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Agreement and Plan of Merger
by and among
Xxxxxxx-Xxxxxx Corporation
Unitrin, Inc.
and CW Disposition Company
dated as of November 6, 2000
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TABLE OF CONTENTS
ARTICLE 1
THE MERGER.........................................................A-2
Section 1.1 The Merger...........................................A-2
Section 1.2 Effect on Capital Stock at the Effective Time........A-3
Section 1.3 Share Certificates...................................A-3
ARTICLE 2
THE SURVIVING CORPORATION..........................................A-4
Section 2.1 Certificate of Incorporation.........................A-4
Section 2.2 By-Laws..............................................A-5
Section 2.3 Directors and Officers...............................A-5
ARTICLE 3
COVENANTS AND REPRESENTATIONS AND WARRANTIES.......................A-6
Section 3.1 Stockholders Meeting.................................A-6
Section 3.2 Filings; Other Actions...............................A-6
Section 3.3 Reasonable Efforts...................................A-8
Section 3.4 Representations and Warranties of the Company........A-9
Section 3.5 Representations and Warranties of UNITRIN
and Merger Sub....................................A-10
ARTICLE 4
CONDITIONS TO THE MERGER..........................................A-11
Section 4.1 Conditions to the Obligation of the Company.........A-11
Section 4.2 Conditions to the Obligations of UNITRIN
and Merger Sub....................................A-13
ARTICLE 5
TERMINATION.......................................................A-15
Section 5.1 Termination.........................................A-15
Section 5.2 Effect of Termination...............................A-16
ARTICLE 6
MISCELLANEOUS.....................................................A-16
Section 6.1 Notices.............................................A-16
Section 6.2 Successors and Assigns..............................A-18
Section 6.3 Governing Law.......................................A-18
Section 6.4 Counterparts; Effectiveness.........................A-18
Section 6.5 Amendments. .......................................A-18
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AGREEMENT AND PLAN OF MERGER, dated as of November 6, 2000 (this
"Agreement"), among XXXXXXX-XXXXXX CORPORATION, a Delaware corporation (the
"Company"), UNITRIN, INC., a Delaware corporation ("UNITRIN"), and CW
DISPOSITION COMPANY, a Delaware corporation and a wholly owned subsidiary
of UNITRIN ("Merger Sub").
WHEREAS, UNITRIN owns all the issued and outstanding shares of
common stock, par value $.01 per share, of Merger Sub ("Merger Sub Common
Stock"), and 4,382,400 shares (approximately 44% of the total number of
issued and outstanding shares) of common stock, par value $1.00 per share,
of the Company ("Common Stock");
WHEREAS, prior to the effectiveness of the Merger (as defined
below), UNITRIN plans to contribute to Merger Sub 4,382,400 shares
(approximately 44% of the total number of issued and outstanding shares) of
Common Stock (the "Contributed Shares");
WHEREAS, the Company and UNITRIN desire that Merger Sub merge with
and into the Company (the "Merger"), upon the terms and subject to the
conditions set forth in this Agreement in accordance with the General
Corporation Law of the State of Delaware (the "DGCL"), pursuant to which
all the issued and outstanding shares of Merger Sub Common Stock shall be
converted into shares of a new Class B common stock, par value $1.00 per
share, of the Company ("Class B Common Stock"), and all the issued and
outstanding shares of Common Stock (other than the Contributed Shares held
by Merger Sub, which shall be canceled with no securities or other
consideration issued in exchange therefor) shall remain issued and
outstanding;
WHEREAS, UNITRIN has agreed, subject to certain conditions, to
distribute all the shares of Class B Common Stock, on a pro rata basis, to
the holders of the common stock of UNITRIN promptly following consummation
of the Merger (the "Distribution"), pursuant to the terms and conditions of
a Distribution Agreement entered into between the Company and UNITRIN dated
as of the date hereof (the "Distribution Agreement"), which provides for
the Distribution and certain other matters;
WHEREAS, the Boards of Directors of the Company and Merger Sub by
resolutions duly adopted have approved the terms, and declared the
advisability, of this Agreement and of the Merger, and the Company has
directed the submission of this Agreement to its stockholders for adoption;
and
WHEREAS, the Merger is intended to constitute a reorganization
within the meaning of Section 368(a)(1)(E) of the Internal Revenue Code of
1986, as amended (the "Code").
NOW, THEREFORE in consideration of the premises and the mutual
agreements and provisions herein contained, the parties hereto agree as
follows:
ARTICLE 1
THE MERGER
Section 1.1 The Merger.
(a) Upon the terms and subject to the conditions of this Agreement,
at the Effective Time (as defined below), Merger Sub shall be merged with
and into the Company in accordance with the DGCL, whereupon the separate
corporate existence of Merger Sub shall cease, and the Company shall be the
surviving corporation (the "Surviving Corporation").
(b) Following satisfaction or waiver of all conditions to the
Merger, but only on the Distribution Date (as defined in the Distribution
Agreement), the Company shall file a Certificate of Merger (the
"Certificate of Merger") with the Secretary of State of the State of
Delaware and make all other filings or recordings required by the DGCL in
connection with the Merger. The Merger shall become effective at such time
as the Certificate of Merger is duly filed with the Secretary of State of
the State of Delaware or at such later time as is specified in the
Certificate of Merger (the "Effective Time").
(c) At and after the Effective Time, the Merger shall have the
effects set forth in the DGCL. Without limiting the foregoing and subject
thereto, from and after the Effective Time, the Surviving Corporation shall
possess all the rights, privileges, powers and franchises and be subject to
all the restrictions, disabilities and duties of the Company and Merger
Sub, all as provided under the DGCL.
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Section 1.2 Effect on Capital Stock at the Effective Time. At the Effective
Time:
(a) All the shares of Merger Sub Common Stock outstanding
immediately prior to the Effective Time shall be converted in the aggregate
into and become 4,382,400 fully paid and non-assessable shares of Class B
Common Stock of the Surviving Corporation and shall have the rights and
privileges as set forth in the Surviving Corporation Certificate of
Incorporation (as defined in Section 2.1).
(b) Each of the Contributed Shares shall automatically be canceled
and retired and shall cease to exist, and no stock of the Surviving
Corporation or other consideration shall be delivered in exchange therefor.
(c) Each share of Common Stock outstanding immediately prior to the
Effective Time (other than shares to be canceled in accordance with Section
1.2(b)) shall remain issued and outstanding, and each share of Common Stock
that immediately prior to the Effective Time was held in the treasury of
the Company shall remain in the treasury of the Company and, in each case,
shall have the rights and privileges as set forth in the Surviving
Corporation Certificate of Incorporation (as defined in Section 2.1).
Section 1.3 Share Certificates.
(a) As soon as practicable after the Effective Time:
(i) the Surviving Corporation shall deliver, or cause to be
delivered, to UNITRIN a number of certificates issued in the names of such
persons, in each case, as UNITRIN shall direct, representing in the
aggregate 4,382,400 shares of Class B Common Stock of the Surviving
Corporation which UNITRIN has the right to receive upon conversion of
shares of Merger Sub Common Stock pursuant to the provisions of Section 1.2
(a) hereof;
(ii) the Surviving Corporation shall cancel the share
certificate or certificates that immediately prior to the Effective Time
represented the shares of Common Stock owned directly by Merger Sub; and
(iii) the share certificates that immediately prior to the
Effective Time represented shares of Common Stock that remain issued and
outstanding or in the treasury of the Company pursuant to Section 1.2(c)
hereof shall not be exchanged and shall continue to represent an equal
number of shares of Common Stock of the
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Surviving Corporation without physical substitution of share certificates
of the Surviving Corporation for existing share certificates of the
Company.
(b) Any dividend or other distribution declared or made with
respect to any shares of capital stock of the Company, whether the record
date for such dividend or distribution is before or after the Effective
Time, shall be paid to the holder of record of such shares of capital stock
on such record date, regardless of whether such holder has surrendered its
certificates representing Common Stock or received certificates
representing Class B Common Stock pursuant to Section 1.3(a)(i).
ARTICLE 2
THE SURVIVING CORPORATION
Section 2.1 Certificate of Incorporation.
(a) In the event the adoption of this Agreement and the Governance
Provisions (as defined below) is approved by the stockholders of the
Company at the Stockholders Meeting (as defined below), at the Effective
Time the Restated Certificate of Incorporation of the Company as in effect
immediately prior to the Effective Time shall be amended so as to read in
its entirety as set forth in Exhibit A-1(a) hereto and as so amended shall
be the Restated Certificate of Incorporation of the Surviving Corporation.
(b) In the event the adoption of the Governance Provisions is not
approved, but the adoption of this Agreement is approved, by the
stockholders of the Company at the Stockholders Meeting, and the Company
waives the condition to its obligation to consummate the Merger set forth
in Section 4.1(b) hereof, at the Effective Time the Restated Certificate of
Incorporation of the Company as in effect immediately prior to the
Effective Time shall be amended so as to read in its entirety as set forth
in Exhibit A-1(b) hereto and as so amended shall be the Restated
Certificate of Incorporation of the Surviving Corporation.
(c) The Restated Certificate of Incorporation of the Surviving
Corporation that becomes effective pursuant to either Section 2.1(a) or
2.1(b) hereof is herein referred to as the "Surviving Corporation
Certificate of Incorporation."
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Section 2.2 By-Laws.
(a) In the event the adoption of this Agreement and the Governance
Provisions is approved by the stockholders of the Company at the
Stockholders Meeting, at the Effective Time the By-Laws of the Company as
in effect immediately prior to the Effective Time shall be amended so as to
read in their entirety as set forth in Exhibit A-1(c) hereto and as so
amended shall be the By-Laws of the Surviving Corporation.
(b) In the event the adoption of the Governance Provisions is not
approved, but the adoption of this Agreement is approved, by the
stockholders of the Company at the Stockholders Meeting, and the Company
waives the condition to its obligation to consummate the Merger set forth
in Section 4.1(b) hereof, at the Effective Time the By-Laws of the Company
as in effect immediately prior to the Effective Time shall be amended so as
to read in their entirety as set forth in Exhibit A-1(d) hereto and as so
amended shall be the By-Laws of the Surviving Corporation.
(c) The By-Laws of the Surviving Corporation as amended pursuant to
either Section 2.2(a) or 2.2(b) hereof are herein referred to as the
"Surviving Corporation By-Laws."
Section 2.3 Directors and Officers.
(a) The Surviving Corporation's board of directors shall consist of
8 members. From and after the Effective Time, until the earlier of their
removal or resignation or until their successors are duly elected or
appointed and qualified in accordance with applicable law, the directors of
the Surviving Corporation shall consist of the directors of the Company in
office at the Effective Time. Each such director shall be designated to
serve as a Director or a Class B Director (each as defined in the Surviving
Corporation Certificate of Incorporation), such designation to be mutually
agreed between UNITRIN and the Company and disclosed in the Proxy Statement
(as defined below).
(b) In the event the adoption of the Governance Provisions is
approved by the stockholders of the Company at the Stockholders Meeting, at
the Effective Time the directors of the Surviving Corporation shall be
divided into three classes pursuant to the Surviving Corporation
Certificate of Incorporation, and each such director shall be designated to
serve as a Class I Director, Class II Director or Class III Director (each as
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defined in the Surviving Corporation Certificate of Incorporation), such
designation to be disclosed in the Proxy Statement.
(c) From and after the Effective Time, until the earlier of their
removal or resignation or until their successors are duly appointed and
qualified in accordance with applicable law and the Surviving Corporation
By-Laws, the officers of the Company shall be the officers of the Surviving
Corporation.
ARTICLE 3
COVENANTS AND REPRESENTATIONS AND WARRANTIES
Section 3.1 Stockholders Meeting. The Company shall, as soon as practicable
following the date of this Agreement, duly call, give notice of, convene
and hold a meeting of its stockholders (the "Stockholders Meeting") for the
purpose of considering, as two separate proposals: (a) the adoption of this
Agreement; and (b) the approval of amendments to the Company's Restated
Certificate of Incorporation to be effected by the Merger, if so approved,
providing for, among other things, (i) the proposed classified Board, (ii)
the elimination of the stockholders' ability to act by written consent and
to call a special meeting, (iii) the requirement of a supermajority vote
for (A) stockholders to amend the Surviving Corporation By-Laws and (B) any
amendment to the Surviving Corporation Certificate of Incorporation that
would affect the Governance Provisions, (iv) the implementation of limits
on Board size and (v) the ability to fill Board vacancies and newly created
directorships, all as set forth in Exhibit A-1(a) hereto (the "Governance
Provisions"), to become effective solely upon effectiveness of the Merger.
The Company shall, through its Board of Directors, recommend to its
stockholders adoption of this Agreement and shall not withdraw, change or
modify such recommendation; provided, however, that the Company's Board of
Directors may withdraw, change or modify such recommendation if it
determines in good faith, after consultation with outside counsel, that it
would be inconsistent with the Board's fiduciary duties to the stockholders
of the Company not to withdraw, change or modify such recommendation.
Section 3.2 Filings; Other Actions.
(a) Subject to the provisions of this Agreement and the
Distribution Agreement, the Company shall prepare and file with the
Securities and Exchange Commission (the "SEC") a proxy statement (the
"Proxy Statement") for the solicitation of proxies in favor of (i) the
adoption of this Agreement; and (ii) the approval of the Governance
Provisions as amendments to the Company's Restated Certificate of
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Incorporation to become effective solely upon the effectiveness of the
Merger. The Company shall not propose to its stockholders the adoption of
the Governance Provisions as independent amendments to the Company's
Restated Certificate of Incorporation, but only as amendments to become
effective solely upon the effectiveness of the Merger. The Company shall
use all reasonable efforts to have the Proxy Statement cleared by the SEC
for mailing in definitive form as promptly as practicable after such
filing. The Company and UNITRIN shall cooperate with each other in the
preparation of the Proxy Statement and any amendment or supplement thereto,
and the Company shall notify UNITRIN of the receipt of any comments of the
SEC with respect to the Proxy Statement and of any requests by the SEC for
any amendment or supplement thereto or for additional information and shall
provide to UNITRIN promptly copies of all correspondence between the SEC
and the Company or any of its advisors with respect to the Proxy Statement.
The Company shall give UNITRIN and its counsel appropriate advance
opportunity to review and comment upon the Proxy Statement and all
responses to requests for additional information by, and replies to
comments of, the SEC, and shall incorporate therein any reasonable comments
UNITRIN may deliver to the Company with respect thereto, before such Proxy
Statement, response or reply is filed with or sent to the SEC. The Company
agrees to use all reasonable efforts, after consultation with UNITRIN and
its advisors, to respond promptly to all such comments of, and requests by,
the SEC and to cause the Proxy Statement to be mailed to the holders of the
Common Stock entitled to vote at the Stockholders Meeting as soon as
reasonably possible following the execution hereof. UNITRIN shall provide
the Company such information concerning the business and affairs of UNITRIN
and Merger Sub as is reasonably required for inclusion in the Proxy
Statement.
(b) Each of the Company and UNITRIN shall promptly, and in any
event within fifteen business days after the execution and delivery of this
Agreement, make all filings or submissions as are required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and any other applicable law.
(c) Each of the Company and UNITRIN agrees promptly to furnish to
the other all copies of written communications (and to advise one another
of the substance of all material oral communications) received by it, or
any of its affiliates or representatives, from, or delivered by any of the
foregoing to, any federal, state, local or international court, commission,
governmental body, agency, authority, tribunal, board or other governmental
entity (each a "Governmental Entity") in respect of the transactions
contemplated hereby.
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(d) At the Stockholders' Meeting, UNITRIN agrees to vote, or cause
to be voted, all shares of Common Stock owned by it and any of its
subsidiaries or affiliates in favor of the adoption of this Agreement and
the approval of the Governance Provisions.
(e) As soon as reasonably practicable following execution of this
Agreement, UNITRIN, as the sole stockholder of Merger Sub, shall execute
and deliver to Merger Sub in accordance with Section 228 of the DGCL a
written consent to adoption of this Agreement.
Section 3.3 Reasonable Efforts. Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties hereto agrees
to use all reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to obtain the
adoption of this Agreement and the approval of the Governance Provisions by
the stockholders of the Company as contemplated by Sections 4.1(a), 4.1(b)
and 4.2(a) hereof and to consummate, as soon as practicable following such
approval, the Merger and the other transactions contemplated by this
Agreement and the Distribution Agreement, including, but not limited to (a)
the obtaining of all necessary actions, waivers, consents and approvals
from all Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities)
and the taking of all reasonable steps as may be necessary to obtain an
approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity (including those in connection with the HSR Act), (b)
the obtaining of all necessary consents, approvals or waivers from third
parties, (c) the defending of any lawsuits or other legal proceedings,
whether judicial or administrative, challenging this Agreement, the
Distribution Agreement or the consummation of the transactions contemplated
hereby or thereby, including seeking to have any stay or temporary
restraining order entered by any court or other Governmental Entity with
respect to the Merger, this Agreement or the Distribution Agreement vacated
or reversed, (d) the execution and delivery of any additional instruments
necessary to consummate the transactions contemplated by this Agreement and
the Distribution Agreement and (e) causing all conditions to the parties'
obligations to consummate (i) the Merger set forth in Article 4 hereof and
(ii) the Distribution set forth in Section 2.1(b) of the Distribution
Agreement to be satisfied. The Company and UNITRIN, upon the other's
request, shall provide all such information reasonably necessary to
accomplish the foregoing concerning the party's business and affairs to the
other party.
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Section 3.4 Representations and Warranties of the Company. The Company
hereby represents and warrants to UNITRIN and Merger Sub that:
(a) the Company's Board of Directors has approved and declared
advisable the Merger, this Agreement, the Distribution Agreement and the
transactions contemplated hereby and thereby, has determined that the
Merger and the other transactions contemplated by this Agreement and the
Distribution Agreement are in the best interests of the stockholders of the
Company and, subject to Section 3.1 hereof, has recommended that the
stockholders of the Company vote in favor of the adoption of this
Agreement;
(b) the Proxy Statement, the form of proxy and any other
solicitation materials used in connection therewith and any oral
solicitations of proxies made by the Company shall not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made, in light of the circumstances under
which they were made, not misleading or omit any statement necessary to
correct any statement in any earlier communication with respect to any
solicitation of a proxy for any of the matters to be voted upon at the
Stockholders Meeting which has become false or misleading, except that no
representation or warranty is made by the Company with respect to
information relating to UNITRIN or Merger Sub that is provided by UNITRIN
for inclusion in the Proxy Statement or any such other proxy material or
oral solicitation;
(c) this Agreement has been duly executed and delivered by the
Company and constitutes the valid and binding agreement of the Company,
enforceable against the Company 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; and
(d) subject to the changes in the Company's capitalization
contemplated by this Agreement, the capitalization of the Company is as
follows:
(i) 22,500,000 authorized shares of Common Stock of which
10,014,161 shares were outstanding at the close of business on October 16,
2000;
(ii) 4,984,149 shares of Common Stock which are held in the
treasury of the Company as the date of this Agreement;
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(iii) 650,000 authorized shares of preferred stock of which
zero (0) shares are outstanding on the date of this Agreement; and
(iv) no shares of any other class or series of capital stock
are authorized, issued or outstanding.
Section 3.5 Representations and Warranties of UNITRIN and Merger Sub. Each
of UNITRIN and Merger Sub jointly and severally represent and warrant to
the Company that:
(a) the Board of Directors of each of UNITRIN and Merger Sub, as
applicable, has approved and declared advisable the Merger, this Agreement,
the Distribution Agreement and the transactions contemplated hereby and
thereby, and, other than as contemplated by Section 3.2(e) hereof, no
stockholder approval or other further corporate action will be required on
the part of UNITRIN or Merger Sub;
(b) this Agreement has been duly executed and delivered by UNITRIN
and Merger Sub and constitutes the valid and binding agreement of each such
corporation, enforceable against UNITRIN and Merger Sub 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;
(c) UNITRIN owns all outstanding capital stock of Merger Sub free
and clear of any claims, liens or encumbrances and no other person holds
any capital stock of Merger Sub nor has any right to acquire any equity
interest in Merger Sub;
(d) as of immediately prior to the Effective Time, all of the
Contributed Shares shall be owned beneficially and of record by Merger Sub,
free and clear of any claims, liens or encumbrances; and
(e) Merger Sub was formed by UNITRIN solely for the purposes of
effectuating the Merger upon the terms and subject to the conditions of
this Agreement; Merger Sub has no employees, will have no assets other than
the Contributed Shares, has not entered into any contract, agreement or
other commitment with any person except for customary corporate
organizational matters or as specifically set forth in this
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Agreement, and has no liabilities, commitments or obligations of any kind
(known or unknown, fixed or contingent), except for those obligations
specifically set forth in this Agreement.
ARTICLE 4
CONDITIONS TO THE MERGER
Section 4.1 Conditions to the Obligation of the Company. The obligation of
the Company to consummate the Merger is subject to the satisfaction (or
waiver by the Company, except that the condition set forth in Section
4.1(a) may not be waived) of the following conditions:
(a) a proposal to adopt this Agreement shall have been approved by
the holders of (i) a majority of the Common Stock outstanding and entitled
to vote thereon and (ii) a majority of the shares of Common Stock (other
than shares held of record or beneficially owned by UNITRIN) present in
person or by proxy at the Stockholders Meeting and voting on such proposal;
(b) a proposal to approve the Governance Provisions shall have been
approved by a majority of the Common Stock outstanding and entitled to vote
thereon;
(c) the waiting period (and any extension thereof) applicable to
the Merger under the HSR Act shall have expired or been terminated;
(d) no court, arbitrator or other Governmental Entity shall have
issued any order, injunction, decree or other legal restraint or
prohibition, and there shall not be any statute, rule or regulation,
restraining or prohibiting the consummation of the Merger or the
Distribution and no proceeding challenging this Agreement or the
Distribution Agreement or the transactions contemplated hereby or thereby
or seeking to prohibit, alter, prevent or materially delay the Merger or
the Distribution shall have been instituted by any Governmental Entity
before any court, arbitrator or other Governmental Entity and be pending;
(e) all actions by or in respect of or filings with any
Governmental Entity required to permit the consummation of the Merger
(other than the filing of the Certificate of Merger in compliance with the
DGCL) and the other transactions contemplated by this Agreement and the
Distribution Agreement shall have been obtained and shall be in full force
and effect, except those that would not reasonably be
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expected to have a material adverse effect on any party's ability to
consummate the transactions contemplated by this Agreement or the
Distribution Agreement;
(f) prior to the Effective Time, the Board of Directors of UNITRIN
shall have declared the Distribution (subject to the prior consummation of
the Recapitalization (as defined in the Distribution Agreement)), all
conditions to the Distribution set forth in the Distribution Agreement,
other than the prior consummation of the Recapitalization, shall have been
satisfied or waived, no circumstance shall exist that would reasonably be
expected to prevent the consummation of the Distribution immediately
following the Merger, and the Distribution Agreement shall remain in full
force and effect;
(g) all representations and warranties of UNITRIN set forth in the
Distribution Agreement (other than the representation and warranty set
forth in Section 2.3(b)(v) of the Distribution Agreement) and all
representations and warranties of UNITRIN and Merger Sub set forth in this
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 Effective Time, and
the Company shall have received a certificate executed by the chief
executive officer of UNITRIN to such effect;
(h) all covenants to have been performed at or prior to the
Effective Time by UNITRIN and Merger Sub pursuant to this Agreement and all
covenants to have been performed at or prior to the Effective Time by
UNITRIN pursuant to the Distribution Agreement shall have been performed by
UNITRIN and Merger Sub in all material respects at or prior to the
Effective Time, and the Company shall have received a certificate executed
by the chief executive officer of UNITRIN to such effect;
(i) each of the Company and UNITRIN shall have received all the
Required Consents (as defined in the Distribution Agreement);
(j) the Class B Common Stock shall have been approved for listing
on the New York Stock Exchange, Inc., subject to official notice of
issuance;
(k) no event outside the control of the Company shall have occurred
or failed to occur that prevents the lawful consummation of the
Recapitalization;
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(l) the transactions contemplated hereby and by the Distribution
Agreement shall be in compliance in all material respects with applicable
federal and state securities and other applicable laws;
(m) all actions and other documents and instruments reasonably
necessary in connection with the transactions contemplated hereby and by
the Distribution Agreement shall have been taken or executed, as the case
may be, in form and substance reasonably satisfactory to the Company; and
(n) either (i) the private letter ruling from the Internal Revenue
Service, 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, insofar as it relates to the tax-free
nature of the Recapitalization, shall be in form and substance satisfactory
to the Company in its sole discretion, and UNITRIN 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 (each as
defined in the Distribution Agreement) in order for the Recapitalization to
qualify as a tax-free transaction or (ii) if the IRS Ruling is not
obtained, each of UNITRIN and the Company shall have received a written
opinion in form and substance satisfactory to it of a nationally recognized
law firm mutually acceptable to UNITRIN and the Company (it being agreed
that Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois) and Xxxxxxx Xxxxxxx &
Xxxxxxxx will each be deemed to be mutually acceptable to UNITRIN and the
Company for purposes of this clause (n)), to the same effect as the IRS
Ruling as it relates to the tax-free nature of the Recapitalization.
The foregoing conditions are for the sole benefit of the Company and shall
not give rise to or create any duty on the part of the Company to waive or
not waive any such condition.
Section 4.2 Conditions to the Obligations of UNITRIN and Merger Sub. The
obligations of UNITRIN and Merger Sub to consummate the Merger are subject
to the satisfaction (or waiver by UNITRIN and Merger Sub, except that the
condition set forth in Section 4.2(a) may not be waived) of the following
conditions:
(a) a proposal to adopt this Agreement shall have been approved by
the holders of (i) a majority of the Common Stock outstanding and entitled
to vote thereon and (ii) a majority of the shares of Common Stock (other
than shares held of record or
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beneficially owned by UNITRIN) present in person or by proxy at the
Stockholders Meeting and voting on such proposal;
(b) the waiting period (and any extension thereof) applicable to
the Merger under the HSR Act shall have expired or been terminated;
(c) 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 the Company 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;
(d) no court, arbitrator or other Governmental Entity shall have
issued any order, injunction, decree or other legal restraint or
prohibition, and there shall not be any statute, rule or regulation,
restraining or prohibiting the consummation of the Merger or the
Distribution and no proceeding challenging this Agreement or the
Distribution Agreement or the transactions contemplated hereby or thereby
or seeking to prohibit, alter, prevent or materially delay the Merger or
the Distribution shall have been instituted by any Governmental Entity
before any court, arbitrator or other Governmental Entity and be pending;
(e) all actions by or in respect of or filings with any
Governmental Entity required to permit the consummation of the Merger
(other than the filing of the Certificate of Merger in compliance with the
DGCL) and the other transactions contemplated by this Agreement and the
Distribution Agreement shall have been obtained and shall be in full force
and effect, except those that would not reasonably be expected to have a
material adverse effect on any party's ability to consummate the
transactions contemplated by this Agreement or the Distribution Agreement;
(f) at the Effective Time, all conditions to the declaration of the
Distribution and the Distribution set forth in the Distribution Agreement,
other than the prior consummation of the Recapitalization, shall have been
satisfied or waived, no circumstance shall exist that would reasonably be
expected to prevent the consummation of the Distribution immediately
following the Merger, and the Distribution Agreement shall remain in full
force and effect;
(g) all representations and warranties of the Company set forth in
the Distribution Agreement (other than the representation and warranty set
forth in Section 2.3(a)(v) of the Distribution Agreement) and this
Agreement that are qualified as to materiality shall be true and correct,
and any such representations and warranties that
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are not so qualified shall be true and correct in all material respects, as
of the Effective Time, and UNITRIN shall have received a certificate
executed by the chief executive officer of the Company to such effect; and
(h) all covenants to have been performed at or prior to the
Effective Time by the Company pursuant to this Agreement or the
Distribution Agreement shall have been performed at or prior to the
Effective Time by the Company in all material respects, and UNITRIN shall
have received a certificate executed by the chief executive officer of the
Company to such effect.
The foregoing conditions are for the sole benefit of UNITRIN and Merger Sub
and shall not give rise to or create any duty on the part of UNITRIN or
Merger Sub to waive or not waive any such condition.
ARTICLE 5
TERMINATION
Section 5.1 Termination.
(a) This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time (notwithstanding any
approval of this agreement by the stockholders of the Company):
(i) by mutual written consent of the Company and UNITRIN;
(ii) by either the Company or UNITRIN, if there shall be any
law or regulation that makes consummation of the Merger illegal or
otherwise prohibited or if any judgment, injunction, order or decree
enjoining the Company or Merger Sub from consummating the Merger is entered
and such judgment, injunction, order or decree shall become final and
nonappealable;
(iii) by either the Company or UNITRIN, if there shall be
any law or regulation that makes consummation of the Distribution illegal
or otherwise prohibited or if any judgment, injunction, order or decree
enjoining UNITRIN from consummating the Distribution is entered and such
judgment, injunction, order or decree shall become final and nonappealable;
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(iv) by either the Company or UNITRIN, if after a vote on
the matter by the Company's stockholders at the Stockholders Meeting, the
conditions set forth in Sections 4.1(a) and (b) hereof, in the case of the
Company, and Section 4.2(a) hereof, in the case of UNITRIN, are not
satisfied;
(v) by either the Company or UNITRIN, if the Merger 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 Distribution Agreement; or
(vi) by either the Company or UNITRIN, to the extent the
Company or UNITRIN, as applicable, is allowed to terminate the Distribution
Agreement pursuant to Section 5.10(a)(iii) or 5.10(a)(iv)(C) thereof, as
applicable.
(b) This Agreement shall terminate automatically without any action
on the part of the Company, UNITRIN or Merger Sub in the event the
Distribution Agreement is terminated according to its terms.
Section 5.2 Effect of Termination. If this Agreement is terminated pursuant
to Section 5.1, this Agreement shall become void and of no effect with no
liability on the part of any party hereto.
ARTICLE 6
MISCELLANEOUS
Section 6.1 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.
Xxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
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Fax: (000) 000-0000
Attn: Chief Financial Officer
with a copy to:
UNITRIN, INC.
Xxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: General Counsel
and with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxx, Esq.
To Merger Sub:
CW DISPOSITION COMPANY
c/o UNITRIN, INC.
Xxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Chief Financial Officer
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxx, Esq.
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To the Company:
XXXXXXX-XXXXXX CORPORATION
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
Attn: General Counsel
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxxx X. Xxxxxxxxxx, Esq.
Section 6.2 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other party hereto.
Section 6.3 Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware.
Section 6.4 Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto
shall have received counterparts hereof signed by the other party hereto.
Section 6.5 Amendments. Any provision of this Agreement may be amended or
waived prior to the Effective Time (whether before or after approval of
matters presented in connection with the Merger by the stockholders of the
Company) if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the Company and UNITRIN or, in the
case of a waiver, by the party against whom such waiver is to be effective;
provided that after the adoption of this Agreement by the stockholders of
the Company, there shall be no amendment that by law requires
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further approval of such stockholders without obtaining such further
approval of such stockholders.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and
year first above written.
XXXXXXX-XXXXXX CORPORATION
By /s/ Xxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman and Chief Executive Officer
UNITRIN, INC.
By /s/ Xxxx X. Xxxxx
------------------------
Name: Xxxx X. Xxxxx
Title: Senior Vice President and
Chief Financial Officer
CW DISPOSITION COMPANY
By /s/ Xxxx X. Xxxxx
------------------------
Name: Xxxx X. Xxxxx
Title: President
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