, such amounts
as may be required to be deducted and withheld with respect to
the making of such payment under the Code, or under any
provision of state, local or foreign tax (as defined herein)
law. To the extent that amounts are so withheld and paid over
to the appropriate taxing authority, such withheld amounts will
be treated for all purposes of this Agreement as having been
paid to the holder of Raytheon Common Stock or Xxxxxx Class B
Common Stock, as the case may be, in respect of which such
deduction and withholding was made.
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(d) Termination of Exchange Fund and Common Shares
Trust. Any portion of the Exchange Fund and the Common Shares
Trust which remains undistributed for six months after the
Effective Time shall be delivered to the Surviving Corporation,
and any holders of fractional interests in Xxxxxx Class B
Common Stock or any holders of Raytheon Common Stock
representing Xxxxxx Class B Common Stock who have not
theretofore complied with the provisions of this Article 2
shall thereafter look only to the Surviving Corporation for
satisfaction of their claims for Xxxxxx Class B Common Stock,
dividends and other distributions, if any, and, with respect to
shares of Xxxxxx Class B Common Stock constituting Excess
Shares, any cash in lieu of fractional shares thereof, as the
case may be.
Section 2.5. Treatment of Raytheon Stock Options.
Prior to the Effective Time, Xxxxxx and Raytheon shall take all
such actions as may be necessary to cause each unexpired and
unexercised option under stock option plans of Raytheon in
effect on the date hereof which has been granted to current or
former directors, officers, employees, consultants or
independent contractors of Raytheon or its subsidiaries or to
any other persons by Raytheon (each, a "Raytheon Option") to be
automatically converted at the Effective Time into an option (a
"Xxxxxx Exchange Option") to purchase that number of shares of
Xxxxxx Class B Common Stock equal to the number of shares of
Raytheon Common Stock issuable immediately prior to the
Effective Time upon exercise of the Raytheon Option (without
regard to actual restrictions on exercisability), with an
exercise price equal to the exercise price which existed under
the corresponding Raytheon Option, and with other terms and
conditions that are the same as the terms and conditions of
such Raytheon Option immediately before the Effective Time
(except for any changes in vesting rights or permitted time of
exercise which result from the occurrence of the Merger). In
connection with the issuance of Xxxxxx Exchange Options, Xxxxxx
shall (i) reserve for issuance the number of shares of Xxxxxx
Class B Common Stock that will become subject to Xxxxxx
Exchange Options pursuant to this Section 2.5, and (ii) from
and after the Effective Time, upon exercise of Xxxxxx Exchange
Options, make available for issuance all shares of Xxxxxx Class
B Common Stock covered thereby, subject to the terms and
conditions applicable thereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF XXXXXX
In order to induce Raytheon to enter into this
Agreement, Xxxxxx hereby represents and warrants to Raytheon
that the statements contained in this Article are true, correct
and complete. The parties hereto agree that representations
and warranties of Xxxxxx
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set forth in this Article 3 have been prepared on a basis that
reflects the consummation of the HEC Reorganization (as defined
in the Xxxxxx Distribution Agreement, the "HEC Reorganization")
and accordingly, all references to Xxxxxx exclude all
businesses, assets or obligations of Xxxxxx which will not be
such following the consummation of the HEC Reorganization.
Section 3.1. Organization and Standing. Xxxxxx and
each of its significant subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware, with respect to Xxxxxx, and under the
laws of its state or other jurisdiction of incorporation, with
respect to its significant subsidiaries, in each case with full
power and authority (corporate and other) to own, lease, use
and operate its properties and to conduct its business as and
where owned, leased, used, operated and conducted. Xxxxxx and
each of its significant subsidiaries is duly qualified to do
business and in good standing in each jurisdiction in which the
nature of the business conducted by it or the property it owns,
leases or operates makes such qualification necessary, except
where the failure to be so qualified or in good standing in
such jurisdiction would not have a material adverse effect on
Xxxxxx. Xxxxxx is not in default in the performance,
observance or fulfillment of any provision of its certificate
of incorporation or by-laws, as amended.
Section 3.2. Subsidiaries. Xxxxxx does not own,
directly or indirectly, any equity or other ownership interest
in any corporation, partnership, joint venture or other entity
or enterprise, except as set forth in Section 3.2 to the
disclosure schedule delivered by Xxxxxx to Raytheon and dated
as of the date hereof (the "Xxxxxx Disclosure Schedule").
Except as set forth in Section 3.2 to the Xxxxxx Disclosure
Schedule, Xxxxxx is not subject to any obligation or
requirement to provide funds to or make any investment (in the
form of a loan, capital contribution or otherwise) in any such
entity. Except as set forth in Section 3.2 to the Xxxxxx
Disclosure Schedule, Xxxxxx owns directly or indirectly each of
the outstanding shares of capital stock (or other ownership
interests having by their terms ordinary voting power to elect
a majority of directors or others performing similar functions
with respect to such significant subsidiary) of each of its
significant subsidiaries. Each of the outstanding shares of
capital stock of each of Xxxxxx' significant subsidiaries is
duly authorized, validly issued, fully paid and nonassessable,
and is owned, directly or indirectly, by Xxxxxx free and clear
of all liens, pledges, security interests, claims or other
encumbrances. Other than as set forth in Section 3.2 to the
Xxxxxx Disclosure Schedule, there are no outstanding
subscriptions, options, warrants, puts, calls, agreements,
understandings, claims or other commitments or rights of any
type relating to the issuance, sale or transfer of any
securities of any significant subsidiary of Xxxxxx, nor are
there outstanding any securities which are convertible into or
exchangeable for any shares of capital stock of any significant
subsidiary of Xxxxxx; and no significant subsidiary of Xxxxxx
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has any obligation of any kind to issue any additional
securities or to pay for securities of Xxxxxx or any
significant subsidiary of Xxxxxx or any predecessor of any of
the foregoing.
Section 3.3. Corporate Power and Authority. Xxxxxx
has all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Xxxxxx
and the consummation of the transactions contemplated hereby to
be effected by Xxxxxx have been duly authorized by all
necessary corporate action on the part of Xxxxxx. This
Agreement has been duly executed and delivered by Xxxxxx, and
constitutes the legal, valid and binding obligation of Xxxxxx,
enforceable against it in accordance with its terms.
Section 3.4. Capitalization of Xxxxxx. (a) As of
September 30, 1996, Xxxxxx' authorized capital stock consisted
solely of 75,000 shares of common stock, without par value, all
of which were issued and outstanding. Each outstanding share
of Xxxxxx capital stock is duly authorized and validly issued,
fully paid and nonassessable, and has not been issued in
violation of any preemptive or similar rights and is owned
indirectly by GM free and clear of all liens, pledges, security
interests, claims or other encumbrances. Each share of Xxxxxx
Class B Common Stock to be issued in connection with the Merger
will be duly authorized and validly issued, fully paid and
nonassessable and will not be issued in violation of any
preemptive or similar rights. Xxxxxx has no authorized or
outstanding bonds, debentures, notes or other obligations or
securities, the holders of which have the right to vote with
the stockholders of Xxxxxx on any matter.
(b) Immediately prior to the Effective Time, but
after giving effect to the GM Transactions, Xxxxxx will have
(i) 102,630,503 shares of Class A Common Stock outstanding,
(ii) no shares of Class A Common Stock reserved for issuance
upon the exercise of outstanding options, warrants and
convertible securities, (iii) not more than 4,150,000 shares of
Class B Common Stock reserved for issuance upon the exercise of
outstanding options (plus (x) up to 1,000,000 additional shares
of Class B Common Stock which may be reserved for issuance in
respect of options granted after July 1, 1997 in accordance
with Section 5(c) of Schedule EM of the Separation Agreement
and plus (y) such additional shares of Class B Common Stock
which may be reserved for issuance in respect of options
associated with any corporate employees of Xxxxxx or its
affiliates which Xxxxxx and Raytheon agree may become or remain
employees of the Surviving Corporation after the Merger), (iv)
no shares of any other class of capital stock outstanding, and
(v) except as set forth in the foregoing clause (iii) or as
otherwise contemplated by this Agreement, no shares of Class A
Common Stock, Class B Common Stock or any other class of
capital stock subject in any event to issuance upon the
exercise, conversion or exchange of any other securities or
pursuant to any contractual or other right, option, warrant or
agreement.
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(c) Other than as contemplated by the Merger or as
set forth in Section 3.4 to the Xxxxxx Disclosure Schedule,
there are no outstanding subscriptions, options, warrants,
puts, calls, agreements, understandings, claims or other
commitments or rights of any type relating to the issuance,
sale or transfer of any securities of Xxxxxx, nor are there
outstanding any securities which are convertible into or
exchangeable for any shares of capital stock of Xxxxxx; and
Xxxxxx has no obligation of any kind to issue any additional
securities or to pay for securities of Xxxxxx or any
predecessor or affiliate. The issuance and sale of all of the
shares of capital stock described in this Section 3.4 have been
in compliance with federal and state securities laws. Except
as set forth in Section 3.4 to the Xxxxxx Disclosure Schedule,
Xxxxxx has not agreed to register any securities under the
Securities Act of 1933, as amended (together with rules and
regulation thereunder, the "Securities Act"), or under any
state securities law or granted registration rights with
respect to any securities of Xxxxxx to any person or entity.
Section 3.5. Conflicts, Consents and Approvals.
Neither the execution and delivery of this Agreement by Xxxxxx
nor the consummation of the transactions contemplated hereby
will:
(a) conflict with, or result in a breach of any
provision of the certificate of incorporation or by-laws of
Xxxxxx or its significant subsidiaries;
(b) violate, or conflict with, or result in a breach
of any provision of, or constitute a default (or an event
which, with the giving of notice, the passage of time or
otherwise, would constitute a default) under, or entitle any
party (with the giving of notice, the passage of time or
otherwise) to terminate, accelerate, modify or call a default
under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or
assets of Xxxxxx or any of its significant subsidiaries under,
any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, intellectual property or
other license, contract, undertaking, agreement, lease or other
instrument or obligation to which Xxxxxx or any of its
significant subsidiaries is a party;
(c) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Xxxxxx or any of its
significant subsidiaries or any of their respective properties
or assets; or
(d) except as contemplated by the Xxxxxx
Distribution Agreement, require any action or consent or
approval of, or review by, or registration or filing by Xxxxxx
or any of its affiliates with, any third party or any court,
arbitral tribunal, administrative agency or commission or other
governmental or regulatory body, agency, instrumentality or au-
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thority (a "Governmental Authority"), other than (i)
authorization for listing of the shares of Xxxxxx Class A
Common Stock and Xxxxxx Class B Common Stock to be issued in
the Merger on the NYSE, subject to official notice of issuance,
(ii) actions required by the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder (the "HSR Act") and any
comparable laws of foreign jurisdictions, (iii) registrations
or other actions required under federal and state securities
laws as are contemplated by this Agreement, and (iv) as set
forth in Section 3.5 to the Xxxxxx Disclosure Schedule;
except in the case of (b), (c) and (d) for any of the foregoing
that, individually or in the aggregate, would neither have a
material adverse effect on Xxxxxx nor materially delay or
adversely impact Xxxxxx' ability to consummate the transactions
contemplated hereby and by the other Transaction Agreements (as
defined in the GM Implementation Agreement, the "Transaction
Agreements").
Section 3.6. Xxxxxx Financial Statements. (a)
Included in the Xxxxxx Disclosure Schedule are (i) pro forma
unaudited consolidated balance sheets as of December 31, 1995
and 1994, and pro forma unaudited consolidated statements of
income and cash flows for the two years ended December 31, 1995
and 1994, for Xxxxxx and its subsidiaries (such financial
statements, the "Xxxxxx Statements" and the balance sheet as of
December 31, 1995 included therein, the "Xxxxxx Balance
Sheet"), and (ii) an unaudited pro forma consolidated balance
sheet and statement of income and cash flows at and for the
nine months ended September 30, 1996 for Xxxxxx and its
subsidiaries (the "Xxxxxx Interim Statements"). The Xxxxxx
Statements and the Xxxxxx Interim Statements have been prepared
on a basis that gives effect to the consummation of the HEC
Reorganization, except to the extent disclosed in the notes
thereto. The Xxxxxx Balance Sheet (including any related notes
and schedules) and the consolidated balance sheet included in
the Xxxxxx Interim Statements fairly present in all material
respects the consolidated financial position of Xxxxxx and its
subsidiaries, after giving effect to the consummation of the
HEC Reorganization, as of their respective dates, and each of
the consolidated statements of income and cash flows included
in the Xxxxxx Statements and the Xxxxxx Interim Statements
fairly presents in all material respects the consolidated
results of operations and cash flows, as the case may be, of
Xxxxxx and its subsidiaries, after giving effect to the
consummation of the HEC Reorganization, for the periods set
forth therein, in each case in accordance with generally
accepted accounting principles ("GAAP") consistently applied
except as disclosed in the Basis of Presentation note thereto
and except that footnotes to the Xxxxxx Statements and the
Xxxxxx Interim Statements required by GAAP are omitted.
-13-
(b) Proper accounting controls are, and since
January 1, 1994, have been, in place to ensure that no portion
of any international sales representative commission or
contingent fee payment is included, directly or indirectly, in
the contract price of any sale to the United States Government
pursuant to the Foreign Military Sales ("FMS") program, or any
sale to a foreign government financed in whole or in part with
funding from the U.S. Foreign Military Finance ("FMF") program,
except as permitted thereunder and except where there is no
reasonable likelihood that the failure to have in place such
controls would give rise to any unreserved loss, cost or
expense in excess of $10 million individually or, when
aggregated with the aggregate of those items excepted from the
representations set forth in clause (c) below and in Sections
3.9 and 3.13, $100 million.
(c) All payments to international sales
representatives since January 1, 1994, including commission and
contingent fee payments to international sales representatives
on FMS and FMF contracts, (i) have been accurately reported on
Xxxxxx' books and records, and (ii) have been made consistent
with all applicable United States and foreign laws and
regulations, except where there is no reasonable likelihood
that the failure to accurately report or to be consistent with
applicable law would give rise to any unreserved loss, cost or
expense in excess of $10 million individually or, when
aggregated with the aggregate of those items excepted from the
representations set forth in clause (b) above and in Sections
3.9 and 3.13, $100 million.
Section 3.7. Registration Statement. None of the
information provided by or on behalf of Xxxxxx for inclusion in
the registration statement on Form S-4, as supplemented or
amended from time to time (the "Registration Statement"),
including the prospectus, as supplemented or amended from time
to time, relating to the shares of Xxxxxx Class B Common Stock
to be issued in the Merger (the "Prospectus"), at the time it
becomes effective or, in the case of Raytheon's proxy statement
or consent solicitation with respect to the Merger, as
supplemented or amended from time to time (the "Proxy
Statement"), at the date of mailing or at the date of voting or
consent and approval with respect thereto, will contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the cir-
cumstances under which they are made, not misleading. The
Registration Statement, except for such portions thereof that
relate only to Raytheon, will comply as to form in all material
respects with the provisions of the Securities Act and the
Securities Exchange Act of 1934, as amended (together with the
rules and regulations thereunder, the "Exchange Act").
Section 3.8. Compliance with Law. Xxxxxx and its
subsidiaries are in compliance with, and at all times since
December 31, 1994 have been in compliance with, all applicable
laws, statutes, orders, rules, regulations, policies or
guidelines promulgated, or
-14-
judgments, decisions or orders entered by any Governmental
Authority (collectively, "Applicable Law") relating to them or
their businesses or properties, including, without limitation,
the Truth-In-Negotiations Act, the Procurement Integrity Act,
the Foreign Corrupt Practices Act and the Cost Accounting
Standards, except where the failure to be in compliance
therewith would not have a material adverse effect on Xxxxxx.
Section 3.9. Litigation. Except as set forth in
Section 3.9 to the Xxxxxx Disclosure Schedule, there is no
suit, claim, action, proceeding or investigation, whether
civil, criminal or administrative in nature (an "Action"),
pending or, to the knowledge of Xxxxxx threatened against
Xxxxxx or any of its subsidiaries, nor are there any facts
known to Xxxxxx which would support an Action, which has any
reasonable likelihood of resulting in unreserved liability to
Xxxxxx or its subsidiaries in excess of $10 million
individually or, when aggregated with the aggregate of those
items excepted from the representations set forth in Sections
3.6(b) and (c) and Section 3.13, $100 million or a material
adverse effect on the ability of Xxxxxx to consummate the
transactions contemplated hereby. Xxxxxx is not subject to any
outstanding order, writ, injunction or decree which,
individually or in the aggregate, insofar as can be reasonably
foreseen, could have a material adverse effect on Xxxxxx or on
its ability to consummate the transactions contemplated hereby.
Except as set forth in Section 3.9 to the Xxxxxx Disclosure
Schedule, since December 31, 1994, neither Xxxxxx nor any of
its significant subsidiaries has been subject to any
outstanding order, writ, injunction or decree relating to its
method of doing business or its relationship with past,
existing or future users or purchasers of any goods or services
of Xxxxxx or any such subsidiaries.
Section 3.10. Taxes. Xxxxxx and its subsidiaries
have filed (or there have been duly filed on their behalf) all
federal and material state, local and foreign income,
franchise, excise, real and personal property and other tax
returns and reports (including, but not limited to, those filed
on a consolidated, combined or unitary basis) required to have
been filed by them prior to the date hereof (taking into
account extensions). All of the foregoing returns and reports,
to the extent they relate to the income, assets or business of
Xxxxxx or its subsidiaries, are true and correct in all
material respects, and Xxxxxx and its subsidiaries have paid
(or there have been paid on their behalf), or adequate
provision has been made in the financial statements of Xxxxxx
included in the Xxxxxx Disclosure Schedule for all taxes
payable in respect of all periods ending on or prior to
September 30, 1996. None of Xxxxxx or any of its subsidiaries
(i) will have any liability for any taxes in excess of the
amounts so paid or reserves so established, (ii) is delinquent
in the payment of any tax, assessment or governmental charge or
(iii) has requested any extension of time within which to file
any returns in respect of any fiscal year which have not since
been filed, except, in each case, where such liability,
delinquency or failure to request such an extension would not
-15-
have a material adverse effect on Xxxxxx. No deficiencies for
any tax, assessment or governmental charge have been proposed
in writing, asserted or assessed (tentatively or definitely),
in each case, by any taxing authority, against Xxxxxx or any of
its subsidiaries for which there are not adequate reserves.
Except as set forth in Section 3.10 to the Xxxxxx Disclosure
Schedule, none of Xxxxxx or any of its subsidiaries (or any
consolidated, combined or unitary group of which any such
corporation is a member) is the subject of any tax audit which
could reasonably be expected to have a material adverse effect
on Xxxxxx. As of the date of this Agreement, there are no
pending requests for waivers of the time to assess any such
tax, other than those made in the ordinary course and for which
payment has been made or there are adequate reserves. The
consolidated federal income tax returns of GM through the
fiscal year ending December 31, 1990 have been audited by the
Internal Revenue Service. For the purposes of this Agreement,
the term "tax" shall include all federal, state, local and
foreign taxes including interest and penalties thereon.
Section 3.11. Absence of Certain Changes. (a)
Except as set forth in Section 3.11 to the Xxxxxx Disclosure
Schedule and except as contemplated by the GM Implementation
Agreement, since September 30, 1996, the businesses of Xxxxxx
and its subsidiaries have been conducted in the ordinary
course, consistent with past practice, and there has been no
(i) material adverse change in the assets, liabilities, results
of operations, business or financial condition of Xxxxxx and
its subsidiaries taken as a whole or (ii) material adverse
effect on the ability of Xxxxxx to consummate the transactions
contemplated hereby.
(b) Except (i) as set forth in Schedule 3.11 to the
Xxxxxx Disclosure Schedule, (ii) for the Separation Agreements
(as defined in the Xxxxxx Distribution Agreement, the
"Separation Agreement"), and (iii) pursuant to customary
accounting practices relating to Government Contracts (A)
neither Xxxxxx nor any of its subsidiaries has entered into any
agreement material to Xxxxxx and its subsidiaries, taken as a
whole, with GM or any affiliate of GM on terms that are not as
favorable, in all material respects, to terms that would be
obtainable in comparable agreements with unrelated third
parties, and (B) from the date hereof to the Effective Time
Xxxxxx will not enter into any such agreement, excluding for
all purposes of this Section 3.11 any such agreement which will
not continue in force from and after the Effective Time.
(c) Except (i) as set forth in Schedule 3.11 to the
Xxxxxx Disclosure Schedule and (ii) for the Separation
Agreement, since September 30, 1996, neither Xxxxxx nor any of
its subsidiaries has taken any action referred to in clauses
(i) through (xiii) of Section 5.2(a) hereof.
-16-
Section 3.12. Undisclosed Liabilities. Except as
and to the extent disclosed or reserved against on the Xxxxxx
Interim Statements, neither Xxxxxx nor any of its subsidiaries
has any liabilities or obligations of any nature, whether known
or unknown, absolute, accrued, contingent or otherwise, and
whether due or to become due, except (i) as set forth in
Section 3.12 to the Xxxxxx Disclosure Schedule, (ii) as
incurred after the date of the Xxxxxx Interim Statements in the
ordinary course of business consistent with prior practice, or
(iii) for liabilities and obligations which are not,
individually or in the aggregate, material to Xxxxxx and its
subsidiaries, taken as a whole.
Section 3.13. Environmental Matters. (a) As used
herein, the term "Environmental Laws" means all applicable
federal, state, local or foreign laws relating to pollution or
protection of human health or the environment (including
ambient air, surface water, groundwater, land surface or
subsurface strata), including laws relating to emissions,
discharges, releases or threatened releases of chemicals,
pollutants, contaminants, or industrial, toxic or hazardous
substances or wastes (collectively, "Hazardous Materials") into
the environment, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials, as well as all
applicable authorizations, codes, decrees, demands or demand
letters, injunctions, judgments, licenses, notice or notice
letters, orders, permits, plans or regulations issued, entered,
promulgated or approved thereunder.
(b) There are, with respect to Xxxxxx and its
subsidiaries, and to Xxxxxx' knowledge with respect to its and
their predecessors, no past or present material violations of
Environmental Laws, releases of any material into the
environment, actions, activities, circumstances, conditions,
events, incidents, or contractual obligations which may give
rise to any liability under any applicable Environmental Laws
and none of Xxxxxx or its subsidiaries has received any notice
with respect to any of the foregoing, nor is any Action pending
or to Xxxxxx' knowledge threatened in connection with any of
the foregoing;
(c) Xxxxxx is in material compliance with all
applicable Environmental Laws;
(d) Xxxxxx has all valid permits required under
Environmental Laws for the operation of its business as
presently conducted;
except, in the case of (b), (c) and (d) for any of the
foregoing matters that would not reasonably be expected to
result in Xxxxxx or its subsidiaries incurring unreserved
losses, costs or expenses in excess of $10 million individually
or, when aggregated with the aggregate of those items excepted
from the representations set forth in Sections 3.6(b) and (c)
-17-
and Section 3.9, $100 million, and except as is set forth in
Section 3.9 or 3.13 to the Xxxxxx Disclosure Schedule.
Section 3.14. Employee Benefits. (a) The plans,
contracts or arrangements described in subsections 3, 4, 5, 6
and 7 of Schedule EM to the Separation Agreement include
(i) all "employee benefit plans", as defined in Section 3(3) of
ERISA, which Xxxxxx and/or its subsidiaries maintain (the
"Xxxxxx Employee Benefit Plans") and (ii) all material
employment agreements, and all material bonus and other
incentive compensation, deferred compensation, disability,
severance, stock award, stock option or stock purchase
agreements, collective bargaining agreements, workers'
compensation, policies and arrangements with respect to the
employment and termination of employment of any officer,
director or other employee whose principal place of employment
is in the United States under which Xxxxxx or its subsidiaries
could have any liability (the "Xxxxxx Employee Arrangements").
(b) With respect to each Xxxxxx Employee Benefit
Plan and Xxxxxx Employee Arrangement, a complete and correct
copy of each of the following documents has been provided or
made available to Raytheon: (i) the most recent plan document
or agreement, and all amendments thereto and all related trust
documents; (ii) the most recent summary plan description, and
all related summaries of material modifications; and (iii) the
most recent actuarial and financial reports.
(c) None of the Xxxxxx Employee Benefit Plans is
subject to Section 4063, 4064 or 4202 of ERISA.
(d) With respect to each Xxxxxx Employee Benefit
Plan that is subject to Title IV or Section 302 of ERISA or
Section 412 or 4971 of the Code (other than a Multiemployer
Plan, as defined below), except as would not have a material
adverse effect on Xxxxxx: (i) there does not exist any
accumulated funding deficiency within the meaning of Section
412 of the Code or Section 302 of ERISA, whether or not waived;
(ii) except for the Xxxxxx Employee Benefit Plans disclosed in
Section 3.14(d) of the Xxxxxx Disclosure Schedule, the fair
market value of the assets of such Plan equals or exceeds the
actuarial present value of all accrued benefits under the Plan
(whether or not vested), on a termination basis; (iii) other
than the consummation of the transactions contemplated by this
Agreement, no reportable event within the meaning of Section
4043(c) of ERISA has occurred; and (iv) all premiums to the
Pension Benefit Guaranty Corporation have been paid in full and
there are no outstanding penalties or interest assessments.
With respect to each Xxxxxx Employee Benefit Plan which is a
Multiemployer Plan, except as would not have a material adverse
effect on Xxxxxx: (i) no Withdrawal Liability (as defined
below) exists that has not been satisfied in full; (ii) if
Xxxxxx or any of its subsidiaries were to experience a
withdrawal or
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partial withdrawal from such Plan, no Withdrawal Liability
would be incurred; and (iii) neither Xxxxxx nor any of its
subsidiaries has received any notification, nor has any reason
to believe, that any such Plan is in reorganization, has been
terminated, or may reasonably be expected to be in
reorganization or to be terminated. A "Multiemployer Plan"
means any "multiemployer plan" within the meaning of Section
4001(a)(3) of ERISA. "Withdrawal Liability" means liability to
a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as those terms are
defined in Part I of Subtitle E of Title IV of ERISA.
(e) All contributions required to have been made by
Xxxxxx or its subsidiaries under any Xxxxxx Employee Benefit
Plan or any Applicable Law to any trusts established thereunder
or in connection therewith have been made by the due date
therefor (including any valid extensions), except where any
failure to contribute would not, individually or in the
aggregate, have a material adverse effect on Xxxxxx.
(f) The Xxxxxx Employee Benefit Plans and Xxxxxx
Employee Arrangements have been maintained, in all material
respects, in accordance with their terms and Applicable Law,
including but not limited to the filing of applicable reports,
documents and notices regarding any Xxxxxx Employee Benefit
Plans with the Secretary of Labor and the Secretary of the
Treasury, or the furnishing of such documents to participants
in the Xxxxxx Employee Benefit Plans, except where any failure
to comply would not, individually or in the aggregate, have a
material adverse effect on Xxxxxx.
(g) With respect to each Xxxxxx Employee Benefit
Plan that is intended to be a "qualified plan" within the
meaning of Section 401(a) of the Code (a "Qualified Plan"),
either the Internal Revenue Service has issued a favorable
determination letter that has not been revoked, or an
application for a favorable determination letter was timely
submitted to the Internal Revenue Service for which no final
action has been taken by the Internal Revenue Service, and
there are no existing circumstances nor any events that have
occurred that could adversely affect the qualified status of
any Qualified Plan or the related trust, except to the extent
such circumstances or events can be cured without a material
adverse effect on Xxxxxx. Each Xxxxxx Employee Benefit Plan
which is intended to meet the requirements of Section 501(c)(9)
of the Code meets such requirements and provides no
disqualified benefits (as such term is defined in Section
4976(b) of the Code), except as would not have a material
adverse effect on Xxxxxx.
(h) Section 3.14(h) of the Xxxxxx Disclosure
Schedule (i) identifies each Xxxxxx Employee Benefit Plan and
each Xxxxxx Employee Arrangement that is part of a plan or
arrangement that is to be split pursuant to Schedule EM to the
Separation Agreement,
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(ii) identifies any funding vehicle associated therewith and
(iii) states whether there are any employee contributions made
with respect thereto.
Section 3.15. Brokerage and Finder's Fees. Except
for obligations to Xxxxxxx, Xxxxx & Co., Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated and Salomon Brothers Inc, neither
Xxxxxx nor any of its affiliates, stockholders, directors,
officers or employees has incurred or will incur on behalf of
Xxxxxx or any affiliate of Xxxxxx, any brokerage, finder's or
similar fee in connection with the transactions contemplated by
this Agreement. Other than with respect to the fee of Xxxxxxx,
Sachs & Co., which may be paid by Xxxxxx, no such fee will be
charged against or payable by Xxxxxx or any subsidiary thereof,
and if the fee of Xxxxxxx, Xxxxx & Co. is payable by Xxxxxx
after the Effective Time, it will be reflected as a liability
on the Closing Date Balance Sheet (as defined in the Separation
Agreement). A copy of all agreements relating to any such fee
payable by Xxxxxx or any subsidiary thereof to Xxxxxxx, Sachs &
Co. has (or upon request will be) delivered to Raytheon.
Section 3.16. Opinion of Financial Advisor. The
Boards of Directors of GM, HEC and Xxxxxx have received the
written opinion of Xxxxxxx, Sachs & Co., their financial
advisor, to the effect that, as of January 16, 1997, the
Aggregate Consideration (as defined therein) is fair to the GM
Group (as defined therein) as a whole. Xxxxxx has heretofore
provided a copy of such opinion to Raytheon and such opinion
has not been withdrawn, revoked or modified.
Section 3.17. Board and Stockholder Approval. The
Board of Directors of Xxxxxx, at a meeting duly called and
held, has, by unanimous vote of the directors then in office
determined that this Agreement and the transactions
contemplated hereby are fair to and in the best interests of
Xxxxxx and its stockholder. Xxxxxx Electronics Corporation
("HEC"), in its capacity as sole stockholder of Xxxxxx, has,
acting by written consent, determined that this Agreement and
the transactions contemplated hereby are fair to and in the
best interests of Xxxxxx and its stockholder, and adopted and
approved this Agreement and the transactions contemplated
hereby. No other vote of the holders of any class or series of
Xxxxxx capital stock or indebtedness is necessary to approve
and adopt this Agreement and the transactions contemplated
hereby.
Section 3.18. DGCL Section 203 and State Takeover
Laws. Prior to the date hereof, the Board of Directors of
Xxxxxx has taken all action necessary to exempt under or make
not subject to (x) Section 203 of the DGCL and (y) to its
knowledge, any other state takeover law or state law that
purports to limit or restrict business combinations or the
ability
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to acquire or vote shares (i) the execution of this Agreement,
(ii) the Merger and (iii) the transactions contemplated hereby
and by the Xxxxxx Distribution Agreement.
Section 3.19. Permits. Xxxxxx and its subsidiaries
have in effect all federal, state, local and foreign
governmental approvals, authorizations, certificates, filings,
franchises, licenses, notices, permits and rights ("Permits")
necessary for them to own, lease and operate their properties
and assets and to carry on their business as now conducted or
as presently contemplated to be conducted, and there has
occurred no default under any such Permit, except for the
absence of Permits and for defaults under Permits which absence
or defaults, individually or in the aggregate, would not have a
material adverse effect on Xxxxxx.
Section 3.20. Restrictive Agreements. Except as set
forth in Section 3.20 of the Xxxxxx Disclosure Schedule, Xxxxxx
and its subsidiaries will not be parties to or bound by any
agreement, contract, policy, license, Permit, document,
instrument, arrangement or commitment that materially limits,
after the Effective Time, the ability of Xxxxxx or any of its
subsidiaries to compete in any line of business or with any
person or in any geographic area or which would so limit, after
the Effective Time, the ability of the Surviving Corporation or
any subsidiary thereof.
Section 3.21. Real Estate. Each of Xxxxxx and its
subsidiaries (i) has good and marketable title to its owned
real properties and (ii) has valid and subsisting leasehold
interests in its leased real properties, in each case free and
clear of any liens or encumbrances of whatsoever nature, other
than liens and encumbrances which would not reasonably be
expected to have a material adverse effect on Xxxxxx. The real
property leased or owned by Xxxxxx or any of its subsidiaries
(including, without limitation, all buildings, structures,
improvements and fixtures located thereon, thereunder,
thereover or therein, and all appurtenances thereto and other
aspects thereof): (1) is in good operating condition and
repair and is structurally sound and free of defects, with no
material alterations or repairs being required thereto under
applicable law or insurance company requirements; and (2) is
otherwise suitable, sufficient, adequate and appropriate in all
respects (whether physical, structural, operational, legal,
practical or otherwise) for its current use, operation and
occupancy, except, in each such case, to the extent that
failure to meet such standards would not reasonably be expected
to have a material adverse effect on Xxxxxx. Except as set
forth in Section 3.21 of the Xxxxxx Disclosure Schedule, no
material real property owned or leased by Xxxxxx or any of its
subsidiaries is subject to any sales contracts, option, right
of first refusal or similar agreement or arrangement with any
third party.
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Section 3.22. Employees. (a) There is no labor
strike or work stoppage pending or, to the knowledge of Xxxxxx,
threatened against Xxxxxx or any of its subsidiaries that,
individually or in the aggregate, has had or would reasonably
be expected to have a material adverse effect on Xxxxxx.
Except as set forth in Section 3.22 of the Xxxxxx Disclosure
Schedule, neither Xxxxxx nor any of its subsidiaries is a party
to any collective bargaining agreement, nor has Xxxxxx
received, within the past 12 months, any demand or request for
recognition by a labor organization purporting to represent any
employees of Xxxxxx or its subsidiaries.
(b) Except as set forth in Section 3.22 of the
Xxxxxx Disclosure Schedule, neither Xxxxxx nor any of its
subsidiaries is a party to any severance or change-in-control
plan or agreement which could entitle any employee of Xxxxxx or
any such subsidiary to payments as a result of the consummation
of the transactions contemplated by this Agreement.
Section 3.23. Certain Retirement Assets. (a) The
aggregate fair market value of the assets of the HEC Bargaining
and Nonbargaining Retirement Plans as of November 30, 1996 was
not less than $7,000,000,000. The actuarial accrued liability
for such plans as of December 1, 1995 under government cost
accounting standards was $4,677,000,000 as calculated and
disclosed in the Actuarial Reports for Fiscal Year ending
December 31, 1996 and Plan Year beginning December 1, 1995 as
prepared by Towers, Xxxxxx. To the best knowledge of Xxxxxx,
as of December 1, 1996 there has been no material increase in
such liabilities, other than those arising as a result of
benefit accruals, terminations, retirements, salary increases
and growth due to interest, all of which have occurred in the
ordinary course of business.
(b) To the best knowledge of Xxxxxx, the share of
the assets of the HEC Retirement Plan allocable to the defense
business under government cost accounting standards (i.e., the
Defense Business Fraction, as defined in Schedule EM to the
Separation Agreement as determined as of November 30, 1996) is
not less than 70% as of November 30, 1996.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF RAYTHEON
In order to induce Xxxxxx to enter into this
Agreement, Raytheon hereby represents and warrants to Xxxxxx
that the statements contained in this Article are true, correct
and complete.
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Section 4.1. Organization and Standing. Raytheon
and each of its significant subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware, with respect to Raytheon, and under
the laws of its state or other jurisdiction of incorporation,
with respect to its significant subsidiaries, in each case with
full power and authority (corporate and other) to own, lease,
use and operate its properties and to conduct its business as
and where owned, leased, used, operated and conducted.
Raytheon and each of its significant subsidiaries is duly
qualified to do business and in good standing in each
jurisdiction in which the nature of the business conducted by
it or the property it owns, leases or operates makes such
qualification necessary, except where the failure to be so
qualified or in good standing in such jurisdiction would not
have a material adverse effect on Raytheon. Raytheon is not in
default in the performance, observance or fulfillment of any
provision of its certificate of incorporation, as amended or
by-laws, as amended and restated.
Section 4.2. Subsidiaries. Raytheon does not own,
directly or indirectly, any equity or other ownership interest
in any corporation, partnership, joint venture or other entity
or enterprise, except as set forth in Section 4.2 to the
disclosure schedule delivered by Raytheon to Xxxxxx and dated
as of the date hereof (the "Raytheon Disclosure Schedule").
Except as set forth in Section 4.2 to the Raytheon Disclosure
Schedule, Raytheon is not subject to any obligation or
requirement to provide funds to or make any investment (in the
form of a loan, capital contribution or otherwise) in any such
entity. Except as set forth in Section 4.2 to the Raytheon
Disclosure Schedule, Raytheon owns directly or indirectly each
of the outstanding shares of capital stock (or other ownership
interests having by their terms ordinary voting power to elect
a majority of directors or others performing similar functions
with respect to such significant subsidiary) of each of its
significant subsidiaries. Each of the outstanding shares of
capital stock of each of Raytheon's significant subsidiaries is
duly authorized, validly issued, fully paid and nonassessable,
and is owned, directly or indirectly, by Raytheon free and
clear of all liens, pledges, security interests, claims or
other encumbrances. Other than as set forth in Section 4.2 to
the Raytheon Disclosure Schedule, there are no outstanding
subscriptions, options, warrants, puts, calls, agreements,
understandings, claims or other commitments or rights of any
type relating to the issuance, sale or transfer of any
securities of any significant subsidiary of Raytheon, nor are
there outstanding any securities which are convertible into or
exchangeable for any shares of capital stock of any significant
subsidiary of Raytheon; and no significant subsidiary of
Raytheon has any obligation of any kind to issue any additional
securities or to pay for securities of Raytheon or any
significant subsidiary of Raytheon or any predecessor of any of
the foregoing.
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Section 4.3. Corporate Power and Authority.
Raytheon has all requisite corporate power and authority to
enter into this Agreement and, subject to the approval of
Raytheon Stockholders, Raytheon has all requisite corporate
power and authority to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by
Raytheon and the consummation of the transactions contemplated
hereby to be effected by Raytheon have been duly authorized by
all necessary corporate action on the part of Raytheon, subject
to the approval of Raytheon Stockholders. This Agreement has
been duly executed and delivered by Raytheon, and constitutes
the legal, valid and binding obligation of Raytheon,
enforceable against it in accordance with its terms.
Section 4.4. Capitalization of Raytheon. (a) As of
December 31, 1996, Raytheon's authorized capital stock
consisted solely of (x) 400,000,000 shares of Raytheon Common
Stock, of which (i) 236,250,167 shares were issued and
outstanding, (ii) 69,123,796 shares of Raytheon Common Stock
were held in the treasury of Raytheon and (iii) 12,570,360
shares were reserved for issuance upon the exercise or
conversion of outstanding options granted by Raytheon with an
average weighted exercise price as set forth in Section 4.4 of
the Raytheon Disclosure Schedule and (y) 3,000,000 shares of
preferred stock, without par value, none of which were issued
and outstanding or reserved for issuance. Each outstanding
share of Raytheon capital stock is duly authorized and validly
issued, fully paid and nonassessable, and has not been issued
in violation of any preemptive or similar rights. Raytheon has
no authorized or outstanding bonds, debentures, notes or other
obligations or securities, the holders of which have the right
to vote with the stockholders of Raytheon on any matter.
(b) Other than as contemplated by the Merger or as
set forth in Section 4.4 to the Raytheon Disclosure Schedule,
there are no outstanding subscriptions, options, warrants,
puts, calls, agreements, understandings, claims or other
commitments or rights of any type relating to the issuance,
sale or transfer of any securities of Raytheon, nor are there
outstanding any securities which are convertible into or
exchangeable for any shares of capital stock of Raytheon; and
Raytheon has no obligation of any kind to issue any additional
securities or to pay for securities of Raytheon or any
predecessor or affiliate. The issuance and sale of all of the
shares of capital stock described in this Section 4.4 have been
in compliance with federal and state securities laws. The
Raytheon Disclosure Schedule accurately sets forth the number
of shares of Raytheon Common Stock issuable upon exercise of
Raytheon Options, and the average exercise prices with respect
thereto, along with a list of the options held by each
corporate officer of Raytheon. Except as set forth in Section
4.4 to the Raytheon Disclosure Schedule, Raytheon has not
agreed to register any securities under the Securities Act or
under any state securities law or granted registration rights
with respect to any securities of Raytheon to any person or
entity.
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Section 4.5. Conflicts, Consents and Approvals.
Neither the execution and delivery of this Agreement by
Raytheon nor the consummation of the transactions contemplated
hereby will:
(a) conflict with, or result in a breach of any
provision of the certificate of incorporation or by-laws of
Raytheon or its significant subsidiaries;
(b) violate, or conflict with, or result in a breach
of any provision of, or constitute a default (or an event
which, with the giving of notice, the passage of time or
otherwise, would constitute a default) under, or entitle any
party (with the giving of notice, the passage of time or
otherwise) to terminate, accelerate, modify or call a default
under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or
assets of Raytheon or any of its significant subsidiaries
under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, intellectual property
or other license, contract, undertaking, agreement, lease or
other instrument or obligation to which Raytheon or any of its
significant subsidiaries is a party;
(c) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Raytheon or any of
its significant subsidiaries or any of their respective
properties or assets; or
(d) require any action or consent or approval of, or
review by, or registration or filing by Raytheon or any of its
affiliates with, any third party or any Governmental Authority,
other than, (i) authorization of the Merger and the
transactions contemplated hereby by Raytheon Stockholders, (ii)
actions required by the HSR Act and any comparable laws of
foreign jurisdictions, (iii) registrations or other actions
required under federal and state securities laws as are
contemplated by this Agreement and (iv) as set forth in Section
4.5 to the Raytheon Disclosure Schedule;
except in the case of (b), (c) and (d) for any of the foregoing
that, individually or in the aggregate, would neither have a
material adverse effect on Raytheon nor materially delay or
adversely impact Raytheon's ability to consummate the
transactions contemplated hereby.
Section 4.6. Raytheon SEC Documents. (a) Raytheon
has timely filed with the Securities and Exchange Commission
(the "Commission") all forms, reports, schedules, statements
and other documents required to be filed by it since December
31, 1994 under the Exchange Act or the Securities Act (such
documents, as supplemented and amended since the time of
filing, collectively, the "Raytheon SEC Documents"). The
Raytheon SEC Documents, including any financial statements or
schedules included therein, at the time filed
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(and, in the case of registration statements and proxy
statements, on the dates of effectiveness and the dates of
mailing, respectively) (i) did not contain any untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading, and (ii) complied in all material
respects with the applicable requirements of the Exchange Act
and the Securities Act, as the case may be. The financial
statements of Raytheon included in the Raytheon SEC Documents
at the time filed (and, in the case of registration statements
and proxy statements, on the date of effectiveness and the date
of mailing, respectively) complied as to form in all material
respects with applicable accounting requirements and with the
published rules and regulations of the Commission with respect
thereto, were prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited
statements, as permitted by Form 10-Q of the Commission), and
fairly present (subject in the case of unaudited statements to
normal, recurring audit adjustments) the consolidated financial
position of Raytheon and its consolidated subsidiaries as at
the dates thereof and the consolidated results of its
operations and cash flows for the periods then ended.
Included in the Raytheon Disclosure Schedule are (i)
audited consolidated balance sheets as of December 31, 1995 and
1994, and consolidated statements of income, cash flows and
shareholders' equity for the two years ended December 31, 1995
and 1994, together with a report of Raytheon's independent
accountants thereon, for Raytheon and its subsidiaries (such
financial statements, the "Raytheon Statements" and the balance
sheet as of December 31, 1995 included therein, the "Raytheon
Balance Sheet"), and (ii) an unaudited consolidated balance
sheet and statement of income, cash flows and shareholders'
equity at and for the nine months ended September 29, 1996 for
Raytheon and its subsidiaries (the "Raytheon Interim
Statements"). The Raytheon Balance Sheet (including any
related notes and schedules) and the consolidated balance sheet
included in the Raytheon Interim Statements fairly present in
all material respects the consolidated financial position of
Raytheon and its subsidiaries as of their respective dates, and
each of the consolidated statements of income, cash flows and
shareholders' equity included in the Raytheon Statements and
the Raytheon Interim Statements (including any related notes
and schedules) fairly presents in all material respects the
consolidated results of operations, retained earnings and cash
flows, as the case may be, of Raytheon and its subsidiaries for
the periods set forth therein, in each case in accordance with
GAAP consistently applied except as disclosed in the footnotes
thereto.
(b) Proper accounting controls are, and since
January 1, 1994, have been, in place to ensure that no portion
of any international sales representative commission or
contingent fee payment is included, directly or indirectly, in
the contract price of any sale to
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the United States Government pursuant to the FMS program, or
any sale to a foreign government financed in whole or in part
with funding from the FMF program, except as permitted
thereunder and except where there is no reasonable likelihood
that the failure to have in place such controls would give rise
to any unreserved loss, cost or expense in excess of $10
million individually or, when aggregated with the aggregate of
those items excepted from the representations set forth in
clause (c) below and in Sections 4.9 and 4.13, $100 million.
(c) All payments to international sales
representatives since January 1, 1994, including commission and
contingent fee payments to international sales representatives
on FMS and FMF contracts, (i) have been accurately reported on
Raytheon's books and records, and (ii) have been made
consistent with all applicable United States and foreign laws
and regulations, except where there is no reasonable likelihood
that the failure to accurately report or to be consistent with
applicable law would give rise to any unreserved loss, cost or
expense in excess of $10 million individually or, when
aggregated with the aggregate of those items excepted from the
representations set forth in clause (b) above and in Sections
4.9 and 4.13, $100 million.
Section 4.7. Registration Statement. None of the
information provided by or on behalf of Raytheon for inclusion
in the Registration Statement, including the Prospectus, at the
time it becomes effective, or in the Proxy Statement, at the
date of mailing or at the date of voting or consent and
approval with respect thereto, and none of the information
provided by Raytheon for inclusion in GM's proxy statement or
consent solicitation statement regarding the GM Transactions
(the "GM Proxy Statement") at the date of mailing or at the
date of voting or consent and approval with respect thereto,
will contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.
The Proxy Statement, except for such portions thereof that
relate only to GM or Xxxxxx, and such portions of the
Registration Statement that relate only to Raytheon, will
comply as to form in all material respects with the provisions
of the Securities Act and the Exchange Act.
Section 4.8. Compliance with Law. Raytheon and its
subsidiaries are in compliance with, and at all times since
December 31, 1994 have been in compliance with, all Applicable
Law relating to them or their businesses or properties,
including, without limitation, the Truth-In-Negotiations Act,
the Procurement Integrity Act, the Foreign Corrupt Practices
Act and the Cost Accounting Standards, except where the failure
to be in compliance therewith would not have a material adverse
effect on Raytheon.
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Section 4.9. Litigation. Except as set forth in
Section 4.9 to the Raytheon Disclosure Schedule, there is no
Action pending or, to the knowledge of Raytheon, threatened
against Raytheon or any of its subsidiaries, nor are there any
facts known to Raytheon which would support an Action, which
has any reasonable likelihood of resulting in unreserved
liability to Raytheon or its subsidiaries in excess of $10
million individually or, when aggregated with the aggregate of
those items excepted from the representations set forth in
Sections 4.6(b) and (c) and Section 4.13, $100 million or a
material adverse effect on the ability of Raytheon to
consummate the transactions contemplated hereby. Raytheon is
not subject to any outstanding order, writ, injunction or
decree which, individually or in the aggregate, insofar as can
be reasonably foreseen, could have a material adverse effect on
Raytheon or on its ability to consummate the transactions
contemplated hereby. Except as set forth in Section 4.9 to the
Raytheon Disclosure Schedule, since December 31, 1994, neither
Raytheon nor any of its significant subsidiaries has been
subject to any outstanding order, writ, injunction or decree
relating to its method of doing business or its relationship
with past, existing or future users or purchasers of any goods
or services of Raytheon or any such subsidiaries.
Section 4.10. Taxes. Raytheon and its subsidiaries
have duly filed all federal and material state, local and
foreign income, franchise, excise, real and personal property
and other tax returns and reports (including, but not limited
to, those filed on a consolidated, combined or unitary basis)
required to have been filed by them prior to the date hereof
(taking into account extensions). All of the foregoing returns
and reports are true and correct in all material respects, and
Raytheon and its subsidiaries have paid or made adequate
provision in the financial statements of Raytheon included in
the Raytheon Disclosure Schedule for all taxes payable in
respect of all periods ending on or prior to September 30,
1996. None of Raytheon or any of its subsidiaries (i) will
have any liability for any taxes in excess of the amounts so
paid or reserves so established, (ii) is delinquent in the
payment of any tax, assessment or governmental charge or (iii)
has requested any extension of time within which to file any
returns in respect of any fiscal year which have not since been
filed, except, in each case, where such liability, delinquency
or failure to request such an extension would not have a
material adverse effect on Raytheon. No deficiencies for any
tax, assessment or governmental charge have been proposed in
writing, asserted or assessed (tentatively or definitely), in
each case, by any taxing authority, against Raytheon or any of
its subsidiaries for which there are not adequate reserves.
Except as set forth in Section 4.10 to the Raytheon Disclosure
Schedule, none of Raytheon or any of its subsidiaries is the
subject of any tax audit which could reasonably be expected to
have a material adverse effect on Raytheon. As of the date of
this Agreement, there are no pending requests for waivers of
the time to assess any such tax, other than those made in the
ordinary course and for which payment has been made or there
are adequate reserves. The consolidated federal income tax
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returns of Raytheon through the fiscal year ending December 31,
1991 have been audited by the Internal Revenue Service.
Section 4.11. Absence of Certain Changes. (a)
Except as set forth in Section 4.11 to the Raytheon Disclosure
Schedule, since September 29, 1996, the businesses of Raytheon
and its subsidiaries have been conducted in the ordinary
course, consistent with past practice, and there has been no
(i) material adverse change in the assets, liabilities, results
of operations, business or financial condition of Raytheon and
its subsidiaries taken as a whole or (ii) material adverse
effect on the ability of Raytheon to consummate the
transactions contemplated hereby.
(b) Except as set forth in Section 4.11 to the
Raytheon Disclosure Schedule, since September 29, 1996, neither
Raytheon nor any of its subsidiaries has taken any action
referred to in clauses (i) through (vi) of Section 5.3(b)
hereof.
Section 4.12. Undisclosed Liabilities. Except as
and to the extent disclosed or reserved against on the Raytheon
Interim Statements, neither Raytheon nor any of its
subsidiaries has any liabilities or obligations of any nature,
whether known or unknown, absolute, accrued, contingent or
otherwise, and whether due or to become due except (i) as set
forth in Section 4.12 to the Raytheon Disclosure Schedule, (ii)
as incurred after the date of the Raytheon Interim Statements
in the ordinary course of business consistent with prior
practice, or (iii) for liabilities and obligations which are
not, individually or in the aggregate, material to Raytheon and
its subsidiaries, taken as a whole.
Section 4.13. Environmental Matters. (a) There
are, with respect to Raytheon and its subsidiaries, and to
Raytheon's knowledge with respect to its and their
predecessors, no past or present material violations of
Environmental Laws, releases of any material into the
environment, actions, activities, circumstances, conditions,
events, incidents, or contractual obligations which may give
rise to any liability under any applicable Environmental Laws
and none of Raytheon or its subsidiaries has received any
notice with respect to any of the foregoing, nor is any Action
pending or to Raytheon's knowledge threatened in connection
with any of the foregoing;
(b) Raytheon is in material compliance with all
applicable Environmental Laws;
(c) Raytheon has all valid permits required under
Environmental Laws for the operation of its business as
presently conducted;
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except, in each case, for any of the foregoing matters that
would not reasonably be expected to result in Raytheon or its
subsidiaries incurring unreserved losses, costs or expenses in
excess of $10 million individually or, when aggregated with the
aggregate of those items excepted from the representations set
forth in Sections 4.6(b) and (c) and Section 4.9, $100 million,
and except as is set forth in Section 4.9 or 4.13 to the
Raytheon Disclosure Schedule.
Section 4.14. Employee Benefits. (a) Section
4.14(a) of the Raytheon Disclosure Schedule sets forth a
complete and correct list of: (i) all "employee benefit
plans", as defined in Section 3(3) of ERISA, which Raytheon
and/or its subsidiaries maintain (the "Raytheon Employee
Benefit Plans") and (ii) all material employment agreements,
and all material bonus and other incentive compensation,
deferred compensation, disability, severance, stock award,
stock option or stock purchase agreements, collective
bargaining agreements, workers' compensation, policies and
arrangements with respect to the employment and termination of
employment of any officer, director or other employee whose
principal place of employment is or was in the United States
under which Raytheon or its subsidiaries could have any
liability (the "Raytheon Employee Arrangements").
(b) With respect to each Raytheon Employee Benefit
Plan and Raytheon Employee Arrangement, a complete and correct
copy of each of the following documents has been provided or
made available to Xxxxxx: (i) the most recent plan document or
agreement, and all amendments thereto and all related trust
documents; (ii) the most recent summary plan description, and
all related summaries of material modifications; and (iii) the
most recent actuarial and financial reports.
(c) Except as set forth in Section 4.14(c) of the
Raytheon Disclosure Schedule, none of the Raytheon Employee
Benefit Plans is subject to Section 4063, 4064 or 4202 of
ERISA.
(d) With respect to each Raytheon Employee Benefit
Plan that is subject to Title IV or Section 302 of ERISA or
Section 412 or 4971 of the Code (other than a Multiemployer
Plan), except as would not have a material adverse effect on
Raytheon: (i) there does not exist any accumulated funding
deficiency within the meaning of Section 412 of the Code or
Section 302 of ERISA, whether or not waived; (ii) the fair
market value of the assets of such Plan equals or exceeds the
actuarial present value of all accrued benefits under the Plan
(whether or not vested), on a termination basis; (iii) other
than the consummation of the transactions contemplated by this
Agreement, no reportable event within the meaning of Section
4043(c) of ERISA has occurred; and (iv) all premiums to the
Pension Benefit Guaranty Corporation have been paid in full and
there are no outstanding penalties or interest
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assessments. With respect to each Raytheon Employee Benefit
Plan which is a Multiemployer Plan, except as would not have a
material adverse effect on Raytheon: (i) no Withdrawal
Liability exists that has not been satisfied in full; (ii) if
Raytheon or any of its subsidiaries were to experience a
withdrawal or partial withdrawal from such Plan, no Withdrawal
Liability would be incurred; and (iii) neither Raytheon nor any
of its subsidiaries has received any notification, nor has any
reason to believe, that any such Plan is in reorganization, has
been terminated, or may reasonably be expected to be in
reorganization or to be terminated.
(e) All contributions required to have been made by
Raytheon or its subsidiaries under any Raytheon Employee
Benefit Plan or any Applicable Law to any trusts established
thereunder or in connection therewith have been made by the due
date therefor (including any valid extensions), except where
any failure to contribute would not, individually or in the
aggregate, have a material adverse effect on Raytheon.
(f) The Raytheon Employee Benefit Plans and Raytheon
Employee Arrangements have been maintained, in all material
respects, in accordance with their terms and Applicable Law,
including but not limited to the filing of applicable reports,
documents and notices regarding any Raytheon Employee Benefit
Plans with the Secretary of Labor and the Secretary of the
Treasury, or the furnishing of such documents to participants
in the Raytheon Employee Benefit Plans, except where any
failure to comply would not, individually or in the aggregate,
have a material adverse effect on Raytheon.
(g) With respect to each Raytheon Employee Benefit
Plan that is intended to be a "qualified plan" within the
meaning of Section 401(a) of the Code (a "Qualified Plan"),
either the Internal Revenue Service has issued a favorable
determination letter that has not been revoked, or an
application for a favorable determination letter was timely
submitted to the Internal Revenue Service for which no final
action has been taken by the Internal Revenue Service, and
there are no existing circumstances nor any events that have
occurred that could adversely affect the qualified status of
any Qualified Plan or the related trust, except to the extent
such circumstances or events can be cured without a material
adverse effect on Raytheon. Each Raytheon Employee Benefit
Plan which is intended to meet the requirements of Section
501(c)(9) of the Code meets such requirements and provides no
disqualified benefits (as such term is defined in Section
4976(b) of the Code), except as would not have a material
adverse effect on Raytheon.
Section 4.15. Brokerage and Finder's Fees. Except
for Raytheon's obligations to Bear, Xxxxxxx & Co. Inc. and
Credit Suisse First Boston Corporation, neither Raytheon nor
any of its affiliates, stockholders, directors, officers or
employees has incurred
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or will incur on behalf of Raytheon or any affiliate of
Raytheon, any brokerage, finder's or similar fee in connection
with the transactions contemplated by this Agreement. A copy
of all agreements relating to any such fees payable by Raytheon
or any affiliate of Raytheon has (or upon request will be)
delivered to Xxxxxx.
Section 4.16. Opinion of Financial Advisor. The
Board of Directors of Raytheon has received (a) the opinion of
Bear, Xxxxxxx & Co. Inc. to the effect that, as of January 16,
1997, the financial terms of the Merger are fair to the
Raytheon Stockholders from a financial point of view and (b)
the opinion of Credit Suisse First Boston Corporation to the
effect that, as of January 16, 1997, the Merger Consideration
(as defined in such opinion) is fair to the Raytheon
Stockholders from a financial point of view, and on or promptly
following the date hereof such opinions will be confirmed in
writing. Raytheon, promptly upon receipt thereof, will provide
a copy of such written opinions to Xxxxxx. Neither of such
opinions has been withdrawn, revoked or modified.
Section 4.17. Board Recommendation. The Board of
Directors of Raytheon, at a meeting duly called and held, has
by the unanimous vote of all directors present (i) determined
that this Agreement and the transactions contemplated hereby
are fair to and in the best interests of Raytheon and the
Raytheon Stockholders and (ii) resolved to recommend that the
Raytheon Stockholders approve this Agreement and the
transactions contemplated hereby.
Section 4.18. Voting Requirements. The affirmative
vote of the holders of a majority of all outstanding shares of
Raytheon Common Stock, voting as a single class, at the
Raytheon stockholders meeting to adopt and approve this
Agreement, is the only vote of the holders of any class or
series of Raytheon capital stock or indebtedness necessary to
approve and adopt this Agreement and the transactions
contemplated hereby.
Section 4.19. DGCL Section 203 and State Takeover
Laws. Prior to the date hereof, the Board of Directors of
Raytheon has taken all action necessary to exempt under or make
not subject to (x) Section 203 of the DGCL and (y) to its
knowledge, any other state takeover law or state law that
purports to limit or restrict business combinations or the
ability to acquire or vote shares (i) the execution of this
Agreement, (ii) the Merger and (iii) the transactions
contemplated hereby.
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Section 4.20. Permits. Raytheon and its
subsidiaries have in effect all federal, state, local and
foreign Permits necessary for them to own, lease and operate
their properties and assets and to carry on their business as
now conducted or as presently contemplated to be conducted, and
there has occurred no default under any such Permit, except for
the absence of Permits and for defaults under Permits which
absence or defaults, individually or in the aggregate, would
not have a material adverse effect on Raytheon.
Section 4.21. Restrictive Agreements. As of the
date hereof, except as set forth in Section 4.21 of the
Raytheon Disclosure Schedule, Raytheon and its subsidiaries
will not be parties to or bound by any agreement, contract,
policy, license, Permit, document, instrument, arrangement or
commitment that materially limits, after the Effective Time,
the ability of Raytheon or any of its subsidiaries to compete
in any line of business or with any person or in any geographic
area or which would so limit, after the Effective Time, the
ability of the Surviving Corporation or any subsidiary thereof.
Section 4.22. Real Estate. Each of Raytheon and its
subsidiaries (i) has good and marketable title to its owned
real properties and (ii) has valid and subsisting leasehold
interests in its leased real properties, in each case free and
clear of any liens or encumbrances of whatsoever nature, other
than liens and encumbrances which would not reasonably be
expected to have a material adverse effect on Raytheon. The
real property leased or owned by Raytheon or any of its
subsidiaries (including, without limitation, all buildings,
structures, improvements and fixtures located thereon,
thereunder, thereover or therein, and all appurtenances thereto
and other aspects thereof): (1) is in good operating condition
and repair and is structurally sound and free of defects, with
no material alterations or repairs being required thereto under
applicable law or insurance company requirements; and (2) is
otherwise suitable, sufficient, adequate and appropriate in all
respects (whether physical, structural, operational, legal,
practical or otherwise) for its current use, operation and
occupancy, except, in each such case, to the extent that
failure to meet such standards would not reasonably be expected
to have a material adverse effect on Raytheon. No material
real property owned or leased by Raytheon or any of its
subsidiaries is subject to any sales contracts, option, right
of first refusal or similar agreement or arrangement with any
third party.
Section 4.23. Employees. (a) There is no labor
strike or work stoppage pending or, to the knowledge of
Raytheon, threatened against Raytheon or any of its
subsidiaries that, individually or in the aggregate, has had or
would reasonably be expected to have a material adverse effect
on Raytheon. Except as set forth in Section 4.23 of the
Raytheon Disclosure Schedule, neither Raytheon nor any of its
subsidiaries is a party to any collective bargaining agreement,
nor has Raytheon received, within the past 12 months, any
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demand or request for recognition by a labor organization
purporting to represent any employees of Raytheon or its
subsidiaries.
(b) Except as set forth in Section 4.23 of the
Raytheon Disclosure Schedule, neither Raytheon nor any of its
subsidiaries is a party to any severance or change-in-control
plan or agreement which could entitle any employee of Raytheon
or any such subsidiary to payments as a result of the
consummation of the transactions contemplated by this
Agreement.
Section 4.24. Shareholder Rights Plan. There does
not exist any shareholder rights plan or any outstanding rights
issued by Raytheon with respect to any of Raytheon's securities
(other than as disclosed in Section 4.4(a)(iii) or Section 4.4
of the Raytheon Disclosure Schedule).
ARTICLE 5
COVENANTS OF THE PARTIES
The parties hereto agree as follows with respect to
the period from and after the execution of this Agreement.
Section 5.1. Mutual Covenants.
(a) General. Each of the parties hereto shall use
all commercially reasonable efforts to take all action and to
do all things necessary, proper or advisable to consummate the
Merger and the transactions contemplated by this Agreement
(including using all commercially reasonable efforts to cause
the conditions set forth in Article 6 for which they are
responsible to be satisfied as soon as practicable and to
prepare, execute and deliver such further instruments and take
or cause to be taken such other and further action as any other
party hereto shall reasonably request), subject to the
limitations in Section 5.1(b) below.
(b) HSR Act. As soon as practicable, and in any
event no later than ten (10) business days after the date
hereof, each of the parties hereto shall file any Notification
and Report Forms and related material required to be filed by
it with the Federal Trade Commission and the Antitrust Division
of the United States Department of Justice under the HSR Act
with respect to the Merger and shall promptly make any further
filings pursuant thereto that may be necessary, proper or
advisable. Each of Raytheon and Xxxxxx shall
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furnish to the other such information and assistance as the
other reasonably may request in connection with the preparation
of any submissions to, or agency proceedings by, any
Governmental Authority under the HSR Act or any comparable laws
of foreign jurisdictions, and each of Raytheon and Xxxxxx shall
keep the other promptly apprised of any communications with,
and inquiries or requests for information from, such
Governmental Authorities. Each of Raytheon and Xxxxxx hereby
agrees to use its best efforts to cause the condition set forth
in Section 6.1(b) of this Agreement to be satisfied, including,
without limitation, by disposing of or holding separate, or
agreeing to dispose of or hold separate, any assets (but in the
case of Xxxxxx, only Xxxxxx Assets, as defined in the
Separation Agreement).
Each of Raytheon and Xxxxxx hereby agrees to use its
best efforts to cooperate and assist in any defense by the
other party hereto of the Merger before any Governmental
Authority reviewing the Merger, including by promptly providing
such information as may be requested by such Governmental
Authority or such assistance as may be reasonably requested by
the other party hereto in such defense.
(c) Tax-Free Treatment. The parties intend the
Merger to qualify as a reorganization under Section 368(a) of
the Code and certain of the transactions contemplated by the
Xxxxxx Distribution Agreement (the "Spin-Off Transactions") to
qualify as tax-free spin-offs within the meaning of Sections
355 and 368(a)(1)(D) of the Code. Each of the parties and its
affiliates shall use all commercially reasonable efforts to
cause the Merger and the Spin-Off Transactions to so qualify
and to obtain, as of the Effective Time, the opinions (the "Tax
Opinions") of Wachtell, Lipton, Xxxxx & Xxxx, special counsel
to Raytheon, and Weil, Gotshal & Xxxxxx LLP, special counsel to
Xxxxxx, substantially in the forms attached hereto as Exhibits
G and H (or otherwise in form and substance satisfactory to
Raytheon or Xxxxxx, respectively), in each case to the effect
that the Merger shall qualify as a reorganization within the
meaning of Section 368 of the Code, it being understood that in
rendering such Tax Opinions, such tax counsel shall be entitled
to rely upon, inter alia, representations of officers of
Raytheon and Xxxxxx substantially in the form of Exhibits I and
J. Neither party hereto nor its affiliates shall take any
action that would cause the Merger not to qualify as a
reorganization under Section 368(a) or that would cause the
Spin-Off Transactions not to qualify as tax-free spin-offs
within the meaning of Sections 355 and 368(a)(1)(D) of the
Code. The parties shall take the position for all purposes
that the Merger qualifies as a reorganization under Section
368(a) of the Code, and the Spin-Off Transactions qualify as
tax-free spin-offs within the meaning of Sections 355 and
368(a)(1)(D) of the Code, unless and until the parties fail to
obtain either of the Tax Opinions as of the Closing Date.
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(d) NYSE Listing. The parties hereto shall use all
commercially reasonable efforts to cause the shares of Xxxxxx
Class A Common Stock and Xxxxxx Class B Common Stock to be
issued pursuant to the Xxxxxx Distribution Agreement and the
Merger, respectively, to be approved for listing on the NYSE,
subject to official notice of issuance, prior to the Closing
Date.
(e) Letters of Accountants. Xxxxxx shall use all
commercially reasonable efforts to cause to be delivered to
Raytheon two letters from Xxxxxx' independent accountants, one
dated a date within two business days before the date on which
the Registration Statement shall become effective and one dated
a date within two business days before the date on which the
Proxy Statement is mailed to Raytheon Stockholders, in each
case addressed to Raytheon, in form and substance reasonably
satisfactory to Raytheon and customary in scope and substance
for comfort letters delivered by independent public accountants
in connection with registration statements similar to the
Registration Statement and proxy statements similar to the
Proxy Statement.
Raytheon shall use all commercially reasonable
efforts to cause to be delivered to Xxxxxx two letters from
Raytheon's independent accountants, one dated a date within two
business days before the date on which the Registration
Statement shall become effective and one dated a date within
two business days before the date on which the Proxy Statement
is mailed to Raytheon Stockholders, in each case addressed to
Xxxxxx, in form and substance reasonably satisfactory to Xxxxxx
and customary in scope and substance for comfort letters
delivered by independent public accountants in connection with
registration statements similar to the Registration Statement
and proxy statements similar to the Proxy Statement.
(f) Public Announcements. Unless otherwise required
by Applicable Law or requirements of the NYSE (and in that
event only if time does not permit), at all times prior to the
earlier of the Effective Time or termination of this Agreement
pursuant to Section 7.1, the parties hereto shall consult with
each other before issuing any press release or other public
announcement with respect to the Merger or the other
transactions and matters contemplated hereby and shall not
issue any such press release or public announcement prior to
such consultation, provided that the initial press release
relating to this Agreement and the transactions contemplated
hereby will be a joint press release.
(g) Access. From and after the date of this
Agreement until the Effective Time (or the termination of this
Agreement), Raytheon and Xxxxxx shall permit representatives of
the other to have appropriate access at all reasonable times to
the other's premises, properties, books, records, contracts,
tax records and documents to the extent related to Xxxxxx'
business (which, for purposes of this Section 5.1(g), shall
mean Xxxxxx' business
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after giving effect to the consummation of HEC Reorganization)
or Raytheon's business, as the case may be. Information
obtained by Raytheon and Xxxxxx pursuant to this Section 5.1(g)
shall be subject to the provisions of the confidentiality
agreements between them, each dated February 7, 1996 (together,
the "Confidentiality Agreement"), which agreements remain in
full force and effect.
(h) Indemnification. From and after the Effective
Time, the Surviving Corporation shall indemnify, defend and
hold harmless each individual who is now, or has been at any
time prior to the date hereof or who becomes prior to the
Effective Time, an officer or director of Raytheon or Xxxxxx or
any of their respective subsidiaries (the "Indemnified
Parties") against all losses, claims, damages, costs, expenses,
liabilities or judgments or amounts that are paid in settlement
with the approval of the Surviving Corporation (which approval
shall not be unreasonably withheld) arising out of or in
connection with any claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole
or in part out of (i) the fact that such person is or was a
director or officer of Raytheon or Xxxxxx or their respective
subsidiaries, as the case may be, whether pertaining to any
matter existing or occurring at or prior to the Effective Time
and whether asserted or claimed prior to, or at or after, the
Effective Time (but in the case of Xxxxxx only insofar as
relating to the Defense Business (as defined in the Separation
Agreement)) and (ii) this Agreement or the transactions
contemplated hereby, in each case to the full extent Raytheon
or Xxxxxx, as the case may be, would have been permitted under
Delaware law and its certificate of incorporation and bylaws to
indemnify such person, and the Surviving Corporation shall pay
expenses reasonably incurred by an Indemnified Party in advance
of the final disposition of any such action or proceeding to
such Indemnified Party to the full extent permitted by law upon
receipt of the undertaking contemplated by Section 145(e) of
the DGCL. Without limiting the generality of the foregoing, in
the event any such claim, action, suit, proceeding or
investigation is brought against any Indemnified Party (whether
arising before or after the Effective Time), after the
Effective Time, the Surviving Corporation (i) shall pay all
reasonable fees and expenses of any counsel retained by any
Indemnified Parties promptly as statements therefor are
received, and (ii) shall use its commercially reasonable
efforts to assist in the vigorous defense of any such matter,
provided that the Surviving Corporation shall not be liable for
any settlement of any claim effected without its written
consent, which consent, however, shall not be unreasonably
withheld. Any Indemnified Party wishing to claim
indemnification under this Section 5.1(h), upon learning of any
such claim, action, suit, proceeding or investigation, shall
notify the Surviving Corporation (but the failure so to notify
the Surviving Corporation shall not relieve it from any
liability which it may have under this Section 5.1(h) except to
the extent such failure materially prejudices the Surviving
Corporation), and shall deliver to the Surviving Corporation
the undertaking, if any, contemplated by Section 145(e) of the
DGCL.
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The provisions of this Section 5.1(h) are intended to
be for the benefit of, and shall be enforceable by, each
Indemnified Party, his or her heirs and his or her legal
representatives.
(i) Expenses. Except as otherwise provided in this
Agreement or the other Transaction Agreements, whether or not
the Merger is consummated, the parties hereto shall pay their
own costs and expenses associated with this Agreement and the
transactions contemplated hereby.
(j) Preparation of SEC Documents. Xxxxxx shall
promptly furnish Raytheon, and Raytheon shall promptly furnish
Xxxxxx and GM, with all information concerning such party as
may be requested for inclusion in the Proxy Statement, the
Registration Statement and the GM Proxy Statement to be filed
with the Commission with respect to the Merger, the GM Merger
and the other transactions contemplated by this Agreement and
the Xxxxxx Distribution Agreement. Xxxxxx and Raytheon jointly
shall prepare the Proxy Statement and the Registration
Statement and shall cooperate with GM in the preparation of the
GM Proxy Statement. The parties shall use all commercially
reasonable efforts to file the Proxy Statement with the
Commission on a confidential basis as soon as is reasonably
practicable after the date hereof. If at any time prior to the
Effective Time, any information pertaining to Raytheon or
Xxxxxx contained in or omitted from the Registration Statement,
the Proxy Statement or the GM Proxy Statement makes such
statements contained therein false or misleading, Raytheon or
Xxxxxx, as the case may be, shall promptly inform the other or
GM, as appropriate, and promptly provide the information
necessary to make the statements contained therein not false
and misleading. The parties shall use all commercially
reasonable efforts to have the Registration Statement declared
effective by the Commission on a date as close as reasonably
practicable to the anticipated date of termination of any
applicable waiting periods under the HSR Act and to maintain
the effectiveness of the Registration Statement through the
Effective Time. Raytheon shall use all commercially reasonable
efforts to mail to its stockholders the Proxy Statement on a
date as soon as reasonably practicable after the effectiveness
of the Registration Statement which shall include all
information required under Applicable Law to be furnished to
such stockholders in connection with the Merger and the
transactions contemplated hereby.
(k) No Solicitation. Each of the parties hereto
agrees that, during the term of this Agreement, without the
consent of the other, it shall not, and shall not authorize or
permit any of its subsidiaries or any of its or its
subsidiaries' directors, officers, employees, agents or
representatives, directly or indirectly, to solicit, initiate,
knowingly encourage or facilitate, or furnish or disclose non-
public information in furtherance of, any inquiries or the
making of any proposal with respect to any merger,
consolidation or other business
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combination involving such party, or any acquisition of any
capital stock or any material portion of the assets (except for
acquisitions of assets in the ordinary course of business
consistent with past practice and except for consummation of
the GM Transactions) of such party, or any combination of the
foregoing (in each case, a "Competing Transaction"), or
negotiate, explore or otherwise engage in discussions with any
person (other than the other party hereto or its respective
directors, officers, employees, agents and representatives or,
with respect to Xxxxxx, its affiliates) with respect to any
Competing Transaction or enter into any agreement, arrangement
or understanding therefor requiring them to abandon, terminate
or fail to consummate the Merger; provided, however, that
Xxxxxx' obligations under this Section 5.1(k) shall only apply
with respect to a Competing Transaction that includes the
Defense Business or the consummation of which would otherwise
result in the termination or material breach of any of the
Transaction Agreements, and provided further, that
notwithstanding any other provision hereof, each party may (i)
engage in discussions or negotiations with a third party who
(without any solicitation, initiation, knowing encouragement,
discussion or negotiation, directly or indirectly, by or with
such party or its subsidiaries, or any of its or its
subsidiaries' directors, officers, employees, agents or
representatives after the date hereof) seeks to initiate such
discussion or negotiations and may furnish such third party
information concerning such party and its business, properties
and assets if, and only to the extent that, in each case (A)
(x) the third party has first proposed a Competing Transaction
that is superior to the transactions contemplated by this
Agreement and has demonstrated that the consideration necessary
for the Competing Transaction is reasonably likely to be
available (all as determined in good faith in each case by such
party's Board of Directors after consultation with its
financial advisors) and (y) such party's Board of Directors has
concluded in good faith, on the basis of oral or written advice
of outside counsel, that such action is necessary for the Board
of Directors to act in a manner consistent with its fiduciary
duties under Applicable Law and (B) prior to furnishing such
information to or entering into discussions or negotiations
with such person, such party shall have (x) provided prompt
notice to the other party of its intent to furnish information
to or enter into discussions or negotiations with such person
or entity and a description of the financial and other terms of
the proposed Competing Transaction (as well as all material
revisions or modifications thereof), together with the evidence
by which the third party which proposed such Competing
Transaction demonstrated the likely availability of the
consideration therefor, and (y) received from such person or
entity an executed confidentiality agreement in reasonably
customary form on terms not in the aggregate materially more
favorable to such person or entity than the terms contained in
the Confidentiality Agreement, (ii) with respect to Raytheon,
comply with Rule 14e-2 promulgated under the Exchange Act with
regard to a tender or exchange offer, and/or (iii) provided
such party shall have terminated this Agreement pursuant to
Section 7.1(i) hereof, accept a Competing Transaction from a
third
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party. Each party hereto will immediately cease all existing
activities, discussions and negotiations with any parties
conducted heretofore with respect to any of the foregoing.
(l) Additional Agreements. Each of Xxxxxx and
Raytheon will comply in all material respects with all
applicable laws and with all applicable rules and regulations
of any Governmental Authority in connection with its execution,
delivery and performance of this Agreement and the transactions
contemplated hereby.
(m) Blue Sky. Xxxxxx and Raytheon will use all
commercially reasonable efforts to obtain prior to the
Effective Time all necessary blue sky permits and approvals
required to permit the distribution of the shares of Xxxxxx
Class B Common Stock to be issued in accordance with the
provisions of this Agreement.
(n) Notification of Certain Matters. Each of Xxxxxx
and Raytheon shall notify the other promptly following the
receipt of process with respect to any stockholder litigation
initiated against it relating to the Merger, and from time to
time upon the request of the other shall provide a summary of
the status thereof.
Section 5.2. Covenants of Xxxxxx.
(a) Conduct of Xxxxxx' Operations. During the
period from the date of this Agreement to the Effective Time,
Xxxxxx (which for purposes of this Section 5.2(a) shall mean
Xxxxxx after giving effect to the consummation of the HEC
Reorganization, as if the HEC Reorganization had been
consummated as of the date of this Agreement), shall conduct
its business and operations in the ordinary course except with
respect to the consummation of the GM Transactions in
accordance with the terms thereof as contemplated by the
Transaction Agreements and except as expressly contemplated by
this Agreement, the Separation Agreement, and the transactions
contemplated hereby and thereby, and shall use all commercially
reasonable efforts to maintain and preserve its business
organization and its material rights and franchises and to
retain the services of its officers and key employees and
maintain relationships with customers, suppliers, lessees,
licensees and other third parties to the end that their
goodwill and ongoing business shall not be impaired in any
material respect. Without limiting the generality of the
foregoing, during the period from the date of this Agreement to
the Effective Time, Xxxxxx shall not, except with respect to
the consummation of the GM Transactions and except as otherwise
expressly contemplated by this Agreement, the Separation
Agreement and the transactions contemplated hereby and thereby
or as otherwise set forth in Section 5.2(a) or Section 3.22 to
the Xxxxxx Disclosure Schedule, without the prior written
consent of Raytheon:
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(i) grant any person any right or option to acquire
any shares of its capital stock or enter into any agreement,
understanding or arrangement with respect to the purchase, sale
or voting of its capital stock or issue any instrument
convertible into or exchangeable for such capital stock, or
make, declare or pay any dividend or distribution in respect of
any of its capital stock other than in cash;
(ii) sell, transfer, lease, pledge, mortgage,
encumber or otherwise dispose of any material amount of its
property or assets other than in the ordinary course of
business, consistent with past practice;
(iii) make or propose any changes in its certificate
of incorporation or bylaws;
(iv) merge or consolidate with any other person or
persons or acquire assets or capital stock of any other person
or persons the value of which individually or in the aggregate
exceeds $100 million or enter into any confidentiality
agreement with any person with respect to any such transaction;
(v) create any subsidiaries which are material to
Xxxxxx and which are not, directly or indirectly, wholly owned
by Xxxxxx;
(vi) enter into or modify any employment, severance,
termination or similar agreements or arrangements with, or
grant any bonuses, salary increases, severance or termination
pay to, or otherwise increase the compensation or benefits of,
any officer, director, consultant or employee other than
increases in salary, compensation or benefits granted in the
ordinary course of business consistent (including as to the
amount and timing thereof) with past practice, except as may be
required by Applicable Law or a binding written contract in
effect on the date of this Agreement;
(vii) except as may be required by changes in
Applicable Law or accounting principles, change any method or
principle of accounting in a manner that is inconsistent with
past practice;
(viii) take any action that would reasonably be
expected to result in the representations and warranties set
forth in Article 3 becoming false or inaccurate;
(ix) enter into or carry out any other transaction
which is material to Xxxxxx other than in the ordinary and
usual course of business;
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(x) take any action which could reasonably be
expected to adversely affect or delay the ability of any
parties hereto to obtain any approval of any Governmental
Authority required to consummate the transaction contemplated
hereby;
(xi) settle any Actions, whether now pending or
hereafter made or brought, on terms which include a material
limitation on the business or operations of the Surviving
Corporation;
(xii) permit or cause any subsidiary to do any of the
foregoing or agree or commit to do any of the foregoing; or
(xiii) agree in writing or otherwise to take any of the
foregoing actions.
(b) Notification of Certain Matters. Xxxxxx shall
give prompt notice to Raytheon of (i) the occurrence or non-
occurrence of any event the occurrence or nonoccurrence of
which would cause any Xxxxxx representation or warranty
contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the Effective Time and (ii) any
material failure of Xxxxxx to comply with or satisfy any
covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 5.2(b) shall not limit
or otherwise affect the remedies available hereunder to
Raytheon.
(c) Debt. As of or prior to the Effective Time,
Xxxxxx shall incur indebtedness for borrowed money (the
principal amount of which is referred to as "Debt") in an
amount equal to the Intercompany Payment Amount (as defined
below) for the purpose of funding payments to one or more
Affiliates of Xxxxxx (which may include, without limitation,
payments with respect to existing debt, dividends,
distributions and/or contributions to capital) as of or prior
to the Effective Time (collectively the "Intercompany
Payment"). Xxxxxx and Raytheon shall cooperate in connection
with Xxxxxx' negotiation of the terms and conditions relating
to the Debt comprising the Intercompany Payment Amount, and
Xxxxxx shall not commit to incur such Debt without obtaining
the consent of Raytheon to such terms and conditions, which
consent shall not be unreasonably withheld or delayed. No
interest in respect of the Debt comprising the Intercompany
Payment Amount shall be accrued and unpaid at the Effective
Time. The "Intercompany Payment Amount" will be equal to
$9,500,000,000 ($9.5 billion) minus the "Class A Common Stock
Amount" (as defined below) and minus all other Debt of Xxxxxx
which is outstanding as of the Effective Time. The "Class A
Common Stock Amount" is equal to 102,630,503 multiplied by the
average closing price of Raytheon Common Stock, regular way, on
the New York Stock Exchange during the 30-day period ending 5
days prior to the Effective Time, provided,
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however, that in the event such average price is greater than
$54.29 such price shall be deemed to be $54.29, and in the
event such average price is less than $44.42, such price shall
be deemed to be $44.42.
(d) Adoption of Rights Plan. Xxxxxx shall take all
action necessary to adopt a shareholder rights plan
incorporating in all material respects the terms and provisions
set forth in Exhibit K effective as of the Effective Time.
Section 5.3. Covenants of Raytheon.
(a) Raytheon Stockholders Meeting. Raytheon shall
take all action in accordance with the federal securities laws,
the DGCL and its Certificate of Incorporation and bylaws
necessary to obtain the consent and approval of Raytheon
Stockholders with respect to the Merger, this Agreement, and
the transactions contemplated hereby and thereby. The
stockholder vote or consent required for approval of this
Agreement will be no greater than is provided in Section 4.17.
Raytheon shall use all commercially reasonable efforts to
solicit from its stockholders proxies to be voted at its
stockholders meeting in favor of this Agreement pursuant to the
Proxy Statement and, subject to the fiduciary duties of its
Board of Directors, the Proxy Statement shall include the
recommendation of the Board of Directors of Raytheon in favor
of this Agreement and the Merger. Raytheon shall use all
commercially reasonable efforts to promptly and expeditiously
secure any vote or consent of stockholders required by the
DGCL, the applicable requirements of any securities exchange
and Raytheon's Certificate of Incorporation and Bylaws to
effect the Merger.
(b) Conduct of Raytheon's Operations. During the
period from the date of this Agreement to the Effective Time,
Raytheon shall conduct its business and operations in the
ordinary course except as expressly contemplated by this
Agreement and the transactions contemplated hereby and shall
use all commercially reasonable efforts to maintain and
preserve its business organization and its material rights and
franchises and to retain the services of its officers and key
employees and maintain relationships with customers, suppliers,
lessees, licensees and other third parties to the end that
their goodwill and ongoing business shall not be impaired in
any material respect. Without limiting the generality of the
foregoing, during the period from the date of this Agreement to
the Effective Time, Raytheon shall not, except as otherwise
expressly contemplated by this Agreement and the transactions
contemplated hereby, or pursuant to agreements, arrangements or
understandings in effect as of the date hereof, which are
disclosed in Section 5.3(b) to the Raytheon Disclosure
Schedule, or as otherwise set forth in Section 5.3(b) to the
Raytheon Disclosure Schedule, without the prior written consent
of Xxxxxx:
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(i) do or effect any of the following actions with
respect to its securities: (A) adjust, split, combine,
recapitalize or reclassify its capital stock, (B) make, declare
or pay any dividend (other than regular quarterly cash
dividends consistent as to time of payment and amount with the
dividends declared and paid during 1996) or distribution on, or
directly or indirectly redeem, purchase or otherwise acquire,
any shares of its capital stock or any securities or
obligations convertible into or exchangeable for any shares of
its capital stock (except for purchases of shares of Raytheon
Common Stock by Raytheon in the open market, the aggregate
number of which shares is not in excess of the number of shares
of Raytheon Common Stock issued by Raytheon after the date
hereof pursuant to the exercise of stock options by employees
of Raytheon), (C) grant any person any right or option to
acquire any shares of its capital stock other than in the
ordinary course of business, consistent with past practice
pursuant to existing option plans or the Raytheon Company
Deferral Plan for Directors, the aggregate amount of which will
not exceed the amount set forth in Section 5.3(b) to the
Raytheon Disclosure Schedule, (D) issue, deliver or sell or
agree to issue, deliver or sell any shares of its capital stock
or any securities, instruments or obligations convertible into
or exchangeable or exercisable for any shares of its capital
stock or such securities (except pursuant to the exercise of
options to purchase Raytheon Common Stock outstanding on the
date hereof or the Raytheon Company Deferral Plan for Directors
or created hereafter in accordance with this Section 5.3(b)(i))
or (E) enter into any agreement, understanding or arrangement
with respect to the sale or voting of its capital stock;
(ii) except as may be required by changes in
Applicable Law or accounting principles, change any method or
principle of accounting in a manner that is inconsistent with
past practice;
(iii) take any action that would reasonably be
expected to result in the representations and warranties set
forth in Article 4 becoming false or inaccurate;
(iv) take any action which could reasonably be
expected to adversely affect or delay the ability of any
parties hereto to obtain any approval of any Governmental
Authority required to consummate the transaction contemplated
hereby;
(v) permit or cause any subsidiary to do any of the
foregoing or agree or commit to do any of the foregoing; or
(vi) agree in writing or otherwise to take any of the
foregoing actions.
(c) Notification of Certain Matters. Raytheon shall
give prompt notice to Xxxxxx of (i) the occurrence or non-
occurrence of any event the occurrence or non-
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occurrence of which would cause any Raytheon representation or
warranty contained in this Agreement to be untrue or inaccurate
in any material respect at or prior to the Effective Time and
(ii) any material failure of Raytheon to comply with or satisfy
any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 5.3(c) shall not limit
or otherwise affect the remedies available hereunder to Xxxxxx.
(d) Affiliates. Prior to the Effective Time,
Raytheon shall deliver to Xxxxxx a letter identifying all
persons who are, at the time this Agreement is submitted for
adoption to the stockholders of Raytheon, "affiliates" of
Raytheon for purposes of Rule 145 under the Securities Act.
Raytheon shall use all reasonable efforts to cause each such
person to deliver to the Surviving Corporation on or prior to
the Effective Time a written agreement substantially in the
form attached as Exhibit F.
(e) Raytheon Securities Law Filings. During the
period from the earlier of (i) the date on which the
registration statement for Xxxxxx Class A Common Stock relating
to the GM Proxy Statement is declared effective by the
Commission and (ii) the date on which the Registration
Statement is declared effective by the Commission, through and
including the later of (x) the date of the meeting of
Raytheon's Stockholders with respect to this Agreement or (y)
the date of the meeting of GM's stockholders with respect to
the GM Proxy Statement (or in the case of a consent
solicitation, the date on which the requisite approval of the
GM Transactions by the stockholders of GM shall have been
obtained), Raytheon shall provide Xxxxxx and GM with drafts of
each filing under the Securities Act or the Exchange Act (other
than a filing under the Exchange Act on Form 8-K with respect
to matters not contemplated by the Transaction Agreements)
which it proposes to make a reasonable period of time in
advance of the filing thereof with the Commission, and shall
consult with Xxxxxx and GM as regards any comments or concerns
raised by Xxxxxx or GM with respect thereto, all with a view
towards coordinating the disclosure contained in such filings
with the disclosure to be contained in or incorporated by
reference in the Registration Statement, the Prospectus, and
the proxy statement or consent solicitation to be used by GM in
connection with the GM Transactions.
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ARTICLE 6
CONDITIONS
Section 6.1. Mutual Conditions. The obligations of
the parties hereto to consummate the Merger shall be subject to
fulfillment of the following conditions:
(a) No temporary restraining order, preliminary or
permanent injunction or other order or decree which prevents
the consummation of the Merger shall have been issued and
remain in effect, and no statute, rule or regulation shall have
been enacted by any Governmental Authority which prevents the
consummation of the Merger.
(b) All waiting periods applicable to the
consummation of the Merger under the HSR Act shall have expired
or been terminated and all approvals of, or filings with, any
Governmental Authority required to consummate the transactions
contemplated hereby shall have been obtained or made, other
than immaterial approvals and filings, the failure to obtain or
make which would have no material adverse effect on Xxxxxx or
Raytheon or, following the Effective Time, the Surviving
Corporation.
(c) All consents or approvals of all persons (other
than Governmental Authorities) required for the consummation of
the transactions contemplated hereby shall have been obtained
and shall be in full force and effect, unless the failure to
obtain any such consent or approval is not reasonably likely to
have, individually or in the aggregate, a material adverse
effect on Xxxxxx or Raytheon or, following the Effective Time,
the Surviving Corporation.
(d) The requisite approval of the stockholders of
Raytheon to the Merger shall have been obtained.
(e) The Commission shall have declared the
Registration Statement and the Proxy Statement effective. On
the Closing Date and at the Effective Time, no stop order or
similar restraining order shall have been threatened by the
Commission or entered by the Commission or any state securities
administrator prohibiting the Merger.
(f) The GM Transactions shall have been consummated
in accordance with the terms contemplated by the Transaction
Agreements.
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(g) The shares of Xxxxxx Class B Common Stock to be
issued pursuant to the Merger shall have been authorized for
listing on the NYSE, subject to official notice of issuance.
(h) Xxxxxx shall have received from Xxxxxxx, Sachs &
Co. a written confirmation, dated as of a date within two
business days of the date of the first mailing of the Proxy
Statement, of its opinion dated January 16, 1997, to the boards
of directors of GM, Xxxxxx and HEC that on the basis of and
subject to the assumptions and limitations and other matters
set forth therein, the Aggregate Consideration (as defined
therein) is fair to the GM Group (as defined therein) as a
whole, together (if requested by Xxxxxx or Raytheon) with a
consent authorizing the use of such opinion in connection with
the Registration Statement and Proxy Statement, and such
opinion shall not have been withdrawn revoked or modified in an
adverse manner.
(i) Raytheon shall have received from Bear, Xxxxxxx
& Co. Inc. and Credit Suisse First Boston Corporation a written
confirmation, dated as of a date within two business days of
the date of the first mailing of the Proxy Statement, of its
opinion dated January 16, 1997, to Raytheon's board of
directors that on the basis of and subject to the assumptions,
representations, limitations and other matters set forth
therein, the financial terms of the Merger are fair to the
stockholders of Raytheon from a financial point of view (with
respect to Bear, Xxxxxxx & Co. Inc.) and the Merger
Consideration (as defined in the opinion of Credit Suisse First
Boston Corporation) is fair to the stockholders of Raytheon
from a financial point of view, together with a consent
authorizing the use of such opinions in connection with the
Registration Statement and Proxy Statement, and such opinions
shall not have been withdrawn, revoked or modified in an
adverse manner.
(j) Receipt by Raytheon and Xxxxxx, respectively, of
the Tax Opinions of Wachtell, Lipton, Xxxxx & Xxxx, special
counsel to Raytheon, and Weil, Gotshal & Xxxxxx LLP, special
counsel to Xxxxxx, substantially in the forms attached hereto
as Exhibits G and H (or otherwise in form and substance
satisfactory to Raytheon or Xxxxxx, respectively), in each case
to the effect that the Merger shall qualify as a reorganization
within the meaning of Section 368 of the Code, it being
understood that in rendering the Tax Opinions, such tax counsel
shall be entitled to rely upon, inter alia, representations of
officers of Raytheon and Xxxxxx substantially in the form of
Exhibits I and J.
(k) All state securities or blue sky permits or
approvals required to carry out the transaction contemplated
hereby shall have been received.
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Section 6.2. Conditions to Obligations of Raytheon.
The obligations of Raytheon to consummate the Merger and the
transactions contemplated hereby shall be subject to the
fulfillment of the following conditions unless waived by
Raytheon:
(a) The representations and warranties of Xxxxxx set
forth in Article 3 shall be true and correct on the date hereof
and on and as of the Closing Date as though made on and as of
the Closing Date (except for representations and warranties
made as of a specified date, which need be true and correct
only as of the specified date), except, in the case of the
representations and warranties other than those set forth in
Sections 3.6(b) and (c), the first two sentences of Section
3.9, Section 3.13 and any representation or warranty that is
qualified by the words "material adverse effect," for such
inaccuracies which have not had and would not reasonably be
expected to have a material adverse effect on Xxxxxx or the
Surviving Corporation; provided, however, that any and all
actions taken by Xxxxxx pursuant to Section 5.1(b) and the
effects thereof on the representations and warranties of Xxxxxx
set forth in Article 3 shall be ignored for purposes of this
Section 6.2(a).
(b) Xxxxxx shall have performed in all material
respects each obligation and agreement and shall have complied
in all material respects with each covenant to be performed and
complied with by it hereunder at or prior to the Effective
Time.
(c) Xxxxxx shall have furnished Raytheon with a
certificate dated the Closing Date signed on behalf of it by
the Chairman, President or any Vice President to the effect
that the conditions set forth in Sections 6.2(a) and (b) have
been satisfied.
(d) Since the date of this Agreement, except to the
extent contemplated by Section 3.11 to the Xxxxxx Disclosure
Schedule, and except for any actions taken by Xxxxxx pursuant
to Section 5.1(b) and any effects thereof upon Xxxxxx, there
shall not have been any material adverse change in the assets,
liabilities, results of operations, business or financial
condition of Xxxxxx and its subsidiaries taken as a whole or
any material adverse effect on the ability of Xxxxxx to
consummate the transactions contemplated hereby.
(e) GM shall have received the Ruling (as defined in
the Xxxxxx Distribution Agreement) and the substance thereof
shall be reasonably satisfactory to Raytheon.
Section 6.3. Conditions to Obligations of Xxxxxx.
The obligations of Xxxxxx to consummate the Merger and the
other transactions contemplated hereby shall be subject to the
fulfillment of the following conditions unless waived by
Xxxxxx:
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(a) The representations and warranties of Raytheon
set forth in Article 4 shall be true and correct on the date
hereof and on and as of the Closing Date as though made on and
as of the Closing Date (except for representations and
warranties made as of a specified date, which need be true and
correct only as of the specified date), except, in the case of
the representations and warranties other than those set forth
in Sections 4.6(b) and (c), the first two sentences of Section
4.9, Section 4.13 and any representation or warranty that is
qualified by the words "material adverse effect," for such
inaccuracies which have not had and would not reasonably be
expected to have a material adverse effect on Raytheon or the
Surviving Corporation; provided, however, that any and all
actions taken by Raytheon pursuant to Section 5.1(b) and the
effects thereof on the representations and warranties of
Raytheon set forth in Article 4 shall be ignored for purposes
of this Section 6.3(a).
(b) Raytheon shall have performed in all material
respects each obligation and agreement and shall have complied
in all material respects with each covenant to be performed and
complied with by it hereunder at or prior to the Effective
Time.
(c) Raytheon shall have furnished Xxxxxx with a
certificate dated the Closing Date signed on its behalf by its
Chairman, President or any Vice President to the effect that
the conditions set forth in Sections 6.3(a) and (b) have been
satisfied.
(d) Since the date of this Agreement, except to the
extent contemplated by Section 4.11 to the Raytheon Disclosure
Schedule, and except for any actions taken by Raytheon pursuant
to Section 5.1(b) and any effects thereof upon Raytheon, there
shall not have been any material adverse change in the assets,
liabilities, results of operations, business or financial
condition of Raytheon and its subsidiaries taken as a whole or
any material adverse effect on the ability of Raytheon to
consummate the transactions contemplated hereby.
(e) The Debt contemplated by Section 5.2(c) shall
have been incurred and the borrowings thereunder received, and
the Intercompany Payment shall have been duly made in full.
ARTICLE 7
TERMINATION AND AMENDMENT
Section 7.1. Termination. This Agreement may be
terminated at any time prior to the Effective Time:
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(a) by mutual written consent of Xxxxxx and
Raytheon;
(b) by either Xxxxxx or Raytheon if any permanent
injunction or other order of a court or other competent
Governmental Authority preventing the consummation of the
Merger or the GM Transactions shall have become final and
nonappealable;
(c) by either Xxxxxx or Raytheon in the event of
either: (i) a material breach by the other party of any
representation or warranty contained herein which breach cannot
be or has not been cured within 30 days after the giving of
written notice to the breaching party of such breach; or (ii) a
material breach by the other party of any of the covenants or
agreements contained herein, which breach cannot be or has not
been cured within 30 days after the giving of written notice to
the breaching party of such breach;
(d) by either Xxxxxx or Raytheon if the Merger shall
not have been consummated before December 31, 1997, unless
extended by the Boards of Directors of both Xxxxxx and Raytheon
(provided that the right to terminate this Agreement under this
Section 7.1(d) shall not be available to any party whose
failure (or whose affiliate's failure) to perform any material
covenant or obligation under this Agreement or under the GM
Implementation Agreement, has been the cause of or resulted in
the failure of the Merger to occur on or before such date);
(e) by either Xxxxxx or Raytheon if at the meeting
of Raytheon Stockholders (including any adjournment or
postponement thereof) the requisite vote of the Raytheon
Stockholders to approve the Merger and the transactions
contemplated hereby shall not have been obtained;
(f) by either Raytheon or Xxxxxx if at the
respective meetings of holders of the GM $1 2/3 Common Stock
and the GM Class H Common Stock (including any adjournments or
postponements thereof) the requisite vote of each such class of
stock of GM to approve the GM Transactions shall not have been
obtained (or with respect to a consent solicitation in lieu of
such meetings, the period to consent to such transactions shall
have expired without the requisite consents having been
obtained);
(g) by either Xxxxxx or Raytheon upon the occurrence
of any event that has resulted in a material adverse change
after the date hereof in the assets, liabilities, results of
operations, businesses or financial condition of the other
party and its subsidiaries, taken as a whole, or upon the
occurrence of an event which could reasonably be expected to
result in such a material adverse change with respect to such
party or, after the Effective Time, the Surviving Corporation,
excluding for all purposes of this clause (g), any actions
taken by
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Xxxxxx or Raytheon pursuant to Section 5.1(b) and any effects
thereof on Xxxxxx or Raytheon or effects which could reasonably
be expected to result from such actions on Xxxxxx, Raytheon or,
after the Effective Time, the Surviving Corporation;
(h) by either Xxxxxx or Raytheon if the Board of
Directors of the other party or any committee of the Board of
Directors of the other party (i) shall withdraw or modify in
any adverse manner its approval or recommendation of this
Agreement or the Merger, (ii) shall fail to reaffirm such
approval or recommendation upon such party's request, (iii)
shall approve or recommend any acquisition of the other party
or a material portion of its assets or any tender offer for
shares of its capital stock, in each case, other than by a
party hereto or an affiliate thereof, or (iv) shall resolve to
take any of the actions specified in clause (i) above of this
subparagraph (h);
(i) by either Xxxxxx or Raytheon upon five business
days' prior notice to the other and upon payment of the amounts
specified in Section 7.2 hereof, if, as a result of any offer,
inquiry, solicitation or proposal with respect to any Competing
Transaction received by such party after the date hereof from a
person other than the other party to this Agreement or any of
its affiliates, the Board of Directors of such party shall have
concluded in good faith, after considering applicable
provisions of state law and after giving effect to all
adjustments which may be offered by the other party described
below pursuant to this subparagraph (i), on the basis of oral
or written advice of outside counsel, that such action is
necessary for the Board of Directors to comply with its
fiduciary duties under applicable law and prior to any such
termination, such party shall, and shall cause its respective
financial and legal advisors to, negotiate with the other party
to this Agreement to seek to make such adjustments in the terms
and conditions of this Agreement as would enable such party to
proceed with the transactions contemplated hereby; or
(j) by either Xxxxxx or Raytheon if the GM
Implementation Agreement shall have been terminated pursuant to
its terms.
Section 7.2. Effect of Termination. In the event of
the termination of this Agreement pursuant to Section 7.1, this
Agreement, except for the provisions of Section 5.1(i) and the
provisions of Section 7.2, shall become void and have no
effect, without any liability on the part of any party or its
directors, officers or stockholders. Notwithstanding the
foregoing, nothing in this Section 7.2 shall relieve any party
to this Agreement of liability for a willful breach of any
provision of this Agreement nor invalidate the provisions of
the Confidentiality Agreement. If this Agreement is terminated
(A) by Raytheon pursuant to Section 7.1(h), (B) by Xxxxxx
pursuant to Section 7.1(i), (C) by either Raytheon or Xxxxxx
pursuant to Section 7.1(f) or pursuant to Section 7.1(j) (but
with respect to Section 7.1(j)
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only in the event the GM Implementation Agreement was
terminated pursuant to Sections 5.1(d), 5.1(e) or 5.1(f)
thereof or pursuant to Section 5.1(b) thereof solely as a
result of the termination of the Xxxxxx Distribution Agreement
pursuant to Section 4(a)(i), 4(a)(ii) (other than with respect
to a termination arising from a failure to obtain the opinion
contemplated by Section 3(d) of the Xxxxxx Distribution
Agreement solely as a result of any matter that would also
constitute a breach of the representations or warranties of
Raytheon set forth herein) or 4(a)(v) thereof) or (D) by
Raytheon or Xxxxxx pursuant to Section 7.1(d) but only in the
event the Merger shall not have been consummated as a result of
the non-completion of the Spin-Off Merger (as defined in the
Xxxxxx Distribution Agreement) by reason solely of the failure
to satisfy the condition set forth in Section 3(c) or the
condition set forth in Section 3(j) of the Xxxxxx Distribution
Agreement or due solely to the failure of the Board of
Directors of GM to determine the Xxxxxx Distribution Ratio (as
defined in the Xxxxxx Distribution Agreement), then Xxxxxx
shall pay to Raytheon, within five business days of such
termination in cash by wire transfer in immediately available
funds to an account designated by Raytheon, in reimbursement
for Raytheon's and its affiliates' expenses, an amount in cash
equal to the aggregate amount of Raytheon's and its affiliates'
actual documented out-of-pocket expenses incurred in connection
with pursuing the transactions contemplated by this Agreement,
including legal, accounting and investment banking fees, up to
but not in excess of an amount equal to $20 million in the
aggregate, and, if (x) following the date hereof but prior to
the time of such termination a Competing Transaction involving
the Defense Business shall have been commenced, publicly
proposed, publicly disclosed or communicated to the Board of
Directors of Xxxxxx or (y) at any time within three months
following such termination any agreement with respect to a
Competing Transaction involving the Defense Business shall have
been entered into or any such Competing Transaction shall have
been consummated, then, in addition (except in the case of a
termination pursuant to Section 7.1(i) where such amount
already has been paid), Xxxxxx shall pay to Raytheon, within
five business days of such termination (or, in the case of
clause (y), prior to the earlier of the signing or consummation
of any such transaction) in cash by wire transfer in
immediately available funds to an account designated by
Raytheon a termination fee in an amount equal to $200 million.
In the event this Agreement is terminated (A) by Xxxxxx
pursuant to Section 7.1(e) or 7.1(h), (B) by Raytheon pursuant
to Section 7.1(e) or 7.1(i), or (C) by Raytheon or Xxxxxx
pursuant to Section 7.1(d) (but in the case of Section 7.1(d)
only in the event the Merger shall not have been consummated as
a result of the failure of the condition set forth in Section
6.1(i) to have been satisfied at a time when all other
conditions set forth in Article 6 (other than the condition set
forth in Section 6.1(f)) shall have been satisfied or be
capable of being satisfied, and only if the failure of the
condition set forth in Section 6.1(i) to have been satisfied
does not result from any matter that would also constitute a
breach of the representations or warranties of Xxxxxx set forth
herein), then Raytheon shall pay to Xxxxxx, within five
business days of such termination in cash by wire
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transfer in immediately available funds to an account
designated by Xxxxxx, in reimbursement for Xxxxxx' and its
affiliates' expenses, an amount in cash equal to the aggregate
amount of Xxxxxx' and its affiliates' actual documented out-of-
pocket expenses incurred in connection with pursuing the
transactions contemplated by this Agreement, including legal,
accounting and investment banking fees, up to but not in excess
of an amount equal to $20 million in the aggregate and if (x)
following the date hereof but prior to the time of such
termination a Competing Transaction involving Raytheon shall
have been commenced, publicly proposed, publicly disclosed or
communicated to the Board of Directors of Raytheon or (y) at
any time within three months following such termination any
agreement with respect to a Competing Transaction involving
Raytheon shall have been entered into or any such Competing
Transaction shall have been consummated, then, in addition
(except in the case of a termination pursuant to Section 7.1(i)
where such amount already has been paid), Raytheon shall pay to
Xxxxxx, within five business days of such termination (or, in
the case of clause (y), prior to the earlier of the signing or
consummation of any such transaction) in cash by wire transfer
in immediately available funds to an account designated by
Xxxxxx a termination fee in an amount equal to $200 million.
Xxxxxx and Raytheon agree that the agreements
contained in this Section 7.2 are an integral part of the
transactions contemplated by this Agreement and constitute
liquidated damages and not a penalty. If one party fails to
pay to the other any fee due under this Section 7.2 in
accordance with the terms hereof, the defaulting party shall
pay the costs and expenses (including legal fees and expenses)
in connection with any action, including the filing of any
lawsuit or other legal action, taken to collect payment,
together with interest on the amount of any unpaid fee at the
publicly announced prime rate of Citibank, N.A. from the date
such fee was required to be paid.
Section 7.3. Amendment. This Agreement may be
amended by the parties hereto, by action taken or authorized by
their respective Boards of Directors, at any time before or
after adoption of this Agreement by Raytheon stockholders and
before or after approval of the GM Transactions by GM's
stockholders, but after either such approval or authorization,
no amendment shall be made which by law requires further
approval or authorization by the stockholders of GM or
Raytheon, as the case may be, without such further approval or
authorization. Notwithstanding the foregoing, this Agreement
may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
Section 7.4 Extension; Waiver. At any time prior to
the Effective Time, Xxxxxx (with respect to Raytheon) and
Raytheon (with respect to Xxxxxx) by action taken or authorized
by their respective Boards of Directors, may, to the extent
legally allowed, (a) extend the time for the performance of any
of the obligations or other acts of such party, (b)
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waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto
and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid
only if set forth in a written instrument signed on behalf of
such party.
ARTICLE 8
MISCELLANEOUS
Section 8.1. No Survival of Representations and
Warranties. The representations and warranties made herein by
the parties hereto shall not survive the Effective Time. This
Section 8.1 shall not limit any covenant or agreement of the
parties hereto, which by its terms contemplates performance
after the Effective Time or the termination of this Agreement.
Section 8.2. Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed given if delivered personally, telecopied (which is con-
firmed) or dispatched by a nationally recognized overnight
courier service to the parties at the following addresses (or
at such other address for a party as shall be specified by like
notice):
(a) if to Xxxxxx:
HE Holdings, Inc.
0000 Xxxxxx Xxxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
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and with copies to:
GM
General Motors Corporation
0000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
and
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, P.C.
Telecopy No.: (000) 000-0000
(b) if to Raytheon:
Raytheon Company
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
Section 8.3. Interpretation; Absence of Presumption.
(a) For the purposes hereof, (i) words in the singular shall
be held to include the plural and vice versa and words of one
gender shall be held to include the other gender as the context
requires, (ii) the terms "hereof", "herein", and "herewith" and
words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a
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whole (including all of the Schedules and Exhibits hereto) and
not to any particular provision of this Agreement, and Article,
Section, paragraph, Exhibit and Schedule references are to the
Articles, Sections, paragraphs, Exhibits and Schedules to this
Agreement unless otherwise specified, (iii) the word
"including" and words of similar import when used in this
Agreement shall mean "including, without limitation," unless
the context otherwise requires or unless otherwise specified,
(iv) the word "or" shall not be exclusive, (v) provisions shall
apply, when appropriate, to successive events and transactions,
and (vi) all references to any period of days shall be deemed
to be to the relevant number of calendar days.
(b) The Article, Section and paragraph headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of
this Agreement.
(c) This Agreement shall be construed without regard
to any presumption or rule requiring construction or
interpretation against the party drafting or causing any
instrument to be drafted.
(d) For the purposes of any provision of this
agreement, a "material adverse effect" with respect to
Raytheon, Xxxxxx (which shall mean Xxxxxx after giving effect
to the consummation of the HEC Reorganization) or the Surviving
Corporation shall be deemed to occur if the consequences of a
breach or inaccuracy of the contemplated covenant or
representation under this Agreement are reasonably likely to
have a material adverse effect on the assets, liabilities,
results of operations or financial condition of such party and
its subsidiaries taken as a whole.
Section 8.4. Counterparts. This Agreement may be
executed in counterparts, which together shall constitute one
and the same Agreement. The parties may execute more than one
copy of the Agreement, each of which shall constitute an
original.
Section 8.5. Entire Agreement; Severability. (a)
This Agreement (including the documents and the instruments
referred to herein) and the Confidentiality Agreement contains
the entire agreement between the parties with respect to the
subject matter hereof, supersede all previous agreements,
negotiations, discussions, writings, understandings,
commitments and conversations with respect to such subject
matter and there are no agreements or understandings between
the parties other than those set forth or referred to herein or
therein.
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(b) If any provision of this Agreement or the
application thereof to any person or circumstance is determined
by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof, or the
application of such provision to persons or circumstances or in
jurisdictions other than those as to which it has been held
invalid or unenforceable, shall remain in full force and effect
and shall in no way be affected, impaired or invalidated
thereby, so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination, the parties
shall negotiate in good faith in an effort to agree upon such a
suitable and equitable provision to effect the original intent
of the parties.
Section 8.6. Definitions of "subsidiary" and
"significant subsidiary". When a reference is made in this
Agreement to a subsidiary of a party, the term "subsidiary"
means any corporation or other organization, whether
incorporated or unincorporated, of which at least a majority of
the securities or interests having by the terms thereof
ordinary voting power to elect at least a majority of the board
of directors or others performing similar functions with
respect to such corporation or other organization is directly
or indirectly owned or controlled by such party or by any one
or more of its subsidiaries, or by such party and one or more
of its subsidiaries. When a reference is made in this
Agreement to a significant subsidiary of a party, the phrase
"significant subsidiary" means a subsidiary of such party that
constitutes a "significant subsidiary" within the meaning of
Rule 1-02 of Regulation S-X of the Commission.
Section 8.7. Third Party Beneficiaries. Other than
the provisions of Sections 5.1(h), (a) the provisions of this
Agreement are solely for the benefit of the parties and are not
intended to confer upon any person except the parties any
rights or remedies hereunder, and (b) there are no third party
beneficiaries of this Agreement and this Agreement shall not
provide any third person with any remedy, claim, liability,
reimbursement, claim of action or other right in excess of
those existing without reference to this Agreement.
Section 8.8. Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the State
of Delaware without regard to principles of conflicts of law.
Section 8.9. Specific Performance. In the event of
any actual or threatened default in, or breach of, any of the
terms, conditions and provisions of this Agreement, the party
or parties who are or are to be thereby aggrieved shall have
the
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right to specific performance and injunctive or other equitable
relief of its rights under this Agreement, in addition to any
and all other rights and remedies at law or in equity, and all
such rights and remedies shall be cumulative. The parties
agree that the remedies at law for any breach or threatened
breach, including monetary damages, are inadequate compensation
for any loss and that any defense in any action for specific
performance that a remedy at law would be adequate is waived.
Any requirements for the securing or posting of any bond with
such remedy are waived.
Section 8.10. Assignment. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of the
other party. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and
assigns.
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IN WITNESS WHEREOF, each of the undersigned,
intending to be legally bound, has caused this Agreement to be
duly executed and delivered on the date first set forth above.
HE HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President and
Chief Financial Officer
RAYTHEON COMPANY
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxxx
Title: Executive Vice President
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