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AGREEMENT AND PLAN OF MERGER
Among
BANCINSURANCE CORPORATION
BANCINSURANCE ACQUISITIONS, INC.
and
WESTFORD GROUP, INC.
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Dated as of July 19, 1999
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as
of July 19, 1999, among BANCINSURANCE CORPORATION, an Ohio corporation
("Bancinsurance"), BANCINSURANCE ACQUISITIONS, INC., an Ohio corporation and a
wholly owned subsidiary of Bancinsurance ("Acquisitions"), and WESTFORD GROUP,
INC., an Ohio corporation ("Westford Group"). Westford Group and Acquisitions
are hereinafter sometimes referred to as the "Constituent Corporations" and
Acquisitions as the "Surviving Corporation."
RECITALS
A. Bancinsurance, Acquisitions and Westford Group desire that Westford
Group merge with and into Acquisitions (the "Merger"), upon the terms and
conditions set forth herein and in accordance with the Ohio General Corporation
Law (the "Ohio Law") with the result that Acquisitions shall continue as the
surviving corporation and the separate existence of Westford Group (except as it
may be continued by operation of law) shall cease.
B. Bancinsurance, Acquisitions and Westford Group desire that at the
Effective Time (as hereinafter defined) all outstanding shares of the capital
stock of Westford Group (the "Westford Common Stock") be converted into the
right to receive a cash payment as provided herein.
C. Bancinsurance, Acquisitions and Westford Group desire that,
immediately after the Effective Time and solely as a result of the Merger,
Bancinsurance will own all the issued and outstanding shares of the capital
stock of the Surviving Corporation.
D. The respective Boards of Directors of Bancinsurance, Acquisitions
and Westford Group have approved the Merger.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, agreements and conditions contained herein, and in order
to set forth the terms and conditions of the Merger and the mode of carrying the
same into effect, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, in accordance with this Agreement and the Ohio
Law, Westford Group shall be merged with and into Acquisitions, the separate
existence of Westford Group (except as it may be continued by operation of law)
shall cease, and Acquisitions shall continue as the Surviving Corporation under
the name "Westford Group, Inc."
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SECTION 1.02 Effect of the Merger. Upon the effectiveness of the
Merger, the Surviving Corporation shall succeed to, and assume all the rights
and obligations of, Westford Group and Acquisitions in accordance with the Ohio
Law and the Merger shall otherwise have the effects set forth in Section 1701.82
of the Ohio Law.
SECTION 1.03 Consummation of the Merger. As soon as practicable after
the satisfaction or waiver of the conditions to the obligations of the parties
to effect the Merger set forth herein, provided that this Agreement has not been
terminated previously, the parties hereto will cause the Merger to be
consummated by filing with the Secretary of State of the State of Ohio a
properly executed certificate of merger in accordance with the Ohio Law. The
Merger shall be effective upon filing such certificate of merger with the
Secretary of State of the State of Ohio (the "Effective Time").
SECTION 1.04 Articles of Incorporation; Code of Regulations; Directors
and Officers. The Articles of Incorporation of the Surviving Corporation from
and after the Effective Time shall be the Articles of Incorporation of
Acquisitions as in effect immediately prior to the Effective Time, until
thereafter amended in accordance with the provisions thereof and as provided by
the Ohio Law. The Code of Regulations of the Surviving Corporation from and
after the Effective Time shall be the Code of Regulations of Acquisitions as in
effect immediately prior to the Effective Time, continuing until thereafter
amended in accordance with the provisions thereof and the Articles of
Incorporation of the Surviving Corporation and as provided by the Ohio Law. The
initial directors and officers of the Surviving Corporation shall be the
directors and officers of Acquisitions immediately prior to the Merger.
SECTION 1.05 Further Assurances. If at any time after the Effective
Time the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (i) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation, its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets of
either of the Constituent Corporations, or (ii) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its proper officers
and directors or their designees shall be authorized to execute and deliver, in
the name and on behalf of either of the Constituent Corporations, all such
deeds, bills of sale, assignments and assurances and do, in the name and on
behalf of such Constituent Corporation, all such other acts and things
necessary, desirable or proper to vest, perfect or confirm its right, title or
interest in, to or under any of the rights, privileges, powers, franchises,
properties or assets of such Constituent Corporation and otherwise to carry out
the purposes of this Agreement.
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ARTICLE II
CONVERSION OF SECURITIES
SECTION 2.01 Conversion of Securities of Westford Group.
(a) Outstanding Shares. By virtue of the Merger and without
any action on the part of the holders of the capital stock of Westford Group, at
the Effective Time, all outstanding shares of Westford Group Common Stock
(excluding shares held in the treasury of Westford Group, which shall be
cancelled as provided in paragraph (b) below and shares held by Bancinsurance or
Acquisitions, which shall be cancelled as provided in paragraph (c) below) shall
be converted into the right to receive in cash $0.70 per share.
(b) Treasury Stock. Each share of capital stock that is held
in the treasury of Westford Group shall be cancelled and retired and no cash or
other consideration shall be paid or delivered in exchange therefor.
(c) Shares Held by Bancinsurance or Acquisitions. Each of the
shares of Westford Common Stock held by Bancinsurance or Acquisitions, in each
case other than in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
SECTION 2.02 Conversion of Acquisitions Common Stock. At the Effective
Time, each share of Common Stock, without par value, of Acquisitions issued and
outstanding immediately prior to the Effective Time shall remain outstanding
and, by virtue of the Merger, automatically and without any action on the part
of the holder thereof, be converted into and become one validly issued, fully
paid and nonassessable share of common stock, without par value, of the
Surviving Corporation.
SECTION 2.03 Surrender and Exchange of Shares.
(a) At the Effective Time, each holder of an outstanding
certificate or certificates that prior thereto represented shares of the capital
stock of Westford Group shall surrender the same to Bancinsurance or its agent,
and each such holder shall be entitled upon such surrender to receive in
exchange therefor, without cost to it, cash as provided in Section 2.01 hereof,
and the certificate or certificates so surrendered in exchange for such
consideration shall forthwith be cancelled by Bancinsurance.
(b) If a certificate representing shares of the capital stock
of Westford Group has been lost, stolen or destroyed, the holder of such
certificate shall submit an affidavit describing the lost, stolen or destroyed
certificate, the number of shares evidenced thereby and affirming the status of
that certificate in lieu of surrendering such certificate to Bancinsurance,
which shall deem such certificate cancelled; provided that Bancinsurance may
require the holder of such certificate to provide Bancinsurance with a bond in
such amount as Bancinsurance may direct as a condition to paying any
consideration hereunder. Until so surrendered,
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the outstanding certificates that, prior to the Effective Time, represented
shares of the capital stock of Westford Group that shall have been converted as
aforesaid shall be deemed for all corporate purposes, except as hereinafter
provided, to evidence the ownership of the consideration into which such shares
have been so converted.
SECTION 2.04. Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, shares of capital stock of Westford Group that are
outstanding immediately prior to the Effective Time and that are held by
shareholders who have not voted such shares in favor of the approval and
adoption of this Agreement and who shall have delivered a written demand for
appraisal of such shares in the manner provided in Section 1701.85 of the Ohio
Law ("Dissenting Shares") shall not be converted into or be exchangeable for the
right to receive the consideration provided in Section 2.01 of this Agreement,
but the holders of such shares shall be entitled to payment of the appraised
value of such shares in accordance with the provisions of Section 1701.85 of the
Ohio Law; provided, however, that (i) if any holder of Dissenting Shares shall
subsequently deliver a written withdrawal of his demand for appraisal of such
shares (with the written approval of the Surviving Corporation, if such
withdrawal is not tendered within ten (10) days after the Effective Time), or
(ii) if any holder fails to perfect or loses his appraisal rights as provided in
Section 1701.85 of the Ohio Law, or (iii) if any holder of Dissenting Shares
fails to demand payment within the time period provided in Section 1701.85 of
the Ohio Law, such holder shall forfeit the right to appraisal of such shares
and such shares shall thereupon be deemed to have been converted into and to
have become exchangeable for, as of the Effective Time, the right to receive the
consideration provided in Section 2.01 of this Agreement, without any interest
thereon. Dissenting Shares, if any, after payments of fair value in respect
thereto have been made to dissenting shareholders of Westford Group pursuant to
the Ohio Law, shall be cancelled.
SECTION 2.05 Closing of Stock Transfer Books. On and after the
Effective Time, there shall be no transfers on the stock transfer books of
Westford Group, Acquisitions, or Bancinsurance of shares of Westford Common
Stock that were issued and outstanding immediately prior to the Effective Time.
SECTION 2.06 Closing. The closing (the "Closing") shall be scheduled to
occur at the offices of Porter, Wright, Xxxxxx & Xxxxxx LLP, Columbus, Ohio, at
10:00 a.m. local time, as soon as practicable upon the satisfaction or waiver of
the conditions to the obligations of the parties to effect the Merger set forth
herein. The Closing, and all transactions to occur at the Closing, shall be
deemed to have taken place at the close of business on the date of closing (the
"Closing Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties of Westford Group. Westford
Group represents and warrants to Bancinsurance and Acquisitions as follows:
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(a) Organization and Qualification. Westford Group and its
wholly owned subsidiary, American Legal Publishing, Inc. ("ALP") (Westford Group
and ALP are sometimes referred to herein as the "Companies"), are each
corporations duly organized, validly existing and in good standing under the
laws of the State of Ohio and have all requisite corporate power and authority
to own or lease and operate their properties and assets and to carry on their
business as is now being conducted. Each of the Companies is duly qualified as a
foreign corporation to do business and is in good standing in each jurisdiction
in which the character of its properties owned or leased or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified would not have a material adverse effect on the financial condition,
operating results or business of the Companies.
(b) Capitalization. The authorized capital stock of Westford
Group consists of 2,000,000 shares of Westford Common Stock. As of the date of
this Agreement, 1,434,202 shares of Westford Common Stock are issued and
outstanding (65,496 shares of which are held as treasury shares), all of which
were duly authorized and validly issued and are fully paid and nonassessable.
The authorized capital stock of ALP consists of 750 shares of common stock,
without par value (the "ALP Common Stock"). As of the date of this Agreement,
100 shares of ALP Common Stock are issued and outstanding, all of which are
owned by Westford Group and which were duly authorized and validly issued and
are fully paid and nonassessable. With the exception of a certain $50,000
convertible debenture issued to Bancinsurance and held by Acquisitions (the
"Debenture"), Westford Group does not have any subscription, warrant, option,
convertible security, stock appreciation or other right (contingent or other) to
purchase or acquire any shares of any class of capital stock of Westford Group
authorized or outstanding and there is not any commitment of Westford Group to
issue any shares, warrants, options or other such rights or to distribute to
holders of any class of its capital stock any evidences of indebtedness or
assets. Westford Group does not have any obligation (contingent or other) to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof.
(c) Authority Relative to Agreement. Westford Group has all
requisite corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder. The execution, delivery and
performance of this Agreement by Westford Group and the consummation by it of
the transactions contemplated hereby have been duly authorized by Westford
Group's Board of Directors. Except for shareholder approval, as provided herein,
no other corporate approvals or proceedings on the part of Westford Group are
necessary to authorize this Agreement and the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Westford Group and
constitutes the legal, valid and binding obligation of Westford Group,
enforceable against Westford Group in accordance with its terms. Westford
Group's Board of Directors has by the requisite vote of all directors present at
a meeting duly called for such purpose determined that this Agreement and the
Merger is advisable and fair and in the best interests of Westford Group and its
shareholders.
(d) Non-Contravention. The execution and delivery of this
Agreement by Westford Group and the consummation by Westford Group of the
transactions contemplated hereby will not (i) violate or conflict with any
provision of the Articles of Incorporation or Code
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of Regulations of either of the Companies or (ii) result in any violation of,
conflict with, or default (or an event which with notice or lapse of time or
both would constitute a default) or loss of a benefit under, or permit the
termination of or the acceleration of any obligation under, any mortgage,
indenture, lease, agreement or other instrument, permit, concession, grant,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the business conducted by the Companies (the
"Business") or to the Companies or their properties, or (iii) result in the
creation or imposition of any Claim in favor of any third person or entity upon
any of the assets of the Companies or the Business, other than any such
violation, conflict, default, loss, termination or acceleration that would not
have a material adverse effect on the properties, assets, financial condition,
operating results or business of the Companies (a "Westford Material Adverse
Effect").
(e) Consents. No consent, approval, order or authorization of,
or registration, declaration or filing with, any Federal, state, local or
foreign governmental or regulatory authority is required to be made or obtained
by Westford Group in connection with the execution and delivery of this
Agreement by Westford Group or the consummation by Westford Group of the
transactions contemplated hereby, except for (i) the filing of proxy statement
for a special meeting of shareholders to vote on this Agreement (as provided
herein), (ii) filing of a certificate of merger with the Secretary of State of
the State of Ohio in accordance with the Ohio Law, and (iii) such consents,
approvals, orders or authorizations which if not obtained, or registrations,
declarations or filings which if not made, would not have a Westford Material
Adverse Effect or materially adversely affect the ability of Westford Group to
consummate the transactions contemplated hereby or the ability of the Surviving
Corporation to conduct the Business after the Effective Time.
(f) Financial Statements, Etc. All financial statements (the
"Financial Statements") of the Companies (including any related schedules and/or
notes, if any) have been prepared in accordance with GAAP consistent with prior
periods. Such balance sheets fairly present in all material respects the
financial position of the Companies as of their respective dates, and such
statements of operations, stockholders' equity and cash flows fairly present in
all material respects the results of operations of the Companies for the
respective periods then ended, subject, in the case of unaudited financial
statements, to normal year-end adjustments and the absence of certain footnote
disclosures.
(g) Absence of Certain Changes or Events. Except as otherwise
disclosed in the Financial Statements, since December 31, 1998, neither of the
Companies has (i) issued any stock, bonds or other corporate securities, (ii)
borrowed or refinanced any amount or incurred any liabilities (absolute or
contingent) in excess of $50,000, other than trade payables incurred in the
ordinary course of business consistent with past practice, (iii) discharged or
satisfied any claim in excess of $50,000 or incurred or paid any obligation or
liability (absolute or contingent) other than current liabilities shown on the
balance sheet of Westford Group as of December 31, 1998 and current liabilities
incurred since the date of such balance sheet in the ordinary course of business
consistent with past practice, (iv) declared or made any payment or distribution
to shareholders or purchased or redeemed any shares of its capital stock or
other securities, (v) mortgaged, pledged or subjected to lien any of its assets,
tangible or intangible, other than liens
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for current real property taxes not yet due and payable, (vi) sold, assigned or
transferred any of its tangible assets, or cancelled any debts or claims, except
in the ordinary course of business consistent with past practice or as otherwise
contemplated hereby, (vii) sold, assigned or transferred any Intellectual
Property Rights (as hereinafter defined) or other intangible assets, (viii)
waived any rights of substantial value, whether or not in the ordinary course of
business, (ix) except as otherwise provided in Section 5.03(f) below, entered
into, adopted, amended or terminated any bonus, profit sharing, compensation,
termination, stock option, stock appreciation right, restricted stock,
performance unit, pension, retirement, deferred compensation, employment,
severance or other employee benefit plan, agreement, trust, fund or other
arrangement for the benefit of any director, officer or employee, or increased
in any manner the compensation or fringe benefits of any director or officer, or
increased the compensation or fringe benefits of any executive officer other
than in the ordinary course of business consistent with past practices, or made
any payment of a cash bonus to any director or officer or to any employee of, or
consultant or agent to, Westford Group or made any other material change in the
terms or conditions of employment, (x) announced any plan or legally binding
commitment to create any employee benefit plan, program or arrangement or to
amend or modify in any material respect any existing employee benefit plan,
program or arrangement, (xi) eliminated the vesting conditions or otherwise
accelerated the payment of any compensation, including any stock options, (xii)
suffered any damage, destruction or loss to any of its assets or properties,
(xiii) made any change in its accounting systems, policies, principles or
practices, or (xiv) made any loans to any person.
(h) Actions Pending. There is no action, suit, dispute,
investigation, proceeding or claim pending or, to the best knowledge of Westford
Group, threatened against or affecting the Companies, their properties or
rights, or the Business, before any court, administrative agency, governmental
body, arbitrator, mediator or other dispute resolution body, and Westford Group
is not aware of any facts or circumstances which may give rise to any such
action, suit, dispute, investigation, proceeding or claim, (ii) the Companies
are not subject to any order, judgment, decree, injunction, stipulation, or
consent order of or with any court or other governmental agency, and (iii)
neither of the Companies has entered into any agreement to settle or compromise
any proceeding pending or threatened against it which has involved any
obligation other than the payment of money or for which it has any continuing
obligation, which (in the case of each of clauses (i), (ii) and (iii) of this
Section 3.01(h)) would have a Westford Material Adverse Effect or would affect
the ability of Westford Group to consummate the transactions contemplated
hereby, or the ability of Bancinsurance to conduct the Business after the
Effective Time.
(i) Title to Properties. Westford Group or ALP, as
appropriate, has good title to the properties and assets reflected on the most
recent balance sheet of Westford Group other than non-material properties and
assets disposed of in the ordinary course of business consistent with past
practice since the date of such balance sheet, and all such properties and
assets are free and clear of any liens, claims, charges, restrictions, rights of
others, security interests, prior assignments or other encumbrances
(collectively "Claims"), except (i) liens for current taxes not yet due and (ii)
minor imperfections of title, if any, not material in amount and not materially
detracting from the value or impairing the use of the property subject thereto
or impairing the
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operations or proposed operations of Westford Group (collectively, the
"Permitted Liens"). Such properties and assets constitute all of the assets
necessary to conduct the Business substantially in the same manner as it has
been conducted prior to the date hereof.
(j) Real Property Interests. Westford Group owns no real
property. ALP has good leasehold title to its office space located in
Cincinnati, Ohio (the "Leased Premises"). ALP is the lawful owners of all
improvements and fixtures located on the Leased Premises, free and clear of all
Claims except for Permitted Liens. The lease relating to the Leased Premises is
a valid and binding agreement, without any material default of ALP thereunder
and, to the best knowledge of Westford Group, without any material default
thereunder of the other party thereto, and such lease gives ALP the right to use
or occupy, as the case may be, all real properties as are sufficient and
adequate to operate the Business as it is currently being conducted.
(k) Intellectual Property Rights. The patents, trademarks and
trade names, trademark and trade name registrations, servicemark, brandmark and
brand name registrations and copyrights, the applications therefor and the
licenses with respect thereto (collectively, the "Intellectual Property Rights")
currently used by ALP constitute all material proprietary rights owned or held
by Westford Group that are reasonably necessary to the conduct of the Business.
The Companies conduct the Business without infringement or claim of infringement
of any Intellectual Property Right of others and the conduct by the Surviving
Corporation after the Effective Time of the Business, as it is currently
conducted, will not infringe or misappropriate or otherwise violate the
Intellectual Property Rights of any other person or constitute a breach or
violation of any agreement relating to the Intellectual Property Rights. To the
best knowledge of Westford Group, no person is challenging, infringing,
misappropriating or otherwise violating any such Intellectual Property Rights or
claiming that the conduct of the Business, infringes, misappropriates or
otherwise violates the Intellectual Property Rights of any third party.
(l) Labor Matters. The Companies are not and have not been a
party to any collective bargaining or union agreement, and no such agreement is
or has been applicable to any employees of the Companies. There are not any
controversies between either of the Companies and any of such employees that
might reasonably be expected to materially adversely affect the conduct of the
Business, or any unresolved labor union grievances or unfair labor practice or
labor arbitration proceedings pending, or, to the best knowledge of Westford
Group, threatened relating to the Business. To the best knowledge of Westford
Group, there are no labor unions or other organizations representing or
purporting to represent any employees of the Companies and there are not any
organizational efforts currently being made or threatened involving any of such
employees. The Companies are in compliance in all material respects with all
laws and regulations or other legal or contractual requirements regarding the
terms and conditions of employment of employees, former employees or prospective
employees or other labor related matters, including, without limitation, laws,
rules, regulations, orders, rulings, conciliation agreements, decrees, judgments
and awards relating to wages, hours, the payment of social security and similar
taxes, equal employment opportunity, employment discrimination, fair labor
standards and occupational health and safety, wrongful discharge or violation of
the personal rights of employees, former employees or prospective employees,
except where failure to
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comply would not have a Westford Material Adverse Effect. The Companies are not
liable for any arrears of wages or any taxes or penalties for failure to comply
with any of the foregoing, except where failure to comply would not have a
Westford Material Adverse Effect.
(m) Severance Arrangements. Neither of the Companies is a
party to any agreement with any employee (i) the benefits of which (including,
without limitation, severance benefits) are contingent, or the terms of which
are materially altered, upon the occurrence of a transaction involving either of
the Companies of the nature of any of the transactions contemplated by this
Agreement or (ii) providing severance benefits in excess of those generally
available under the Companies' severance policies or which are conditioned upon
a change of control, after the termination of employment of such employees
regardless of the reason for such termination of employment, and neither of the
Companies is a party to any employment agreement or compensation guarantee
extending for a period longer than one year.
(n) Taxes. The Companies have (A) timely filed all Federal and
all material state, local and foreign returns, declarations, reports, estimates,
information returns and statements ("Returns") required to be filed by it in
respect of any Taxes (as hereinafter defined), (B) timely paid all Taxes that
are due and payable with respect to the periods covered by the Tax Returns
referred to in clause (A) without regard to whether such Taxes have been
assessed (except for audit adjustments not material in the aggregate or to the
extent that liability therefor is reserved for in the Companies' most recent
financial statements), (C) established reserves that are adequate for the
payment of all Taxes not yet due and payable with respect to the results of
operations of Westford Group, and (D) complied in all material respects with all
applicable laws, rules and regulations relating to the payment and withholding
of Taxes and has in all material respects timely withheld from employee wages
and paid over to the proper governmental authorities all amounts required to be
so withheld and paid over. No Federal, state, local or foreign Tax audits or
other administrative proceedings or court proceedings are currently pending with
regard to any Federal or material state, local or foreign Taxes for which
Westford Group would be liable, and no deficiency for any such Taxes has been
proposed, asserted or assessed or, to the best knowledge of Westford Group,
threatened pursuant to such examination of Westford Group by such Federal,
state, local or foreign taxing authority with respect to any period.
For purposes of this Agreement, "Taxes" shall mean
all Federal, state, local, foreign or other taxing authority income, franchise,
sales, use, ad valorem, property, payroll, social security, unemployment,
assets, value added, withholding, excise, severance, transfer, employment,
alternative or add-on minimum and other taxes, charges, fees, levies, imposts,
duties, licenses or other assessments, together with any interest and any
penalties, additions to tax or additional amounts imposed by any taxing
authority.
(o) Compliance with Law; Permits. The Companies are not in
default in any material respect under any order or decree of any court,
governmental authority, arbitrator or arbitration board or tribunal or under any
laws, ordinances, governmental rules or regulations to which Westford Group or
any of its properties or assets is subject, except where such default would not
have a Westford Material Adverse Effect. Copies of all material permits,
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authorizations, approvals, registrations, variances and licenses ("Permits")
issued to or used by the Companies in connection with the conduct of the
Business have been provided to Bancinsurance; such Permits constitute all
Permits necessary for the Companies to own, use and maintain their properties
and assets or required for the conduct of the Business in substantially the same
manner as it is currently conducted. Each Permit of the Companies is in full
force and effect and no proceeding is pending, or, to the best knowledge of
Westford Group, threatened, to modify, suspend, revoke or otherwise limit any of
such Permits and no administrative or governmental actions have been taken or,
to the best knowledge of Westford Group, threatened, in connection with the
expiration or renewal of any of such Permits. To the best knowledge of Westford
Group, the Companies will not be required, as a result of the consummation of
the transactions contemplated hereby, to obtain or renew any Permits.
(p) Employee Benefit Plans. The Companies have provided
Bancinsurance with copies of each employee benefit plan as defined in Section
3(3) of ERISA, or any other plan, program, policy or arrangement for or
regarding bonuses, commissions, incentive compensation, severance, vacation,
deferred compensation, pensions, profit sharing, retirement, payroll savings,
stock options, stock purchases, stock awards, stock ownership, phantom stock,
stock appreciation rights, medical/dental expense payment or reimbursement,
disability income or protection, sick pay, group insurance, self insurance,
death benefits, employee welfare or fringe benefits of any nature; but not
including employment Contracts with individual employees (any of the foregoing
being referred to as an "Employee Benefit Plan"). With respect to each Employee
Benefit Plan of the Companies, the Companies have operated and currently operate
such plan in material compliance with the plan documents and all applicable
laws, including without limitation ERISA and the Code (including, but not
limited to, Section 4980B thereof and the regulations thereunder).
(q) Environmental Matters. The Companies are in compliance in
all material respects with all Federal, state or local statutes, ordinances,
orders, judgments, rulings or regulations relating to environmental pollution or
to environmental regulation or control. Neither of the Companies nor, to the
best knowledge of Westford Group, any of the Companies' officers, employees,
representatives or agents or any other person, have treated, stored, processed,
discharged, spilled or otherwise disposed of any substance defined as hazardous
or toxic by any applicable Federal, state or local law, rule, regulation, order
or directive, or any waste or by-product thereof, at any real property or any
other facility owned, leased or used by Westford Group, in violation of any
applicable statutes, regulations, ordinances or directives of any governmental
authority or court, which violations may result in any material liability to
Westford Group. To the best knowledge of Westford Group, no employee or other
person has ever made a claim or demand against Westford Group based on alleged
damage to health caused by any such hazardous or toxic substance or by any waste
or by-product thereof. Westford Group has not been charged by any governmental
authority with improperly using, handling, storing, discharging or disposing of
any such hazardous or toxic substance or waste or by-product thereof or with
causing or permitting any pollution of any body of water.
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(r) Personal Property. All of the tangible personal property
of the Companies is presently utilized by the Companies in the ordinary course
of business and is in good repair, ordinary wear and tear excepted.
(s) Contracts. The Companies have provided to Bancinsurance
lists all contracts and arrangements to which either of the Companies is a party
or by which it is bound and which are material to the conduct of the Business or
to the financial condition or results of operations of the Companies. Each such
contract or agreement is a valid and binding agreement, without any material
default of either of the Companies thereunder and, to the best knowledge of
Westford Group, without any material default thereunder of the other party
thereto. Westford Group has not received notice of any cancellation or
termination of, or of any threat to cancel or terminate, any such contracts or
agreements where such cancellation or termination would have a Westford Material
Adverse Effect.
(t) Insurance. All policies of fire, liability, workers'
compensation and other forms of insurance providing insurance coverage to or for
the Companies for events or occurrences arising or taking place in the case of
occurrence type insurance, and for claims made and/or suits commenced in the
case of claims-made type insurance are in full force and effect, and provide
insurance in such amounts and against such risks as is customary for companies
engaged in similar businesses to protect the employees, properties, assets,
businesses and operations of the Companies. All such policies will remain in
full force and effect and will not in any way be affected by, or terminate or
lapse by reason of, any of the transactions contemplated hereby, except by
reason of an insurer's assessment of Bancinsurance or the conduct of the
Business after the Effective Time. There are no pending or threatened claims
under any insurance policy, the outcome of which would have a Westford Material
Adverse Effect.
(u) Pending Transactions. Except for this Agreement and the
transactions contemplated hereby, Westford Group is not a party to or bound by
any agreement, negotiation, discussion, commitment or undertaking with respect
to a merger or consolidation with, or an acquisition of all or substantially all
of the property and assets of, any other corporation or person or the sale,
lease or exchange of all or substantially all of its properties and assets to
any other person.
(v) Claims Against Officers and Directors. To the best
knowledge of Westford Group, there are no pending or threatened claims against
any director, officer, employee or agent of the Companies or any other person
which could give rise to any claim for indemnification against the Companies.
(w) Customers. Westford Group has provided Bancinsurance
information concerning the largest clients/customers of the Business ("Major
Customers"). Since December 31, 1998, there has not been any adverse change in
the business relationship, and there has been no material dispute, between the
Companies and any Major Customer and there are no indications that any Major
Customer intends to reduce its purchases from the Companies
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(x) Improper and Other Payments. To the best of Westford
Group's knowledge, neither of the Companies nor any director, officer, employee,
agent or representative of the Companies, nor any person acting on behalf of any
of them, has (i) made, paid or received any bribes, kickbacks or other similar
payments to or from any person, whether lawful or unlawful, (ii) made any
unlawful contributions, directly or indirectly, to a domestic or foreign
political party or candidate, or (iii) made any improper foreign payment (as
defined in the Foreign Corrupt Practices Act).
(y) Brokers. The Companies have not used any broker or finder
in connection with the transactions contemplated hereby, and the Companies shall
not be liable for or otherwise suffer or incur any loss as a result of or in
connection with any brokerage or finder's fee or other commission of any person
retained by Westford Group in connection with any of the transactions
contemplated by this Agreement.
(z) Accounts Receivable and Advances. (i) Each account
receivable of Westford Group (collectively, the "Accounts Receivable")
represents a sale made in the ordinary course of business other than to
affiliates and which arose pursuant to an enforceable contract for a bona fide
sale of goods or for services performed, and Westford Group has performed all of
its obligations to produce the goods or perform the services to which such
Accounts Receivable relates, and (ii) to the best of knowledge of Westford
Group, no Accounts Receivable is subject to any claim for reduction,
counterclaim, set-off, recoupment or other claim for credit, allowances or
adjustments by the obligor thereof, in an amount individually or in the
aggregate that would have a Westford Material Adverse Effect.
(aa) Reports. Since December 31, 1993, Westford Group has
timely filed all reports and statements, together with any amendments required
to be made with respect thereto, that it was required to file with (i) the SEC,
including, but not limited to, Forms 10-K, Forms 10-Q, and Forms 8-K, or (ii)
other regulatory authorities, including any applicable state securities
authority (except, in the case of state securities authorities, failures to file
which are not reasonably likely to have, individually or in the aggregate, a
Westford Material Adverse Effect). As of their respective dates, each of such
reports and documents, including the financial statements, exhibits, and
schedules thereto, complied in all material respects with all applicable Laws.
As of its respective date, each such report and document did not, in all
material respects, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
(bb) Accuracy of Statements. Neither this Agreement nor any
schedule, exhibit, statement, list, document, certificate or other information
furnished or to be furnished by or on behalf of Westford Group to Bancinsurance
in connection with this Agreement or any of the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein, in light of the circumstances in which they are made, not
misleading.
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SECTION 3.02 Representations and Warranties of Bancinsurance.
Bancinsurance represents and warrants to Westford Group as follows:
(a) Organization and Qualification. Bancinsurance is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Ohio and has all requisite corporate power and authority to own
or lease and operate its properties and assets and to carry on its business as
it is now being conducted. Bancinsurance is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction in
which the character of its properties owned or leased or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified would not have a material adverse effect on the financial condition,
operating results or business of Bancinsurance and its subsidiaries, taken as a
whole (a "Bancinsurance Material Adverse Effect"). Bancinsurance owns
beneficially and of record all the issued and outstanding capital stock of
Acquisitions, free and clear of all Claims.
(b) Authority Relative to Agreements. Bancinsurance has all
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
by Bancinsurance and the consummation by Bancinsurance of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
Bancinsurance, no other corporate approvals or proceedings on the part of
Bancinsurance are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Bancinsurance and constitutes the legal, valid and binding obligation of
Bancinsurance, enforceable against Bancinsurance in accordance with its terms.
Bancinsurance's Board of Directors has by the unanimous written consent of all
directors determined that this Agreement and the Merger is advisable and fair
and in the best interests of Bancinsurance and its shareholders.
(c) Non-Contravention. The execution and delivery of this
Agreement by Bancinsurance and the consummation by Bancinsurance of the
transactions contemplated hereby will not (i) violate or conflict with any
provision of the Articles of Incorporation or Code of Regulations of
Bancinsurance, (ii) result in any violation of, conflict with, or default (or an
event which with notice or lapse of time or both would constitute a default) or
loss of a benefit under, or permit the termination of or the acceleration of any
obligation under, any mortgage, indenture, lease, agreement or other instrument,
permit, concession, grant, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Bancinsurance or any of its
subsidiaries or their respective properties, or (iii) result in the creation or
imposition of any Claim in favor of any third person or entity upon the assets
of Bancinsurance or any of its subsidiaries, other than any such violation,
conflict, default, loss, termination or acceleration that would not have a
Bancinsurance Material Adverse Effect or materially adversely affect the ability
of Bancinsurance to consummate the transactions contemplated hereby or to
conduct the Business after the Effective Time.
(d) Consents. No consent, approval, order or authorization of,
or registration, declaration or filing with, any Federal, state, local or
foreign governmental or regulatory authority is required to be made or obtained
by Bancinsurance in connection with the execution
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15
and delivery of this Agreement by Bancinsurance or the consummation by
Bancinsurance of the transactions contemplated hereby, except for (i) any
necessary filings pursuant to Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations promulgated by the SEC
thereunder, (ii) the filing of a certificate of merger with the Secretary of
State of the State of Ohio in accordance with the Ohio Law, (iii) any consents,
licenses, permits, franchises or other governmental authorizations pertaining to
the Business that are required as a result of the consummation of the
transactions contemplated hereby, and (iv) such consents, approvals, orders or
authorizations which if not obtained, or registrations, declarations or filings
which if not made, would not have a Bancinsurance Material Adverse Effect or
materially adversely affect the ability of Bancinsurance to consummate the
transactions contemplated hereby or to conduct the Business after the Effective
Time.
(e) Actions Pending. There is no action, suit, dispute,
investigation, proceeding or claim pending or, to the best knowledge of
Bancinsurance, threatened against or affecting Bancinsurance or any of its
subsidiaries, or their respective properties or rights, before any court,
administrative agency, governmental body, arbitrator, mediator or other dispute
resolution body that would have a Bancinsurance Material Adverse Effect or would
affect the ability of Bancinsurance or Acquisitions to consummate the
transactions contemplated hereby, or the ability of Bancinsurance or the
Surviving Corporation to conduct the Business after the Effective Time, and
Bancinsurance is not aware of any facts or circumstances which may give rise to
any of the foregoing. Bancinsurance is not subject to any order, judgment,
decree, injunction, stipulation, or consent order of or with any court or other
governmental agency. Bancinsurance has not entered into any agreement to settle
or compromise any proceeding pending or threatened against it which has involved
any obligation other than the payment of money or for which Bancinsurance has
any continuing obligation.
(f) Brokers. Neither Bancinsurance nor any of its subsidiaries
has used any broker or finder in connection with the transactions contemplated
hereby, and neither Bancinsurance nor any of its subsidiaries has or shall have
any liability or otherwise suffer or incur any loss as a result of or in
connection with any brokerage or finder's fee or other commission of any person
retained by Bancinsurance or any of its subsidiaries in connection with any of
the transactions contemplated by this Agreement.
(g) Accuracy of Statements. Neither this Agreement nor any
schedule, exhibit, statement, list, document, certificate or other information
furnished or to be furnished by or on behalf of Bancinsurance to Westford Group
in connection with this Agreement or any of the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein, in light of the circumstances in which they are made, not
misleading.
SECTION 3.03 Representations and Warranties of Acquisitions.
Acquisitions represents and warrants to Westford Group as follows:
(a) Organization and Qualification. Acquisitions is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Ohio and has all
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requisite corporate power and authority to own or lease and operate its
properties and assets and to carry on its business as it is now being conducted.
Acquisitions is duly qualified as a foreign corporation to do business, and is
in good standing, in each jurisdiction in which the character of its properties
owned or leased or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified would not have a material
adverse effect on the financial condition, operating results or business of
Acquisitions.
(b) Capitalization. The authorized capital stock of
Acquisitions consists of 850 shares of common stock, without par value. As of
the date hereof, 100 shares of common stock are issued and outstanding, all of
which were duly authorized and validly issued and are fully paid and
nonassessable, and all such shares are owned of record and beneficially by
Bancinsurance, and no shares of common stock are held in the treasury of
Acquisitions. Acquisitions has no commitments to issue or sell any shares of its
capital stock or any securities or obligations convertible into or exchangeable
for, or giving any person any right to subscribe for or acquire from
Acquisitions, any shares of its capital stock, and no securities or obligations
evidencing any such rights are outstanding.
(c) Authority Relative to Agreement. Acquisitions has all
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
by Acquisitions and the consummation by Acquisitions of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
Acquisitions and by Bancinsurance as its sole shareholder, and no other
corporate approvals or proceedings on the part of Acquisitions are necessary to
authorize this Agreement and the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Acquisitions and constitutes
the legal, valid and binding obligation of Acquisitions, enforceable against
Acquisitions in accordance with its terms.
(d) Non-Contravention. The execution and delivery of this
Agreement by Acquisitions and the consummation by Acquisitions of the
transactions contemplated hereby will not (i) violate or conflict with any
provision of the Articles of Incorporation or Code of Regulations of
Acquisitions or (ii) result in any violation of, conflict with, or default (or
an event which with notice or lapse of time or both would constitute a default)
or loss of a benefit under, or permit the termination of or the acceleration of
any obligation under, any mortgage, indenture, lease, agreement, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Acquisitions or its properties, other than any such violation, conflict,
default, loss, termination or acceleration that would not materially adversely
affect the ability of Acquisitions to consummate the transactions contemplated
hereby.
(e) Consents. No consent, approval, order or authorization of,
or registration, declaration or filing with, any Federal, state, local or
foreign governmental or regulatory authority is required to be made or obtained
by Acquisitions in connection with the execution and delivery of this Agreement
by Acquisitions or the consummation by Acquisitions of the transactions
contemplated hereby, except for (i) the filing of a certificate of merger with
the Secretary of State of the State of Ohio in accordance with the Ohio Law,
(ii) any consents, licenses, permits, franchises or other governmental
authorizations pertaining to the Business that
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are required as a result of the consummation of the transactions contemplated
hereby, and (iii) such consents, approvals, orders or authorizations which if
not obtained, or registrations, declarations or filings which if not made, would
not materially adversely affect the ability of Acquisitions to consummate the
transactions contemplated hereby.
(f) Other Matters. Acquisitions has been formed for the sole
purpose of effecting the Merger and, except as contemplated by this Agreement,
Acquisitions has not conducted any business activities and does not have any
material liabilities or obligations.
ARTICLE IV
COVENANTS
SECTION 4.01 Conduct of Westford Group's Business. Westford Group
covenants and agrees that, prior to the Effective Time, unless Bancinsurance
shall otherwise consent in writing or as otherwise expressly contemplated by
this Agreement:
(a) The Business shall be conducted only in, and neither of
the Companies shall take any action except in, the ordinary course of business
consistent with past practice and the Companies shall use their best efforts to
preserve intact its present business organization, keep available the services
of its current officers and employees, maintain its assets (other than those
permitted to be disposed of hereunder) in good repair and condition, maintain
its books of account and records in the usual, regular and ordinary manner, and
preserve its goodwill and ongoing business;
(b) The Companies shall not directly or indirectly do any of
the following: (i) sell, pledge, dispose of or encumber any property or assets
(including Intellectual Property Rights) of the Companies, except inventory and
immaterial assets in the ordinary course of business consistent with past
practice; (ii) amend or propose to amend its Articles of Incorporation or Code
of Regulations of either of the Companies; (iii) split, combine or reclassify
any outstanding shares of its capital stock, or declare, set aside or pay any
dividend payable in cash, stock, property or otherwise with respect to such
shares; (iv) redeem, purchase, acquire or offer to acquire any shares of its
capital stock; or (v) enter into any contract, agreement, commitment or
arrangement with respect to any of the matters set forth in this subsection (b);
(c) Neither of the Companies shall (i) issue, sell, pledge or
dispose of, or agree to issue, sell, pledge or dispose of, any additional shares
of, or securities convertible or exchangeable for, or any options, warrants or
rights of any kind to acquire any shares of, its capital stock of any class or
other property or assets, or modify the terms or any outstanding options,
warrants or rights to acquire the Companies' capital stock; (ii) acquire (by
merger, consolidation or acquisition of stock or assets) any corporation,
partnership or other business organization or division thereof or any material
amount of assets; (iii) incur or guarantee any indebtedness for borrowed money
other than in the ordinary course of business and consistent with past
practices, or refinance any such indebtedness or issue or sell any debt
securities; (iv)
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enter into or modify any material contract, lease, agreement or commitment, or
permit or perform any act that would cause a material breach of any such
contract, lease, agreement or commitment; (v) terminate, modify, assign, waive,
release or relinquish any material contract rights or amend any material rights
or claims; (vi) discharge or satisfy any material Claim or settle or compromise
any material claim, action, suit or proceeding pending or threatened against the
Companies or, if the Companies may be liable or obligated to provide
indemnification, against the Companies' directors or officers, before any court,
governmental agency or arbitrator; (vii) make any loans, advances or capital
contributions to or investments in, any other person, except as may be required
under agreements in effect and upon prior notice to Bancinsurance; (viii) alter
through merger, liquidation, reorganization, restructuring or in any other
manner the corporate structure or ownership of the Companies; or (ix) violate or
fail to perform, in any material respect, any obligation imposed upon the
Companies by any applicable laws, orders or decrees, ordinances, government
rules or regulations or conciliation agreements where such violation or failure
would have a Westford Material Adverse Effect;
(d) The Companies shall not grant any increase in the salary
or other compensation of its directors, officers or employees not otherwise
contemplated by Section 5.03(f), except, in the case of employees who are not
directors or executive officers of the Companies, reasonable salary increases in
the ordinary course of business consistent with past practice, or grant any
bonus to any employee or enter into any employment agreement or make any loan to
or enter into any material transaction of any other nature with any employee of
the Companies;
(e) The Companies shall not take any action to institute any
new severance or termination pay practices with respect to any directors,
officers or employees of the Companies or to increase the benefits payable under
its severance or termination pay practices;
(f) The Companies shall not adopt or amend, in any material
respect, any plan for the benefit or welfare of any directors, officers or
employees, except as contemplated hereby or as may be required by applicable law
or regulation; and
(g) Each of the Companies shall use its best efforts, to the
extent not prohibited by the foregoing provisions of this Section 4.01, to
maintain its relationships with its suppliers and customers, clients, and others
having business dealings with it, and if and as requested by Bancinsurance or
Acquisitions, (i) Westford Group shall use its best efforts to make reasonable
arrangements for representatives of Bancinsurance or Acquisitions to meet with
customers and suppliers of the Companies, and (ii) the Companies shall schedule,
and the management of the Companies shall participate in, meetings of
representatives of Bancinsurance or Acquisitions with employees of the
Companies.
SECTION 4.02 Shareholder Approval; Etc. As soon as reasonably
practicable after execution of this Agreement, Westford Group shall call a
shareholders' meeting, to be held as soon as reasonably practicable for the
purpose of voting upon approval of this Agreement and file a Proxy Statement
with the SEC, and shall furnish all information concerning it and the holders of
its capital stock as Bancinsurance may reasonably request in connection with
such
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action. The Board of Directors of Westford Group shall recommend (subject to
compliance with their fiduciary duties as advised by counsel) to Westford
Group's shareholders the approval of this Agreement.
SECTION 4.03 Access to Information.
(a) Each of Bancinsurance and Westford Group shall, and shall
cause its respective subsidiaries, officers, directors, employees,
representatives, advisors and agents to, afford, from the date hereof to the
Effective Time, the officers, employees, representatives, advisors and agents of
the other party complete access at all reasonable times to its officers,
employees, agents, properties, books, records and workpapers, and shall furnish
each other party all financial, operating and other information and data as
Bancinsurance or Westford Group, through its officers, employees or agents, may
reasonably request and shall promptly furnish to the other monthly operating and
financial reports in such form as Bancinsurance or Westford Group shall
reasonably request.
(b) Westford Group, at least three business days prior to the
Effective Date, shall deliver to Bancinsurance a list setting forth the names
and locations of each bank or other financial institution at which Westford
Group has an account (giving the account numbers) or safe deposit box and the
names of all persons authorized to draw thereon or have access thereto, and the
names of all persons, if any, now holding powers of attorney or comparable
delegation of authority from Westford Group and a summary statement thereof.
(c) Each of Bancinsurance and Westford Group shall, and shall
cause its respective officers, directors, employees, representatives, advisors
and agents to, afford the officers, employees, representatives, advisors and
agents of the other party with access to such information concerning
Bancinsurance or Westford Group as may be necessary for each party to ascertain
the accuracy and completeness of the information supplied by Bancinsurance or
Westford Group.
(d) If this Agreement is terminated, each of the parties
hereto shall, and shall cause its officers, employees, representatives, advisors
and agents to, destroy or deliver to the other party all confidential documents,
work papers and other materials, and all copies thereof, obtained by it or on
its behalf from such other party as a result of this Agreement or in connection
herewith, whether so obtained before or after the execution and delivery hereof.
(e) Each of the parties hereto and its officers and employees
shall not disclose or use any information so obtained, except as required by
applicable law or legal process or by any applicable rules or regulations of a
national securities exchange or the NASD upon the advice of counsel, without the
prior written consent of the other party; provided that any such information may
be disclosed to a party's financial advisors, accountants, counsel and other
representatives, as may be appropriate or required in connection with the
transactions contemplated hereby, but only if such persons shall be specifically
informed by such party of the confidential nature of such information and agree
to comply with the restrictions contained herein. The agreements contained in
this Section 4.03(e) do not apply to information that (i) is
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or becomes generally available to the public other than as a result of a
disclosure by a receiving party or its representatives, (ii) was known to the
receiving party on a non-confidential basis prior to its receipt, (iii) becomes
available to a party on a non-confidential basis from a source not bound by any
duty of confidentiality to the other party or (iv) is independently developed by
a receiving party without reference to any confidential information.
(f) No investigation pursuant to this Section 4.03 shall
affect, add to, or subtract from any representations or warranties of the
parties hereto or the conditions to the obligations of the parties hereto to
effect the Merger.
SECTION 4.04 Further Assurances. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its best efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement,
including, without limitation, using all reasonable efforts to obtain all
necessary waivers, consents and approvals and to effect all necessary
registrations and filings; provided that the foregoing shall not require
Bancinsurance to agree to make, or to permit Westford Group to make, any
divestiture of a significant asset in order to obtain any waiver, consent or
approval.
SECTION 4.05 Inquiries and Negotiations. Neither Westford Group nor any
of its affiliates, directors, officers, employees, representatives, advisors or
agents, shall, directly or indirectly, encourage, solicit or initiate any
discussions, submissions of proposals or offers or negotiations with, or,
participate in any negotiations or discussions with, or provide any information
or data of any nature whatsoever to, or otherwise cooperate in any other way
with, or assist or participate in, facilitate or encourage any effort or attempt
by, any person, other than Bancinsurance and its affiliates, representatives and
agents, concerning any merger, consolidation, sale of substantial assets, sale
of shares of capital stock or other equity securities, recapitalization, debt
restructuring or similar transaction involving Westford Group or any division of
Westford Group (such transactions being hereinafter referred to as "Alternative
Transactions"). Westford Group shall immediately notify Bancinsurance if any
proposal, offer, inquiry or other contact is received by, any information is
requested from, or any discussions or negotiations are sought to be initiated or
continued with, Westford Group in respect of an Alternative Transaction, and
shall, in any such notice to Bancinsurance, indicate the identity of the offeror
and the terms and conditions of any proposals or offers or the nature of any
inquiries or contacts, and thereafter shall keep Bancinsurance informed of the
status and terms of any such proposals or offers and the status of any such
discussions or negotiations. Westford Group shall not release any third party
from, or waive any provision of, any confidentiality or standstill agreement to
which Westford Group is a party.
SECTION 4.06 Notification of Certain Matters. Westford Group shall give
prompt notice to Bancinsurance and Acquisitions, and Bancinsurance and
Acquisitions shall give prompt notice to Westford Group, of (i) the occurrence,
or failure to occur, of any event that such party believes would be likely to
cause any of its representations or warranties contained in this Agreement to be
untrue or inaccurate in any material respect at any time from the date hereof to
the Effective Time and (ii) any material failure of Westford Group,
Bancinsurance or
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Acquisitions, as the case may be, or any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that failure to
give such notice shall not constitute a waiver of any defense that may be
validly asserted.
SECTION 4.07 Employee Matters. Except as otherwise expressly agreed to
by Bancinsurance or Acquisitions, Westford Group acknowledges and understands
that nothing in this Agreement shall be deemed to create any employment status
other than employment at will for any Westford Group employees. Employees who
continue as employees of the Surviving Corporation shall be entitled to
participate in all employee benefit plans maintained by Bancinsurance or the
Surviving Corporation for employees of the Surviving Corporation generally. It
being understood and agreed, however, that nothing in this Section 4.07 shall
require Bancinsurance (i) to provide or continue for the benefit of any
employees any Plan currently maintained by Westford Group, or (ii) to maintain
the organizational structure of the Business as in effect on the date hereof.
ARTICLE V
CONDITIONS TO THE MERGER
SECTION 5.01 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) this Agreement and the Merger shall have been approved and
adopted by the requisite vote of the shareholders of Westford Group;
(b) the conversion option in the Debenture shall have been
exercised by Acquisitions in full; and
(c) no preliminary or permanent injunction or other order,
decree or ruling issued by any court of competent jurisdiction nor any statute,
rule, regulation or order entered, promulgated or enacted by any governmental,
regulatory or administrative agency or authority shall be in effect that would
prevent the consummation of the Merger as contemplated hereby.
SECTION 5.02 Conditions to the Obligation of Westford Group to Effect
the Merger. The obligation of Westford Group to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
additional conditions:
(a) Bancinsurance shall have performed and complied in all
material respects with all obligations and agreements required to be performed
and complied with by it under this Agreement at or prior to the Effective Time;
(b) the representations and warranties of Bancinsurance
contained in this Agreement that are qualified as to materiality shall be true
and correct and all such
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representations and warranties that are not so qualified shall be true and
correct in all material respects, in each case, as of the date hereof and at and
as of the Effective Time as if made at and as of such date, except to the extent
any such representation or warranty is expressly made as of the date hereof or
as of a specified date prior to the date hereof, in which case such
representation or warranty shall have been true and correct as of such date; and
(c) Westford Group shall have received a certificate from the
Chief Executive Officer of Bancinsurance, dated as of the Effective Time, to the
effect that the conditions set forth in paragraphs (a) and (b) above have been
satisfied.
SECTION 5.03 Conditions to the Obligation of Bancinsurance and
Acquisitions to Effect the Merger. The obligation of Bancinsurance and
Acquisitions to effect the Merger shall be subject to the fulfillment at or
prior to the Effective Time of the following additional conditions:
(a) Westford Group shall have performed and complied in all
material respects with all obligations and agreements required to be performed
and complied with by it under this Agreement at or prior to the Effective Time;
(b) the representations and warranties of Westford Group
contained in this Agreement that are qualified as to materiality shall be true
and correct and all such representations and warranties that are not so
qualified shall be true and correct in all material respects, in each case, as
of the date hereof and at and as of the Effective Time as if made at and as of
such date, except to the extent any such representation or warranty is expressly
made as of the date hereof or as of a specified date prior to the date hereof,
in which case such representation or warranty shall have been true and correct
as of such date;
(c) Bancinsurance shall have received a certificate from the
Chief Executive Officer and the Chief Financial Officer of Westford Group, dated
as of the Effective Time, to the effect that the conditions set forth in
paragraphs (a) and (b) above have been satisfied;
(d) Bancinsurance shall have received from Westford Group the
Financial Statements, in form and in substance reasonably satisfactory to
Bancinsurance;
(e) Bancinsurance shall have completed its financial due
diligence review of all the assets, liabilities, net worth, revenues, expenses,
profitability and financial condition of Westford Group. This condition shall be
deemed to have been satisfied on the close of business on the day which is 30
business days after the date of the receipt of the last of the Financial
Statements, unless, prior to such time, Bancinsurance has notified Westford
Group that it is not satisfied with the results of its financial due diligence
review because such review disclosed one or more conditions with respect to the
assets, liabilities, net worth, revenues, expenses, profitability or financial
condition of Westford Group which, taken as a whole, is materially different
than the same were previously represented to Bancinsurance. If Bancinsurance so
notifies Westford Group, Westford Group shall have an additional period of five
business days to permit it to cure the defect, if it is so curable, to the
reasonable satisfaction of Bancinsurance. If
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Westford Group cures such defect within such period and Bancinsurance
acknowledges its satisfaction in writing, this condition shall be deemed to have
been satisfied; and
(f) Westford Group shall have paid (i) all bonuses payable to
Westford Group's directors and officers that are accrued on Westford Group's
books and records immediately prior to the Effective Time and (ii) a
bonus/honorarium to certain of Westford Group's directors in an amount not to
exceed $25,000 in the aggregate.
ARTICLE VI
TERMINATION AND ABANDONMENT
SECTION 6.01 Termination and Abandonment. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after approval by the shareholders of Westford Group:
(a) by mutual action of the Boards of Directors of
Bancinsurance and Westford Group;
(b) by Westford Group, if the conditions set forth in Sections
5.01 and 5.02 shall not have been complied with or performed and such
noncompliance or nonperformance shall not have been cured or eliminated (or by
its nature cannot be cured or eliminated) by Bancinsurance and Acquisitions on
or before December 31, 1999; or
(c) by Bancinsurance or Acquisitions, if the conditions set
forth in Sections 5.01 and 5.03 shall not have been complied with or performed
and such noncompliance or nonperformance shall not have been cured or eliminated
(or by its nature cannot be cured or eliminated) by Westford Group on or before
December 31, 1999; or
(d) by Bancinsurance or Westford Group (i) if there has been a
material breach of a representation or warranty made by the other party the
effect of which is a Westford Material Adverse Effect or a Bancinsurance
Material Adverse Effect, as the case may be, or (ii) if there has been a breach
by the other party in any material respect of the covenants set forth in this
Agreement which by its nature cannot be cured or eliminated.
SECTION 6.02 Effect of Termination. In the event of the termination of
this Agreement and the abandonment of the Merger pursuant to Section 6.01, this
Agreement shall thereafter become void and have no effect, and no party hereto
shall have any liability to any other party hereto or its shareholders or
directors or officers in respect thereof, and each party shall be responsible
for its own expenses, except as follows: (i) the obligations imposed by Sections
4.03(d) and 4.03(e) hereof shall survive the termination, and (ii) nothing
herein shall relieve any party from liability for any willful breach hereof.
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ARTICLE VII
INDEMNIFICATION
(a) Westford Group agrees to indemnify Bancinsurance and
Acquisitions against, and agrees to hold each of them harmless from, any and all
losses, costs, claims, damages (including consequential damages), penalties and
expenses (including attorneys' fees) (the "Losses"), incurred or suffered by
them relating to or arising out of or in connection any material breach of or
any material inaccuracy in any representation or warranty made by Westford Group
in this Agreement or any document delivered by Westford Group at the Closing.
(b) Bancinsurance agrees to indemnify Westford Group against,
and agrees to hold it harmless from, any and all Losses, incurred or suffered by
it relating to or arising out of or in connection with any material breach of or
any material inaccuracy in any representation or warranty made by Bancinsurance
or Acquisitions in this Agreement or any document delivered by Bancinsurance or
Acquisitions at the Closing.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 Non-Survival of Representations and Covenants. The
respective representations, warranties, obligations, covenants, and agreements
of the parties shall not survive the Effective Time.
SECTION 8.02 Expenses, Etc. Whether or not the transactions
contemplated by this Agreement are consummated, neither Westford Group, on the
one hand, and Bancinsurance and Acquisitions, on the other hand, shall have any
obligation to pay any of the fees and expenses of the other incident to the
negotiation, preparation and execution of this Agreement, including the fees and
expenses of counsel, accountants, investment bankers and other experts and
Bancinsurance shall pay all such fees and expenses incurred by Acquisitions.
Westford Group, on the one hand, and Bancinsurance and Acquisitions, on the
other hand, shall indemnify the other and hold it harmless from and against any
claims for finders' fees or brokerage commissions in relation to or in
connection with such transactions as a result of any agreement or understanding
between such indemnifying party and any third party.
SECTION 8.03 Publicity; Confidentiality. Westford Group and
Bancinsurance agree that this Agreement and the exchange of information pursuant
thereto is confidential and they will not disclose or issue any press release or
make any other public announcement concerning this Agreement or the transactions
contemplated hereby without the prior consent of the other party, except that
Westford Group or Bancinsurance may make such public disclosure that it believes
in good faith to be required by law or any applicable rules and regulations of a
national securities exchange or the NASD (in which event such party shall
consult with the other prior to making such disclosure).
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SECTION 8.04 Execution in Counterparts. For the convenience of the
parties, this Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
SECTION 8.05 Notices. All notices that are required or may be given
pursuant to the terms of this Agreement shall be in writing and shall be
sufficient in all respects if given in writing and delivered by hand or national
overnight courier service, transmitted by telecopy or mailed by registered or
certified mail, postage prepaid, and shall be deemed given upon receipt, as
follows:
If to Bancinsurance or Acquisitions to:
BANCINSURANCE CORPORATION
00 X. Xxxxx Xx., 0xx Xxxxx
Xxxxxxxx, XX 00000
Fax Number: 000-000-0000
Attention: Si Xxxxx
If to Westford Group, to:
WESTFORD GROUP, INC.
00 X. Xxxxx Xx., 0xx Xxxxx
Xxxxxxxx, XX 00000
Fax Number: 000-000-0000
Attention: Si Xxxxx
or such other address or addresses as any party hereto shall have designated by
notice in writing to the other parties hereto.
SECTION 8.06 Waivers. Westford Group, on the one hand, and
Bancinsurance and Acquisitions, on the other hand, may, by written notice to the
other, (i) extend the time for the performance of any of the obligations or
other actions of the other under this Agreement; (ii) waive any inaccuracies in
the representations or warranties of the other contained in this Agreement or in
any document delivered pursuant to this Agreement; (iii) waive compliance with
any of the conditions of the other contained in this Agreement; or (iv) waive
performance of any of the obligations of the other under this Agreement. Except
as provided in the preceding sentence, no action taken pursuant to this
Agreement, including, without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representations, warranties, covenants or
agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach.
SECTION 8.07 Amendments, Supplements, Etc. At any time, this Agreement
may be amended or supplemented by such additional agreements, articles or
certificates, as may be determined by the parties hereto to be necessary,
desirable or expedient to further the purposes of
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this Agreement, or to clarify the intention of the parties hereto, or to add to
or modify the covenants, terms or conditions hereof or to effect or facilitate
any governmental approval or acceptance of this Agreement or to effect or
facilitate the filing or recording of this Agreement or the consummation of any
of the transactions contemplated hereby. Any such instrument must be in writing
and signed by all of the parties hereto.
SECTION 8.08 Entire Agreement. This Agreement and its schedules and
exhibits, and the documents to be executed or delivered at the Effective Time in
connection herewith, constitute the entire agreement among the parties hereto
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral and written, among the parties hereto with respect to the
subject matter hereof. No representation, warranty, promise, inducement or
statement of intention has been made by any party that is not embodied in this
Agreement or such other documents, and none of the parties shall be bound by, or
be liable for, any alleged representation, warranty, promise, inducement or
statement of intention not embodied herein or therein. As used herein, the "best
knowledge" or "awareness" as to Westford Group shall refer to the actual
knowledge of each director and executive officer of Westford Group after due
inquiry.
SECTION 8.09 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, without regard to
conflict of laws principles.
SECTION 8.10 Binding Effect, Benefits. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
SECTION 8.11 Assignability. Neither this Agreement nor any of the
parties' rights hereunder shall be assignable by any party hereto without the
prior written consent of the other parties hereto.
SECTION 8.12 Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
SECTION 8.13 Variation and Amendment. This Agreement may be varied or
amended at any time before or after the approval and adoption of this Agreement
by the shareholders of Westford Group by action of the respective Boards of
Directors of Westford Group, Bancinsurance and Acquisitions, without action by
the shareholders thereof, provided that after approval and adoption of this
Agreement by Westford Group's shareholders no such variance or amendment shall,
without consent of such shareholders, reduce the consideration that the holders
of the capital stock of Westford Group shall be entitled to receive upon the
Effective Time pursuant to Section 2.01 hereof.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the day and year first above written.
BANCINSURANCE CORPORATION WESTFORD GROUP, INC.
By: /s/ Si Xxxxx By: /s/ Si Xxxxx
----------------------------- -----------------------------
Title: Chairman Title: President
-------------------------- --------------------------
BANCINSURANCE ACQUISITIONS, INC.
By: /s/ Si Xxxxx
-----------------------------
Title: President
--------------------------
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