Distribution Agreement
by and between
Unitrin, Inc.
and
Curtiss-Wright Corporation
dated as of November 6, 2000
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS....................................................2
Section 1.1..............................................General 2
Section 1.2...........................References; Interpretation 9
ARTICLE 2
DISTRIBUTION AND OTHER TRANSACTIONS; CERTAIN COVENANTS AND
REPRESENTATIONS AND WARRANTIES.................................9
Section 2................The Distribution and Other Transactions 9
Section 2.2......Declaration Date and Distribution Date; Further
Assurances 15
Section 2.3.......................Representations and Warranties 15
Section 2.4...............Certain Post-Distribution Transactions 19
ARTICLE 3
INDEMNIFICATION...............................................20
Section 3.1...............................Indemnification by C-W 20
Section 3.2...........................Indemnification by UNITRIN 23
Section 3.3...............................Treatment of Payments. 24
Section 3.4......................Procedures for Indemnification. 24
Section 3.5........................ ......Remedies Not Exclusive 27
Section 3.6..........................................Subrogation 27
Section 3.7.............................Indemnification Payments 27
ARTICLE 4
COVENANTS.....................................................27
Section 4.1................................Access to Information 27
Section 4.2......................................Confidentiality 28
Section 4.3......................................No Solicitation 29
Section 4.4.............................Certain Other Agreements 30
Section 4.5.................................Public Announcements 30
Section 4.6....................................Required Consents 31
Section 4.7...............................Litigation Cooperation 31
Section 4.8........................................Other Matters 31
ARTICLE 5
MISCELLANEOUS.................................................31
Section 5.1.....................Complete Agreement; Construction 31
Section 5.2.........................................Counterparts 32
Section 5.3...............................Survival of Agreements 32
Section 5.4.............................................Expenses 32
Section 5.5..............................................Notices 32
Section 5.6..............................................Waivers 33
Section 5.7...........................................Amendments 33
Section 5.8...........................................Assignment 34
Section 5.9...............................Successors and Assigns 34
Section 5.10.........................................Termination 34
Section 5.11........................................Subsidiaries 35
Section 5.12...........................Third Party Beneficiaries 35
Section 5.13..................................Title and Headings 36
Section 5.14..............................Exhibits and Schedules 36
Section 5.15.......................................GOVERNING LAW 36
Section 5.16.............................Consent to Jurisdiction 36
Section 5.17........................................Severability 36
DISTRIBUTION AGREEMENT, dated as of November 6, 2000 (this "Agreement"),
between UNITRIN, INC, a Delaware corporation ("UNITRIN"), and CURTISS-WRIGHT
CORPORATION, a Delaware corporation ("C-W").
WHEREAS, UNITRIN owns, as of the close of business on the date hereof,
4,382,400 shares of common stock, par value $1.00 per share, of C-W (the common
stock of C-W is referred to herein as the "Common Stock");
WHEREAS, simultaneously with the execution hereof, C-W, UNITRIN and CW
DISPOSITION COMPANY, a Delaware corporation and a wholly owned subsidiary of
UNITRIN ("Merger Sub"), are entering into an Agreement and Plan of Merger in the
form attached hereto as Exhibit A-1 (the "Recapitalization Agreement"), pursuant
to which, among other things, Merger Sub will merge with and into C-W (the
"Merger") with the following consequent capital stock changes: (a) 4,382,400
shares of Common Stock held by UNITRIN will be contributed to Merger Sub and, as
of the Effective Time (as defined in the Recapitalization Agreement), will
automatically be canceled and retired with no securities or other consideration
issued in exchange therefore, (b) all of the common stock of Merger Sub owned by
UNITRIN will be converted into 4,382,400 shares of a new Class B common stock,
par value $1.00 per share, of C-W ("Class B Common Stock"), which class of
common stock will be entitled to elect at least 80% of the members of the Board
of Directors of C-W and in all other respects will be substantially identical to
the Common Stock, and (c) all other shares of Common Stock held by stockholders
of C-W will remain issued and outstanding (the "Recapitalization");
WHEREAS, the Board of Directors of UNITRIN has determined that it is in
the best interests of UNITRIN and its stockholders to distribute on the
Distribution Date (as defined herein) all the shares of Class B Common Stock
that UNITRIN will receive in the Recapitalization, on the terms and subject to
the conditions set forth in this Agreement, to the holders of record of the
common stock, par value $.01 per share, of UNITRIN ("UNITRIN Common Stock"), as
of the Distribution Record Date (as defined herein), on a pro rata basis (the
"Distribution");
WHEREAS, the Board of Directors of C-W has determined that it is in the
best interests of C-W and its stockholders that the Distribution be consummated,
and the Recapitalization is a necessary and desirable means to enable the
Distribution to occur;
WHEREAS, UNITRIN is expected to receive a ruling from the Internal Revenue
Service to the effect that the Distribution will be, to the extent set forth
therein, a tax-free distribution within the meaning of Section 355 of the Code
(as defined herein); and
WHEREAS, each of UNITRIN and C-W has determined that it is necessary and
desirable to set forth the principal corporate transactions required to effect
the Distribution and the Recapitalization and to set forth other agreements that
will govern certain other matters following the Distribution.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 General. As used in this Agreement, the following terms shall have
the following meanings:
(1) "Action" shall mean any action, suit, arbitration, inquiry, proceeding
or investigation by or before any court, any governmental or other regulatory or
administrative agency, body or commission or any arbitration tribunal.
(2) "Acquisition Proposal" shall have the meaning set forth in Section
4.3(a).
(3) "Affiliate" shall mean, when used with respect to a specified person,
another person that controls, is controlled by, or is under common control with
the person specified. As used herein, "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such person, whether through the ownership of voting securities
or other interests, by contract or otherwise.
(4) "Assets" shall mean assets, properties and rights (including
goodwill), wherever located (including in the possession of vendors or other
third parties or elsewhere), whether real, personal or mixed, tangible,
intangible or contingent, in each case whether or not recorded or reflected or
required to be recorded or reflected on the books and records or financial
statements of any Person.
(5) "Business Entity" shall mean any corporation, partnership, limited
liability company or other entity which may legally hold title to Assets.
(6) "Cash Dividend" shall have the meaning set forth in Section 2.1(d).
(7) "Cash Dividend Record Date" shall mean the date determined by the
Board of Directors of C-W as the record date for the determination of holders of
record of Common Stock entitled to receive the Cash Dividend.
(8) "Certificate of Merger" shall have the meaning set forth in the
Recapitalization Agreement.
(9) "Class B Common Stock" shall have the meaning set forth in the
recitals hereto.
(10) "Code" shall mean the Internal Revenue Code of 1986, as amended, and
the Treasury Regulations promulgated thereunder, including any successor
legislation or regulations.
(11) "Commission" shall mean the U.S. Securities and Exchange Commission.
(12) "Common Stock" shall have the meaning set forth in the recitals
hereto.
(13) "C-W" shall have the meaning set forth in the heading of this
Agreement.
(14) "C-W Business" shall mean each and every business conducted at any
time prior to, on or after the Distribution Date by C-W or any current, former,
or future Subsidiary of C-W or other Business Entity controlled by C-W, whether
or not such Subsidiary is a Subsidiary of C-W or such Business Entity is
controlled by C-W on the date hereof.
(15) "C-W Group" shall mean C-W and each Person that is a Subsidiary of
C-W immediately prior to the Distribution Date.
(16) "C-W Indemnitees" shall mean C-W, each member of the C-W Group, each
of their respective present and former directors, officers, employees and agents
and each of the heirs, executors, successors and assigns of any of the
foregoing.
(17) "C-W Liabilities" shall mean, collectively, any and all Liabilities
whatsoever that arise out of, result from or are related to the operation of the
C-W Business or the ownership of the assets of the C-W Business by C-W, any
predecessor entity of C-W (and all predecessors thereto) or any Subsidiary of or
Business Entity controlled by such predecessor, any current, former or future
Subsidiary of C-W or any Business Entity controlled by C-W, whether such
Liabilities arise before, on or after the Distribution Date and whether known or
unknown, fixed or contingent, and shall include, without limitation:
(1) any and all Liabilities to which UNITRIN or its predecessors and
successors may become subject arising from or based upon its status or alleged
status as a "controlling person" (as defined under Section 15 of the Securities
Act and Section 20 of the Exchange Act) of C-W or a stockholder of C-W relating
to (A) the Proxy Statement (or any amendment thereto) or any other solicitation
materials or any oral solicitations of proxies (except for liabilities which C-W
incurs as a result of, and to the extent resulting from, information provided by
UNITRIN relating to UNITRIN for inclusion in the Proxy Statement (or any
amendment thereto) or any such other solicitation materials or oral
solicitation); or (B) any other report or document filed by C-W with the
Commission at any time before, on or after the Distribution Date (except for
liabilities which C-W incurs as a result of, and to the extent resulting from,
information provided by UNITRIN relating to UNITRIN for inclusion in such report
or document);
(2) any Liabilities for a breach by C-W of any representation,
warranty or covenant herein or in the Recapitalization Agreement; and
(3) any and all Liabilities which UNITRIN incurs as a result of, and
to the extent resulting from, information provided by C-W relating to C-W for
inclusion in any information statement provided by UNITRIN to its stockholders
or any report or document filed by UNITRIN with the Commission.
(18) "Declaration Date" shall mean the date on which the UNITRIN Board of
Directors shall declare the Distribution; provided that the declaration and the
payment of the Distribution shall be conditioned upon and subject to the
consummation of the Recapitalization, and the payment of the Distribution shall
consist of the shares of Class B Common Stock received by UNITRIN in the
Recapitalization and shall be after the consummation of the Recapitalization on
the day on which the Recapitalization occurs.
(19) "DGCL" shall mean the General Corporation Law of the State of
Delaware.
(20) "Distribution" shall have the meaning set forth in the recitals
hereto.
(21) "Distribution Agent" shall mean the distribution agent selected by
UNITRIN to effect the Distribution, which shall be C-W's stock transfer agent.
(22) "Distribution Date" shall mean the date determined by the Board of
Directors of UNITRIN for the mailing of certificates of Class B Common Stock to
stockholders of UNITRIN in the Distribution. The Distribution Date shall be a
date as soon as practicable following the Declaration Date and shall be the day
on which the Recapitalization occurs.
(23) "Distribution Record Date" shall mean the date determined by the
Board of Directors of UNITRIN as the record date for the determination of the
holders of record of UNITRIN Common Stock entitled to receive shares of Class B
Common Stock in the Distribution.
(24) "Established Liability" shall mean, with respect to each UNITRIN
stockholder, the amount of Tax Liability (including interest and penalties)
resulting from the Distribution, as evidenced by (a) an amended tax return of
such UNITRIN stockholder reflecting the amount of such Tax Liability, together
with proof of payment of such amount, or (b) a deficiency notice received by
such UNITRIN stockholder from the IRS setting forth the amount of such Tax
Liability, together with proof of payment of such amount.
(25) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
(26) "Form 8-A" shall mean a C-W registration statement on Form 8-A
pursuant to which the Class B Common Stock shall be registered under the
Exchange Act, including all amendments thereto.
(27) "Governmental Authority" shall mean any federal, state, local,
foreign or international court, government, department, commission, board,
bureau, agency, official or other regulatory, administrative or governmental
authority.
(28) "Governance Provisions" shall have the meaning set forth in the
Recapitalization Agreement.
(29) "HSR Act" shall have the meaning set forth in Section 2.3(a)(iii).
(30) "Indemnifying Party" shall have the meaning set forth in Section 3.3.
(31) "Indemnitee" shall have the meaning set forth in Section 3.3.
(32) "IRS" shall mean the Internal Revenue Service.
(33) "IRS Ruling" shall have the meaning set forth in Section 2.1(b)(i).
(34) "Liabilities" shall mean any and all losses, claims, charges, debts,
demands, actions, causes of action, suits, damages, obligations, payments, costs
and expenses, sums of money, accounts, reckonings, bonds, specialties,
indemnities and similar obligations, exonerations, covenants, contracts,
controversies, agreements, promises, omissions, variances, guarantees, make
whole agreements and similar obligations, and other liabilities, including all
contractual obligations, whether absolute or contingent, matured or unmatured,
liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever
arising, and including those arising under any law, rule, regulation, Action,
threatened or contemplated Action (including the costs and expenses of demands,
assessments, judgments, settlements and compromises relating thereto and
attorneys' fees and any and all costs and expenses, whatsoever reasonably
incurred in investigating, preparing or defending against any such Actions or
threatened or contemplated Actions), order or consent decree of any governmental
or other regulatory or administrative agency, body or commission or any award of
any arbitrator or mediator of any kind, and those arising under any contract,
commitment or undertaking, including those arising under this Agreement or the
Recapitalization Agreement, in each case, whether or not recorded or reflected
or required to be recorded or reflected on the books and records or financial
statements of any person.
(35) "Material Adverse Effect" shall mean, with respect to any Person, any
change, effect, event, occurrence or development that is, individually or in the
aggregate, materially adverse to the business, operations, assets, liabilities,
condition (financial or otherwise), results of operations or prospects of such
Person.
(36) "Merger" shall have the meaning set forth in the recitals hereto.
(37) "NYSE" shall mean the New York Stock Exchange, Inc.
(38) "NYSE Listing Application" shall mean the application to be submitted
by C-W to the NYSE for the listing of the Class B Common Stock.
(39) "Person" shall mean any natural person, Business Entity, corporation,
business trust, joint venture, association, company, partnership, other entity
or government, or any agency or political subdivision thereof.
(40) "Proxy Statement" shall have the meaning set forth in the
Recapitalization Agreement.
(41) "Recapitalization" shall have the meaning set forth in the recitals
hereto.
(42) "Recapitalization Agreement" shall have the meaning set forth in the
recitals hereto.
(43) "Required Consents" shall have the meaning set forth in Section 4.5.
(44) "Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
(45) "Subsidiary" shall mean any corporation, limited liability company,
partnership or other entity of which another entity (i) owns, directly or
indirectly, ownership interests sufficient to elect a majority of the Board of
Directors (or persons performing similar functions) (irrespective of whether at
the time any other class or classes of ownership interests of such corporation,
partnership or other entity shall or might have such voting power upon the
occurrence of any contingency) or (ii) is a general partner or an entity
performing similar functions (e.g., a trustee).
(46) "Tax" or "Taxes" shall mean taxes of any kind, levies or other like
assessments, customs, duties, imposts, charges or fees, including income, gross
receipts, ad valorem, value added, excise, real or personal property, asset,
sales, use, license, payroll, transaction, capital, net worth and franchise
taxes, withholding, employment, social security, workers compensation, utility,
severance, production, unemployment compensation, occupation, premium, windfall
profits, transfer and gains taxes or other governmental taxes imposed or payable
to the United States, or any state, county, local or foreign government or
subdivision or agency thereof, and in each instance such term shall include any
interest, penalties, additions to tax or additional amounts attributable to any
such tax.
(47) "Tax Claim" shall have the meaning set forth in Section 3.3.
(48) "Third Party Claim" shall have the meaning set forth in Section 3.3.
(49) "UNITRIN Business" shall mean each and every business (except for the
C-W Business) conducted at any time prior to, on or after the Distribution Date
by UNITRIN or any current, former or future Subsidiary of UNITRIN (it being
understood that the foregoing does not include C-W and its Subsidiaries) or any
Business Entity controlled by UNITRIN (it being understood that the foregoing
does not include C-W and its Subsidiaries), whether or not such Subsidiary is a
Subsidiary of UNITRIN or such Business Entity is controlled by UNITRIN on the
date hereof.
(50) "UNITRIN Common Stock" shall have the meaning set forth in the
recitals hereto.
(51) "UNITRIN Group" shall mean UNITRIN and each Person (other than any
member of the C-W Group) that is a Subsidiary or Affiliate of UNITRIN
immediately prior to the Distribution Date.
(52) "UNITRIN Indemnitees" shall mean UNITRIN, each member of the UNITRIN
Group, each of their respective present and former directors, officers,
employees and agents and each of the heirs, executors, successors and assigns of
any of the foregoing, except C-W Indemnitees who would not otherwise be an
UNITRIN Indemnitee.
(53) "UNITRIN Liabilities" shall mean, collectively, any and all
Liabilities whatsoever that arise out of, result from or are related to the
operation of the UNITRIN Business or the ownership of the assets of the UNITRIN
Business by UNITRIN, any predecessor entity of UNITRIN (and all predecessors
thereto) or any Subsidiary of or Business Entity controlled by any such
predecessor, any current, former or future Subsidiary of UNITRIN or any Business
Entity controlled by UNITRIN (it being understood that the foregoing does not
include C-W and its Subsidiaries), whether such Liabilities arise before, on or
after the Distribution Date and whether known or unknown, fixed or contingent,
and shall include, without limitation:
(1) any Liabilities for a breach by UNITRIN of any representation,
warranty or covenant herein or in the Recapitalization Agreement; and
(2) any and all Liabilities which C-W incurs as a result of, and to
the extent resulting from, information provided by UNITRIN relating to UNITRIN
for inclusion in the Proxy Statement (or any amendment thereto), any other
solicitation materials or any oral solicitation of proxies or any report or
document filed by C-W with the Commission.
Section 1.2 References: Interpretations. References in this Agreement to any
gender include references to all genders, and references to the singular include
references to the plural and vice versa. The words "include", "includes" and
"including" when used in this Agreement shall be deemed to be followed by the
phrase "without limitation". Unless the context otherwise requires, references
in this Agreement to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement. Unless the context otherwise requires, the words "hereof", "hereby"
and "herein" and words of similar meaning when used in this Agreement refer to
this Agreement in its entirety and not to any particular Article, Section or
provision of this Agreement.
ARTICLE 2
DISTRIBUTION AND OTHER TRANSACTIONS; CERTAIN COVENANTS
AND REPRESENTATIONS AND WARRANTIES
Section 2.1 The Distribution and Other Transactions
(1) The Distribution. Subject to the conditions set forth in Section
2.1(b) of this Agreement, on the Declaration Date, the Board of Directors of
UNITRIN shall irrevocably declare the Distribution upon the terms set forth in
this Agreement. The declaration and the payment of the Distribution shall be
conditioned upon and subject to the consummation of the Recapitalization, and
the payment of the Distribution shall consist of the shares of Class B Common
Stock received by UNITRIN in the Recapitalization, it being understood that the
Distribution will occur after, but on the same date as, the filing of the
Certificate of Merger. To effect the Distribution, UNITRIN shall cause the
Distribution Agent to distribute, on the Distribution Date, on a pro rata basis
and taking into account Section 2.1(c), to the holders of record of UNITRIN
Common Stock on the Distribution Record Date, the certificates representing the
shares of Class B Common Stock received by UNITRIN in the Recapitalization.
During the period commencing on the date the certificates representing shares of
Class B Common Stock are delivered to the Distribution Agent and ending upon the
date(s) on which certificates evidencing such shares are mailed to holders of
record of UNITRIN Common Stock on the Distribution Record Date or on which
fractional shares of Class B Common Stock are sold on behalf of such holders,
the Distribution Agent shall hold the certificates representing shares of Class
B Common Stock on behalf of such holders. UNITRIN shall deliver to the
Distribution Agent the share certificates representing the shares of Class B
Common Stock held by UNITRIN. UNITRIN shall enter into an agreement with the
Distribution Agent in connection with the foregoing, and shall agree, among
other things, to reimburse the Distribution Agent for its reasonable costs,
expenses and fees in connection with the Distribution. C-W agrees, if requested
by UNITRIN, to provide such number of certificates evidencing shares of Class B
Common Stock that UNITRIN shall reasonably require in order to effect the
Distribution.
(2) Conditions to the Declaration and Distribution. The UNITRIN Board of
Directors shall irrevocably declare the Distribution, and cause the Distribution
to be effected on the Distribution Date, as soon as reasonably practicable
following the satisfaction or waiver, as determined by UNITRIN in its sole
discretion, of the conditions set forth below (which conditions must be
satisfied or waived on or prior to the Declaration Date unless any such
condition by its terms can only be satisfied after the Declaration Date in which
case such condition must be satisfied or waived on or prior to the Distribution
Date):
(1) the private letter ruling requested from the IRS providing that,
among other things, the Recapitalization and the Distribution will qualify, to
the extent set forth therein, as tax-free transactions for federal income tax
purposes under Sections 354 and 355 of the Code, respectively (the "IRS Ruling")
shall have been issued and shall continue in effect, such ruling shall be in
form and substance satisfactory to UNITRIN in its sole discretion, and C-W shall
have complied with all provisions set forth in the IRS Ruling that are required
to be complied with prior to the Declaration Date and the Distribution Date;
(2) no event outside the control of UNITRIN shall have occurred or
failed to occur that prevents the lawful consummation of the Distribution;
(3) the transactions contemplated hereby and by the Recapitalization
Agreement shall be in compliance in all material respects with applicable
federal and state securities and other applicable laws;
(4) each of C-W and UNITRIN shall have received all the Required
Consents;
(5) all conditions to the Recapitalization (including those set forth
in Article 4 of the Recapitalization Agreement) (other than, in the case of the
declaration, the declaration and consummation of the Distribution) shall have
been satisfied or waived by the applicable party, in the case of the
declaration, no circumstances shall exist that would reasonably be expected to
prevent the consummation of the Recapitalization immediately prior to the
Distribution and, in the case of the Distribution, the Recapitalization shall
have been consummated;
(6) The Cash Dividend (as defined below) shall have been declared by
the Board of Directors of C-W substantially simultaneously with the declaration
of the Distribution and no circumstances shall exist that would reasonably be
expected to prevent prompt payment of the Cash Dividend;
(7) the Form 8-A shall have been filed with the Commission;
(8) the Class B Common Stock shall have been approved for listing on
the NYSE, subject to official notice of issuance;
(9) each of the representations and warranties (other than the
representation and warranty set forth in Section 2.3(a)(v) of this Agreement) of
C-W set forth in this Agreement and the Recapitalization Agreement that are
qualified as to materiality shall be true and correct, and any such
representations and warranties that are not so qualified shall be true and
correct in all material respects, as of the Declaration Date and the
Distribution Date and UNITRIN shall have received a certificate of the chief
executive officer of C-W as to the foregoing;
(10) C-W shall have performed or complied in all material respects
with all agreements and covenants required to be performed by it under this
Agreement and the Recapitalization Agreement at or prior to the Declaration Date
or, if applicable, the Distribution Date and UNITRIN shall have received a
certificate of the chief executive officer of C-W as to the foregoing; and
(11) all actions and other documents and instruments reasonably
necessary in connection with the transactions contemplated hereby and by the
Recapitalization Agreement shall have been taken or executed, as the case may
be, in form and substance reasonably satisfactory to UNITRIN.
The foregoing conditions are for the sole benefit of UNITRIN and shall not give
rise to or create any duty on the part of UNITRIN to waive or not waive any such
condition.
(3) Sale of Fractional Shares. UNITRIN shall appoint the Distribution
Agent as agent for each holder of record of UNITRIN Common Stock who would
otherwise be entitled to receive in the Distribution any fractional share of
Class B Common Stock. The Distribution Agent shall aggregate all such fractional
shares and sell them in an orderly manner as soon as practicable after the
Distribution Date in the open market and, after completion of such sales,
distribute a pro rata portion of the net proceeds from such sales, based upon
the gross selling price of all such fractional shares net of all selling
expenses, to each stockholder of UNITRIN who would otherwise have received a
fractional share. UNITRIN shall reimburse the Distribution Agent for its
reasonable costs, expenses and fees (other than selling expenses) in connection
with the sale of fractional shares of Class B Common Stock and the distribution
of the proceeds thereof in accordance with this Section 2.1(c).
(4) Special Dividend. (i) Subject to the conditions set forth in clause
(ii) below, on the Declaration Date, the Board of Directors of C-W shall declare
a pro rata cash dividend (the "Cash Dividend") in the amount of $.25 per share
to all holders of record of Common Stock on the Cash Dividend Record Date.
UNITRIN hereby waives, subject to completion of the Distribution, its right to
receive its pro rata share of the Cash Dividend.
(ii) The obligation of the Board of Directors of C-W to declare the
Cash Dividend on the Declaration Date shall be conditioned upon the satisfaction
of the conditions set forth in Section 2.1(b) hereof (other than the
consummation of the Recapitalization and other than clause (vi) thereof) and in
Sections 4.1 and 4.2 of the Recapitalization Agreement.
(5) Other Actions.
(1) UNITRIN shall prepare and mail, at such time as determined by
UNITRIN, to the holders of UNITRIN Common Stock, such information concerning
C-W, its business, operations and management, the Distribution and the tax
consequences thereof and such other matters as UNITRIN shall reasonably
determine or as may be required by law. UNITRIN shall give C-W and its counsel
reasonably appropriate advance opportunity to review and comment upon such
documents and shall consider in good faith any comments C-W timely delivers to
UNITRIN with respect to such information. C-W agrees to cooperate with UNITRIN
in the preparation of, and provide any information reasonably requested by
UNITRIN for inclusion in, such mailing. C-W represents that all information
provided to UNITRIN for such mailing shall be true and correct in all material
respects. UNITRIN and C-W will prepare, and C-W will, to the extent required
under applicable law, file with the Commission any such documentation, including
any no action letters or other requests for interpretive or regulatory
assistance, if any, which UNITRIN reasonably determines are necessary or
desirable to effectuate the Distribution and the other transactions contemplated
hereby and by the Recapitalization Agreement, and UNITRIN and C-W shall each use
all reasonable efforts to obtain all necessary approvals from the Commission
with respect thereto as soon as practicable.
(2) UNITRIN and C-W shall take all such action as may be necessary or
appropriate under the securities or blue sky laws of the United States (and any
comparable laws under any foreign jurisdiction) in connection with the
Distribution and the other transactions contemplated hereby and by the
Recapitalization Agreement.
(3) C-W shall prepare and file, and shall use all reasonable efforts
to have approved, an application for the listing on the NYSE of the Class B
Common Stock to be distributed in the Distribution, subject to official notice
of issuance.
(4) C-W shall prepare and file the Form 8-A (which may include or
incorporate by reference information contained in the Proxy Statement) with the
Commission as promptly as practicable following the execution hereof, and shall
use all reasonable efforts to cause the Form 8-A to become effective under the
Exchange Act immediately following the consummation of the Recapitalization or
as soon thereafter as practicable.
(5) On or prior to the Distribution Date, C-W shall, from time to
time as and to the extent reasonably requested by UNITRIN or requested by the
IRS, provide any documentation, certifications or other information necessary to
enable UNITRIN to obtain the IRS Ruling.
(6) On or prior to the Distribution Date, each of UNITRIN and C-W
shall take those actions and consummate those other transactions in connection
with the Distribution that are contemplated by the IRS Ruling, the ruling
request therefor or any related submissions by UNITRIN to the IRS (which
submissions C-W and its counsel shall be given the opportunity to review and
comment upon in accordance with clause (viii) below).
(7) In addition to those matters specifically set forth above,
UNITRIN and C-W also shall take all reasonable steps necessary and appropriate
to cause the conditions set forth in Section 2.1(b) to be satisfied and to
effect the Distribution on the Distribution Date and the Cash Dividend prior to
the Distribution Date.
(8) UNITRIN will give C-W and its counsel reasonably appropriate
advance opportunity to review and comment upon filings to be made by UNITRIN
with the Commission or the IRS with respect to the Distribution, this Agreement,
the Recapitalization Agreement or any of the transactions contemplated hereby or
thereby and shall consider in good faith any comments C-W timely delivers to
UNITRIN with respect to such filing.
(9) C-W will give UNITRIN and its counsel reasonably appropriate
advance opportunity to review and comment upon filings to be made by C-W with
the Commission with respect to the Distribution, this Agreement, the
Recapitalization Agreement and any of the transactions contemplated hereby or
thereby and shall consider in good faith any comments UNITRIN timely delivers to
C-W with respect to such filing.
(10) Prior to the Distribution Date, C-W shall not amend, and the C-W
Board of Directors shall not approve any amendment to, C-W's Restated
Certificate of Incorporation or By-Laws, other than the amendments to be
effected upon the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware in connection with the Recapitalization and, if
applicable, the Governance Provisions in accordance with the terms of the
Recapitalization Agreement.
(11) UNITRIN agrees to be present, and agrees to cause Merger Sub, as
applicable, to be present, in person or by proxy at each and every stockholders
meeting of C-W at which the Recapitalization and the Governance Provisions are
submitted to the stockholders of C-W for consideration at such meeting, and to
vote, or cause to be voted, all shares of Common Stock owned directly or
indirectly by it and its Subsidiaries in favor of the Recapitalization and the
Governance Provisions and similarly to execute any written consent submitted by
stockholders of C-W in favor of the Recapitalization and the Governance
Provisions; provided that the Governance Provisions are to become effective
solely upon the effectiveness of the Merger.
(12) On or prior to the Distribution date, each of UNITRIN and C-W,
as the case may be, shall, from time to time and to the extent reasonably
requested by the other, provide any documentation, certifications or other
information to make required filings in connection with the transactions
contemplated by this Agreement and the Recapitalization Agreement.
Section 2.2 Declaration Date and Distribution Date; Further Assurances
(1) The parties agree that the Declaration Date and the Distribution Date,
as applicable, shall occur as soon as reasonably practicable following the
satisfaction or waiver of the conditions set forth in Section 2.1(b) hereof .
The parties shall cause their respective Boards of Directors to meet on the
Declaration Date and each shall take such corporate action at such meeting as
shall be required to effect the transactions contemplated hereby and by the
Recapitalization Agreement. Immediately following such meeting, C-W shall take
all actions required to consummate the Recapitalization in accordance with the
terms of the Recapitalization Agreement, including the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware.
(2) Subject to each of C-W's and UNITRIN's right to terminate this
Agreement in accordance with Section 5.10, in case at any time after the date
hereof any further action is reasonably necessary or desirable to carry out the
Distribution, the Recapitalization or any other purpose of this Agreement or the
Recapitalization Agreement, the proper officers of each party to this Agreement
shall take all such necessary action. Without limiting the foregoing, UNITRIN
and C-W shall use all reasonable efforts promptly to obtain the IRS Ruling and
all consents and approvals, to enter into all amendatory agreements and to make
all filings and applications that may be required for the consummation of the
transactions contemplated by this Agreement and the Recapitalization Agreement,
including all applicable governmental and regulatory filings.
Section 2.3 Representations and Warranties
(1) C-W hereby represents and warrants to UNITRIN as follows:
(1) Organization; Good Standing. C-W is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all corporate power required to consummate the transactions
contemplated hereby and by the Recapitalization Agreement.
(2) Authorization. The execution, delivery and performance by C-W of
this Agreement and the Recapitalization Agreement and the consummation by C-W of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of C-W, other than the adoption of
the Recapitalization Agreement and the approval of the Governance Provisions by
the stockholders of C-W. Each of this Agreement and the Recapitalization
Agreement constitutes, and each other agreement or instrument executed and
delivered or to be executed and delivered by C-W pursuant to this Agreement or
the Recapitalization Agreement will, upon such execution and delivery,
constitute, a legal, valid and binding obligation of C-W, enforceable against
C-W in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(3) Consents and Filings. Except (A) for the filing of the
Certificate of Merger in connection with the Recapitalization and any other
filings required to be made with the Secretary of State of the State of
Delaware, (B) for the NYSE Listing Application and any filings in connection
therewith, (C) as required under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act") and (D) for the filing of the Proxy
Statement and the Form 8-A and any other reports or documents required to be
filed under the Exchange Act, no material consent of, or filing with, any
Governmental Authority which has not been obtained or made is required to be
obtained or made by C-W for or in connection with the execution and delivery of
this Agreement or the Recapitalization Agreement by C-W, and the consummation by
C-W of the transactions contemplated hereby or thereby.
(4) Noncontravention. Except in the case of any consents that will be
obtained prior to the Distribution Date, the execution, delivery and performance
of this Agreement and the Recapitalization Agreement by C-W does not, and the
consummation by C-W of the transactions contemplated hereby and thereby will
not, (A) violate any applicable federal, state or local statute, law, rule or
regulation, (B) violate any provision of the Restated Certificate of
Incorporation or By-Laws of C-W, or (C) violate any provision of, or result in
the termination or acceleration of, or entitle any party to accelerate any
obligation or indebtedness under, any mortgage, lease, franchise, license,
permit, agreement, instrument, law, order, arbitration award, judgment or decree
to which C-W or any of its Subsidiaries is a party or by which any of them are
bound, except for, in the case of clause (C) above, such violations that,
individually or in the aggregate, would not (I) result in a Material Adverse
Effect with respect to C-W or (II) reasonably be expected to have a material
adverse effect on C-W's ability to consummate the transactions contemplated by
this Agreement or the Recapitalization Agreement.
(5) Litigation. There are no actions or suits against C-W pending, or
to the knowledge of C-W, threatened which seek to, and C-W is not subject to any
judgments, decrees or orders which, enjoin or rescind the transactions
contemplated by this Agreement or the Recapitalization Agreement or otherwise
prevent C-W from complying with the terms and provisions of this Agreement or
the Recapitalization Agreement.
(6) Change of Control Adjustments. Neither the Recapitalization nor
the Distribution or any of the other transactions contemplated hereby or by the
Recapitalization Agreement will (A) constitute a "change of control" or
otherwise result in the increase or acceleration of any benefits, including to
employees of C-W, under any agreement to which C-W or any of its Subsidiaries is
a party or by which it or any of its Subsidiaries is bound or (B) result in any
adjustment of the number of shares subject to, or the terms of, including
exercise price, any outstanding employee stock options of C-W.
(7) Certain Transactions. Except for transactions that are described
in Schedule 2.3(a)(vii), neither C-W nor any other member of the C-W Group has
engaged, nor will engage, in any transaction or taken, or will take, any other
action, or engaged, or will engage, in any negotiations or discussions,
involving or relating to the issuance of stock of C-W or options, warrants or
other rights to acquire stock of C-W (other than compensatory stock plan
issuances). None of the transactions or other actions, negotiations or
discussions described in Schedule 2.3(a)(vii) were undertaken by C-W in
contemplation of the Distribution or are related to the Distribution.
(2) UNITRIN hereby represents and warrants to C-W as follows:
(1) Organization; Good Standing. UNITRIN is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all corporate power required to consummate the transactions
contemplated hereby and by the Recapitalization Agreement.
(2) Authorization. The execution, delivery and performance by UNITRIN
of this Agreement and the Recapitalization Agreement and the consummation by
UNITRIN of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of UNITRIN, other than
the formal declaration of the Distribution. Each of this Agreement and the
Recapitalization Agreement constitutes, and each other agreement or instrument
executed and delivered or to be executed and delivered by UNITRIN pursuant to
this Agreement or the Recapitalization Agreement will, upon such execution and
delivery, constitute, a legal, valid and binding obligation of UNITRIN,
enforceable against UNITRIN in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, and
general equitable principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
(3) Consents and Filings. Except (A) for the filing of the
Certificate of Merger in connection with the Recapitalization and any other
filings required to be made with the Secretary of State of the State of
Delaware, (B) as required under the HSR Act and (C) any reports or documents
required to be filed under the Exchange Act, no material consent of, or filing
with, any Governmental Authority which has not been obtained or made is required
to be obtained or made by UNITRIN for or in connection with the execution and
delivery of this Agreement or the Recapitalization Agreement by UNITRIN, and the
consummation by UNITRIN of the transactions contemplated hereby or thereby.
(4) Noncontravention. Except in the case of consents that will be
obtained on or prior to the Distribution Date, the execution, delivery and
performance of this Agreement and the Recapitalization Agreement by UNITRIN does
not, and the consummation by UNITRIN of the transactions contemplated hereby and
thereby will not, (A) violate any applicable federal, state or local statute,
law, rule or regulation, (B) violate any provision of the Certificate of
Incorporation or By-Laws of UNITRIN or (C) violate any provision of, or result
in the termination or acceleration of, or entitle any party to accelerate any
obligation or indebtedness under, any mortgage, lease, franchise, license,
permit, agreement, instrument, law, order, arbitration award, judgment or decree
to which UNITRIN or any of its Subsidiaries is a party or by which any of them
are bound, except for, in the case of clause (C) above, such violations that,
individually or in the aggregate, would not (I) result in a Material Adverse
Effect with respect to UNITRIN or (II) reasonably be expected to have a material
adverse effect on UNITRIN's ability to consummate the transactions contemplated
by this Agreement or the Recapitalization Agreement.
(5) Litigation. There are no actions or suits against UNITRIN
pending, or to the knowledge of UNITRIN, threatened which seek to, and UNITRIN
is not subject to any judgments, decrees or orders which, enjoin or rescind the
transactions contemplated by this Agreement or the Recapitalization Agreement or
otherwise prevent UNITRIN from complying with the terms and provisions of this
Agreement or the Recapitalization Agreement.
(6) Plan or Series of Related Transactions. As of the date hereof,
there is not, and as of the Distribution Date, there will not be (except as
permitted pursuant to Section 4.3 hereof and disclosed to C-W in accordance with
the terms of Section 4.3 and except for the contemplated Distribution), any
agreement, understanding, arrangement or substantial negotiations involving
UNITRIN and concerning the acquisition by any party or parties of C-W or
UNITRIN'S interest in C-W.
Section 2.4 Certain Post-Distribution Transactions
(1) (i) C-W and UNITRIN shall each comply with, and shall cause its
Subsidiaries to comply with, and otherwise not take, and prevent any of its
Subsidiaries from taking, during the relevant time period, any action
inconsistent with any representation made by such respective party to the IRS in
connection with the request by UNITRIN for the IRS Ruling, and (ii) until two
years after the Distribution Date, C-W will maintain its status as a company
engaged in the active conduct of a trade or business, as defined in Section
355(b) of the Code.
(2) C-W agrees that (i) prior to the two year anniversary of the
Distribution Date, it shall not (A) merge or consolidate with or into any other
corporation, (B) liquidate or partially liquidate, (C) sell or transfer all or
substantially all of its assets (within the meaning of Rev. Proc. 77-37, 1977-2
C.B. 568) in a single transaction or series of transactions, (D) redeem or
otherwise repurchase any C-W stock (other than as described in Section
4.05(1)(b) of Rev. Proc. 96-30, 1996-1 C.B. 696), or (E) take any other action
or actions (other than the adoption of a stockholder rights plan in customary
form) (including the issuance of options to acquire stock of C-W or securities
that are convertible into stock of C-W) which in the aggregate (not taking into
account the Recapitalization) would have the effect of causing or permitting one
or more persons to acquire directly or indirectly stock representing a 50
percent or greater interest (within the meaning of Section 355(e) of the Code)
in C-W, and (ii) prior to the five year anniversary of the Distribution Date, it
shall not initiate or support, or permit its stockholders to vote on, any action
that would in any way alter the ability of the holders of the Class B Common
Stock to (A) elect at least 80% of the members of the Board of Directors of C-W
(to the extent, and in the manner set forth in, the Restated Certificate of
Incorporation and By-Laws of C-W, as in effect immediately after the
consummation of the Recapitalization) or (B) otherwise possess at least 80% of
the total combined voting power of all classes of C-W stock entitled to vote (as
described in Section 368(c) of the Code), unless prior to taking any such action
set forth in the foregoing clauses (i) and (ii), at the election of UNITRIN,
either C-W has obtained (and provided to UNITRIN) a written opinion in form and
substance reasonably acceptable to UNITRIN of a nationally recognized law firm
reasonably acceptable to UNITRIN and C-W, or UNITRIN has obtained (at the
expense of C-W) a supplemental ruling from the IRS, that such action or actions
will not result in (1) the Distribution failing to qualify under Section 355(a)
of the Code or (2) the C-W shares failing to qualify as qualified property for
purposes of Section 355(c)(2) of the Code by reason of Section 355(e) of the
Code. UNITRIN agrees to cooperate with C-W in obtaining such opinion or, as the
case may be, to use all reasonable efforts in obtaining any such supplemental
ruling, including, where appropriate, by providing written representations as to
factual events that transpired prior to the Distribution Date.
ARTICLE 3
INDEMNIFICATION
Section 3.1 Indemnification by C-W
(1) C-W shall, to the fullest extent permitted by law, indemnify, defend
and hold harmless the UNITRIN Indemnitees from and against any and all C-W
Liabilities or third party allegations of C-W Liabilities.
(2) C-W shall, to the fullest extent permitted by law, indemnify, defend
and hold harmless (i) UNITRIN, (ii) each member of the consolidated group of
corporations of which UNITRIN is the common parent corporation (within the
meaning of Section 1504 of the Code) and (iii) each direct or indirect
Subsidiary of UNITRIN (each Person referred to in clauses (ii) and (iii), a
"UNITRIN Member") from and against (A) any actual Liability of UNITRIN or any
UNITRIN Member (including any actual Liability for Taxes to the extent that, in
the absence of any Liability for Taxes resulting from a determination that the
Distribution fails to qualify under Section 355(a) of the Code or that the C-W
shares fail to qualify as qualified property for purposes of Section 355(c)(2)
of the Code by reason of Section 355(e) of the Code, such Liability would
otherwise have been reduced or eliminated by a net operating loss deduction
(within the meaning of Section 172 of the Code and the Treasury regulations
thereunder)), or (B) any Established Liability of any stockholder of UNITRIN (it
being understood that any Established Liability of any stockholder of UNITRIN
shall be deemed to be an actual Liability of UNITRIN for purposes of determining
C-W's indemnification obligation hereunder, regardless of whether such
stockholder actually has or pursues a valid claim for such Established Liability
against UNITRIN), in each case arising from any inaccuracy in, or failure by C-W
to comply with, any representation or undertaking made by C-W to the IRS in
connection with the request by UNITRIN for the IRS Ruling (other than any
representation or undertaking (express or otherwise) contained in Part III.B of
UNITRIN's letter request for the IRS Ruling) (referred to herein as a "C-W
Failure" (it being understood that a Clause (d) Failure (as defined below) shall
not constitute a C-W Failure for purposes of this Article 3)); provided,
however, that, notwithstanding the foregoing, C-W shall not indemnify UNITRIN or
any UNITRIN Member for any Liability or Established Liability that results
solely from a UNITRIN Failure (as defined in Section 3.2(b) hereof) (except to
the extent that any such UNITRIN Failure is in respect of a representation based
in whole or in part upon information provided by C-W); and provided, further,
that if any Liability or Established Liability described in this clause (b)
arises as a result of both a C-W Failure and a UNITRIN failure, and each such
failure is an independent cause of such Liability or Established Liability, then
C-W and UNITRIN shall allocate such Liability or Established Liability between
themselves in such proportion as is appropriate to reflect the relative fault of
C-W on the one hand and UNITRIN on the other with respect to such Liability or
Established Liability.
(3) If C-W (or any of its Subsidiaries) fails to comply with any of its
obligations under Section 2.4(a) or (b) above or takes any action or fails to
take any action, and such failure to comply, action or omission contributes to a
determination that the Distribution fails to qualify under Section 355(a) of the
Code or that the C-W shares fail to qualify as qualified property for purposes
of Section 355(c)(2) of the Code by reason of Section 355(e) of the Code (each a
"355 Failure" (it being understood that a Clause (d) Failure shall not
constitute a 355 Failure for purposes of this Article 3)), then C-W shall, to
the fullest extent permitted by law, indemnify, defend and hold harmless UNITRIN
and each UNITRIN Member from and against (i) any and all federal, state and
local Taxes, including any interest, penalties or additions to Tax, imposed upon
or incurred by UNITRIN and any UNITRIN Member and (ii) any Established Liability
of any stockholder of UNITRIN (it being understood that any Established
Liability of any stockholder of UNITRIN shall be deemed to be a UNITRIN Tax
Liability (as defined below) for purposes of determining C-W's indemnification
obligation hereunder, regardless of whether such stockholder actually has or
pursues a valid claim for such Established Liability against UNITRIN), in each
case as a result of the failure of the Distribution to qualify under Section
355(a) of the Code or the application of Section 355(e) (any such Tax, interest,
penalty or addition to Tax, together with any such Established Liability, a
"UNITRIN Tax Liability"); provided, however, that, notwithstanding the
foregoing, C-W shall not indemnify UNITRIN or any UNITRIN Member for any UNITRIN
Tax Liability that results solely from a UNITRIN Failure (except to the extent
that any such UNITRIN Failure is in respect of a representation based in whole
or in part upon information provided by C-W); and provided, further, that if any
UNITRIN Tax Liability described in this clause (c) arises as a result of both a
355 Failure and a UNITRIN Failure, and each such failure is an independent cause
of such UNITRIN Tax Liability, then C-W and UNITRIN shall allocate such UNITRIN
Tax Liability between themselves in such proportion as is appropriate to reflect
the relative fault of C-W on the one hand and UNITRIN on the other with respect
to such UNITRIN Tax Liability.
(4) Notwithstanding any other provision of this Agreement:
(1) C-W shall not be required to indemnify and hold harmless, and
shall have no liability to, UNITRIN or any UNITRIN Member for any UNITRIN Tax
Liability that would not have been imposed or incurred but for the increase in
UNITRIN's voting power with respect to Common Stock as a result of the
Recapitalization; and
(2) Subject to the proviso hereto, C-W shall be entitled to rely
without limitation on any representations made by UNITRIN in (A) Section
2.3(b)(vi) hereof or (B) its letter request for the IRS Ruling with respect to
sales by UNITRIN stockholders of stock or securities of UNITRIN or C-W, and in
the event that any such representations are not true, correct and complete in
all respects, subject to the proviso hereto, C-W shall not indemnify UNITRIN or
any UNITRIN Member for any UNITRIN Tax Liability that would not have been
incurred but for the failure of any such representations to be true, correct and
complete in all respects; provided, however, that C-W shall not be entitled to
rely on, and will not be relieved of its indemnification obligations hereunder
as a result of inaccuracies or failures in, or incompleteness of, the
representations made by UNITRIN in its letter request for the IRS Ruling with
respect to sales by UNITRIN stockholders of stock or securities of UNITRIN or
C-W if, before taking or failing to take any action, C-W has actual knowledge of
any such inaccuracy, failure or incompleteness.
The exceptions to C-W's indemnification obligations hereunder that are referred
to in subclauses (i) and (ii) of this clause (d) are referred to herein as
"Clause (d) Failures."
(5) Any indemnity payment made by C-W pursuant to either clause (b) or (c)
above shall be made on an after-tax basis, based on the actual tax position of
UNITRIN, the UNITRIN Member or UNITRIN stockholder, as the case may be, in the
taxable year such indemnity payment is received and taking into account the
deductibility for federal income tax purposes of any state taxes. The aggregate
amount to be paid by C-W pursuant to its indemnity obligations set forth in
clauses (b), (c), (d), (e) and (f) of this Section 3.1 shall not exceed $135
million.
(6) In the event that C-W and UNITRIN are jointly liable under either
clause (b) or (c) above, C-W shall be required to indemnify and pay UNITRIN or a
UNITRIN Member, with respect to an Established Liability of a UNITRIN
stockholder, for C-W's proportionate share of such Established Liability (if
any) only if, and to the extent that, UNITRIN shall have agreed (in form
reasonably satisfactory to C-W) to pay such UNITRIN stockholder for UNITRIN's
proportionate share of such Established Liability. In the event that UNITRIN
does not actually pay such UNITRIN stockholder for UNITRIN's proportionate share
of such Established Liability, then UNITRIN will reimburse C-W for any amounts
paid by C-W to UNITRIN in respect of C-W's proportionate share of such
Established Liability.
Section 3.2 Indemnification by UNITRIN
(1) UNITRIN shall, to the fullest extent permitted by law, indemnify,
defend and hold harmless the C-W Indemnitees from and against any and all
UNITRIN Liabilities or third party allegations of UNITRIN Liabilities.
(2) UNITRIN shall, to the fullest extent permitted by law, indemnify,
defend and hold harmless C-W and each member of the consolidated group of
corporations of which C-W is the common parent corporation (within the meaning
of Section 1504 of the Code) (each a C-W Member") from and against any actual
Liability of C-W or any C-W Member arising from any inaccuracy in, or failure by
UNITRIN to comply with, any representation or undertaking made by UNITRIN to the
IRS in connection with the request by UNITRIN for the IRS Ruling or pursuant to
Section 2.3(b)(vi) hereof (referred to herein as a "UNITRIN Failure"); provided,
however, that, notwithstanding the foregoing, UNITRIN shall not indemnify C-W or
any C-W Member for any liability that results solely from a C-W Failure or a 355
Failure (except to the extent that any such failure is in respect of a
representation based in whole or in part upon information provided by UNITRIN);
and provided, further, that if any Liability described in this clause (b) arises
as a result of both a UNITRIN Failure and a C-W Failure and/or a 355 Failure,
and each such failure is an independent cause of such Liability, then UNITRIN
and C-W shall allocate such Liability between themselves in such proportion as
is appropriate to reflect the relative fault of UNITRIN on the one hand and C-W
on the other with respect to such Liability.
Section 3.3 Treatment of Payments. UNITRIN agrees to consider in good faith
treating for federal income tax purposes any indemnity payments it receives
pursuant to this Agreement as payments to which Section 301 of the Code applies.
Section 3.4 Procedures for Indemnification. (a) If (i) a claim or demand is made
against C-W, any C-W Indemnitee, any C-W Member, UNITRIN, any UNITRIN Indemnitee
or any UNITRIN Member (each, an "Indemnitee") by any person who is not a party
to this Agreement (each a "Third Party Claim") as to which such Indemnitee is
entitled to indemnification pursuant to this Agreement, such Indemnitee shall
notify the party which is or may be required pursuant to the terms hereof to
make such indemnification (the "Indemnifying Party") in writing, and in
reasonable detail, of the Third Party Claim promptly (and in any event within 15
business days) after receipt by such Indemnitee of written notice of the Third
Party Claim; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent the
Indemnifying Party shall have been actually prejudiced as a result of such
failure. Thereafter, the Indemnitee shall deliver to the Indemnifying Party,
promptly (and in any event within five business days) after the Indemnitee's
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnitee relating to the Third Party Claim.
If a Third Party Claim is made against an Indemnitee with respect to
which a claim for indemnification is made pursuant to Section 3.1 or Section 3.2
hereof, the Indemnifying Party shall be entitled to participate in the defense
thereof and, if it so chooses and acknowledges in writing its obligation to
indemnify the Indemnitee therefor, to assume the defense thereof with counsel
selected by the Indemnifying Party; provided that such counsel is not reasonably
objected to by the Indemnitee. Should the Indemnifying Party so elect to assume
the defense of a Third Party Claim, the Indemnifying Party shall, within 30 days
(or sooner if the nature of the Third Party Claim so requires), notify the
Indemnitee of its intent to do so, and the Indemnifying Party shall thereafter
not be liable to the Indemnitee for legal or other expenses subsequently
incurred by the Indemnitee in connection with the defense thereof; provided,
that such Indemnitee shall have the right to employ counsel to represent such
Indemnitee if, in such Indemnitee's reasonable judgment, a conflict of interest
between such Indemnitee and such Indemnifying Party exists in respect of such
claim which would make representation of both such parties by one counsel
inappropriate, and in such event the reasonable fees and expenses of such
separate counsel shall be paid by such Indemnifying Party. If the Indemnifying
Party assumes such defense, the Indemnitee shall have the right to participate
in the defense thereof and to employ counsel, subject to the proviso of the
preceding sentence, at its own expense, separate from the counsel employed by
the Indemnifying Party, it being understood that the Indemnifying Party shall
control such defense. The Indemnifying Party shall be liable for the fees and
expenses of counsel employed by the Indemnitee for any period during which the
Indemnifying Party has failed to assume the defense thereof. If the Indemnifying
Party so elects to assume the defense of any Third Party Claim, all of the
Indemnitees shall cooperate with the Indemnifying Party in the defense or
prosecution thereof, including by providing or causing to be provided, records
and witnesses as soon as reasonably practicable after receiving any request
therefor from or on behalf of the Indemnifying Party.
Unless otherwise required by law, in no event will an Indemnitee
admit any liability with respect to, or settle, compromise or discharge, any
Third Party Claim without the Indemnifying Party's prior written consent (which
will not be unreasonably withheld); provided, however, that the Indemnitee shall
have the right to settle, compromise or discharge such Third Party Claim without
the consent of the Indemnifying Party if the Indemnitee releases the
Indemnifying Party from its indemnification obligation hereunder with respect to
such Third Party Claim and such settlement, compromise or discharge would not
otherwise adversely affect the Indemnifying Party. If the Indemnifying Party
acknowledges in writing liability for a Third Party Claim (as between the
Indemnifying Party and the Indemnitee), the Indemnifying Party shall be
permitted to enter into, and the Indemnitee will agree to, any settlement,
compromise or discharge of a Third Party Claim that the Indemnifying Party may
recommend and that by its terms obligates the Indemnifying Party to pay the full
amount of the liability in connection with such Third Party Claim and releases
the Indemnitee completely in connection with such Third Party Claim and that
would not otherwise adversely affect the Indemnitee; provided, however, that the
Indemnitee may refuse to agree to any such settlement, compromise or discharge
if the Indemnitee agrees that the Indemnifying Party's indemnification
obligation with respect to such Third Party Claim shall not exceed the amount
that would be required to be paid by or on behalf of the Indemnifying Party in
connection with such settlement, compromise or discharge; and provided further
that the Indemnifying Party shall not agree to any other settlement, compromise
or discharge of a Third Party Claim not described above without the prior
written consent of the Indemnitee, such consent not to be unreasonably withheld.
If an Indemnifying Party elects not to assume the defense of a Third Party
Claim, or fails to notify an Indemnitee of its election to do so as provided
herein, such Indemnitee may compromise, settle or defend such Third Party Claim.
In such case, the Indemnifying Party shall be responsible for the cost of such
compromise, settlement or defense.
Notwithstanding the foregoing, the Indemnifying Party shall not be
entitled to assume the defense of any Third Party Claim (and shall be liable for
the reasonable fees and expenses of counsel incurred by the Indemnitee in
defending such Third Party Claim) if the Third Party Claim seeks an order,
injunction or other equitable relief or relief for other than money damages
against the Indemnitee which the Indemnitee reasonably determines, after
conferring with its counsel, cannot be separated from any related claim for
money damages. If such equitable relief or other relief portion of the Third
Party Claim can be so separated from that for money damages, the Indemnifying
Party shall be entitled to assume the defense of the portion relating to money
damages.
(2) In the event any Tax Claim (as defined below) is disposed of pursuant
to the provisions of this Section 3.4 or a Final Determination has been made in
circumstances that give rise to a Tax Liability or an Established Liability on
the part of UNITRIN, any UNITRIN Member or any UNITRIN stockholder, as the case
may be, then C-W shall pay to UNITRIN all amounts in respect of any Tax Claim
within twenty (20) business days after such Tax Claim is disposed of or such
Final Determination has been made. For purposes of this Section 3.4(b), (i) "Tax
Claim" shall mean any notice of deficiency, proposed adjustment, adjustment,
assessment, audit, examination, suit, dispute or other written claim which is
commenced or initiated against UNITRIN, any UNITRIN Member or any UNITRIN
stockholder with respect to Taxes that are attributable to the Recapitalization
or Distribution and which result from any act or acts of C-W or its Subsidiaries
described in Section 2.4 of this Agreement or the breach by C-W of any
representation or warranty set forth in this Agreement and (ii) "Final
Determination" shall mean (1) the entry of a decision of a court of competent
jurisdiction at such time as an appeal may no longer be taken from such decision
or (2) the execution of a closing agreement or its equivalent between the
particular taxpayer and the particular relevant taxing authority.
Section 3.5 Remedies Not Exclusive. The remedies provided in this Article 3
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
Section 3.6 Subrogation. In the event of payment by an Indemnifying Party to any
Indemnitee in connection with any Third Party Claim, such Indemnifying Party
shall be subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any right
or claim relating to such Third Party Claim. Such Indemnitee shall cooperate
with such Indemnifying Party in a reasonable manner, and at the cost and expense
of such Indemnifying Party, in prosecuting any subrogated right or claim.
Section 3.7 Indemnification Payments. Indemnification required by this Article 3
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or loss, liability,
claim, damage or expense is incurred.
ARTICLE 4
COVENANTS
Section 4.4 Access to Information
(2) Other than in circumstances in which indemnification is sought
pursuant to Article 3 (in which event the provisions of such Article will
govern), from and after the Distribution Date, each of C-W and UNITRIN shall
afford to the other and its authorized accountants, counsel and other designated
representatives reasonable access during normal business hours, subject to
appropriate restrictions for classified, privileged or confidential information,
to the personnel, properties, books and records of such party and its
Subsidiaries to the extent such access is reasonably required by the other party
in order to perform its obligations under this Agreement or the Recapitalization
Agreement or to comply with such party's financial, tax and other reporting
obligations.
(3) A party providing information or access to information to the other
party under this Article 4 shall be entitled to receive from the recipient, upon
the presentation of invoices therefor, payments for such amounts, relating to
supplies, disbursements and other out-of-pocket expenses, as may be reasonably
incurred in providing such information or access to information.
(4) For a period of two years following the Distribution Date, C-W shall
provide to UNITRIN: (i) promptly following the date (the "Target Date"), as of
which there has been an aggregate change in the outstanding equity or capital
structure of C-W (measured during the period beginning on the Distribution Date
and ending on the Target Date and not taking into account the Recapitalization
or transfers of shares by C-W stockholders, unless C-W participates in such
transfers or such transfers are reported on a Schedule 13D or 13G under the
Exchange Act) that accounts for at least 10% of the total outstanding equity of
C-W as of the Distribution Date written notice of such change and (ii) after the
Target Date, reasonably detailed reports delivered promptly following the
occurrence of each additional change or changes (if any) in the outstanding
equity or capital structure of C-W that, individually or in the aggregate (not
taking into account the Recapitalization or transfers of shares by C-W
stockholders, unless C-W participates in such transfers or such transfers are
reported on a Schedule 13D or 13G under the Exchange Act), account for at least
5% of the total outstanding equity of C-W as of the Distribution Date.
Section 4.5 Confidentiality. Each of C-W and its Subsidiaries and UNITRIN and
its Subsidiaries shall keep, and shall cause its employees, consultants,
advisors and agents to keep, confidential all information concerning the other
parties in its possession, its custody or under its control (except to the
extent that (a) such information is then in the public domain through no fault
of such party, (b) such information has been lawfully acquired from other
sources by such party or (c) this Agreement or the Recapitalization Agreement or
any other agreement entered into pursuant hereto or thereto permits the use or
disclosure of such information) and each party shall not (without the prior
written consent of the other) otherwise release or disclose such information to
any other Person, except such party's auditors and attorneys, unless compelled
to disclose such information by judicial or administrative process or unless
such disclosure is required by law and such party has used all reasonable
efforts to consult with the other affected party or parties prior to such
disclosure, and in such case shall exercise all reasonable efforts to obtain
reliable assurance that such information will be accorded confidential
treatment.
Section 4.6 No Solicitation.
(2) Subject to Sections 4.3(b) and 4.3(c), each of UNITRIN and C-W agree
not to directly or indirectly, through any officer, director, employee,
representative, securityholder or agent solicit, initiate or encourage any
inquiries, offers or proposals or any indication of interest or the commencement
of negotiations or continue any current negotiations or conduct any negotiations
or enter into any agreement or provide any nonpublic information regarding or in
connection with any proposal for the acquisition by any third party of any
shares of capital stock of C-W from C-W or UNITRIN (other than issuances of
common stock by C-W pursuant to employee stock plans in the ordinary course of
business) or the acquisition of, or business combination with, C-W through any
other means including a merger or purchase of assets (an "Acquisition Proposal")
until the earlier to occur of the termination of this Agreement or the time at
which the Distribution is consummated; provided, however, that UNITRIN and C-W
may respond to any unsolicited inquiries or proposals solely to indicate that it
is bound by this Section 4.3. If either of C-W or UNITRIN receives any such
inquiry or proposal, then C-W or UNITRIN, as the case may be, shall inform the
other of the terms and conditions, if any, of such inquiry or proposal and the
identity of the Person making the proposal and shall keep such party promptly
advised of all further communications relating to such inquiry or proposal.
(3) UNITRIN shall be relieved of its obligations under Section 4.3(a) (in
the case of clause (iii) below, only to the extent set forth therein) if:
(1) the Board of Directors of C-W shall or shall resolve to (A) not
recommend, or withdraw its approval or recommendation of, the Recapitalization,
the Recapitalization Agreement, this Agreement or any of the transactions
contemplated thereby or hereby, (B) modify any such approval or recommendation
in a manner adverse to UNITRIN or (C) approve, recommend or enter into any
agreement for any Acquisition Proposal;
(2) C-W breaches or fails to comply with any of its material
obligations set forth in this Agreement or the Recapitalization Agreement and
fails to cure such breach or failure within 30 days following notice from
UNITRIN; or
(3) after receipt of a bona fide written Acquisition Proposal, the
Board of Directors of UNITRIN in good faith determines, after consultation with
its outside counsel, that it would be inconsistent with the Board's fiduciary
duties to stockholders of UNITRIN not to commence discussions or negotiations
with, or provide nonpublic information(other than nonpublic information with
respect to C-W) to the person making such Acquisition Proposal; provided,
however, that UNITRIN shall only be released from its obligations under Section
4.3(a) pursuant to this Section 4.3(b)(iii) with respect to such Acquisition
Proposal.
(4) C-W shall be relieved of its obligations under Section 4.3(a) (to
the extent specifically set forth in this Section 4.3(c)) if after receipt of a
bona fide written Acquisition Proposal, the Board of Directors of C-W in good
faith determines, after consultation with its outside counsel, that it would be
inconsistent with the Board's fiduciary duties to stockholders of C-W not to
commence discussions or negotiations with, or provide nonpublic information to,
the person making such Acquisition Proposal; provided, however, that C-W shall
only be released from its obligations under Section 4.3(a) pursuant to this
Section 4.3(c) with respect to such Acquisition Proposal.
Section 4.7 Certain Other Agreements. During the period commencing on the date
hereof and continuing until the earlier of the termination of this Agreement or
the consummation of the Recapitalization, UNITRIN hereby agrees that it shall
not, and that it shall cause each of its Affiliates not to, without the prior
approval of the Board of Directors of C-W, directly or indirectly, (a) make, or
in any way participate in, any "solicitation" of "proxies" (as such terms are
defined or used in Regulation 14A under the Exchange Act) to consent or vote or
seek to advise or influence any Person with respect to the voting of any shares
of Common Stock; (b) form, join or in any way participate in any Group (other
than with respect to its Affiliates) with respect to any of the shares of Common
Stock; (c) otherwise act, either alone or in concert with others, to seek
control of C-W, including by submitting any written consent in furtherance of
the foregoing or calling a special meeting of C-W stockholders; (d) publicly
disclose any intention, proposal, plan or arrangement with respect to any
foregoing; or (e) make any demand, request or proposal to amend, waive or
terminate any provision of this Section 4.4.
Section 4.8 Public Announcements. Each of UNITRIN and C-W agrees that no public
release or announcement concerning the Recapitalization or the Distribution
shall be issued by either party without the prior written consent of the other
(which shall not be unreasonably withheld), except as such release or
announcement may be required by law or the rules or regulations of any United
States securities exchange or the Nasdaq Stock Market, in which case the party
required to make the release or announcement shall use all reasonable efforts to
allow each other party reasonable time to comment on each release or
announcement in advance of such issuance.
Section 4.9 Required Consents. Each of UNITRIN and C-W shall use all reasonable
efforts to obtain all of the consents, waivers or authorizations required in
connection with the completion of the Recapitalization and the Distribution,
including, without limitation, (a) any material governmental approvals and
consents necessary to consummate the Distribution and the other transactions
contemplated hereby and by the Recapitalization Agreement and (b) those consents
listed on Schedule 4.6 (collectively, the "Required Consents").
Section 4.10 Litigation Cooperation Each of UNITRIN and C-W shall use reasonable
efforts to make available to the other party, upon written request and at the
expense of the other party, its officers, directors, employees and agents as
witnesses to the extent such Persons may reasonably be required in connection
with any Action arising out of (a) the business of such other party and its
predecessors, if any, in which the requesting party may from time to time be
involved; provided that such Action does not involve a claim by either of
UNITRIN or C-W against the other or (b) the matters contained in Section 2.4 and
Article 3 hereof.
Section 4.11 Other Matters. Each of UNITRIN and C-W shall negotiate in good
faith to execute prior to the Distribution Date such further certificates,
agreements and other documents which are reasonably necessary to consummate or
implement the transactions contemplated hereby and by the Recapitalization
Agreement.
ARTICLE 5
MISCELLANEOUS
Section 5.4 Complete Agreement; Construction. This Agreement and the
Recapitalization Agreement, including the Exhibits and Schedules hereto and
thereto, shall constitute the entire agreement between the parties with respect
to the subject matter hereof and thereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Section 5.5 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
Section 5.6 Survival of Agreements. Except as otherwise contemplated by this
Agreement, all covenants, representations, warranties and agreements of the
parties contained in this Agreement shall survive the Distribution Date.
Section 5.7 Expenses. Except as otherwise set forth in this Agreement or in the
Recapitalization Agreement, all costs and expenses incurred in connection with
the preparation, execution, delivery and implementation of this Agreement and
the Recapitalization Agreement, and the Distribution and the other transactions
contemplated hereby and thereby shall be charged to and paid by the party
incurring such costs and expenses.
Section 5.8 Notices. All notices and other communications hereunder shall be in
writing, shall be effective when received, and shall be duly given if delivered
by (a) hand delivery, (b) U.S. mail, postage prepaid, for first class delivery,
(c) Federal Express or similar carrier, freight prepaid, for next business day
delivery, or (d) electronic transmission, provided that confirmation of
transmission and receipt is confirmed, to each party at the following respective
addresses (or at such other address for a party as shall be specified by like
notice):
To UNITRIN:
UNITRIN, Inc.
One East Wacker Drive
Chicago, Illinois 60601
Fax: (312) 661-4690
Attn: Chief Financial Officer
with a copy to:
UNITRIN, Inc.
One East Wacker Drive
Chicago, Illinois 60601
Fax: (312) 661-4941
Attn: General Counsel
and with a copy to:
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive
Suite 2100
Chicago, Illinois 60601
Fax: (312) 407-0411
Attn: Brian W. Duwe, Esq.
To C-W:
CURTISS-WRIGHT CORPORATION
1200 Wall Street West
Lyndhurst, New Jersey 07071
Fax: (201) 896-4021
Attn: General Counsel
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Fax: (212) 455-2502
Attn: Caroline B. Gottschalk, Esq.
Section 5.9 Waivers. The failure of any party to require strict performance by
any other party of any provision in this Agreement will not waive or diminish
that party's right to demand strict performance thereafter of that or any other
provision hereof.
Section 5.10 Amendments. This Agreement may not be modified or amended except by
an agreement in writing signed by each of the parties hereto.
Section 5.11 Assignments. This Agreement shall not be assignable, in whole or in
part, directly or indirectly, by any party hereto without the prior written
consent of the other party hereto, and any attempt to assign any rights or
obligations arising under this Agreement without such consent shall be void.
Section 5.12 Successors and Assigns. The provisions to this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and permitted assigns.
Section 5.13 Termination3.
(2) Prior to the filing of the Certificate of Merger, this Agreement may
be terminated:
(1) by mutual written consent of UNITRIN and C-W;
(2) by either UNITRIN or C-W if the other party is in breach of any
of its obligations or representations and warranties herein or under the
Recapitalization Agreement, which breach would result in a Material Adverse
Effect on such party after giving effect to the Distribution, and such other
party fails to cure such breach within 15 days following notice;
(3) by C-W if, following receipt of an Acquisition Proposal, the
Board of Directors of C-W is required by its fiduciary duties to stockholders of
C-W to terminate this Agreement or the Recapitalization Agreement and accept
such Acquisition Proposal; provided that in such event C-W shall pay the
reasonable documented out-of-pocket fees and expenses incurred by UNITRIN in
connection with this Agreement, the Recapitalization Agreement and the
transactions contemplated hereby and thereby in an aggregate amount of up to
$2.3 million, but only to the extent that UNITRIN does not agree to, or
otherwise vote in favor of, such Acquisition Proposal;
(4) by UNITRIN if (A) the Board of Directors of C-W shall or shall
resolve to (I) not recommend, or withdraw its approval or recommendation of, the
Recapitalization, the Recapitalization Agreement, this Agreement or any of the
transactions contemplated thereby or hereby, (II) modify any such approval or
recommendation in a manner adverse to UNITRIN or (III) approve, recommend or
enter into an agreement for any Acquisition Proposal, (B) the stockholders of
C-W shall not approve the Recapitalization or (C) following receipt of an
Acquisition Proposal, the Board of Directors of UNITRIN is required by its
fiduciary duties to stockholders of UNITRIN to terminate this Agreement and
accept such Acquisition Proposal; provided that (I) in the case of clause (A)
above, C-W shall pay the reasonable documented out-of-pocket fees and expenses
incurred by UNITRIN in connection with this Agreement, the Recapitalization
Agreement and the transactions contemplated hereby or thereby in an aggregate
amount of up to $2.3 million and (II) in the case of clause (C) above, UNITRIN
shall pay the reasonable documented out-of-pocket fees and expenses incurred by
C-W in connection with this Agreement, the Recapitalization Agreement and the
transactions contemplated hereby and thereby in an aggregate amount of up to
$2.3 million; or
(5) by either UNITRIN or C-W if the Recapitalization is not
consummated by June 30, 2001; provided that this right shall not be available to
any party that is in material breach of its obligations under this Agreement or
the Recapitalization.
(3) This Agreement shall terminate automatically without any action on the
part of C-W or UNITRIN in the event the Recapitalization Agreement is terminated
in accordance with its terms.
(4) Except as specifically set forth in clause (a) above and for any
liability in respect of any breach of this Agreement or the Recapitalization
Agreement by either party, no party shall have any liability of any kind to any
other party or any other person as a result of the termination of this
Agreement. After the filing of the Certificate of Merger relating to the
Recapitalization, this Agreement may not be terminated except by an agreement in
writing signed by both parties.
Section 5.14 Subsidiaries. Each of the parties hereto shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and
obligations set forth herein to be performed by any Subsidiary of such party or
by any entity that is contemplated to be a Subsidiary of such party on or after
the Distribution Date (it being understood that C-W and its Subsidiaries shall
not be considered a Subsidiary of UNITRIN).
Section 5.15 Third Party Beneficiaries. Except as provided in Article 3 relating
to Indemnitees, this Agreement is solely for the benefit of the parties hereto
and should not be deemed to confer upon third parties any remedy, claim,
liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement.
Section 5.16 Title and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
Section 5.17 Exhibits and Schedules. The Exhibits and Schedules shall be
construed with and as an integral part of this Agreement to the same extent as
if the same had been set forth verbatim herein.
Section 5.18 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF DELAWARE.
Section 5.19 Consent to Jurisdiction. Each of the parties irrevocably submits to
the exclusive jurisdiction of any state court of the State of Delaware and the
United States District Court for the District of Delaware, for the purposes of
any suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby. Each of the parties agrees to commence any
action, suit or proceeding relating hereto in such Delaware court. Each of the
parties further agrees that service of any process, summons, notice or document
by U.S. registered mail to such party's respective address set forth above shall
be effective service of process for any action, suit or proceeding in Delaware
with respect to any matters to which it has submitted to jurisdiction in this
Section 5.16. Each of the parties irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in such Delaware court
and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
Section 5.20 Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected or
impaired thereby; provided, however, that the consummation of the
Recapitalization is conditioned upon and is not severable from the Distribution,
and that the Distribution is not severable from the Recapitalization. The
parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions, the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.
UNITRIN, INC
By: Eric J. Draut
-------------
Name: Eric J. Draut
Title:Senior Vice President and
Chief Financial Officer
CURTISS-WRIGHT CORPORATION
By: Martin R. Benante
-----------------
Name: Martin R. Benante
Title:Chairman and Chief Executive Officer