CONTRIBUTION AND VOTING AGREEMENT
Exhibit
3
This
Contribution and Voting Agreement, dated as of October 14, 2010 (this “Agreement”), among
Fenist, LLC, an Ohio limited liability company (“Parent”), Falcon
Equity Partners, L.P., an Ohio limited partnership (“Falcon”), Xxxx X.
Xxxxx, in his individual capacity and as custodian of UTMA accounts in the names
of Grayson, Parker and Xxxxxxxx Xxxxx, his minor children (“Xxxx Xxxxx”) and
Xxxxxxx X. Xxxxx, in her individual capacity and as and trustee of the Si Xxxxx
Family Trust (“Xxxxxxx
Xxxxx,” and together with Falcon and Xxxx Xxxxx, the “Contributing
Shareholders”).
WHEREAS,
on August 10, 2010, Parent, Fenist Acquisition Sub, Inc., an Ohio corporation
and a wholly owned subsidiary of Parent (“Merger Sub”), and
Bancinsurance Corporation, an Ohio corporation (the “Company”), entered
into an Agreement and Plan of Merger (the “Merger Agreement)
pursuant to which Merger Sub will merge with and into the Company (the “Merger”);
WHEREAS,
each Contributing Shareholder is a member of Parent and is party to the Amended
and Restated Limited Liability Company Operating Agreement of Parent dated as of
October 14, 2010, (the Operating
Agreement”), of Parent;
WHEREAS,
as of the date hereof, the Contributing Shareholders collectively beneficially
own 2,760,941 shares of common stock, no par value, of the Company (the “Common Stock”), in
the amounts set forth next to such Contributing Shareholder’s name on Exhibit A
hereto (such shares, together with all shares of Common Stock that any
Contributing Shareholder acquires beneficial ownership of after the date hereof
are sometimes referred to in this Agreement as the “Owned Shares”);
and
WHEREAS,
in exchange for its member interest in Parent, each of the Contributing
Shareholders has, among other things, agreed to contribute its Owned Shares to
Parent;
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, Parent
and each of the Contributing Shareholders hereby agree as follows:
1. Voting of
Shares.
(a) Voting. Each
of the Contributing Shareholders covenants and agrees that it shall, and shall
cause any other holder of record of the Owned Shares beneficially owed by it to,
at any meeting of the shareholders of the Company (whether annual or special and
whether or not an adjourned or postponed meeting) or in any other circumstances
upon which a vote, written consent or other approval of the shareholders of the
Company is sought: (i) cause its Owned Shares to be counted as
present for the purpose of establishing a quorum, (ii) vote (or cause to be
voted) all its Owned Shares in favor of the approval of the Merger, adoption of
the Merger Agreement, and any other matter that could reasonably be expected to
facilitate consummation of the Merger, and (iii) vote (or cause to be voted) all
its Owned Shares against any matter that could reasonably be expected to hinder,
oppose, impede, thwart or delay the consummation of the
Merger. Except as set forth in this Section 1, the Contributing
Shareholders shall not be restricted from voting in favor of, against or
abstaining with respect to any matter presented to the shareholders of the
Company. In addition, nothing in this Agreement shall limit the right
of any Contributing Shareholder to vote any Owned Shares in connection with the
election of directors.
(b) Irrevocable
Proxy. (i) Each Contributing Shareholder hereby
irrevocably grants to and appoints, and hereby authorizes and empowers, Parent,
and any individual designated in writing by Parent, and each of them
individually, as such Contributing Shareholder’s sole and exclusive proxy and
attorney-in-fact (with full power of substitution and resubstitution), for and
in the Contributing Shareholder’s name, place and stead, to vote and exercise
all voting and related rights (to the fullest extent that the Contributing
Shareholder is entitled to do so) with respect to its Owned Shares at any
meeting of the shareholders of the Company called, and in every written consent
in lieu of such meeting, with respect to any of the matters specified in, and in
accordance and consistent with, this Section 1. The Contributing
Shareholder may vote its Owned Shares on all other matters not contemplated by
this Section 1.
(ii) Upon the execution of this
Agreement by a Contributing Shareholder, such Contributing Shareholder hereby
revokes any and all prior proxies or powers of attorney given by such
Contributing Shareholder with respect to its Owned Shares. Each Contributing
Shareholder acknowledges and agrees that no subsequent proxies with respect to
its Owned Shares shall be given, and if given, shall not be effective. All
authority conferred herein shall be binding upon and enforceable against any
successors or assigns of each Contributing Shareholder and any transferees of
the Owned Shares. Notwithstanding any other provisions of this Agreement, the
irrevocable proxy granted hereunder shall automatically terminate upon the
termination of this Agreement pursuant to Section 3.
2. Contribution. Subject
to the conditions set forth herein, each Contributing Shareholder agrees to
contribute and deliver to Parent all its Owned Shares (the “Contribution
Commitment”) immediately prior to the Effective Time of the Merger (as
such term is defined in the Merger Agreement). The obligation of each
of the Contributing Shareholders to transfer, contribute and deliver the
Commitment is subject to (a) the terms of this Agreement and (b) the
satisfaction or waiver of all conditions precedent to Parent’s and Merger Sub’s
obligations to effect the closing of the Merger. In the event that
any Contribution Commitment is transferred, contributed and delivered to Parent
and the closing of the Merger does not occur promptly thereafter, Parent will
return such Contribution Commitment to the Contributing Shareholder who
transferred, contributed and delivered such Contribution Commitment as set forth
in the operating agreement of Parent as is then in effect.
3. Termination. This
Agreement shall terminate upon the earliest of (a) the consummation of the
Merger, (b) the termination of the Merger Agreement in accordance with its
terms and (c) written notice of termination of this Agreement by Parent to the
Contributing Shareholders; provided that nothing herein shall relieve any party
hereto from liability for any breach of this Agreement prior to any such
termination.
4. Representations and
Warranties.
(a) Representations and
Warranties of Parent. Parent hereby represents and warrants
to the Contributing Shareholders that Parent has all requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. Parent is duly organized as a limited liability
company and is in good standing under the laws of the State of
Ohio. The execution and delivery by Parent of this Agreement and the
consummation by Parent of the transactions contemplated hereby have been duly
authorized. This Agreement, when duly executed and delivered by
Parent will constitute a legal, valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and general equitable principles whether in a
proceeding in equity or at law.
(b) Representation and
Warranties of Falcon. Falcon hereby represents and
warrants to Parent that it has all requisite power and authority to enter into
this Agreement and to consummate the transactions contemplated
hereby. Falcon is duly formed as a limited partnership and is in good
standing under the laws of the State of Ohio. The execution and
delivery by Falcon of this Agreement and the consummation by Falcon of the
transactions contemplated hereby have been duly authorized. This
Agreement, when duly executed and delivered by Falcon will constitute a legal,
valid and binding obligation of Falcon, enforceable against Falcon in accordance
with its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and general equitable
principles whether in a proceeding in equity or at law.
(c) Representations and
Warranties of the Contributing Shareholders. Each Contributing
Shareholder hereby, severally and not jointly, represents and warrants to Parent
that such Contributing Shareholder has good, valid and marketable title to its
Owned Shares, free and clear of all liens, claims and encumbrances, with full
legal right and power to transfer and convey absolute ownership of its Owned
Shares to Parent, and upon delivery, transfer and assignment of the certificate
or certificates representing such Owned Shares, Parent will obtain good,
transferable title to such Owned Shares free and clear of all liens, claims and
encumbrances whatsoever.
(d) No Inconsistent
Agreements. Each Contributing Shareholder hereby covenants and
agrees that he, she or it (a) has not entered into, and shall not enter into,
any voting agreement or voting trust, with respect to its Owned Shares, (b) has
not granted, and shall not grant, a proxy or power of attorney with respect to
its Owned Shares that is inconsistent with its obligations pursuant to this
Agreement and (c) has not entered into, and shall not enter into, any agreement
or undertaking that is otherwise inconsistent with its obligations pursuant to
this Agreement.
5. Certain Covenants of the
Contributing Shareholders. Except in accordance with the terms
of this Agreement, each of the Contributing Shareholders hereby, severally and
not jointly, covenants and agrees as follows:
(a) Restriction on Transfer and
Non-Interference. Each Contributing Shareholder hereby agrees,
except as expressly contemplated by this Agreement, not to (i) sell, transfer,
pledge, encumber, assign or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to the sale, transfer,
pledge, encumbrance, assignment or other disposition of, any of its Owned Shares
or (ii) knowingly take any action that would make any representation or warranty
of any of the Contributing Shareholders contained herein untrue or incorrect or
have the effect of preventing or disabling any of the Contributing Shareholders
from performing his, her or its obligations under this Agreement.
(b) Certain
Notifications. Each Contributing Shareholder agrees, while
this Agreement is in effect, to promptly notify Parent of the number of any new
shares of Common Stock acquired by such Contributing Shareholder after the date
hereof.
6. Transfer Agent
Instructions. Each Contributing Shareholder shall coordinate
with the Company to credit its Owned Shares to one or more balance accounts at
DTC or the Company’s transfer agent, as specified by Parent. Each
Contributing Shareholder shall provide all such documents, instruments and
information as the Company, DTC or the transfer agent reasonably requests to
effect the transfer of its Owned Shares.
7. Survival. The
representations and warranties of Parent and the Contributing Shareholders made
in Section 4 and the agreement and the covenant set forth in this Section 7
shall survive the termination of this Agreement.
8. Successors and
Assigns. No party may assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other
parties. Subject to the preceding, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns.
9. Severability. The
parties hereto agree that the provisions of this Agreement are severable and, in
the event that any court of competent jurisdiction or governmental agency having
jurisdiction shall determine that any of the covenants, agreements, terms or
other provisions herein contained are invalid or illegal, the validity and
enforceability of the remaining covenants, agreements, terms or conditions shall
not be affected thereby and the portion determined to be invalid or illegal
shall be deemed not to be a part of this Agreement.
10. Entire Agreement;
Amendments. This Agreement supersedes all other prior oral or
written agreements among the Contributing Shareholders and Parent and their
respective affiliates and persons acting on their behalf with respect to the
matters discussed herein, and except for the operating agreement of Parent, this
Agreement contains the entire understanding of the parties with respect to the
matters covered herein and, except as specifically set forth herein, neither
parent nor any Contributing Shareholder makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be amended, waived, terminated or otherwise modified other than by
an instrument in writing signed by all of the parties hereto. Any
amendment to this Agreement made in conformity with the provisions of this
Section 10 shall be binding on all parties. No provision hereof may
be waived other than by an instrument in writing signed by the party against
whom enforcement is sought.
11. Specific Performance.
The parties hereto agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with the terms
hereof and that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or in equity.
12. Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and the respective successors, legal
representatives and assigns of each.
13. Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall be deemed one and the same
instrument.
14. Applicable
Law. This Agreement shall be governed by the laws of the State
of Ohio, without regard to the choice of law rules thereof.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, Parent and each of the Contributing Shareholders have executed
or caused to be executed this Agreement as of the date first written
above.
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FENIST,
LLC
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/s/ Xxxx X. Xxxxx
|
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Name:
Xxxx X. Xxxxx
|
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Its:
Managing Member
|
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FALCON
EQUITY PARTNERS, L.P.
|
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/s/ Xxxx X. Xxxxx
|
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Name:
Xxxx X. Xxxxx
|
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Its:
General Partner
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/s/ Xxxx X. Xxxxx
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Name:
Xxxx X. Xxxxx
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Title: Custodian,
UTMA Accounts for
|
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Grayson,
Parker and Xxxxxxxx Xxxxx
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SI
XXXXX FAMILY TRUST
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/s/ Xxxxxxx X. Xxxxx
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Name:
Xxxxxxx X. Xxxxx
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Its:
Trustee
|
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/s/ Xxxx X. Xxxxx
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Xxxx
X. Xxxxx
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/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx
X. Xxxxx
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EXHIBIT
A
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Contributing Shareholder
|
Common Stock Owned
|
|
|
Falcon
Equity Partners, L.P.
|
1,750,000
shares
|
|
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Xxxx
X. Xxxxx
|
297,626
shares
|
|
|
Xxxx
X. Xxxxx, Custodian, UTMA Accounts for Grayson, Parker and Xxxxxxxx
Xxxxx
|
66,247
shares
|
|
|
Si
Xxxxx Family Trust
|
180,796
shares
|
|
|
Xxxxxxx
X. Xxxxx
|
466,272
shares
|
|
|
TOTAL
|
2,760,941
shares
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