EXHIBIT 2(a)
EXECUTION COPY
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 2
Section 1.3..Effects of The Merger 2
Section 1.4..Certificate of Incorporation and By-laws. 2
Section 1.5..Boards, Committees and Officers 3
Section 1.6..Additional Actions 3
ARTICLE 2
.........CONVERSION OF SECURITIES 4
Section 2.1..Conversion of Capital Stock 4
Section 2.2..Exchange of Certificates 4
(a) Exchange Agent...................................4
(b) Exchange Procedures..............................4
(c) Distributions With Respect to Unexchanged Shares.5
(d) No Further Ownership Rights in Raytheon Common
Stock 5
Section 2.3. No Fractional Share Certificates 6
(a) Determination of Excess Shares...................6
(b) Common Shares Trust..............................6
(c) Distribution to Holders of Fractional Xxxxxx
Class B Common Stock 6
Section 0.0.Xxxxxxxx Fund and Common Shares Trust
Matters 6
(a) No Liability.....................................6
(b) Investment of Exchange Fund......................7
(c) Withholding Rights...............................7
(d) Termination of Exchange Fund and Common Shares
Trust 7
Section 2.5 .Treatment of Raytheon Stock Options. 7
ARTICLE 3
.........REPRESENTATIONS AND WARRANTIES OF XXXXXX 8
Section 3.1..Organization and Standing 8
Section 3.2..Subsidiaries 8
Section 3.3..Corporate Power and Authority 9
Section 3.4..Capitalization of Xxxxxx 9
Section 3.5..Conflicts, Consents and Approvals 10
Section 3.6..Xxxxxx Financial Statements 10
Section 3.7..Registration Statement 11
Section 3.8..Compliance with Law 12
Section 3.9..Litigation 12
Section 3.10.Taxes 12
Section 3.11.Absence of Certain Changes 13
Section 3.12.Undisclosed Liabilities 13
Section 3.13.Environmental Matters 14
Section 3.14.Employee Benefits 14
Section 3.15.Brokerage and Finder's Fees 16
Section 3.16.Opinion of Financial Advisor 16
Section 3.17.Board and Stockholder Approval 16
Section 3.18.DGCL Section 203 and State Takeover Laws 17
Section 3.19.Permits 17
Section 3.20.Restrictive Agreements 17
Section 3.21.Real Estate 17
Section 3.22.Employees 17
Section 3.23.Certain Retirement Assets 18
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Page
ARTICLE 4
........ REPRESENTATIONS AND WARRANTIES OF RAYTHEON 18
Section 4.1..Organization and Standing 18
Section 4.2..Subsidiaries 19
Section 4.3..Corporate Power and Authority 19
Section 4.4..Capitalization of Raytheon 19
Section 4.5..Conflicts, Consents and Approvals 20
Section 4.6..Raytheon SEC Documents 21
Section 4.7..Registration Statement 22
Section 4.8..Compliance with Law 22
Section 4.9..Litigation 22
Section 4.10.Taxes 23
Section 4.11.Absence of Certain Changes 23
Section 4.12.Undisclosed Liabilities 23
Section 4.13.Environmental Matters 24
Section 4.14.Employee Benefits 24
Section 4.15.Brokerage and Finder's Fees 25
Section 4.16.Opinion of Financial Advisor 26
Section 4.17.Board Recommendation 26
Section 0.00.Xxxxxx Requirements 26
Section 4.19.DGCL Section 203 and State Takeover Laws 26
Section 4.20.Permits 26
Section 4.21.Restrictive Agreements 26
Section 4.22.Real Estate 27
Section 4.23.Employees 27
Section 4.24.Shareholder Rights Plan. 27
ARTICLE 5
.........COVENANTS OF THE PARTIES 27
Section 5.1..Mutual Covenants 27
(a) General.........................................27
(b) HSR Act.........................................28
(c) Tax-Free Treatment..............................28
(d) NYSE Listing....................................29
(e) Letters of Accountants..........................29
(f) Public Announcements............................29
(g) Access..........................................29
(h) Indemnification.................................29
(i) Expenses........................................30
(j) Preparation of SEC Documents....................30
(k) No Solicitation.................................31
(l) Additional Agreements...........................32
(m) Blue Sky........................................32
(n) Notification of Certain Matters.................32
Section 5.2..Covenants of Xxxxxx 32
(a) Conduct of Xxxxxx' Operations...................32
(b) Notification of Certain Matters.................34
(c) Debt............................................34
(d) Adoption of Rights Plan.........................34
Section 5.3..Covenants of Raytheon 34
(a) Raytheon Stockholders Meeting...................34
(b) Conduct of Raytheon's Operations................35
(c) Notification of Certain Matters.................36
(d) Affiliates......................................36
(e) Raytheon Securities Law Filings.................36
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Page
ARTICLE 6
.........CONDITIONS 37
Section 6.1..Mutual Conditions 37
Section 6.2..Conditions to Obligations of Raytheon 38
Section 6.3..Conditions to Obligations of Xxxxxx 39
ARTICLE 7
........ TERMINATION AND AMENDMENT
40
Section 7.1..Termination 40
Section 7.2..Effect of Termination 41
Section 7.3..Amendment 43
Section 7.4..Extension; Waiver 43
ARTICLE 8
........ MISCELLANEOUS 43
Section 8.1. No Survival of Representations and
Warranties 43
Section 8.2..Notices 43
Section 8.3..Interpretation; Absence of Presumption 44
Section 8.4..Counterparts 45
Section 8.5..Entire Agreement; Severability 45
Section 8.6. Definitions of "subsidiary" and "significant
..... subsidiary" 45
Section 8.7..Third Party Beneficiaries 46
Section 8.8..Governing Law 46
Section 8.9..Specific Performance 46
Section 8.10.Assignment 46
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Page
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)
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
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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 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."
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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 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.
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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 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 canceled 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 Exchange Agent, together
with a duly
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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 canceled.
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.
(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
canceled and exchanged as provided in this Section 2.2.
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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.
(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
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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.
(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.
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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 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 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.
- 8 -
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.
(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
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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 authority (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
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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.
(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
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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 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 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
- 12 -
filed, except, in each case, where such liability, delinquency or
failure to request such an extension would not 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.
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.
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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) 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").
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(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 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.
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(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, (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.
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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 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.
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
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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.
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.
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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.
Section 4.3. Corporate Power and Authority.
(a) 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.
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(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.
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.
- 20 -
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 (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 the
United States Government pursuant to the FMS program, or any sale to a
foreign government financed in
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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.
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,
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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 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
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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;
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.
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(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 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 or will incur on behalf of
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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.
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.
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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 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
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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 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 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
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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.
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
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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
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
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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 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
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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:
(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;
(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
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(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, 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
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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:
(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;
- 35 -
(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 nonoccurrence 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.
- 36 -
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.
(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.
- 37 -
(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.
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.
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(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:
(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.
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ARTICLE 7
TERMINATION AND AMENDMENT
Section 7.1. Termination. This Agreement may be terminated
at any time prior to the Effective Time:
(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 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;
- 40 -
(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) 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
- 41 -
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 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
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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) 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 confirmed) 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
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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
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
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.
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(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.
(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.
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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 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.Xxxxxxxx
Name: Xxxxxxxxx X. Xxxxxxxx
Title: Executive Vice President
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