\n ARTICLE 5
\n Insurance Matters<\/p>\nSection 5.01. Cooperation in Insurance Matters………………………… 26
\nSection 5.02 Claims……………………………………………….. 26<\/p>\n
ARTICLE 6
\n Employees<\/p>\n
Section 6.01. Employee Matters………………………………………. 28<\/p>\n
ARTICLE 7
\n Post-Closing Adjustment<\/p>\n
Section 7.01. Closing Date Balance Sheet……………………………… 28
\nSection 7.02. Post-Closing Adjustment………………………………… 32<\/p>\n
ARTICLE 8
\n Conditions<\/p>\n
Section 8.01. Conditions to the Obligations of the Parties……………… 33<\/p>\n
ARTICLE 9
\n Miscellaneous<\/p>\n
Section 9.01. Entire Agreement………………………………………. 34
\nSection 9.02. Governing Law…………………………………………. 34
\nSection 9.03. Descriptive Headings…………………………………… 34
\nSection 9.04. Notices………………………………………………. 34
\nSection 9.05. Parties in Interest……………………………………. 37
\nSection 9.06. Counterparts………………………………………….. 37
\nSection 9.07. Binding Effect; Assignment……………………………… 37
\nSection 9.08. Dispute Resolution…………………………………….. 37
\nSection 9.09. Severability………………………………………….. 38
\nSection 9.10. Failure or Indulgence Not Waiver; Remedies Cumulative……… 39
\nSection 9.11. Amendment…………………………………………….. 39
\n<\/c><\/s><\/caption>\n<\/table>\n
ii<\/p>\n
SCHEDULES AND EXHIBITS
\n———————-<\/p>\n
Schedule 1 Additional Delco Assets
\nSchedule 2 Additional Hughes Assets
\nSchedule 3 Additional Telecom Assets
\nSchedule 4 Other Hughes Businesses
\nSchedule 5 Hughes Contracts
\nSchedule 6 Certain Hughes Intellectual Property
\nSchedule 7 Certain Hughes Liabilities
\nSchedule 8 Certain Telecom Liabilities
\nSchedule 9 Certain Delco Liabilities
\nSchedule 10 Dual Use Intellectual Property
\nSchedule 11 Additional Intellectual Property
\nSchedule 7.01 Post-Closing Adjustment<\/p>\n
Exhibit A Real Estate
\nExhibit B Auditors’ Report<\/p>\n
iii<\/p>\n
MASTER SEPARATION AGREEMENT<\/p>\n
This Master Separation Agreement (this “Agreement”), dated as of
\n___________, 1997 is made by and among General Motors Corporation, a Delaware
\ncorporation (“GM”), HE Holdings, Inc., a Delaware corporation and a wholly owned
\nsubsidiary of GM (“Hughes”), Delco Electronics Corporation, a Delaware
\ncorporation and a wholly owned subsidiary of GM, and Hughes Network Systems,
\nInc., a Delaware corporation and a wholly owned subsidiary of GM.<\/p>\n
RECITALS<\/p>\n
WHEREAS, Hughes and Raytheon Company, a Delaware corporation (“Raytheon”),
\nare parties to that certain Agreement and Plan of Merger dated as of January 16,
\n1997, as amended from time to time (the “Merger Agreement”), pursuant to which
\nRaytheon’s business will be combined with the Defense Business through the
\nmerger of Raytheon with and into Hughes (the “Merger”); and<\/p>\n
WHEREAS, as a condition to entering into the Merger Agreement, Raytheon has
\nrequired that Hughes be, at the time of consummation of the Merger, an
\nindependent, publicly owned company, comprising the Defense Business; and<\/p>\n
WHEREAS, in order to satisfy such condition, the parties hereto, subject to
\nthe terms and conditions hereof, intend to effect certain transfers of assets,
\nsubject to assuming certain liabilities, as described herein; and<\/p>\n
WHEREAS, it is the intention of the parties to this Agreement that the
\ntransfers described herein will qualify as tax-free under the Internal Revenue
\nCode of 1986, as amended (the “Code”); and<\/p>\n
WHEREAS, the parties hereto also intend to enter into certain agreements
\ngoverning their relationships following the effectiveness of the Merger;<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and the covenants and
\nagreements set forth below, the parties hereto agree as follows:<\/p>\n
ARTICLE 1<\/p>\n
Definitions<\/p>\n
Section 1.01. Defined Terms. (a) Capitalized terms used herein
\nwhich are not otherwise defined herein shall have the meanings ascribed to them
\nin the Merger Agreement.<\/p>\n
(b) The following terms, as used herein, shall have the following
\nmeanings:<\/p>\n
“Additional Delco Assets” means those certain Assets that are not
\npresently owned by Delco or its Subsidiaries but are used primarily, or are held
\nfor use primarily, in the Automotive Electronics Business, as identified on
\nSchedule 1.<\/p>\n
“Additional Delco Liabilities” means all Liabilities relating to or arising
\nout of the Additional Delco Assets.<\/p>\n
“Additional Hughes Assets” means those certain Assets that are not
\npresently owned by Hughes or its Subsidiaries but are used primarily, or are
\nheld for use primarily, in the Defense Business, as identified on Schedule 2.<\/p>\n
“Additional Hughes Liabilities” means all Liabilities relating to or
\narising out of the Additional Hughes Assets.<\/p>\n
“Additional Telecom Assets” means those certain Assets that are not
\npresently owned by Telecom or its Subsidiaries but are used primarily, or are
\nheld for use primarily in, the Telecommunications and Space Business, as
\nidentified on Schedule 3.<\/p>\n
“Additional Telecom Liabilities” means all Liabilities relating to or
\narising out of the Additional Telecom Assets.<\/p>\n
“Affiliate” of any specified Person means any other Person directly or
\nindirectly Controlling, Controlled by, or under common Control with, such
\nspecified Person.<\/p>\n
“Ancillary Separation Agreements” means the Definitive Agreements and any
\nother agreements entered into among the parties hereto on or prior to the Spin-
\nOff Merger Time with respect to the relationships of the parties after the Spin-
\nOff Merger Time, subject to Section 4.2(b) of the GM Implementation Agreement.<\/p>\n
“Arbiter” has the meaning set forth in Section 7.01.<\/p>\n
2<\/p>\n
“Assets” means any and all assets, properties and rights, whether tangible
\nor intangible, whether real, personal or mixed, whether fixed, contingent or
\notherwise, and wherever located, including, without limitation, the following:<\/p>\n
(i) real property interests (including leases), land, plants,
\n buildings and improvements;<\/p>\n
(ii) machinery, equipment, vehicles, furniture and fixtures,
\n leasehold improvements, supplies, repair parts, tools, plant, laboratory
\n and office equipment and other tangible personal property, together with
\n any rights or claims arising out of the breach of any express or implied
\n warranty by the manufacturers or sellers of any of such assets or any
\n component part thereof;<\/p>\n
(iii) inventories, including raw materials, work-in-process, finished
\n goods, parts, accessories;<\/p>\n
(iv) notes, loans and accounts receivable (whether current or not
\n current), interests as beneficiary under letters of credit, advances and
\n performance and surety bonds;<\/p>\n
(v) banker’s acceptances, shares of stock, bonds, debentures,
\n evidences of indebtedness, certificates of interest or participation in
\n profit-sharing agreements, collateral-trust certificates, investment
\n contracts, voting trust certificates, puts, calls, straddles, options,
\n swaps, collars, caps and other securities or hedging arrangements of any
\n kind;<\/p>\n
(vi) financial, accounting and operating data and records including,
\n without limitation, books, records, electronic data, notes, sales and sales
\n promotional data, advertising materials, credit information, cost and
\n pricing information, customer and supplier lists, reference catalogs,
\n payroll and personnel records, minute books, stock ledgers, stock transfer
\n records and other similar property, rights and information;<\/p>\n
(vii) domestic and foreign patents and patent applications, together
\n with any continuations, continuations-in-part or divisional applications
\n thereof, and all patents issuing thereon (including reissues, renewals and
\n re-examinations of the foregoing); invention disclosures; mask works; net
\n lists; copyrights, and copyright applications and registrations;
\n trademarks, servicemarks, service names, trade names, and trade dress, in
\n each case together with any applications and registrations therefor and all
\n appurtenant goodwill relating thereto; trade secrets, commercial and
\n technical<\/p>\n
3<\/p>\n
information, know-how, proprietary or confidential information, including
\n engineering, production and other designs, notebooks, processes, drawings,
\n specifications, formulae, and technology; computer and electronic data
\n processing programs and software (object and source code), data bases and
\n documentation thereof; inventions (whether patented or not); and all other
\n Intellectual Property under the laws of any country throughout the world;<\/p>\n
(viii) Contracts and all rights therein;<\/p>\n
(ix) prepaid expenses, deposits and retentions held by third
\n parties;<\/p>\n
(x) claims, causes of action, choses in action, rights under
\n insurance policies, rights under express or implied warranties, rights of
\n recovery, rights of set-off, and rights of subrogation;<\/p>\n
(xi) licenses, franchises, permits, authorizations and approvals; and<\/p>\n
(xii) goodwill and going concern value.<\/p>\n
“Auditors’ Report” has the meaning set forth in Section 7.01.<\/p>\n
“Automotive Electronics Business” means (i) the businesses heretofore or
\ncurrently engaged in by HEC and its Subsidiaries as reported in the automotive
\nelectronics segment (or its predecessor segment) in HEC’s financial statements,
\n(ii) any former or discontinued operations primarily related to such businesses
\nas previously conducted (but excluding any former or discontinued operations
\nthat, during the time that such operations were active, previously were reported
\nin the automotive electronics segment (or its predecessor segment) in HEC’s or
\nits predecessor’s financial statements but were subsequently moved to, and are
\ncurrently, or if divested, last were, reported in, the aerospace and defense
\nsystems segment, telecommunications and space segment or the corporate\/other
\nsegment (or their predecessors’ segments) in HEC’s (or its predecessor’s)
\nfinancial statements), and (iii) the businesses related to the Additional Delco
\nAssets; provided, however, that at the Spin-Off Merger Time, Delco and Hughes
\nwill each own 50% of the capital stock or other equity interest of HE Microwave
\nLLC.<\/p>\n
“Automotive Electronics Employees” has the meaning ascribed to such term in
\nthe Employee Matters Agreement.<\/p>\n
4<\/p>\n
“Business Day” means a day other than a Saturday, a Sunday or a day on
\nwhich banking institutions located in the State of New York are authorized or
\nobligated by law or executive order to close.<\/p>\n
“Closing Date Balance Sheet” has the meaning set forth in Section 7.01.<\/p>\n
“Closing Date Final Amount” has the meaning set forth in Section 7.01.<\/p>\n
“Closing Date Financial Information” has the meaning set forth in Section
\n7.01.<\/p>\n
“Closing Date Statement of Purchase Price Adjustment Amounts” has the
\nmeaning set forth in Section 7 .01.<\/p>\n
“Confidential Information” means with respect to any party hereto, (a) any
\nInformation concerning such party, its business or any of its Affiliates that
\nwas obtained by another party hereto prior to the Spin-Off Merger Time, (b) any
\nInformation concerning such party that is obtained by another party under
\nSection 4.03, or (c) any other Information obtained by, or furnished to, another
\nparty hereto that (i) is marked “Proprietary” or “Company Private” or words of
\nsimilar import by the party owning such Information, or any Affiliate of such
\nparty, or (ii) the party owning such Information has notified such other party
\nin writing is confidential or secret; provided, however, that any Information
\nprovided by GM to any of Hughes, Telecom or Delco regarding the Defense
\nBusiness, Telecommunications and Space Business or the Automotive Electronics
\nBusiness, respectively, shall not be deemed Confidential Information with
\nrespect to the use of such Information in their respective businesses by Hughes,
\nTelecom or Delco, as the case may be.<\/p>\n
“Contracts” means any contract, agreement, lease, license, sales order,
\npurchase order, instrument or other commitment that is binding on any Person or
\nany part of its property under applicable law.<\/p>\n
“Control” means the possession, direct or indirect, of the power to direct
\nor cause the direction of the management of the policies of a Person, whether
\nthrough the ownership of voting securities, by contract or otherwise.
\n“Controlling” and “Controlled” have the corollary meanings ascribed thereto.<\/p>\n
“Defense Business” means (i) the businesses heretofore or currently engaged
\nin by HEC and its Subsidiaries as reported in the aerospace and defense systems
\nsegment (or its predecessor segment) in HEC’s financial statements, (ii) any
\nformer or discontinued operations primarily related to such businesses as
\npreviously conducted (but excluding any<\/p>\n
5<\/p>\n
former or discontinued operations that, during the time that such operations
\nwere active, previously were reported in the aerospace and defense system
\nsegment (or its predecessor segment) in HEC’s or its predecessor’s financial
\nstatements but were subsequently moved to, and are currently, or if divested,
\nlast were, reported in, the telecommunications and space segment or automotive
\nelectronics segment (or their predecessors’ segments) in HEC’s (or its
\npredecessor’s) financial statements), (iii) the businesses related to the
\nAdditional Hughes Assets, and (iv) the other businesses set forth on Schedule 4.<\/p>\n
“Defense Employee Arrangements” has the meaning ascribed to such term in
\nthe Employee Matters Agreement.<\/p>\n
“Defense Employee Benefit Plans” has the meaning ascribed to such term in
\nthe Employee Matters Agreement.<\/p>\n
“Defense Employees” has the meaning ascribed to such term in the Employee
\nMatters Agreement.<\/p>\n
“Definitive Agreements” has the meaning set forth in Section 2.06.<\/p>\n
“Delco” means Delco Electronics Corporation, a Delaware corporation that,
\nafter giving effect to the HEC Reorganization (as defined in the Hughes
\nDistribution Agreement), will be a direct Subsidiary of GM and the parent
\ncorporation of all entities owned directly or indirectly by GM that will engage
\nafter the Spin-Off Merger Time in the Automotive Electronics Business conducted
\nimmediately prior to the consummation of the transactions set forth herein.<\/p>\n
“Delco Assets” means all of HEC’s or HEC’s Subsidiaries’ right, title and
\ninterest (including minority interests) in and to all Assets of HEC or any of
\nits Subsidiaries other than Hughes that are used primarily in or held primarily
\nfor use in the operations of the Automotive Electronics Business, including the
\nAdditional Delco Assets and the rights of Delco and its Subsidiaries under this
\nAgreement and the agreements contemplated hereby (including the Ancillary
\nSeparation Agreements), but excluding the Hughes Assets, the Telecom Assets and
\nany cash and cash equivalents.<\/p>\n
“Delco Liabilities” means (i) all Liabilities relating primarily to, or
\narising primarily out of, the Automotive Electronics Business as conducted at
\nany time prior to, on or after the Spin-Off Merger Time, including, without
\nlimitation, all Liabilities relating to or arising out of the Delco Assets, (ii)
\nthe Liabilities described on Schedule 9, (iii) the obligations of Delco created
\npursuant to this Agreement and the agreements contemplated hereby (including
\nunder<\/p>\n
6<\/p>\n
the Ancillary Separation Agreements) and (iv) all Liabilities with respect to
\nAutomotive Electronics Employees and Retired Automotive Electronics Employees.<\/p>\n
“Dual Use Technology” shall mean all Intellectual Property developed by
\nHughes for the Defense Business (i) that is useful in the Telecommunications and
\nSpace Business as conducted immediately prior to the Spin-Off Merger Time and
\n(ii) which covers components manufactured or processes that are to be utilized
\nby the Telecommunications and Space Business, and, with respect to patents,
\npatent applications and invention disclosures, shall consist of the patents,
\npatent applications and invention disclosures set forth on Schedule 10 hereof.<\/p>\n
“Employee Arrangements” means all employment or consulting agreements,
\ncollective bargaining agreements and all bonus and other incentive compensation,
\ndeferred compensation, disability, severance, stock award, stock option or stock
\npurchase agreements, policies or arrangements with respect to the employment and
\ntermination of employment of any employee, officer, director or other Person
\nemployed at any time by HEC or any of its Subsidiaries.<\/p>\n
“Employee Benefit Plan” means each employee benefit plan, as defined in
\nSection 3(3) of ERISA, which HEC or any of its Subsidiaries maintains or to
\nwhich HEC or any of its Subsidiaries has an obligation to make contributions.<\/p>\n
“Employee Matters Agreement” means the agreement to be entered into as of
\nthe Spin-Off Merger Time among Hughes, Telecom and Delco, with respect to, among
\nother things, certain employee benefit and liability issues.<\/p>\n
“ERISA” means the Employee Retirement Income Security Act of 1974, as
\namended.<\/p>\n
“Final Determination” means (i) with respect to federal income Taxes, a
\n“determination” as defined in Section 1313(a) of the Code or execution of an
\nInternal Revenue Service Form 870AD and, with respect to Taxes other than
\nfederal income Taxes, any final determination of liability in respect of a Tax
\nthat, under applicable law, is not subject to further appeal, review or
\nmodification through proceedings or otherwise (including the expiration of a
\nstatute of limitations or a period for the filing of claims for refunds, amended
\nreturns or appeals from adverse determinations) or (ii) the payment of Tax by
\nHughes, HEC or any of their Affiliates, whichever is responsible for payment of
\nsuch Tax liability under applicable law, with respect to any item disallowed or
\nadjusted by a Taxing authority, provided that such responsible party determines
\nthat no action should be taken to<\/p>\n
7<\/p>\n
recoup such payment and Hughes (if the responsible party is HEC or any of its
\nAffiliates) or HEC (if the responsible party is Hughes or any of its Affiliates)
\nagrees.<\/p>\n
“HAC” means Hughes Aircraft Company, a Delaware corporation.<\/p>\n
“HEC” means Hughes Electronics Corporation, a Delaware corporation and as
\nof the date hereof, the owner of all of the capital stock of Hughes.<\/p>\n
“HEC Reorganization” has the meaning ascribed to such term in the Hughes
\nDistribution Agreement.<\/p>\n
“HRL” means Hughes Research Laboratories LLC, a Delaware limited liability
\ncompany.<\/p>\n
“Hughes Assets” means all of HEC’s or HEC’s Subsidiaries’ right, title and
\ninterest (including minority interests) in and to all Assets of HEC or any of
\nits Subsidiaries that are used primarily in or held primarily for use in the
\noperations of the Defense Business, including without limitation the Hughes
\nFacilities, the Hughes Intellectual Property, the Hughes Contracts, the
\nAdditional Hughes Assets, the Assets of the Defense Employee Arrangements and
\nthe Defense Employee Benefit Plans as provided in the Employee Matters Agreement
\nand the rights of Hughes and its Subsidiaries under this Agreement and the
\nagreements contemplated hereby (including the Ancillary Separation Agreements),
\nbut excluding (i) the Telecom Assets, (ii) the Delco Assets and (iii) any cash
\nand cash equivalents on the Closing Date Balance Sheet.<\/p>\n
“Hughes Contracts” means all Contracts pursuant to which Hughes or any of
\nits Subsidiaries (determined immediately following the Spin-Off Merger Time) are
\nparties (other than Contracts that constitute Additional Telecom Assets or
\nAdditional Delco Assets) and the other Contracts identified on Schedule 5.<\/p>\n
“Hughes Debt” means the Debt contemplated by the Merger Agreement to be
\nDebt of Hughes and its Subsidiaries as of the Effective Time.<\/p>\n
“Hughes Facilities” means the real property and facilities described on
\nExhibit A that currently are, or will be on or prior to the Spin-Off Merger
\nTime, owned by, or leased to, Hughes or any of its Subsidiaries.<\/p>\n
“Hughes Intellectual Property” means all of HEC’s or HEC’s Subsidiaries’
\nright, title and interest in and to the Intellectual Property relating primarily
\nto the Defense Business<\/p>\n
8<\/p>\n
and shall include, without limitation, the patents, patent applications, and
\ntrademarks set forth on Schedule 6 hereof. In no event shall Hughes
\nIntellectual Property include the ownership of Dual Use Technology or any
\ntrademark, servicemark or trade or company name which contains the name
\n“HUGHES”; provided, however, that the Hughes Intellectual Property shall include
\nHughes’s rights under the Intellectual Property Agreements contemplated by this
\nAgreement.<\/p>\n
“Hughes Interim Balance Sheet” means the unaudited pro forma consolidated
\nbalance sheet as of September 30, 1996 for Hughes contained in the Hughes
\nInterim Statements and included in the disclosure schedule to the Merger
\nAgreement.<\/p>\n
“Hughes Liabilities” means (i) the Hughes Debt, together with accrued and
\nunpaid interest thereon at the Spin-Off Merger Time to the extent reflected on
\nthe Closing Date Balance Sheet (other than with respect to the Hughes Debt to be
\nincurred in connection with the Intercompany Payment for which there will be no
\naccrued and unpaid interest at the Spin-Off Merger Time), (ii) all Liabilities
\nrelating primarily to, or arising primarily out of, the Defense Business as
\nconducted at any time prior to, on or after the Spin-Off Merger Time, including
\nwithout limitation all Liabilities relating to or arising out of the Hughes
\nAssets, (iii) the Liabilities described on Schedule 7, (iv) all Liabilities with
\nrespect to Defense Employees and Retired Defense Employees, (v) all Liabilities
\narising under the Defense Employee Arrangements and Defense Employee Benefit
\nPlans, and (vi) the obligations of Hughes created pursuant to this Agreement,
\nthe agreements contemplated hereby (including under the Ancillary Separation
\nAgreements) and the other Transaction Agreements (to the extent such other
\nTransaction Agreements contain obligations or liabilities of Hughes and\/or its
\nSubsidiaries from and after the Spin-Off Merger Time).<\/p>\n
“Hughes Spin-Off Separation Agreement” means the agreement to be entered
\ninto prior to the Effective Time between GM and Hughes, with respect to certain
\nseparation issues.<\/p>\n
“Income Tax” has the meaning ascribed to such term in the Tax Sharing
\nAgreement.<\/p>\n
“Indemnifying Party” means a Person that is obligated to provide
\nindemnification pursuant to Article 3 of this Agreement.<\/p>\n
“Indemnitee” means a Person that is entitled to seek indemnification
\npursuant to Article 3 of this Agreement.<\/p>\n
9<\/p>\n
“Information” means all records, books, contracts, instruments, computer
\ndata and other data and information.<\/p>\n
“Intellectual Property” means any and all domestic and foreign patents and
\npatent applications, together with any continuations, continuations-in-part or
\ndivisional applications thereof, and all patents issuing thereon (including
\nreissues, renewals and re-examinations of the foregoing); invention disclosures;
\nmask works; net lists; copyrights, and copyright applications and registrations;
\ntrademarks, servicemarks, service names, trade names, and trade dress, in each
\ncase together with any applications and registrations therefor and all
\nappurtenant goodwill relating thereto; trade secrets, commercial and technical
\ninformation, know-how, proprietary or confidential information, including
\nengineering, production and other designs, notebooks, processes, drawings,
\nspecifications, formulae, and technology; computer and electronic data
\nprocessing programs and software (object and source code), data bases and
\ndocumentation thereof; inventions (whether patented or not); and all other
\nintellectual property under the laws of any country throughout the world.<\/p>\n
“Intellectual Property Agreements” means all agreements to be entered into
\nprior to the Spin-Off Merger Time between Hughes and Telecom (or between their
\nrespective Affiliates) with respect to the treatment after the Spin-Off Merger
\nTime of Intellectual Property, all as described herein.<\/p>\n
“Liabilities” means any and all debts, liabilities, commitments and
\nobligations, whether fixed, contingent or absolute, matured or unmatured,
\nliquidated or unliquidated, accrued or not accrued, known or unknown, whenever
\nor however arising (including, without limitation, whether arising out of any
\nContract or tort based on negligence or strict liability) and whether or not the
\nsame would be required by generally accepted accounting principles to be
\nreflected in financial statements or disclosed in the notes thereto.<\/p>\n
“Loss” or “Losses” has the meaning ascribed to such terms in the Hughes
\nSpin-Off Separation Agreement.<\/p>\n
“Person” means an individual, partnership, limited liability company, joint
\nventure, corporation, trust, unincorporated association, any other entity, or a
\ngovernment or any department or agency or other unit thereof.<\/p>\n
“Prior Relationship” means the ownership relationships among GM, HEC,
\nHughes, Telecom and Delco at any time prior to giving effect to the HEC
\nReorganization and the Spin-Off Transactions.<\/p>\n
10<\/p>\n
“Purchase Price Adjustment Amounts” has the meaning set forth in Section
\n7.01.<\/p>\n
“Representatives” means directors, officers, employees, agents,
\nconsultants, advisors, accountants, attorneys and representatives.<\/p>\n
“Retired Automotive Electronics Employees” has the meaning ascribed to such
\nterm in the Employee Matters Agreement.<\/p>\n
“Retired Defense Employees” means all former employees of the Defense
\nBusiness as described in the Employee Matters Agreement.<\/p>\n
“Retired Satellite Employees” has the meaning ascribed to such term in the
\nEmployee Matters Agreement.<\/p>\n
“Satellite Employees” has the meaning ascribed to such term in the Employee
\nMatters Agreement.<\/p>\n
“Spin-Off Merger” means the merger of Merger Sub with and into GM pursuant
\nto the Hughes Distribution Agreement.<\/p>\n
“Spin-Off Merger Time” means the date and time as of which the Spin-Off
\nMerger becomes effective.<\/p>\n
“Spin-Off Transactions” means the Hughes Spin-Off and the Telecom Spin-Off
\ntransactions contemplated by the Hughes Distribution Agreement.<\/p>\n
“Subsidiary” means with respect to any specified Person, any corporation or
\nother legal entity of which such Person or any of its Subsidiaries Controls or
\nowns, directly or indirectly, more than 50% of the stock of other equity
\ninterest entitled to vote on the election of the members to the board of
\ndirectors or similar governing body.<\/p>\n
“Tax” has the meaning ascribed to such term in the Hughes Spin-Off
\nSeparation Agreement.<\/p>\n
“Tax Sharing Agreement” means the agreement to be entered into as of the
\nSpin-Off Merger Time among GM, Hughes and Telecom, with respect to certain
\nIncome Tax matters.<\/p>\n
“Telecom” means Hughes Network Systems, Inc., a Delaware corporation that,
\nafter giving effect to the HEC Reorganization, will be a direct Subsidiary of GM
\nand the parent<\/p>\n
11<\/p>\n
corporation of all entities owned directly or indirectly by GM that will engage
\nin the Telecommunications and Space Business after the Spin-Off Merger Time (and
\nwhich will be renamed Hughes Electronics Corporation as of the Spin-Off Merger
\nTime).<\/p>\n
“Telecom Assets” means all of HEC’s or HEC’s Subsidiaries right, title and
\ninterest (including minority interests) in and to all Assets of Hughes or any of
\nits Subsidiaries that are used primarily in or held primarily for use in the
\noperations of the Telecommunications and Space Business, including the
\nAdditional Telecom Assets and the rights of Telecom and its Subsidiaries under
\nthis Agreement and the agreements contemplated hereby (including the Ancillary
\nSeparation Agreements), but excluding the Hughes Assets and the Delco Assets.<\/p>\n
“Telecom Liabilities” means (i) all Liabilities relating primarily to, or
\narising primarily out of, the Telecommunications and Space Business as conducted
\nat any time prior to, on or after the Spin-Off Merger Time, including without
\nlimitation all Liabilities relating to or arising out of the Telecom Assets,
\n(ii) all Liabilities with respect to Satellite Employees and Retired Satellite
\nEmployees, (iii) the Liabilities described on Schedule 8, (iv) the obligations
\nof Telecom created pursuant to this Agreement and the agreements contemplated
\nhereby (including under the Ancillary Separation Agreements), (v) all other
\nLiabilities of Hughes that are neither Delco Liabilities nor Hughes Liabilities
\nand (vi) any Debt of Hughes or its Subsidiaries in excess of the Hughes Debt.<\/p>\n
“Telecommunications and Space Business” means the businesses heretofore or
\ncurrently engaged in by HEC and its Subsidiaries (including the businesses
\nrelated to the Additional Telecom Assets), other than (i) the Automotive
\nElectronics Business and (ii) the Defense Business.<\/p>\n
“Third-Party Claim” means any claim, suit, arbitration, inquiry, proceeding
\nor investigation by or before any court, governmental or other regulatory or
\nadministrative agency or commission or any arbitration tribunal asserted by a
\nPerson other than any party hereto or their respective Affiliates which gives
\nrise to a right of indemnification hereunder.<\/p>\n
“Transaction Agreements” has the meaning set forth in the GM Implementation
\nAgreement.<\/p>\n
“Transferee” means any Person that will receive a transfer of Assets
\npursuant to Article 2.<\/p>\n
“Transferor” means any Person that will make a transfer of Assets pursuant
\nto Article 2.<\/p>\n
12<\/p>\n
ARTICLE 2<\/p>\n
Transfer and Assumption<\/p>\n
Section 2.01. Transfer and Contribution of Assets.<\/p>\n
(a) Subject to the terms and conditions of this Agreement:<\/p>\n
(i) prior to the Spin-Off Merger Time, GM shall cause HEC (or shall
\n cause HEC’s appropriate Subsidiary) to transfer to Hughes (or at Hughes’
\n election, a Subsidiary of Hughes) all of HEC’s (or its Subsidiary’s) right,
\n title and interest in and to the Additional Hughes Assets;<\/p>\n
(ii) prior to the Spin-Off Merger Time, GM shall cause HEC (or
\n shall cause HEC’s appropriate Subsidiary) to transfer to Telecom (or at
\n Telecom’s election, an Affiliate of Telecom) all of HEC’s (or its
\n Subsidiary’s) right, title and interest in and to the Additional Telecom
\n Assets;<\/p>\n
(iii) prior to the Spin-Off Merger Time, GM shall cause HEC (or shall
\n cause HEC’s appropriate Subsidiary) to transfer to Delco (or at Delco’s
\n election, an Affiliate of Delco) all of HEC’s right, title and interest in
\n and to the Additional Delco Assets;<\/p>\n
(iv) immediately following the actions referred to in the preceding
\n clauses and prior to the Spin-Off Merger Time, (a) HAC will merge with and
\n into Hughes, with Hughes as the surviving corporation, and (b) HEC will
\n merge with and into GM, with GM as the surviving corporation; and<\/p>\n
(v) immediately following the actions referred to in clause (iv) and
\n prior to the Spin-Off Merger Time, Hughes shall transfer to GM all of its
\n right, title and interest in and to the shares of capital stock of Telecom.<\/p>\n
(b) All of the transfers of Assets to be effected pursuant to this Article
\n2 are hereinafter collectively referred to as the “Transfer” and the Assets so
\ntransferred are hereinafter collectively referred to as the “Transferred
\nAssets.”<\/p>\n
(c) Notwithstanding anything in this Agreement to the contrary, Hughes
\nshall retain and shall not transfer, convey, assign or contribute to any Person
\nthe Hughes Assets.<\/p>\n
13<\/p>\n
In addition, the parties hereto acknowledge and agree that Telecom retains the
\nTelecom Assets and that Delco retains the Delco Assets.<\/p>\n
(d) Each of the parties hereto acknowledges and agrees that the
\nTransferred Assets will be transferred “as is where is” and that, except as set
\nforth in (e) below, each Transferor makes and has made no warranty, either
\nexpress or implied, including without limitation warranties of merchantability
\nor fitness for a particular purpose, with respect to any Transferred Assets.<\/p>\n
(e) Telecom represents and warrants to Hughes that, except for cash and
\ncash equivalents and without giving effect to the sale or anticipated sale of,
\nor other action with respect to, any Hughes Assets pursuant to Section 5.1(b) of
\nthe Merger Agreement, the Hughes Assets as of and immediately following the
\nSpin-Off Merger Time (i) will include (A) all Assets owned or held by HEC and
\nits Subsidiaries and (B) all Assets to which HEC and its Subsidiaries have
\ncontractual rights (whether through ownership, lease, license or otherwise), in
\nthe case of clause (A) and clause (B) immediately prior to the Spin-Off Merger
\nTime which are primarily used in, or held primarily for use in, the Defense
\nBusiness as such business is conducted as of the Spin-Off Merger Time and (ii)
\nwill be sufficient to conduct the Defense Business as so conducted immediately
\nprior to the Spin-Off Merger Time.<\/p>\n
Section 2.02. Assumption of Liabilities.<\/p>\n
(a) Simultaneously with the actions referred to in Section 2.01(a)(i),
\nHughes, in partial consideration for the transfer of the Additional Hughes
\nAssets, shall assume and on a timely basis pay, satisfy and discharge (or cause
\nits Subsidiaries to pay, satisfy and discharge) in accordance with their terms
\nany and all Additional Hughes Liabilities.<\/p>\n
(b) Simultaneously with the actions referred to in Section 2.01(a)(ii),
\nTelecom, in partial consideration for the transfer of the Additional Telecom
\nAssets, shall assume and on a timely basis pay, satisfy and discharge (or cause
\nits Subsidiaries to pay, satisfy and discharge) in accordance with their terms
\nany and all Additional Telecom Liabilities.<\/p>\n
(c) Simultaneously with the actions referred to in Section 2.01(a)(iii),
\nDelco, in partial consideration for the transfer of the Additional Delco Assets,
\nshall assume and on a timely basis pay, satisfy and discharge (or cause its
\nSubsidiaries to pay, satisfy and discharge) in accordance with their terms, any
\nand all Additional Delco Liabilities.<\/p>\n
(d) Hughes hereby retains or assumes, as the case may be, and no other
\nparty hereto shall assume or have any liability with respect to, the Hughes
\nLiabilities. Telecom<\/p>\n
14<\/p>\n
hereby retains or assumes, as the case may be, and no other party hereto shall
\nhave any liability with respect to, the Telecom Liabilities. Delco hereby
\nretains or assumes, as the case may be, and no other party hereto shall have any
\nliability with respect to, the Delco Liabilities.<\/p>\n
Section 2.03. Employee Matters. Notwithstanding anything to the contrary
\ncontained in this Agreement:<\/p>\n
(a) the rights and obligations of the parties with respect to (i) Employee
\nBenefit Plans for the benefit of employees and former employees (and their
\nbeneficiaries) of Hughes and its Subsidiaries and (ii) all Contracts relating to
\nmedical, dental and other services entered into by Hughes and existing for the
\nbenefit of Hughes and its Subsidiaries and their employees, are subject to the
\nprovisions of Article 6; and<\/p>\n
(b) the rights and obligations of GM and Delco with respect to the Employee
\nBenefit Plans for the benefit of employees and former employees (and their
\nbeneficiaries) of Delco shall be governed by separate agreements between Delco
\nand GM.<\/p>\n
Section 2.04. Methods of Transfer and Assumption. The parties hereto
\nagree that (i) any Transfer shall be effected by delivery by the Transferor to
\nthe Transferee of (A) with respect to those Assets which are evidenced by
\ncapital stock certificates or similar instruments, certificates duly endorsed in
\nblank or accompanied by stock powers or other instruments of assignment executed
\nin blank, (B) with respect to any real property interest and\/or any improvements
\nthereon, a grant deed or the equivalent thereof in accordance with local
\npractice, and (C) with respect to all other Assets, such good and sufficient
\ninstruments of contribution, assignment, conveyance, transfer and delivery, in
\nform and substance reasonably satisfactory to the appropriate Transferor and
\nTransferee, as shall be necessary to vest in such Transferee, all of the
\nTransferor’s right, title and interest in and to any such Assets, (ii) the
\nassumption of the Liabilities contemplated pursuant to Section 2.02 hereof shall
\nbe effected by delivery by the party assuming such Liability to the party which
\nis the obligor under such Liability, of such good and sufficient instruments of
\nassumption, in form and substance reasonably satisfactory to such two parties,
\nas shall be necessary for the assumption of such Liabilities. Each party hereto
\nalso agrees to deliver to each other party hereto such other documents,
\ninstruments, certificates and agreements as may be reasonably requested by any
\nsuch other party hereto in connection with the transactions contemplated hereby
\nand to take such further action as may be reasonably necessary to carry out the
\nprovisions hereof, including without limitation, appropriate transfer
\ninstruments if a Hughes Asset, Telecom Asset or Delco Asset is inadvertently
\ntransferred to the incorrect Transferee. Notwithstanding any provision to the
\ncontrary contained in this Agreement, in the event and<\/p>\n
15<\/p>\n
to the extent that there is any conflict between the provisions of this
\nAgreement and the provisions of any of the instruments of transfer or assumption
\nreferred to in this Section 2.04, the provisions of this Agreement shall prevail
\nand govern. To the extent that any transfers contemplated hereby are not
\nconsummated prior to the Effective Time, the parties hereto covenant and agree
\nto take all actions reasonably necessary or appropriate to complete such
\ntransfers promptly following the Effective Time.<\/p>\n
In addition to the foregoing, each Transferor also agrees to deliver
\nto each applicable Transferee (at such Transferee’s sole expense) all tangible
\nproperty included in the Transferred Assets that is reasonably requested by any
\nsuch Transferee in connection with the transactions contemplated hereby.<\/p>\n
Section 2.05. Nonassignable Contracts. Anything contained herein to the
\ncontrary notwithstanding, this Agreement shall not constitute an agreement to
\nassign any Contract or Asset if an assignment or attempted assignment of the
\nsame without the consent of another Person would constitute a breach thereof or
\nin any way impair the rights of a party thereunder. If any such consent is not
\nobtained or if an attempted assignment would be ineffective or would impair such
\nparty’s rights under any such Contract or Asset so that the party entitled to
\nthe benefits of such purported transfer (the “Intended Transferee”) would not
\nreceive all such rights, then (x) the party purporting to make such transfer
\n(the “Intended Transferor”) shall use commercially reasonable efforts to provide
\nor cause to be provided to the Intended Transferee, to the extent permitted by
\nlaw, the benefits of any such Contract or Asset and the Intended Transferor
\nshall promptly pay or cause to be paid to the Intended Transferee when received
\nall moneys received by the Intended Transferor with respect to any such Contract
\nor Asset and (y) in consideration thereof the Intended Transferee shall pay,
\nperform and discharge on behalf of the Intended Transferor all of the Intended
\nTransferor’s Liabilities thereunder in a timely manner and in accordance with
\nthe terms thereof. In addition, the Intended Transferor shall take such other
\nactions as may reasonably be requested by the Intended Transferee in order to
\nplace the Intended Transferee, insofar as reasonably possible, in the same
\nposition as if such Contract or Asset had been transferred as contemplated
\nhereby and so all the benefits and burdens relating thereto, including
\npossession, use, risk of loss, potential for gain and dominion, control and
\ncommand, shall inure to the Intended Transferee. If and when such consents and
\napprovals are obtained, the transfer of the applicable Contract or Asset shall
\nbe effected in accordance with the terms of this Agreement.<\/p>\n
Section 2.06. Other Agreements. (a) The parties hereto are simultaneously
\nentering into agreements embodying certain relationships between the Defense
\nBusiness, the Telecommunications and Space Business and the Automotive
\nElectronics Business after the<\/p>\n
16<\/p>\n
Effective Time. These agreements concern the operation of HRL, Income Taxes,
\nIntellectual Property, real estate, information technology, supply arrangements,
\ntransition services, certain Government Contract matters, corporate purchasing,
\ncertain separation issues between Hughes and GM, HE Microwave LLC and employee
\nmatters (the “Definitive Agreements”).<\/p>\n
(b) The parties hereto agree to take all action as may be necessary in
\norder to eliminate (whether through repayment, forgiveness or otherwise) as of
\nthe Spin-Off Merger Time all intercompany balances between Hughes or its
\nSubsidiaries, on the one hand, and HEC or any of its other Subsidiaries, on the
\nother hand (in both cases determined after giving effect to the HEC
\nReorganization, but without giving effect to the merger of HEC into GM).<\/p>\n
ARTICLE 3<\/p>\n
Indemnification<\/p>\n
Section 3.01. Indemnification by Hughes. Hughes shall indemnify, defend
\nand hold harmless GM, HEC, Telecom, Delco and each of their respective
\nSubsidiaries (determined after giving effect to the HEC Reorganization) and
\ntheir respective successors-in-interest and each of their respective past and
\npresent Representatives against any losses, claims, damages, liabilities or
\nactions, arising, whether prior to or following the Transfer, out of or in
\nconnection with the Hughes Liabilities (including in connection with any breach
\nafter the Spin-Off Merger Time by Hughes or any of its Subsidiaries of any terms
\nof the Transaction Agreements), the Hughes Assets or the Defense Business, and
\nHughes shall reimburse such entity, each such Subsidiary, each such successor-
\nin-interest and each such Representative for any legal or any other expenses
\nreasonably incurred by any of them in connection with investigating or defending
\nany such loss, claim, damage, liability or action.<\/p>\n
Section 3.02. Indemnification by Telecom. Telecom shall indemnify, defend
\nand hold harmless GM, HEC, Hughes, Delco and each of their respective
\nSubsidiaries (determined after giving effect to the HEC Reorganization) and
\ntheir respective successors-in-interest, including with respect to Hughes, the
\nSurviving Corporation, and each of their respective past and present
\nRepresentatives against any losses, claims, damages, liabilities or actions,
\narising, whether prior to or following the Transfer, out of or in connection
\nwith the Telecom Liabilities, the Telecom Assets, the Telecommunications and
\nSpace Business or a violation of the representations and warranties set forth in
\nSection 2.01(e) hereof and, with respect to GM and its related parties, the
\nmerger of HEC with and into GM (other than any<\/p>\n
17<\/p>\n
such losses, claims, damages, liabilities or actions resulting from such merger
\nthat primarily relate to the Automotive Electronics Business), and Telecom shall
\nreimburse such entity, each such Subsidiary, each such successor-in-interest and
\neach such Representative for any legal or any other expenses reasonably incurred
\nby any of them in connection with investigating or defending any such loss,
\nclaim, damage, liability or action. Such indemnification with respect to Hughes
\nshall include any amounts paid by Hughes pursuant to Section 5.1(h) of the
\nMerger Agreement in respect of Telecom Liabilities.<\/p>\n
Section 3.03. Indemnification by Delco. Delco shall indemnify, defend and
\nhold harmless GM, HEC, Hughes, Telecom and each of their respective Subsidiaries
\n(determined after giving effect to the HEC Reorganization) and their respective
\nsuccessors-in-interest, including with respect to Hughes, the Surviving
\nCorporation, and each of their respective past and present Representatives
\nagainst any losses, claims, damages, liabilities or actions, arising, whether
\nprior to or following the Transfer, out of or in connection with the Delco
\nLiabilities, the Delco Assets or the Automotive Electronics Business and with
\nrespect to GM and its related parties, the merger of HEC with and into GM, to
\nthe extent such losses, claims, damages, liabilities or actions primarily relate
\nto the Automotive Electronics Business, and Delco shall reimburse such entity,
\neach such Subsidiary, each such successor-in-interest and each such
\nRepresentative for any legal or any other expenses reasonably incurred by any of
\nthem in connection with investigating or defending any such loss, claim, damage,
\nliability or action. Such indemnification with respect to Hughes shall include
\nany amounts paid by Hughes pursuant to Section 5.1(h) of the Merger Agreement in
\nrespect of Delco Liabilities.<\/p>\n
Section 3.04. Indemnification Procedures. (a) If any Indemnitee receives
\nnotice of the assertion of any Third-Party Claim with respect to which an
\nIndemnifying Party is obligated under this Agreement to provide indemnification,
\nsuch Indemnitee shall give such Indemnifying Party notice thereof (together with
\na copy of such Third-Party Claim, process or other legal pleading) promptly
\nafter becoming aware of such Third-Party Claim; provided, however, that the
\nfailure of any Indemnitee to give notice as provided in this Section 3.04 shall
\nnot relieve any Indemnifying Party of its obligations under this Section 3.04,
\nexcept to the extent that such Indemnifying Party is actually prejudiced by such
\nfailure to give notice. Such notice shall describe such Third-Party Claim in
\nreasonable detail.<\/p>\n
(b) An Indemnifying Party, at such Indemnifying Party’s own expense
\nand through counsel chosen by such Indemnifying Party (which counsel shall be
\nreasonably acceptable to the Indemnitee), may elect to defend any Third-Party
\nClaim. If an Indemnifying Party elects to defend a Third-Party Claim, then,
\nwithin ten Business Days after receiving notice of such Third-Party Claim (or
\nsooner, if the nature of such Third Party<\/p>\n
18<\/p>\n
claim so requires), such Indemnifying Party shall notify the Indemnitee of its
\nintent to do so, and such Indemnitee shall cooperate in the defense of such
\nThird-Party Claim. Such Indemnifying Party shall pay such Indemnitee’s
\nreasonable out-of-pocket expenses incurred in connection with such cooperation.
\nSuch Indemnifying Party shall keep the Indemnitee reasonably informed as to the
\nstatus of the defense of such Third Party Claim. After notice from an
\nIndemnifying Party to an Indemnitee of its election to assume the defense of a
\nThird-Party Claim, such Indemnifying Party shall not be liable to such
\nIndemnitee under this Section 3.04 for any legal or other expenses subsequently
\nincurred by such Indemnitee in connection with the defense thereof other than
\nthose expenses referred to in the preceding sentence; provided, however, that
\nsuch Indemnitee shall have the right to employ one law firm as counsel, together
\nwith a separate local law firm in each applicable jurisdiction (“Separate
\nCounsel”), to represent such Indemnitee in any action or group of related
\nactions (which firm or firms shall be reasonably acceptable to the Indemnifying
\nParty) if, in such Indemnitee’s reasonable judgment at any time, either a
\nconflict of interest between such Indemnitee and such Indemnifying Party exists
\nin respect of such claim, or there may be defenses available to such Indemnitee
\nwhich are different from or in addition to those available to such Indemnifying
\nParty and the representation of both parties by the same counsel would be
\ninappropriate, and in that event (i) the reasonable fees and expenses of such
\nSeparate Counsel shall be paid by such Indemnifying Party (it being understood,
\nhowever, that the Indemnifying Party shall not be liable for the expenses of
\nmore than one Separate Counsel (excluding local counsel) with respect to any
\nThird-Party Claim (even if against multiple Indemnitees)) and (ii) each of such
\nIndemnifying Party and such Indemnitee shall have the right to conduct its own
\ndefense in respect of such claim. If an Indemnifying Party elects not to defend
\nagainst a Third Party Claim, or fails to notify an Indemnitee of its election as
\nprovided in this Section 3.04 within the period of ten Business Days described
\nabove, the Indemnitee may defend, compromise, and settle such Third Party Claim
\nand shall be entitled to indemnification hereunder (to the extent permitted
\nhereunder); provided, however, that no such Indemnitee may compromise or settle
\nany such Third-Party claim without the prior written consent of the Indemnifying
\nParty, which consent shall not be unreasonably withheld or delayed.
\nNotwithstanding the foregoing, the Indemnifying Party shall not, without the
\nprior written consent of the Indemnitee, (i) settle or compromise any Third-
\nParty Claim or consent to the entry of any judgment which does not include as an
\nunconditional term thereof the delivery by the claimant or plaintiff to the
\nIndemnitee of a written release from all liability in respect of such Third-
\nParty Claim or (ii) settle or compromise any Third-Party Claim in any manner
\nthat would be reasonably likely to have a material adverse effect on the
\nIndemnitee.<\/p>\n
(c) Notwithstanding the provisions of Section 3.04(b), Hughes, on the
\none hand, and GM, Telecom and\/or Delco, on the other hand, shall jointly control
\nthe defense<\/p>\n
19<\/p>\n
of, and cooperate with each other with respect to defending, any Third-Party
\nClaim with respect to which Hughes, on the one hand, and GM, Telecom and\/or
\nDelco, on the other hand, are claiming rights to indemnification under Sections
\n3.01, 3.02 or 3.03. If either Hughes, on the one hand, or GM, Telecom and\/or
\nDelco, on the other hand, fails to defend jointly any such Third-Party Claim,
\nthe other party or parties shall solely defend such Third-Party Claim and the
\nparty or parties failing to defend jointly shall use all commercially reasonable
\nefforts to cooperate with the other party or parties in its or their defense of
\nsuch Third Party Claim; provided, however, that no party may compromise or
\nsettle any such Third-Party Claim without the prior written consent of the other
\nappropriate party or parties, which consent shall not be unreasonably withheld
\nor delayed. All costs and expenses of any party in connection with, and during
\nthe course of, the joint control of the defense of any such Third-Party Claim
\nshall be initially paid by the party that incurs such costs and expenses. Such
\ncosts and expenses shall be reallocated and reimbursed in accordance with the
\nrespective indemnification obligations of the parties at the conclusion of the
\ndefense of such Third-Party Claim.<\/p>\n
Section 3.05. Certain Limitations. (a) The amount of any indemnifiable
\nlosses or other liability for which indemnification is provided under this
\nAgreement shall be net of any amounts actually recovered by the Indemnitee from
\nthird parties (including, without limitation, amounts actually recovered under
\ninsurance policies) with respect to such indemnifiable losses or other
\nliability. Any Indemnifying Party hereunder shall be subrogated to the rights
\nof the Indemnitee upon payment in full of the amount of the relevant
\nindemnifiable loss. An insurer who would otherwise be obligated to pay any
\nclaim shall not be relieved of the responsibility with respect thereto or,
\nsolely by virtue of the indemnifi cation provision hereof, have any subrogation
\nrights with respect thereto. If any Indemnitee recovers an amount from a third
\nparty in respect of an indemnifiable loss for which indemnification is provided
\nin this Agreement after the full amount of such indemnifiable loss has been paid
\nby an Indemnifying Party or after an Indemnifying Party has made a partial
\npayment of such indemnifiable loss and the amount received from the third party
\nexceeds the remaining unpaid balance of such indemnifiable loss, then the
\nIndemnitee shall promptly remit to the Indemnifying Party the excess (if any) of
\n(A) the sum of the amount theretofore paid by such Indemnifying Party in respect
\nof such indemnifiable loss plus the amount received from the third party in
\nrespect thereof, less (B) the full amount of such indemnifiable loss or other
\nliability.<\/p>\n
(b) The amount of any loss or other liability for which indemnification is
\nprovided under this Agreement shall be (i) increased to take account of any net
\nTax cost incurred by the Indemnitee arising from the receipt or accrual of an
\nindemnification payment hereunder (grossed up for such increase) and (ii)
\nreduced to take account of any net Tax benefit<\/p>\n
20<\/p>\n
realized by the Indemnitee arising from incurring or paying such loss or other
\nliability. In computing the amount of any such Tax cost or Tax benefit, the
\nIndemnitee shall be deemed to recognize all other items of income, gain, loss,
\ndeduction or credit before recognizing any item arising from the receipt or
\naccrual of any indemnification payment hereunder or incurring or paying any
\nindemnified loss. Any indemnification payment hereunder shall initially be made
\nwithout regard to this Section 3.05(b) and shall be increased or reduced to
\nreflect any such net Tax cost (including gross-up) or net Tax benefit only after
\nthe Indemnitee has actually realized such cost or benefit. For purposes of this
\nAgreement, an Indemnitee shall be deemed to have “actually realized” a net Tax
\ncost or a net Tax benefit to the extent that, and at such time as, the amount of
\nTaxes payable by such Indemnitee is increased above or reduced below, as the
\ncase may be, the amount of Taxes that such Indemnitee would be required to pay
\nbut for the receipt or accrual of the indemnification payment or the incurrence
\nor payment of such Loss, as the case may be. The amount of any increase or
\nreduction hereunder shall be adjusted to reflect any Final Determination with
\nrespect to the Indemnitee’s liability for Taxes, and payments between such
\nindemnified parties to reflect such adjustment shall be made if necessary.<\/p>\n
(c) Any indemnification payment made under this Agreement shall be
\ncharacterized for Tax purposes as if such payment were made immediately prior to
\nthe Spin-Off Merger Time.<\/p>\n
Section 3.06. Exclusivity of Tax Indemnification. Notwithstanding
\nanything in this Agreement to the contrary, (i) the terms of the Tax Sharing
\nAgreement shall govern the rights and obligations among the parties with respect
\nto indemnification relating to Income Tax and (ii) the terms of the Hughes Spin-
\nOff Separation Agreement shall govern the rights and obligations of the parties
\nthereto with respect to indemnification relating to the matters covered thereby.<\/p>\n
ARTICLE 4<\/p>\n
Access to Information<\/p>\n
Section 4.01. Restrictions on Disclosure of Information. (a) Without
\nlimiting its obligations under any other agreement between or among the parties
\nhereto and\/or any of their respective Affiliates relating to confidentiality,
\neach of the parties hereto agrees that it shall not, and shall not permit any of
\nits Affiliates or Representatives to, disclose any Confidential Information to
\nany Person, other than to such Affiliates or Representatives on a<\/p>\n
21<\/p>\n
need-to-know basis in connection with the purpose for which the Confidential
\nInformation was originally disclosed. Notwithstanding the foregoing, each of
\nthe parties hereto and its respective Affiliates and Representatives may
\ndisclose such Confidential Information, and such Information shall no longer be
\ndeemed Confidential Information, to the extent that such party can demonstrate
\nthat such Confidential Information is or was (i) available to such party outside
\nthe context of the Prior Relationship on a nonconfidential basis prior to its
\ndisclosure by the other party, (ii) in the public domain other than by the
\nbreach of this Agreement or by breach of any other agreement between or among
\nthe parties hereto and\/or any of their respective Affiliates relating to
\nconfidentiality, or (iii) lawfully acquired outside the context of the Prior
\nRelationship on a nonconfidential basis or independently developed by, or on
\nbehalf of, such party by Persons who do not have access to, or descriptions of,
\nany such Confidential Information.<\/p>\n
(b) Policies and Procedures. Each of the parties hereto shall
\nmaintain, and shall cause their respective Affiliates to maintain, policies and
\nprocedures, and develop such further policies and procedures as shall from time
\nto time become necessary or appropriate, to ensure compliance with this Section
\n4.01.<\/p>\n
Section 4.02. Legally Required Disclosure of Confidential Information. If
\nany of the parties to this Agreement or any of their respective Affiliates or
\nRepresentatives becomes legally required to disclose any Confidential
\nInformation, such disclosing party shall promptly notify the party owning the
\nConfidential Information (the “Owning Party”) and shall use all commercially
\nreasonable efforts to cooperate with the Owning Party so that the Owning Party
\nmay seek a protective order or other appropriate remedy and\/or waive compliance
\nwith this Section 4.02. All expenses incurred by the disclosing party in
\nseeking a protective order or other remedy shall reasonably be borne by the
\nOwning Party. If such protective order or other remedy is not obtained, or if
\nthe Owning Party waives compliance with this Section 4.02, the disclosing party
\nor its Affiliate or Representative, as applicable, shall (a) disclose only that
\nportion of the Confidential Information which its legal counsel advises it is
\ncompelled to disclose or else stand liable for contempt or suffer other similar
\nsignificant corporate censure or penalty, (b) use all commercially reasonable
\nefforts to obtain reliable assurance requested by the Owning Party that
\nconfidential treatment will be accorded such Confidential Information, and (c)
\npromptly provide the Owning Party with a copy of the Confidential Information so
\ndisclosed, in the same form and format so disclosed, together with a description
\nof all Persons to whom such Confidential Information was disclosed.<\/p>\n
Section 4.03. Access to Information. Until the ten-year anniversary of
\nthe Spin-Off Merger Time, each of the parties hereto shall cooperate with and
\nafford, and shall cause their respective Affiliates and Representatives to
\ncooperate with and afford, to the<\/p>\n
22<\/p>\n
other party reasonable access upon reasonable advance written request to all
\ninformation (other than information protected from disclosure by the attorney
\nclient privilege or work product doctrine) created prior to the Spin-Off Merger
\nTime within such party’s (or its Affiliates or Representatives’) possession.
\nAccess to the requested information shall be provided so long as it relates to
\nthe requesting party’s (the “Requestor”) business, assets or liabilities, and
\naccess is reasonably required by the Requestor as a result of the parties’ Prior
\nRelationship for purposes of auditing, accounting, claims or litigation (except
\nfor claims or litigation between the parties hereto), employee benefits,
\nregulatory or tax purposes or fulfilling disclosure or reporting obligations
\nincluding, without limitation, Information reasonably necessary for the
\npreparation of reports required by or filed under the Securities Exchange Act of
\n1934, as amended, with respect to any period entirely or partially prior to the
\nSpin-Off Merger Time.<\/p>\n
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