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Exhibit II
VOTING, SUPPORT AND INDEMNIFICATION AGREEMENT
AGREEMENT, dated June 6, 1997 (this "Agreement"), by and among
SAFECO Corporation, a Washington corporation ("Acquiror"), and Lincoln National
Corporation, an Indiana corporation, on behalf of itself and any of its
subsidiaries that may own any Common Stock (as defined below), collectively
(the "Shareholder").
W I T N E S S E T H:
WHEREAS, concurrently herewith, Acquiror and American States
Financial Corporation, an Indiana corporation (the "Company"), are entering
into an Agreement and Plan of Merger (as such agreement may hereafter be
amended from time to time, the "Merger Agreement"; capitalized terms used and
not defined herein have the respective meanings ascribed to them in the Merger
Agreement) pursuant to which a subsidiary of Acquiror will be merged with and
into the Company (the "Merger");
WHEREAS, Shareholder owns 50 million shares (the "Shares"), no
par value, of common stock of the Company ("Common Stock"); and
WHEREAS, as an inducement and a condition to entering into the
Merger Agreement, Acquiror has required that the Shareholder agree, and the
Shareholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual premises, representations, warranties, covenants and agreements
contained herein, the parties hereto hereby agree as follows:
1. Provisions Concerning Shares. (a) The Shareholder
hereby agrees that during the period commencing on the date hereof and
continuing until this provision terminates pursuant to Section 7 hereof, at any
meeting of the holders of shares of Common Stock, however called, or in
connection with any written consent of the holders of shares of Common Stock,
it shall vote (or cause to be voted) the Shares held of record or Beneficially
Owned (as defined below) by it, whether heretofore owned or hereafter acquired,
(i) in favor of the adoption of the Merger Agreement and any actions required
in furtherance thereof and hereof; (ii) against any
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action or agreement that would result in a breach in any respect of any
covenant, representation or warranty or any other obligation or agreement of
the Company under the Merger Agreement (after giving effect to any materiality
or similar qualifications contained therein); and (iii) except as otherwise
agreed to in writing in advance by Acquiror, against the following actions
(other than the Merger and the transactions contemplated by the Merger
Agreement): (A) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company; (B) a sale,
lease or transfer of a material amount of assets of the Company, or a
reorganization, recapitalization, dissolution or liquidation of the Company;
(C) (1) any change in a majority of the persons who constitute the board of
directors of the Company; (2) any change in the present capitalization of the
Company or any amendment of the Company's Articles of Incorporation or By-Laws;
(3) any other material change in the Company's corporate structure or business;
or (4) any other action which, in the case of each of the matters referred to
in clauses C (1), (2), (3) or (4), is intended, or could reasonably be
expected, to impede, interfere with, delay, postpone, or materially adversely
affect the Merger and the transactions contemplated by this Agreement and the
Merger Agreement. The Shareholder shall not enter into any agreement or
understanding with any Person the effect of which would be inconsistent or
violative of the provisions and agreements contained in Section 1 or 3 hereof.
For purposes of this Agreement, "Beneficially Own" or "Beneficial Ownership"
with respect to any securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), including pursuant to any
agreement, arrangement or understanding, whether or not in writing. Without
duplicative counting of the same securities by the same holder, securities
Beneficially Owned by a Person shall include securities Beneficially Owned by
all other Persons with whom such Person would constitute a "group" as within
the meanings of Section 13(d)(3) of the Exchange Act.
(b) In furtherance of the foregoing, (i) the Shareholder
hereby appoints Acquiror and the proper officers of Acquiror, and each of
them, with full power of substitution in the premises, its proxies to vote all
Shares at any meeting, general or special, of the shareholders of the Company,
and to execute one or more written consents or other instruments from time to
time in order to take such action without the necessity of a meeting of the
shareholders of the Company, in accordance with the provisions of the preceding
paragraph and (ii) Acquiror hereby agrees to vote such Shares or execute
written consents or other instruments in accordance with the provisions of the
preceding paragraph. The proxy and power of attorney granted herein shall be
irrevocable during the term specified in Section 7 hereof, shall be deemed to
be coupled with an interest and shall revoke all prior proxies granted by the
Shareholder. The Shareholder shall not grant any proxy to any person which
conflicts with the proxy granted herein, and any attempt to do so shall be void
ab initio. The agency granted herein shall survive the insolvency or
bankruptcy of the Shareholder.
(c) The foregoing voting provisions are subject in all
respects to the receipt of any required state insurance department approvals.
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2. Prepayment of Debt. As contemplated by the Merger
Agreement, on the Closing Date, (i) Acquiror shall pay to the Shareholder the
respective amounts of the Assumed Debt Prepayment and the Term Note Prepayment
by wire transfer of immediately available funds to an account designated by the
Shareholder, (ii) the Shareholder shall take any and all action necessary or
appropriate on its part to terminate that certain Assumption Agreement dated
May 16, 1996, between the Shareholder and the Company, relating to the
outstanding 7 1/8% notes due July 15, 1999, originally issued to the public by
the Shareholder on July 15, 1992, and (iii) the Shareholder shall surrender to
the Company for cancellation that certain Term Note due August 15, 1999, issued
by the Company on May 16, 1996.
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3. Other Covenants, Representations and Warranties. The
Shareholder hereby agrees, represents and warrants as to itself to Acquiror as
follows:
(a) Ownership of Shares. The Shareholder is the
Beneficial Owner of 50 million Shares. On the date hereof, such Shares
constitute all of the shares of Common Stock owned of record or Beneficially
Owned by the Shareholder. The Shareholder has sole voting power and sole power
to issue instructions with respect to the matters set forth in Section 1
hereof, sole power of disposition, sole power of conversion, sole power to
demand appraisal rights and, subject to the receipt of any required state
insurance department approvals sole power to agree to all of the matters set
forth in this Agreement, in each case with respect to all such Shares, with no
limitations, qualifications or restrictions on such rights.
(b) Power; Binding Agreement. The execution, delivery
and performance by the Shareholder of this Agreement are within the
Shareholder's corporate powers and have been duly authorized by all necessary
corporate action on the part of the Shareholder. The execution, delivery and
performance of this Agreement by the Shareholder will not violate any other
agreement to which such Shareholder is a party including, without limitation,
any voting agreement, shareholders agreement or voting trust. This Agreement
has been duly and validly executed and delivered by the Shareholder,
enforceable against such Shareholder in accordance with its terms, subject to
the receipt of any required state insurance department approvals.
(c) No Conflicts. (A) No filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Agreement by the Shareholder
and, except for any required state insurance department approvals, the
consummation by it of the transactions contemplated hereby and (B) none of the
execution and delivery of this Agreement by the Shareholder, the consummation
by it of the transactions contemplated hereby or compliance by it with any of
the provisions hereof shall (1) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or obligation of any
kind to which the Shareholder is a party or by which it or any of its
properties or assets may be bound, or (2) subject to the receipt of any
required state insurance department approvals, violation any order, writ,
injunction, decree, judgment, order, statute, rule or regulation applicable to
it or any of its properties or assets.
(d) No Solicitation. From and after the date hereof and
continuing until this provision terminates pursuant to Section 7 hereof, the
Shareholder shall immediately cease any existing discussions or negotiations
with any third parties conducted prior to the date hereof with respect to any
Acquisition Proposal. The Shareholder shall not, directly or indirectly,
through any officer, director, employee, representative or agent or any of its
Subsidiaries, (i) solicit,
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initiate or encourage any Acquisition Proposal, (ii) engage in negotiations or
discussions concerning or provide any nonpublic information to any person or
entity relating to, any Acquisition Proposal or (iii) agree to or approve any
Acquisition Proposal.
(e) Restriction on Transfer, Proxies and
Non-Interference. The Shareholder shall not, directly or indirectly, during
the period commencing on the date hereof and continuing until this provision
terminates pursuant to Section 7 hereof: (i) except as contemplated by the
Merger Agreement, offer for sale, sell, transfer, tender, pledge, encumber,
assign or otherwise dispose of, or enter into any contract, option or other
arrangement or understanding with respect to or consent to the offer for sale,
sale, transfer, tender, pledge, encumbrance, assignment or other disposition
of, any or all of its Shares or any interest therein (provided, however, the
Shareholder may transfer, by sale, exchange or capital contribution, Shares to
any of its directly or indirectly wholly owned subsidiaries if prior to such
transfer such subsidiary becomes a party to this Agreement); (ii) except as
contemplated by this Agreement, grant any proxies or powers of attorney,
deposit any Shares into a voting trust or enter into a voting agreement with
respect to any Shares; or (iii) take any action that would make any of its
representations or warranties contained herein untrue or incorrect or have the
effect of preventing or disabling it from performing its obligations under this
Agreement.
(f) Indiana Takeover Laws. The execution of this
Agreement and the transactions contemplated hereby are exempt from all statutes
of the State of Indiana that purport to limit or restrict business combinations
or the ability to acquire or to vote shares and from all applicable charter or
contractual provisions containing change of control or anti-takeover
provisions.
(g) Reliance by Acquiror. The Shareholder understands
and acknowledges that Acquiror is entering into the Merger Agreement in
reliance upon the Shareholder's execution and delivery of this Agreement.
(h) Tax Representations. The Shareholder has filed a
consolidated federal income tax return including the Company and each of its
domestic Subsidiaries for the taxable year immediately preceding the current
taxable year, and the Shareholder is eligible to make an election under Section
338(h)(10) of the Code (and any comparable election under state, local or
foreign income tax law) with respect to the Company and each of its domestic
Subsidiaries.
4. Tax and Benefits Matters.
(a) The Shareholder shall indemnify and hold harmless
Acquiror, the Company and each Subsidiary of the Company (each, an "Indemnified
Party) against any liability asserted against the Company or any Subsidiary of
the Company on the basis of joint and several liability in connection with any
employee benefit plan (within the meaning of section 3(3) of ERISA) or any
other fringe benefit program or arrangement maintained by the
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Shareholder or any ERISA Affiliate of the Shareholder for employees or former
employees of the Shareholder or any ERISA Affiliate of the Shareholder other
than the Company or any Subsidiary of the Company, including any loss, cost,
expense (including all legal and expert fees and expenses), damage (including
damages to Persons, property or the environment), fines, penalties or claims.
The Shareholder may elect to compromise or defend at its own expense and by
its own counsel (which counsel shall be reasonably satisfactory to the
Acquiror) any claim asserted by a third party against an Indemnified Party for
which the Shareholder, pursuant to this Section 4(a) is indemnifying such
Indemnified Party. If the Shareholder elects to compromise or defend such a
claim, it shall, within 10 days after receiving notice of such claim, notify
the Indemnified Party of its intent to do so, and such Indemnified Party shall
cooperate, at the expense of the Shareholder, in the compromise of, or defense
against, such claim. If the Shareholder elects not to compromise or defend
against such claim, or fails to notify the Indemnified Party of its election to
do so as herein provided, or otherwise abandons the defense of such claim, (i)
such Indemnified Party may pay (without prejudice to any of its rights as
against the Shareholder), compromise or defend such claim (until such defense
is assumed by the Shareholder) and (ii) the costs and expenses of such
Indemnified Party incurred in connection therewith shall be indemnifiable by
the Shareholder pursuant to this Section 4(a). Notwithstanding the foregoing,
neither the Shareholder nor any Indemnified Party may settle or compromise any
claim (however, if the sole settlement relief payable to a third party in
respect of such claim is monetary damages that are paid in full by the
Shareholder, Shareholder may settle such claim without the consent of the
Indemnified Party) over the objection of the other; provided, however, that
consent to settlement or compromise shall not be unreasonably withheld by such
Indemnified Party. In any event, except as otherwise provided herein, the
Shareholder and the Indemnified Party may each participate, at its own expense,
in the defense of such claim.
(b)(i) The Shareholder and Acquiror shall jointly make
timely and irrevocable elections under Section 338(h)(10) of the Code and, if
permissible, similar elections under any applicable state, local or foreign
income tax laws for the Company and each domestic subsidiary of the Company
specified by Acquiror in writing on or before the Closing Date (the
"Elections"). The Shareholder, the Company and Acquiror shall report the
transactions contemplated herein and in the Merger Agreement consistent with
the Elections and shall take no position contrary thereto unless and to the
extent required to do so pursuant to a determination (as defined in Section
1313(a) of the Code or any similar state, local or foreign tax provision).
(ii) To the extent possible, the Shareholder, the Company
and Acquiror shall execute at the Closing any and all forms necessary to
effectuate the Elections (including, without limitation, Internal Revenue
Service Form 8023-A and any similar forms under applicable state, local and
foreign income tax laws (the "Section 338 Forms")). In the event, however, any
Section 338 Forms are not executed at the Closing, the Shareholder, the Company
and Acquiror shall prepare and complete each such Section 338 Form no later
than 15 days prior to the date such Section 338 Form is required to be filed.
The Shareholder, the Company and Acquiror shall each cause the Section 338
Forms to be duly executed by an authorized person for the
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Shareholder, the Company and Acquiror in each case, and shall duly and timely
file the Section 338 Forms in accordance with applicable tax laws and the terms
of this Agreement.
(iii) The Shareholder and Acquiror agree to use their best
efforts to enter into an agreement (the "Allocation Agreement") as soon as
practicable after the Closing Date to address the computation of the Modified
Aggregate Deemed Sale Price (as defined under applicable Treasury Regulations)
("MADSP") of the asserts of the Company and the Subsidiaries of the Company for
which an Election is made. Acquiror shall initially prepare a statement
setting forth a proposed computation and allocation of MADSP (the
"Computation") and submit it to the Shareholder no later than one hundred
twenty days after the Closing Date. If, within thirty (30) days of the
Shareholder's receipt of the Computation, the Shareholder shall not have
objected in writing to such Computation, the Computation shall become the
Allocation Agreement. If, sixty (60) days before the last date on which the
Section 338(h)(10) Forms must be filed, Acquiror and the Shareholder have not
adopted an Allocation Agreement, any disputed aspects of the Allocation
Agreement shall be resolved, before the last date on which the Section
338(h)(10) Forms may be filed, by a big six accounting firm mutually acceptable
to Acquiror and the Shareholder (the "Neutral Auditors"). The decision of the
Neutral Auditors shall be final, and the costs, expenses and fees of the
Neutral Auditors shall be borne equally by Acquiror and the Shareholder.
Acquiror and the Shareholder shall not take a position before any Taxing
Authority or otherwise (including in any Return) inconsistent with the
Allocation Agreement unless and to the extent required to do so pursuant to a
determination (as defined in Section 1313(a) of the Code or any similar state,
local or foreign law).
(c) Except as otherwise required by law or permitted by
Section 4(b) hereof, Acquiror covenants that it will not cause or permit the
Company, its Subsidiaries, Acquiror or any Affiliate of Acquiror (i) to take
any action on the Closing Date, other than in the ordinary course of business
or except as agreed in writing between the parties (including, but not limited
to, the distribution of any dividend or the effectuation of any redemption)
that could give rise to any Tax liability or loss of the Consolidated Group
under this Agreement and the Merger Agreement, (ii) to make any election or
deemed election under Section 338 of the Code with respect to the Merger or
(iii) to amend any Return, file a claim for refund, make or change any Tax
election, change an annual Tax accounting period, adopt or change any method of
Tax accounting, adjust any reserve, or make any other change with respect to
any Tax position of the Company or any of its Subsidiaries that results or will
result in any materially increased Tax liability to, or material reduction of
any Tax Benefit of, the Consolidated Group, the Company or any Affiliate of the
Company for any Pre-Closing Period.
(d)(i) Except as provided in this Section 4(d) or Section
4(e) hereof, liability for Consolidated Taxes and entitlement to any refund
with respect to Consolidated Taxes shall be allocated to the Shareholder, and
the Shareholder shall indemnify and hold harmless Acquiror, the Company and the
Subsidiaries of the Company for such Consolidated Taxes (including,
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without limitation, all Consolidated Taxes attributable to the Elections or any
of the transactions contemplated by this Agreement and the Merger Agreement).
(ii) Acquiror shall be liable for and shall indemnify and
hold harmless the Shareholder for (i) the Taxes of the Company and each
Subsidiary of the Company for any taxable year or period that begins after the
Closing Date and (ii) all Taxes of the Company and each Subsidiary other than
Consolidated Taxes ("Standalone Taxes").
(iii) In the event that any Taxing Authority makes any
adjustment to the Tax liability of the Company or any Subsidiary of the Company
for any Pre-Closing Period and such adjustment could reasonably be expected to
produce a Tax Benefit to Acquiror, the Company or any Subsidiary of the Company
for any Tax period beginning on or after the Cloning Date, Acquiror shall pay
the Shareholder the reasonably anticipated net after-Tax value to Acquiror, the
Company or any Subsidiary of the Company of such Tax Benefit, discounted at a
rate of 7 percent per annum from the anticipated date of realization of such
Tax Benefit to the date of payment, as the amount of the Tax Benefit is
determined under this Section 4(d)(iii). Following the date of any such
adjustment to the Tax liability of the Company or any Subsidiary of the
Company, the Shareholder shall prepare a statement showing a proposed
computation of the anticipated payment by Acquiror and shall submit it to
Acquiror for review. If, within thirty (30) days of Acquiror's receipt of the
statement, Acquiror shall not have objected to the computation, the computation
shall become final and Acquiror shall pay the Shareholder the computed amount
within fifteen (15) days of such date. If, within sixty (60) days of
Acquiror's receipt of the statement, Acquiror and the Shareholder have not
agreed on the correct payment due to the Shareholder hereunder, the dispute
shall be submitted to the Neutral Auditors for resolution, and the Neutral
Auditors shall resolve the dispute within thirty (30) days of submission. The
decision of the Neutral Auditors shall be final, and the costs, expenses and
fees of the Neutral Auditors shall be borne equally by Acquiror and the
Shareholder. Acquiror shall pay the Shareholder the amount determined by the
Neutral Auditors within fifteen (15) days of their determination. For purposes
of this Section 4(d)(iii), the Shareholder, Acquiror, and, if necessary, the
Neutral Auditors shall make reasonable assumptions regarding the existing and
future business and operations of the Company and its Subsidiaries, the Tax
positions of the Company, its Subsidiaries and Acquiror, probable Tax
consequences under the Code, and other factors relevant to a reasonable and
equitable determination of the anticipated value of any such Tax Benefit,
taking into account any special circumstances known to the parties at the time
of such determination.
(iv) Any payment by the Shareholder or Acquiror under this
Section 4(d) will be an adjustment to the portion of the Merger Consideration
allocable to the Shares that are held by the Shareholder immediately prior to
the Effective Time.
(v) The Shareholder shall file or cause to be filed
(including by causing the Company or the relevant Subsidiary to file) when due
all Returns with respect to Consolidated
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Taxes that are required to be filed by or with respect to a member of the
Consolidated Group (including the Company and/or any Subsidiary of the Company
for Pre-Closing Periods), and Acquiror shall file or cause to be filed when due
all other Returns that are required to be filed by or with respect to the
Company.
4(e)(i). Subject to Section 4(e)(ii) hereof, the Tax Sharing
Agreements and any other Tax allocation or sharing agreement or arrangement,
whether or not written, that may have been entered into by the Shareholder or
any member of the Consolidated Group and the Company or any Subsidiary of the
Company shall be terminated as of the Closing Date for all periods, and all
amounts then due from or to the Company or any Subsidiary of the Company under
any such Tax Sharing Agreements or other tax sharing agreement or arrangement
shall be paid on or prior to the Closing Date.
(ii) Notwithstanding Section 4(e)(i) hereof, as soon as
practicable after the Closing Date (but in any event within seventy-five (75)
days of such date), the Company shall prepare and deliver to the Shareholder
accurate and complete separate income and franchise Tax Returns for any Tax
period of the Company and its Subsidiaries for any Tax period of the Company or
its Subsidiaries beginning January 1, 1997 and ending on the Closing Date, and
payment shall be made within ten (10) days of such delivery to or by the
Shareholder, as the case may be, of the difference, if any, between (i) the
Separate Tax Liability of the ASFC Group (each as defined in the Tax Sharing
Agreements) for such period and (ii) the sum of all amounts previously paid to
the Shareholder by the Company for such period pursuant to the Tax Sharing
Agreements.
(f) From and after the Closing Date, each of the
Shareholder and Acquiror shall:
(i) assist in all reasonable respects (and cause their
respective Affiliates to assist) the other party in preparing any
Returns or reports which such other party is responsible for preparing
and filing in accordance with Section 4(c);
(ii) cooperate in all reasonable respects in preparing for
any audits of, or disputes with Taxing Authorities regarding, any
Returns of the Company or any Subsidiary of the Company;
(iii) make available to the other and to any Taxing
Authority as reasonably requested all information, records, and
documents relating to Taxes of the Company and each Subsidiary of the
Company (including with respect to any potential payments contemplated
by Section 4(d)(iii) hereof);
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(iv) provide timely notice to the other in writing of any
pending or threatened Tax audits or assessments of the Company and
each Subsidiary of the Company for taxable periods for which the other
may have a liability under Section 4(d) hereof; and
(v) furnish the other with copies of all correspondence
received from any Taxing Authority in connection with any Tax audit or
information request with respect to any such taxable period.
(g)(i) The Shareholder shall control, manage and solely be
responsible for any audit, contest, claim, proceeding or inquiry with respect
to Consolidated Taxes and shall have the exclusive right to settle or contest
in its sole discretion any such audit, contest, claim, proceeding or inquiry
without the consent of any other party; provided, however, that the Shareholder
shall not, without the prior written consent of Acquiror which consent shall
not be unreasonably withheld, file, or cause to be filed, any Return affecting
the liability of the Company or its Subsidiaries with respect to Taxes for any
period other than a Pre-Closing Period.
(ii) Acquiror shall control, manage and solely be
responsible for any audit, contest, claim, proceeding or inquiry with respect
to Standalone Taxes or Taxes for any taxable year or period beginning after the
Closing and shall have the exclusive right to settle or contest any such audit,
contest, claim, proceeding, or inquiry without the consent of any other party.
(h) The provisions of this Section 4 shall survive the
consummation of the Merger and shall not expire.
5. Further Assurances. From time to time, at the other
party's request and without further consideration, the Shareholder and Acquiror
shall execute and deliver such additional documents and take all such further
lawful action as may be necessary or desirable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement and the Merger Agreement.
6. Stop Transfer. The Shareholder agreed with, and
covenants to, Acquiror that it shall not request that the Company register the
transfer (book-entry or otherwise) of any certificate or uncertificated
interest representing the Shares, unless such transfer is made in compliance
with this Agreement. In the event of a stock dividend or distribution, or any
change in the Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term
"Shares" shall be deemed to refer to and include the Shares as well as all such
stock dividends and distributions and any shares into which or for which any or
all of the Shares may be changed or exchanged.
7. Termination. Except as otherwise provided herein,
the covenants and agreements contained in Sections 1, 3(f) and 6 hereof with
respect to the Shares shall terminate (a) in the event the Merger Agreement is
terminated in accordance with the terms of Article 12
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thereof, upon such termination, and (b) in the event the Merger is consummated,
upon the Effective Time.
8. Miscellaneous.
(a) Entire Agreement. This Agreement and constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof.
(b) Assignment. Except for any assignment pursuant to a
transfer permitted by Section 3(e)(i), this Agreement shall not be assigned by
operation of law or otherwise without the prior written consent of the other
party. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors.
(c) Amendments, Waivers, Etc. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by the
relevant parties hereto.
(d) Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand, or when sent by facsimile transmission
(with receipt confirmed by an electronically generated written confirmation),
addressed as follows (or to such other address as a party may designate by
notice to the others):
If to the Shareholder: Lincoln National Corporation
200 East Berry Street
Fort Wayne, Indiana 46802
Facsimile: (219) 455-5403
Attention: Jack D. Hunter, Esq.
If to Acquiror: SAFECO Corporation
SAFECO Plaza
Seattle, Washington 98185
Facsimile: (206) 545-5559
Attention : James W. Ruddy, Esq.
(e) Severability. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner
as to be effective and valid under applicable law but if any provision or
portion of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or
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portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(f) Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages for
which it would not have an adequate remedy at law for money damages, and
therefore each of the parties hereto agrees that in the event of any such
breach the aggrieved party shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other equitable
relief in addition to any other remedy to which it may be entitled, at law or
in equity.
(g) Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law
or in equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
(h) No Waiver. The failure of any party hereto to
exercise any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance
by any other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not constitute
a waiver by such party of its right to exercise any such or other right, power
or remedy or to demand such compliance.
(i) No Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of, and shall not be enforceable by, any person
or entity who or which is not a party hereto.
(j) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Indiana, without giving
effect to the principles of conflicts of law thereof.
(k) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES ANY RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY SUCH ACTION, SUIT OR
PROCEEDING.
(l) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of
which, taken together, shall constitute one and the same Agreement.
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Page 87
IN WITNESS WHEREOF, Acquiror and the Shareholder have caused
this Agreement to be duly executed as of the day and year first above written.
SAFECO CORPORATION
By: /s/ R.H. Eigsti
----------------------------------
Name: R.H. Eigsti
Title: Chairman and Chief
Executive Officer
LINCOLN NATIONAL CORPORATION
By: /s/ Barbara S. Kowalczyk
----------------------------------
Name: Barbara S. Kowalczyk
Title: Senior Vice President
AGREED TO AND ACKNOWLEDGED
(with respect to Sections 3 and 6):
AMERICAN STATES FINANCIAL CORPORATION
By: /s/ Robert A. Anker
-------------------------------------------
Name: Robert A. Anker
Title: Chief Executive Officer
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