EXHIBIT 99.2
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "Agreement") is made as of this
19th day of October, 1999 by and between TransFinancial Holdings, Inc., a
Delaware corporation (the "Company"), and COLA Acquisitions, Inc., a Kansas
corporation ("COLA").
RECITALS
WHEREAS, the Board of Directors of the Company (the "Board of
Directors") formed a special committee comprised exclusively of independent
directors of the Company (the "Special Committee") to consider and act upon a
proposal received from three members of the Board of Directors, who include the
Chairman of the Board, Vice Chairman of the Board and Chief Executive Officer of
the Company, to acquire all of the issued and outstanding shares of the Company
not currently owned by them;
WHEREAS, having received the advice of its financial and legal
advisors, and following detailed negotiation of the terms of a transaction with
COLA, the entity formed by the three members of the Board of Directors to
conduct the acquisition, and following consideration and negotiation of
proposals received from third parties to acquire some or all of the assets or
outstanding shares of stock of the Company, the Special Committee has
unanimously determined that the terms of the proposed acquisition of the Company
by COLA, upon the terms and subject to the conditions hereinafter provided, are
fair to and in the best interests of the Company and its stockholders (other
than COLA and certain related parties);
WHEREAS, upon the terms and subject to the conditions of this Agreement
and in accordance with the General Corporation Law of the State of Delaware (the
"DGCL") and the Kansas General Corporation Code (the"KGCC"), COLA will merge
with and into the Company (the "Merger") pursuant to which certain outstanding
shares of common stock of the Company, par value $0.01 per share (the "Common
Stock"), shall be converted into the right to receive $6.03 in cash per share of
Common Stock, as more fully set forth herein;
WHEREAS, the Board of Directors, based on the unanimous recommendation
of the Special Committee, has determined that the Merger is fair to and in the
best interests of the Company and its stockholders (other than COLA and certain
related parties) and has approved this Agreement, the Merger and the other
transactions contemplated hereby and has recommended approval and adoption of
this Agreement by the stockholders of the Company.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
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ARTICLE I
THE MERGER
1.1. The Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the DGCL and the KGCC, at the
Effective Time (as defined in Article 1.2), COLA shall be merged with and into
the Company. Following the Merger, the separate existence of COLA shall cease
and the Company shall continue as the surviving corporation of the Merger (the
"Surviving Corporation").
1.2. Effective Time. As soon as practicable after the satisfaction or,
if permissible, the waiver of the conditions set forth in Article VII, the
parties hereto shall cause the Merger to be consummated by filing a certificate
of merger (the "Certificate of Merger") with the Secretary of State of the State
of Delaware and by making any related filings required under the DGCL and the
KGCC in connection with the Merger. The Merger shall become effective at such
time as the Certificate of Merger is duly filed with the Secretary of State of
the State of Delaware or at such later time as is agreed to by the parties
hereto and as is specified in the Certificate of Merger (the "Effective Time" or
the "Closing").
1.3. Effects of the Merger. From and after the Effective Time, the
Merger shall have the effects set forth in the DGCL (including, without
limitation, Sections 259, 260 and 261 thereof) and the KGCC. Without limiting
the generality of the foregoing, and subject thereto, at the Effective Time, all
the properties, rights, privileges, powers and franchises of the Company and
COLA shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and COLA shall become the debts, liabilities and duties of
the Surviving Corporation.
1.4. Certificate of Incorporation and By-laws. Unless otherwise agreed
by the Company and COLA prior to Closing, (a) the certificate of incorporation
of the Company, as in effect immediately prior to the Effective Time, shall be
amended and restated by the Certificate of Merger in the manner set forth on
Exhibit A and such amended and restated certificate of incorporation shall be
the certificate of incorporation of the Surviving Corporation (the "Surviving
Certificate") until thereafter amended in accordance with the DGCL, and (b) the
bylaws of COLA immediately prior to the Effective Time shall be the bylaws of
the Surviving Corporation until thereafter amended in accordance with the
Surviving Certificate and the DGCL.
1.5. Directors and Officers. From and after the Effective Time, until
their respective successors are duly elected or appointed and qualified in
accordance with applicable law, (a) the directors of COLA at the Effective Time
shall be the directors of the Surviving Corporation and (b) the officers of the
Company at the Effective Time shall be the officers of the Surviving
Corporation.
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ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
2.1. Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of COLA, the Company or the holders of
any of the Company's securities, the Company's securities shall be converted in
accordance with the following provisions.
2.1.1. Public Shares. Each share of the Common Stock, other
than any shares of Common Stock to be converted or canceled pursuant to Article
2.1.2 or 2.1.3 and other than any Dissenting Shares (as defined in Article 2.5),
issued and outstanding immediately prior to the Effective Time (the "Public
Shares") shall be converted into the right to receive $6.03 in cash, without
interest (the "Merger Consideration"). At the Effective Time, each Public Share
shall no longer be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each certificate evidencing any Public Share shall
thereafter represent only the right to receive, upon the surrender of such
certificate in accordance with the provisions of Article 2.2, an amount in cash
per share equal to the Merger Consideration. The holders of certificates
previously evidencing the Public Shares shall cease to have any rights with
respect to such shares of Common Stock except as otherwise provided herein or by
law.
2.1.2. Treasury Shares; COLA Shares. Each share of capital
stock of the Company (a) held in the treasury of the Company or by any wholly
owned subsidiary of the Company or (b) owned by COLA shall automatically be
canceled, retired and cease to exist without any conversion thereof and no
payment shall be made with respect thereto.
2.1.3. Conversion of Excluded Shares. The shares of Common
Stock listed on Exhibit B hereto shall be converted into and become shares of
stock of the Surviving Corporation in the manner described in Exhibit B and the
converted shares shall have the rights set forth in the Surviving Certificate.
Notwithstanding anything to the contrary in this Agreement, COLA shall have the
right, in its sole discretion, to alter and amend Exhibit B at any time prior to
the filing of a preliminary proxy statement with the Securities and Exchange
Commission by giving written notice of such amendment to the Company but shall
not increase the number of shares listed on Exhibit B by more than 1,000 shares.
2.1.4. Conversion of Shares of COLA. Each share of Class A,
Class B and Class C Stock of COLA outstanding immediately prior to the Effective
Time shall be converted into and become one share of the same class of stock of
the Surviving Corporation with the rights set forth in the Surviving
Certificate.
2.1.5 Capital Stock of Surviving Corporation. The shares of
stock resulting from conversion under Articles 2.1.3 and 2.1.4 shall constitute
the only outstanding shares of capital stock of the Surviving Corporation.
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2.2. Exchange of Certificates and Cash.
2.2.1. Exchange Agent. On or before the Effective Time, COLA
shall enter into an agreement providing for the matters set forth in this
Article 2.2 (the "Exchange Agent Agreement") with a bank or trust company
selected by COLA and reasonably acceptable to the Company (the "Exchange
Agent"), authorizing such Exchange Agent to act as Exchange Agent in connection
with the Merger. Immediately prior to the Effective Time, COLA shall deposit or
shall cause to be deposited with or for the account of the Exchange Agent, for
the benefit of the holders of Public Shares, an amount in cash equal to the
Merger Consideration payable pursuant to Article 2.1.1 (such cash funds are
hereafter referred to as the "Exchange Fund"). The Exchange Agent shall invest
the Exchange Fund as COLA directs, provided that investments shall be made only
in obligations of or guaranteed by the United States of America or in
certificates of deposit or banker's acceptances of commercial banks with capital
in excess of $100 million.
2.2.2. Exchange Procedures. As soon as reasonably practicable
after the Effective Time, but in any event within five (5) Business Days
thereafter, COLA will instruct the Exchange Agent to mail to each holder of
record of a certificate or certificates which immediately prior to the Effective
Time evidenced outstanding Public Shares (the "Certificates"), (a) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as COLA may reasonably specify) and (b) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Exchange
Agent or to such other agent or agents as may be appointed by COLA, together
with a letter of transmittal, duly executed, and such other customary documents
as may be required pursuant to such instructions (collectively, the "Transmittal
Documents"), the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration for each share of Common Stock
formerly represented by such Certificate, without any interest thereon, less any
required withholding of taxes, and the Certificate so surrendered shall
thereupon be canceled. In the event of a transfer of ownership of Public Shares
which is not registered in the transfer records of the Company, the Merger
Consideration may be issued and paid in accordance with this Article II to the
transferee of such shares if the Certificate evidencing such shares of Common
Stock is presented to the Exchange Agent and is properly endorsed or otherwise
in proper form for transfer. The signature on the Certificate or any related
stock power must be properly guaranteed and the person requesting payment of the
Merger Consideration must either pay any transfer or other taxes required by
reason of the payment to a person other than the registered holder of the
Certificate so surrendered or establish to the Surviving Corporation's
satisfaction that such tax has been paid or is not applicable. The Merger
Consideration will be delivered by the Exchange Agent as promptly as practicable
following surrender of a Certificate and the related Transmittal Documents. Cash
payments may be made by check unless otherwise required by a depositary
institution in connection with the book-entry delivery of securities. No
interest will be payable on such Merger Consideration. Until surrendered in
accordance with this Article 2.2.2, each Certificate shall be deemed at any time
after the Effective Time to evidence only the right to receive, upon such
surrender, the Merger
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Consideration for each Public Share formerly represented by such Certificate.
The Exchange Fund shall not be used for any purpose other than as set forth in
this Article II. Any interest, dividends or other income earned on the
investment of cash held in the Exchange Fund shall be for the account of the
Surviving Corporation.
2.2.3. Termination of Exchange Fund. Any portion of the
Exchange Fund (including the proceeds of any investments thereof) which remains
undistributed to the holders of Common Stock for one year following the
Effective Time shall be delivered to the Surviving Corporation upon demand. Any
holders of Public Shares who have not theretofore complied with this Article II
shall thereafter look only to the Surviving Corporation for payment of the
Merger Consideration.
2.2.4. No Liability. None of COLA, the Surviving Corporation
or the Company shall be liable to any holder of Public Shares for any cash
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
2.2.5. Withholding Rights. COLA, the Surviving Corporation and
the Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
Public Shares such amounts as the Surviving Corporation or the Exchange Agent is
required to deduct and withhold with respect to the making of such payment under
the United States Internal Revenue Code of 1986, as amended, or any provision of
state, local or foreign tax law; provided, however, that COLA or the Surviving
Corporation, as the case may be, shall promptly pay any amounts deducted or
withheld hereunder to the applicable governmental authority, shall promptly file
all tax returns and reports required to be filed in respect of such deductions
and withholding, and shall provide to any holder of Public Shares affected by
such withholding promptly upon written request proof of such payment and a copy
of all tax returns and reports relevant thereto. To the extent that amounts are
so withheld by the Surviving Corporation or the Exchange Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the shares of Common Stock in respect of which such deduction
and withholding was made by the Surviving Corporation or the Exchange Agent.
2.2.6. Lost, Stolen or Destroyed Certificates. In the event
any Certificates evidencing Public Shares shall have been lost, stolen or
destroyed, the holder of such lost, stolen or destroyed Certificate(s) shall
execute an affidavit of that fact upon request. The holder of any such lost,
stolen or destroyed Certificate(s) shall also deliver a reasonable indemnity
against any claim that may be made against COLA or the Exchange Agent with
respect to the Certificate(s) alleged to have been lost, stolen or destroyed.
The affidavit and any indemnity which may be required hereunder shall be
delivered to the Exchange Agent, who shall be responsible for making payment for
such lost, stolen or destroyed Certificates(s) pursuant to the terms hereof.
2.3. Stock Transfer Books. At the Effective Time, the stock transfer
books of the Company shall be closed, and there shall be no further registration
of transfers of shares of Common Stock thereafter on the records of the Company.
Any Certificates evidencing the Public Shares presented to the Exchange Agent or
the Surviving Corporation for any reason at or
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after the Effective Time shall be exchanged for the Merger Consideration
pursuant to the terms hereof.
2.4. Stock Options.
2.4.1. Cancellation. Subject to Articles 2.4.3, 2.4.4 and
2.4.5 and the terms of such Option, each Option (as defined in Article 3.3)
which is outstanding immediately prior to the Effective Time, whether or not
then exercisable, shall be canceled as of the Effective Time. Each holder of
such canceled Options shall be paid by the Surviving Corporation as soon as
practicable, but in any event within thirty days after the Effective Time, for
each such Option, an amount determined as follows: (a) for each Option with an
exercise price below $6.03 per share, an amount equal to (i) the excess, if any,
of the Merger Consideration over the applicable exercise price per share of such
Option multiplied by (ii) the number of shares issuable upon exercise of such
Option, and (b) for each Option with an exercise price at or above $6.03, twenty
cents ($0.20) multiplied by the number of shares issuable upon exercise of such
Option, in each case subject to any required withholding of taxes.
2.4.2 Termination. All Company Option Plans (as defined in
Article 3.3) shall terminate as of the Effective Time and the Company shall use
its commercially reasonable efforts to ensure that following the Effective Time
no holder of an Option or any participant in a Company Option Plan shall have
any right thereunder to acquire any capital stock of the Company or the
Surviving Corporation.
2.4.3. Consents. Prior to the Effective Time, the Company
shall use its commercially reasonable efforts to (a) obtain all consents from
holders of Options and (b) make any amendments to the terms of the Company
Option Plans and any Options granted thereunder that are necessary or
appropriate to give effect to the transactions contemplated by this Article 2.4.
2.4.4. Other Arrangements. In lieu of the cancellation of
Options referred to in this Article 2.4, prior to the Effective Time, the
Company may enter into mutually acceptable arrangements with any holder of
Options providing that such holder's Options will be treated in a manner other
than as provided in Article 2.4.1.
2.4.5 Payments. All payments to holders of Options made
pursuant to this Article 2.4 shall be contingent upon consummation of the Merger
and will be subject to the withholding of such amounts as the Surviving
Corporation is required to deduct and withhold with respect to the making of
such payment under the United States Internal Revenue Code of 1986, as amended,
or any provision of state, local or foreign tax law.
2.5. Dissenting Shares.
2.5.1. Generally. Notwithstanding any other provision of this
Agreement to the contrary, Shares that are outstanding immediately prior to the
Effective Time and which are held by stockholders (a) who shall not have voted
in favor of adoption of this Agreement and (b) who shall be entitled to and
shall have properly demanded in writing an appraisal of such shares in
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accordance with Section 262 of the DGCL ("Dissenting Shares"), shall not be
converted into or represent the right to receive the Merger Consideration unless
such stockholders fail to perfect, withdraw or otherwise lose their right to
appraisal. Such stockholders shall be entitled to receive payment of the
appraised value of such Dissenting Shares in accordance with the provisions of
the DGCL. If, after the Effective Time, any such stockholder fails to perfect,
withdraws or loses its right to appraisal, such Shares shall be treated as if
they had been converted as of the Effective Time into a right to receive the
Merger Consideration, without interest thereon, upon surrender of the
Certificate or Certificates that formerly evidenced such Shares in the manner
set forth in Article 2.2.
2.5.2. Notice of Demands. The Company shall give COLA prompt
notice of any demands for appraisal received by it, withdrawals of such demands,
and any other instruments served pursuant to the DGCL and received by the
Company. COLA shall direct all negotiations and proceedings with respect to
demands for appraisal under the DGCL. The Company shall not, except with the
prior written consent of COLA, which shall not be unreasonably withheld, make
any payment with respect to any demands for appraisal, or offer to settle, or
settle, any such demands.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to COLA as follows:
3.1. Organization and Qualifications. The Company and each subsidiary
of the Company (a "Company Subsidiary") is a corporation, partnership or other
legal entity duly incorporated or organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
and has the requisite power and authority and all necessary governmental
approvals, to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to be so organized,
existing and in good standing would not have a Company Material Adverse Effect
(as defined below). The Company and each Company Subsidiary is duly qualified or
licensed and in good standing to do business in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that would not,
individually or in the aggregate, have a material adverse effect on the
business, assets, results of operations or financial condition of the Company
and the Company Subsidiaries, taken as a whole (a "Company Material Adverse
Effect").
3.2. Certificate of Incorporation and Bylaws. COLA has been given
access by the Company to a complete and correct copy of the certificate of
incorporation and the bylaws or equivalent organizational documents, each as
amended to the date hereof, of the Company and each Company Subsidiary. Such
certificates of incorporation, bylaws and equivalent organizational documents
are in full force and effect. Neither the Company nor any Company Subsidiary is
in violation of any provision of its certificate of incorporation, bylaws or
equivalent organizational documents.
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3.3. Capitalization. The authorized capital stock of the Company
consists of 13,000,000 shares of Common Stock and 1,000,000 shares of preferred
stock, par value $0.01 per share (the "Preferred Stock"). As of September 30,
1999: (a) 3,252,115 shares of Common Stock were outstanding, all of which were
validly issued, fully paid and nonassessable; (b) no shares of Preferred Stock
were issued and outstanding; (c) 421,450 shares of Common Stock were reserved
for issuance upon the exercise of outstanding stock options (the "Options")
granted pursuant to the Company's 1992 Incentive Stock Plan and 1998 Long-Term
Incentive Plan (collectively, the "Company Option Plans"); (d) 4,345,561 shares
of Common Stock and no shares of Preferred Stock were held in the treasury of
the Company; (e) 23,860 shares of Common Stock are subject to issuance as
deferred compensation to Xxxxxxx X. X'Xxxx (f) no Company Subsidiary owns any
shares of the Company's capital stock; and (g) there are no securities of any
Company Subsidiary outstanding which are convertible into or exercisable or
exchangeable for capital stock of the Company. Except as set forth above, and
except pursuant to the First Amended and Restated Rights Agreement dated March
4, 1999 by and between the Company and U.M.B. Bank n.a., no shares of capital
stock or other securities of the Company have been issued, are reserved for
issuance or are outstanding. All shares of Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable.
3.4. Subsidiaries. The Company owns, directly or indirectly, all of the
outstanding shares of capital stock of, or other equity interest in, each
Company Subsidiary. Except as set forth in Exhibit C, all outstanding shares of
capital stock of each Company Subsidiary are duly authorized, validly issued,
fully paid and nonassessable, and are owned, directly or indirectly, by the
Company free and clear of all liens, pledges, security interests, claims or
other encumbrances ("Encumbrances"). Exhibit C sets forth for each Company
Subsidiary: (a) its authorized capital stock or share capital, (b) the number of
issued and outstanding shares of stock or share capital, and (c) the holder or
holders of such shares. Except for the Company's interest in each Company
Subsidiary or as set forth in Exhibit C, neither the Company nor any Company
Subsidiary owns directly or indirectly any interest or investment (whether
equity or debt) in any corporation, partnership, joint venture, business, trust
or entity.
3.5. Authority Relative to This Agreement. The Company has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action. No other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby, other than,
with respect to the Merger, the adoption of this Agreement by the holders of a
majority of the aggregate voting power of the issued and outstanding shares of
Common Stock (the "Company Stockholder Approval"), and the filing and
recordation of appropriate merger documents as required by, and in accordance
with, the KGCC and the DGCL. This Agreement has been duly and validly executed
and delivered by the Company and, assuming the due authorization, execution and
delivery by COLA, constitutes the legal, valid and binding obligation of the
Company,
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enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the rights of
creditors generally and by general principles of equity.
3.6. No Conflict; Required Filings and Consents.
3.6.1. Conflicts. Except as set forth in Exhibit D, the
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement and the consummation of the transactions
contemplated hereby will not, (a) conflict with or violate the Company's
Restated Certificate of Incorporation, or its By-laws, or the certificate of
incorporation, by-laws or other equivalent organizational documents of any
Company Subsidiary, (b) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to the Company or any Company Subsidiary or
by which any property or asset of the Company or any Company Subsidiary is bound
or affected, or (c) result in any breach of or constitute a default (or an event
which, with notice, lapse of time or both, would become a default) under, result
in the loss of a material benefit under or give to others any right of
termination, amendment, acceleration, increased payments or cancellation of, or
result in the creation of a lien or other encumbrance on any properties or
assets of the Company pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or any other instrument
or obligation to which Company is a party or by which Company or any of its
properties or assets is bound or affected, except, in the case of clauses (b)
and (c), for any such conflicts, violations, breaches, defaults or other
occurrences which (x) would not prevent or delay consummation of the Merger in
any material respect or otherwise prevent the Company from performing its
obligations under this Agreement in any material respect, and (y) would not,
individually or in the aggregate, have a Company Material Adverse Effect.
3.6.2. Required Filings, Consents, etc. The execution and
delivery of this Agreement by the Company do not, and the performance of this
Agreement and the consummation of the Merger and the other transactions
contemplated hereby by the Company will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign (each a "Governmental Entity"),
except (a) for (i) any applicable requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act") or the Securities Act of 1933, as amended
(the "Securities Act"), (ii) the filing and recordation of appropriate merger
and similar documents as required by the DGCL and the KGCC, and (iii) filings
under the rules and regulations of the American Stock Exchange, Inc., and (b)
where the failure to obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications, (i) would not prevent or delay
consummation of the Merger in any material respect or otherwise prevent the
Company from performing its obligations under this Agreement in any material
respect, and (ii) would not, individually or in the aggregate, have a Company
Material Adverse Effect.
3.7. Opinion of Financial Advisor. The Company represents that Xxxxxxx
Xxxxx & Company, L.L.C. (the "Financial Advisor") has delivered to the Special
Committee and to the Board of Directors its written opinion, as of the date
hereof, subject to the qualifications and limitations stated therein, to the
effect that the consideration to be received by the holders of the Shares (other
than Shares held by COLA and the Excluded Shares) pursuant to the Merger is fair
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to such holders of Shares from a financial point of view. The Company has been
authorized by the Financial Advisor to permit, subject to prior review and
consent by the Financial Advisor, the inclusion of the fairness opinion (or a
reference thereto) in the Proxy Statement (as defined in Article 6.2.1) and the
Schedule 13E-3 (as defined in Article 6.2.3) on the terms of the engagement
letter between the Company and the Financial Advisor dated July 15, 1999.
3.8. Board Approval. The Board of Directors of the Company, based on
the unanimous recommendation of the Special Committee, at a meeting duly called
and held and at which a quorum was present and voting, unanimously (a)
determined that this Agreement and the Merger are fair to and in the best
interests of the Company's stockholders (other than COLA and the holders of the
Excluded Shares), (b) approved this Agreement, the Merger and the other
transactions contemplated hereby, and (c) resolved to recommend approval and
adoption of this Agreement by the Company's stockholders.
3.9. Brokers. No broker, finder or investment banker (other than the
Financial Advisor) is entitled to any brokerage, finder's or other fee or
commission in connection with this Agreement, the Merger and the other
transactions contemplated hereby based upon arrangements made by or on behalf of
the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COLA
COLA hereby represents and warrants to the Company as follows:
4.1. Organization and Qualification. COLA is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Kansas and has the requisite power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted. COLA is duly qualified or licensed
and in good standing to do business in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that would not, individually or in
the aggregate, have a material adverse effect on the business, results of
operations or financial condition of COLA and its subsidiaries, taken as a whole
("COLA Material Adverse Effect") and would not prevent COLA from consummating
the transactions contemplated hereby.
4.2. Authority Relative to This Agreement. COLA has all necessary
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by COLA and the
consummation by it of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of COLA and no other corporate
proceedings on the part of COLA are necessary to authorize this Agreement or to
consummate such transactions (other than the filing and recordation of
appropriate merger documents as required by the KGCC and the DGCL). This
Agreement has been duly and validly executed and delivered by COLA and, assuming
the due authorization, execution and delivery by the
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Company, constitutes the legal, valid and binding obligation of COLA,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the rights of
creditors generally and by general principles of equity.
4.3. No Conflict; Required Filings and Consents.
4.3.1. Conflicts. The execution and delivery of this Agreement
by COLA do not, and the consummation of the transactions contemplated hereby
will not, (a) conflict with or violate the certificate of incorporation or
by-laws of COLA, or (b) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to COLA or by which any of its properties
or assets are bound or affected, except in the case of clauses (b), for any such
conflicts, violations, breaches, defaults or other occurrences which (x) would
not prevent or delay consummation of the Merger in any material respect or
otherwise prevent COLA from performing its obligations under this Agreement in
any material respect, or (y) would not, individually or in the aggregate, have a
COLA Material Adverse Effect.
4.3.2. Required Filings, Consents, etc. The execution and
delivery of this Agreement by COLA do not, and the performance of this Agreement
and the consummation of the Merger and the other transactions contemplated
hereby by COLA will not, require any consent, approval, authorization or permit
of, or filing with or notification to, any Governmental Entity, except (a) for
(i) any applicable requirements, if any, of the Exchange Act, the Securities
Act, and (ii) filing and recordation of appropriate merger and similar documents
as required by the KGCC and the DGCL and (b) where the failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, would not (x) prevent or delay consummation of the Merger in any
material respect or otherwise prevent COLA from performing its obligations under
this Agreement in any material respect, or (y) would not, individually or in the
aggregate, have a COLA Material Adverse Effect.
4.4. Financing. COLA has received and accepted a written commitment
from LaSalle Bank, n.a. (the "Bank") for the provision of a senior credit
facility or facilities for the transactions contemplated hereby in an amount of
up to $38 million (with $10 million of such commitment to be provided by Bankers
Trust). The aggregate amount of the financing (the "Financing") contemplated by
the commitment (the "Commitment") will be sufficient to consummate the Merger.
COLA has provided true and correct copies of the Commitment to the Company prior
to the date hereof, and will provide copies of any material amendments or
modifications thereto. To the knowledge of COLA, there exists no condition with
respect to COLA or the Company as of the date of this Agreement that would
materially adversely affect the ability of COLA to satisfy in all respects the
conditions set forth in the Commitment.
4.5. Solvency. COLA has no reason to believe that the Financing to be
provided to COLA to effect the Merger will cause (a) the fair salable value of
the Surviving Corporation's assets to be less than the total amount of its
existing liabilities and identified contingent liabilities, (b) the fair salable
value of the Surviving Corporation's assets to be less than the amount that will
be required to pay its probable liabilities and its existing debts as they
mature, (c) the Surviving Corporation not to be able to pay its existing debts
as they mature or (d) the
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Surviving Corporation to have an unreasonably small amount of capital with which
to engage in its business.
4.6. No Knowledge of Breach. As of the date hereof, COLA is not aware
of any fact that causes any representation or warranty of the Company made in
this Agreement to be false or misleading.
4.7. Xxxx-Xxxxx-Xxxxxx. Capitalized terms used in this Article 4.7 but
not otherwise defined herein are used as defined in the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder (the "HSR Act"). Financial information described in this
Article 4.7 is to be determined in accordance with the HSR Act. As of the date
hereof and the date of Closing, (a) the annual net sales of the Person within
which COLA is included under the HSR Act, determined in accordance with the HSR
Act, for the most recent fiscal year were less than $10,000,000 and (b) the
total assets of such Person were less than $10,000,000.
4.8. Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with this
Agreement, the Merger and the other transactions contemplated hereby based upon
arrangements made by or on behalf of COLA.
4.9. Ownership of Company Stock. As of the date of this Agreement,
122,200 Shares have been contributed as capital to COLA. Prior to the date of
this Agreement, COLA has provided the Company with true and accurate copies of
documents showing the contribution of such shares to COLA. Prior to the
execution of this Agreement, COLA has provided the Company with a true and
accurate copy of the letter agreement among Xxxxxxx X. X'Xxxx, Xxx X. Xxxxxxx,
Xxxxxxx X. Xxx, and COLA, a copy of which is attached as Exhibit E, in which (a)
Xx. Xxxxxxx has agreed to contribute 154,650 Shares to COLA at such time as
those shares are no longer pledged as collateral for personal indebtedness,
which will be no later than November 30, 1999, and (b) COLA and Messrs. O'Neil,
Xxxxxxx and Cox have agreed to vote all Shares held by them (other than Excluded
Shares) in favor of the Merger.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
5.1. Conduct of Business by the Company Pending the Merger. The Company
covenants and agrees that, between the date of this Agreement and the Effective
Time, unless COLA shall have consented (such consent to be given or withheld
within its sole discretion), neither the Company nor any Company Subsidiary
shall:
(a) conduct its business in any manner other than in the ordinary
course of business consistent with past practice;
(b) amend or propose to amend its certificate of incorporation or
by-laws;
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(c) authorize for issuance, issue, grant, sell, pledge, redeem or
acquire for value any of its or their securities, including options, warrants,
commitments, stock appreciation rights, subscriptions, or other rights to
purchase securities; provided, however, that shares of Common Stock earned as
Performance Shares by employees of the Company and Company Subsidiaries pursuant
to the Company's 1998 Long-Term Incentive Plan may be issued upon such
employees' satisfaction of performance criteria that (i) have been adopted by
the Board of Directors prior to the date of this Agreement or (ii) are
subsequently approved by COLA; and provided, further, that the Company may issue
securities pursuant to the exercise of options, warrants, commitments,
subscriptions, or other rights to purchase securities outstanding on the date
hereof;
(d) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property, or otherwise, with respect to any of its
capital stock or other equity interests, or subdivide, reclassify, recapitalize,
split, combine or exchange any of its shares of capital stock;
(e) take any action, other than reasonable and usual actions in the
ordinary course of business and consistent with past practice, with respect to
accounting policies or procedures (including tax accounting policies and
procedures);
(f) take any action that would, or could reasonably be expected to
result in, any of its representations and warranties set forth in this Agreement
being untrue or in any of the conditions to the Merger set forth in Article VII
not being satisfied, except as provided in Articles 6.4 and 8.1 hereof; or
(g) authorize any of, or commit or agree to take any of, the foregoing
actions.
ARTICLE VI
ADDITIONAL COVENANTS
6.1. Access to Information; Confidentiality. From the date hereof to
the Effective Time, the Company shall (and shall cause the Company Subsidiaries
and the officers, directors, employees, auditors and agents of the Company and
each of the Company Subsidiaries to) afford the officers, employees and agents
of COLA (the "COLA Representatives") reasonable access at all reasonable times
to its officers, employees, agents, properties, offices, plants and other
facilities, books and records, and shall furnish such COLA Representatives with
all financial, operating and other data and information as may from time to time
be reasonably requested.
6.2. Proxy Statement; Schedule 13E-3.
6.2.1. Proxy Statement. As soon as practicable after the date
of this Agreement, the Company shall prepare and file with the SEC a proxy
statement, in form and substance approved by COLA (such approval not to be
unreasonably withheld), relating to the meeting of the Company's stockholders to
be held in connection with the Merger (together with any amendments thereof or
supplements thereto, the "Proxy Statement"). COLA shall furnish to the Company
such information concerning itself as the Company may reasonably request in
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connection with the preparation of the Proxy Statement. The Proxy Statement will
comply in all material respects with applicable federal securities laws, except
that no representation is made by the Company with respect to information
supplied by COLA for inclusion in the Proxy Statement. The Proxy Statement shall
include the opinion of the Financial Advisor referred to in Article 3.7 hereof.
The Company will use its commercially reasonable best efforts to respond to the
comments of the SEC concerning the Proxy Statement and to cause the Proxy
Statement to be mailed to the Company's stockholders, in each case as soon as
reasonably practicable. Each party to this Agreement will notify the other
parties promptly of the receipt of the comments of the SEC, if any, and of any
request by the SEC for amendments or supplements to the Proxy Statement or for
additional information, and will supply the other parties with copies of all
correspondence between such party or its representatives, on the one hand, and
the SEC or members of its staff, on the other hand, with respect to the Proxy
Statement or the Merger.
6.2.2. Information. The information provided by each of the
Company and COLA for use in the Proxy Statement shall not, at (a) the time the
Proxy Statement (or any amendment thereof or supplement thereto) is first mailed
to the stockholders of the Company or (b) the time of the Company stockholders'
meeting contemplated by such Proxy Statement, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading. If at any
time prior to the Effective Time any event or circumstance relating to any party
hereto, or their respective officers or directors, should be discovered by such
party which should be set forth in an amendment or a supplement to the Proxy
Statement, such party shall promptly inform the Company and COLA thereof and
take appropriate action in respect thereof.
6.2.3. Schedule 13E-3. As soon as practicable after the date
of this Agreement, COLA and the Company shall file with the SEC a Rule 13E-3
Transaction Statement on Schedule 13E-3 (the "Schedule 13E-3"), with respect to
the Merger. Each of the parties hereto agrees to use its reasonable best efforts
to cooperate and to provide each other with such information as any of such
parties may reasonably request in connection with the preparation of the
Schedule 13E-3. The information provided by each of the Company and COLA for use
in the Schedule 13E-3 shall not, at the time the Schedule 13E-3 is filed with
the SEC, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. Each party hereto agrees promptly to
supplement, update and correct any information provided by it for use in the
Schedule 13E-3 if and to the extent that it is or shall have become incomplete,
false or misleading. Each party agrees to provide the other party and the other
party's counsel with any comments such party or its counsel may receive from the
SEC or its staff with respect to the Schedule 13E-3 promptly after the receipt
of such comments and of any request by the SEC for amendments or supplements to
the Schedule 13E-3 or for additional information, and will supply the other
parties with copies of all correspondence between such party or its
representatives, on the one hand, and the SEC or members of its staff, on the
other hand, with respect to the Schedule 13E-3.
6.3. Action by Stockholders. The Company, acting through its Board of
Directors, shall, in accordance with applicable law, the Company Charter and the
Company's bylaws, duly call, give notice of, convene and hold a special meeting
of stockholders (the "Company
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Stockholders' Meeting") as soon as practicable after the date of this Agreement
for the purpose of adopting this Agreement. The Company will, through the Board
of Directors based on the recommendation of the Special Committee, (a) recommend
to its stockholders the adoption of this Agreement, and (b) use its best efforts
to obtain the Company Stockholder Approval. COLA shall vote all shares of Common
Stock owned by it in favor of the adoption of this Agreement.
6.4. Acquisition Proposals. From and after the date hereof, the Company
will not, and will not authorize or permit any of its officers, directors,
employees or agents (its "Representatives"), directly or indirectly, to solicit,
initiate or knowingly encourage (including by way of furnishing information) or
take any other action to facilitate knowingly any inquiries or the making of any
proposal which constitutes or may reasonably be expected to lead to an
Acquisition Proposal (as defined below) from any person, or engage in any
discussion or negotiations relating thereto or accept any Acquisition Proposal;
provided, however that notwithstanding any other provision hereof: (a) the
Special Committee may at any time prior to the receipt of Company Stockholder
Approval, engage in discussions or negotiations with a third party who (without
any solicitation, initiation, encouragement, discussion or negotiation, directly
or indirectly, by or with the Company or its Representatives after the date
hereof) seeks to initiate such discussions or negotiations and may furnish such
third party information concerning the Company and its business, properties and
assets if, and only to the extent that, (i) (A) the third party has first made
an Acquisition Proposal that is more favorable to the Company and its
stockholders (other than COLA and holders of the Excluded Shares) than the
transactions contemplated by this Agreement and has demonstrated that financing
for the Acquisition Proposal is reasonably likely to be obtained (as determined
in good faith in each case by the Special Committee after consultation with its
financial advisors) and (B) the Special Committee shall conclude in good faith,
after considering applicable provisions of state law, on the basis of oral or
written advice of outside counsel (who may be the Company's regularly engaged
independent counsel) that such action is necessary for the Special Committee to
act in a manner consistent with its fiduciary duties under applicable law and
(ii) prior to furnishing such information to or entering into discussions or
negotiations with such person or entity, the Company (A) provides three Business
Days' prior written notice to COLA to the effect that it is furnishing
information to or entering into discussions or negotiations with such person or
entity and (B) receives from such person or entity an executed confidentiality
agreement in reasonably customary form; (b) the Special Committee may withdraw
or modify its recommendation referred to in Article 6.3 following receipt of a
bona fide unsolicited Acquisition Proposal from a third party if (i) the Special
Committee, after consultation with and receipt of advice from the Financial
Advisor or another nationally recognized investment banking firm, determines in
good faith in the exercise of its fiduciary obligations under applicable law
that the Acquisition Proposal is more favorable to the Company and its
stockholders (other than COLA and holders of the Excluded Shares) than the
transactions contemplated by this Agreement and (ii) the Special Committee,
after consultation with independent legal counsel (who may be the Company's
regularly engaged independent counsel), determines in good faith that such
action is necessary for the Special Committee to comply with its fiduciary
obligations under applicable law and/or (c) the Board of Directors, upon the
recommendation of the Special Committee, may comply with Rule 14e-2 promulgated
under the Exchange Act with regard to a tender or exchange offer or take any
other required action (including, without limitation, the making of such public
disclosures as may be necessary or advisable under applicable securities laws)
and
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provided further, that, in the event of an exercise of the Company's or its
Board of Director's or the Special Committee's rights under clause (a), (b) or
(c) above, notwithstanding anything contained in this Agreement to the contrary,
such action shall not constitute a breach of this Agreement by the Company but
shall only give rise to the rights specified in Article 8.3 to the extent
provided therein. As of the date of this Agreement, the Company shall
immediately cease and terminate any existing solicitation, initiation,
encouragement, activity, discussion or negotiation with any parties conducted
heretofore by the Company with respect to the foregoing. The Company shall
notify COLA orally and in writing of any such inquiries, offers or proposals
(including, without limitation, the terms and conditions of any such proposal
and the identify of the person making it), within 24 hours of the receipt
thereof, shall keep COLA informed of the status and details of any such inquiry,
offer or proposal, and shall give COLA three Business Days' advance notice of
any agreement to be entered into with or any information to be supplied to any
person making such inquiry, offer or proposal. As used herein, "Acquisition
Proposal" means any proposal or offer to acquire, directly or indirectly, in one
transaction or a series of related transactions, twenty percent (20%) or more of
the outstanding shares of the Company's Common Stock (whether by purchase,
merger, consolidation, share exchange, business combination or other similar
transaction) or twenty percent (20%) or more of the dollar value of the assets
of the Company.
6.5. Directors' and Officers' Insurance and Indemnification.
6.5.1. Generally. It is understood and agreed that the Company
shall, to the fullest extent permitted under Delaware law and regardless of
whether the Merger becomes effective, and the Surviving Corporation shall, from
and after the Effective Time, to the fullest extent permitted under Delaware
law, indemnify, defend and hold harmless any person who is now, or has been at
any time prior to the date hereof, or who becomes prior to the Effective Time,
an officer or director (the "Indemnified Party") of the Company or any of its
subsidiaries against all losses, claims, damages, liabilities, costs and
expenses (including attorneys' fees and expenses), judgments, fines, losses, and
amounts paid in settlement, with the written approval of the Surviving
Corporation (which approval shall not be unreasonably withheld), in connection
with any threatened, pending or completed action, suit, claim, proceeding or
investigation (each a "Claim") to the extent that any such Claim is based on, or
arises out of, (a) the fact that such person is or was a director, officer,
employee, fiduciary or agent of the Company or any subsidiaries or is or was
serving at the request of the Company or any of its subsidiaries as a director,
officer, employee, fiduciary or agent of another corporation, partnership, joint
venture, trust or other enterprise, or (b) this Agreement, or any of the
transactions contemplated hereby, in each case to the extent that any such Claim
pertains to any matter or fact arising, existing, or occurring prior to or at
the Effective Time, regardless of whether such Claim is asserted or claimed
prior to, at or after the Effective Time, and in the event any Indemnified Party
becomes involved in any capacity in any Claim, the Company or the Surviving
Corporation, as applicable, shall advance expenses to such Indemnified Party in
advance of the final disposition thereof upon receipt of the undertaking
specified in Section 145 of the DGCL, including payment of the reasonable fees
and expenses of counsel selected by the Indemnified Party, promptly as
statements therefor are received. Any determination required to be made with
respect to whether an Indemnified Party's conduct complies with the standards
set forth under Delaware law, the Certificate of Incorporation, the By-laws,
this Agreement or any indemnification agreement, as
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the case may be, shall be made by independent counsel mutually acceptable to the
Surviving Corporation and the Indemnified Party.
6.5.2. Continuation of Rights. The Certificate of
Incorporation and By-laws of the Company or the Surviving Corporation, as the
case may be, shall not be amended, repealed or otherwise modified for a period
from the date hereof until six years after the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who as of the date
hereof are or were directors, officers, employees, fiduciaries or agents of the
Company and its Subsidiaries or otherwise entitled to indemnification,
advancement of expenses or exculpation from liability under the Company's
Restated Certificate of Incorporation, By-laws or indemnification agreements;
provided that in the event any Claim is asserted or made within such six year
period, such provisions shall not be so amended, repealed or otherwise modified
until the later of the end of such six-year period or the disposition of the
Claim.
6.5.3. Insurance. At or prior to the Effective Time, COLA, the
Company or the Surviving Corporation shall obtain a fully-paid officers' and
directors' liability insurance policy covering the Indemnified Parties who are
currently covered by the Company's officers' and directors' liability insurance
policy for a term of six years after the Effective Time in the amount of $10
million and on such other terms as are not materially less favorable to the
officers and directors than those in effect on the date hereof.
6.5.4. Agreement Binding. This Article 6.5 is intended to be
for the benefit of, and shall be enforceable by, the Indemnified Parties, their
heirs and personal representatives, and shall be binding on the Surviving
Corporation and its respective successors and assigns. If the Surviving
Corporation or any of its successors or assigns (i) consolidates with or merges
into any other person and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (ii) transfers all or substantially
all of its properties and assets to any person, then and in each such case,
proper provision shall be made so that the successors and assigns of the
Surviving Corporation assume the obligations set forth in this Article 6.5.
6.6. Best Efforts; Further Action.
6.6.1. Best Efforts. Upon the terms and subject to the
conditions hereof, including without limitation Article 6.4, each of the parties
hereto shall use its reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations or otherwise to consummate
and make effective the Merger and the other transactions contemplated hereby,
including, without limitation, using its reasonable best efforts to obtain all
licenses, permits, waivers, orders, consents, approvals, authorizations,
qualifications and orders of Governmental Entities and parties to contracts with
the Company and the Company Subsidiaries as are necessary for the consummation
of the Merger and the other transactions contemplated hereby.
6.6.2. Further Action. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement, the proper officers and directors of each party to this
Agreement shall use their reasonable best efforts to take all such action.
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6.7. Public Announcements. COLA and the Company shall consult with each
other before issuing any press release or otherwise making any public statements
with respect to this Agreement or the transactions contemplated hereby and shall
not issue any such press release or make any such public statement without the
prior consent of the other party, which consent shall not be unreasonably
withheld; provided, however, that a party may, without the prior consent of the
other party, issue such press release or make such public statement as may be
required by law, regulation or any listing agreement or arrangement to which the
Company or COLA is a party with a national securities exchange if it has used
all reasonable efforts to consult with the other party and to obtain such
party's consent but has been unable to do so in a timely manner.
6.8. Conveyance Taxes. COLA and the Company shall cooperate in the
preparation, execution and filing of all returns, questionnaires, applications,
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees, and any similar taxes which become payable in
connection with the transactions contemplated by this Agreement that are
required or permitted to be filed on or before the Effective Time.
6.9 Financing. COLA shall use reasonable efforts to accept and close
the Financing on terms consistent with the Commitment or such other terms as
shall be satisfactory to COLA or as are not more onerous to COLA than as set
forth in the Commitment, and to execute and deliver definitive agreements with
respect to the Financing (the "Definitive Financing Agreements"). COLA shall use
reasonable efforts to satisfy all requirements of the Definitive Financing
Agreements which are conditions to closing the transactions constituting the
Financing. The obligations contained herein are not intended, nor shall they be
construed, to benefit or confer any rights upon any person, firm or entity other
than the Company.
6.10. Special Committee. Until the earlier of the Effective Time or the
termination of this Agreement, (a) any amendment of this Agreement, any
termination of this Agreement by the Company, any extension by the Company of
the time for the performance of any of the obligations or other acts of COLA,
any consent or approval of the Company contemplated hereby, any extension of the
Effective Time as contemplated by the last sentence of Article 2.2, any waiver
of any of the Company's rights hereunder, any amendment to the Company's
Restated Certificate of Incorporation or By-laws or any action taken by the
Company that adversely affects the interest of the stockholders of the Company
(other than the COLA Stockholders) with respect to the transactions contemplated
hereby, will require the concurrence of the Special Committee, and (b) the
Special Committee shall be authorized to take all actions on behalf of the
Company hereunder, except to the extent prohibited by the DGCL. COLA agrees on
behalf of itself and its Affiliates and Associates that, until the earlier of
the Effective Time or the termination of this Agreement, it will not take any
action to change the composition or authority of the Special Committee without
the prior approval of a majority of the persons then serving as members of the
Special Committee.
6.11 Action by COLA. Prior to the earlier of the Effective Time or the
termination of this Agreement, COLA shall retain ownership of all Shares of
Common Stock owned by it as of the date of this Agreement and all Shares
contributed to it in accordance with the letter
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agreement attached as Exhibit E hereto and shall not distribute, sell, pledge or
otherwise transfer such Shares to any person.
ARTICLE VII
CLOSING CONDITIONS
7.1. Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger and the other
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Effective Time of the following conditions, any or all of which may
be waived, in whole or in part, to the extent permitted by applicable law:
7.1.1. Company Stockholder Approval. The Company Stockholder
Approval shall have been obtained.
7.1.2. COLA Stockholder Approval. Approval of this Agreement
by the stockholders of COLA shall have been obtained.
7.1.3. No Order. No Governmental Entity or federal or state
court of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent) which is
in effect and which materially restricts, prevents or prohibits consummation of
the Merger or the other transactions contemplated by this Agreement; provided,
however, that the parties shall use their reasonable best efforts to cause any
such decree, judgment, injunction or other order to be vacated or lifted.
7.2. Additional Conditions to Obligations of COLA. The obligation of
COLA to effect the Merger is also subject to satisfaction or waiver of the
following conditions:
7.2.1. Representations and Warranties. Each of the
representations and warranties of the Company contained in this Agreement that
are qualified by materiality shall be true and correct and each of the
representations and warranties of the Company contained in this Agreement that
are not qualified by materiality shall be true and correct in all material
respects, in each case as of the Effective Time as though made on and as of the
Effective Time, except (a) for changes specifically permitted by this Agreement
and (b) that those representations and warranties which address matters only as
of a particular date shall remain true and correct as of such date.
7.2.2. Agreement and Covenants. The Company shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it at or prior to
the Effective Time.
7.2.3. Performance Shares. The Company shall have issued all
shares of Common Stock earned by employees of the Company and Company
Subsidiaries pursuant to the terms of the Company's 1998 Long-Term Incentive
Plan.
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7.2.4. Financing. COLA shall have obtained the Financing, and
the proceeds of such Financing shall have been received by or made immediately
available to COLA at or immediately prior to the Closing.
7.2.5. Dissenting Shares. As of the Effective Time, Dissenting
Shares shall aggregate no more than five percent (5 %) of the then outstanding
Shares.
7.2.6. Officer's Certificate. COLA shall have received a
certificate of an appropriate officer of the Company to the effect that the
conditions set forth in this Article 7.2 have been satisfied at the Effective
Time.
7.3. Additional Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger is also subject to the
satisfaction or waiver of the following conditions:
7.3.1. Representations and Warranties. Each of the
representations and warranties of COLA contained in this Agreement that are
qualified by materiality shall be true and correct and each of the
representations and warranties of COLA contained in this Agreement that are not
qualified by materiality shall be true and correct in all material respects, in
each case as of the Effective Time as though made on and as of the Effective
Time, except (a) for changes specifically permitted by this Agreement and (b)
that those representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date.
7.3.2. Agreement and Covenants. COLA shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the
Effective Time.
7.3.3. Officer's Certificate. The Company shall have received
a certificate of an appropriate officer of COLA to the effect that the
conditions set forth in this Article 7.3 have been satisfied at the Effective
Time.
7.4 Frustration of Conditions. No party hereto may rely on the failure
of any condition set forth in this Article to be satisfied if such failure was
caused by such party's failure to use reasonable efforts to consummate the
transactions contemplated by this Agreement.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1. Termination. This Agreement, notwithstanding approval thereof by
the stockholders of the Company, may be terminated as follows (each a
"Termination"):
(a) by mutual written consent of the Company and COLA;
(b) by COLA or the Company at any time prior to the Effective Time:
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(i) if there shall be any statute, law, rule or regulation
that makes consummation of the Merger illegal or prohibited, or if any
court of competent jurisdiction in the United States or other
Governmental Entity shall have issued an order, judgment, decree or
ruling, or taken any other action restraining, enjoining or otherwise
prohibiting the Merger and such order, judgment, decree, ruling or
other action shall have become final and non-appealable (provided, that
the party seeking to terminate this Agreement pursuant to this clause
(i) shall have used all reasonable best efforts to remove such
judgment, injunction, order, decree or ruling); or
(ii) upon a vote at a duly held meeting, or upon any
adjournment thereof, the stockholders of the Company shall have failed
to give any approval required by applicable law.
(c) by the Company at any time prior to the receipt of Company
Stockholder Approval, if the Company shall have received after the date of this
Agreement but prior to the date of Company Stockholder Approval an Acquisition
Proposal from a third party that was not initiated, solicited or knowingly
encouraged by the Company or any Company Subsidiary in violation of this
Agreement if:
(i) the Special Committee, after consultation with and receipt
of written advice from the Financial Advisor or another nationally
recognized investment banking firm, determines in good faith in the
exercise of its fiduciary obligations under applicable law that the
Acquisition Proposal is more favorable to the Company and its
stockholders (other than COLA and holders of the Excluded Shares) than
the transactions contemplated by this Agreement (including any
adjustment to the terms and conditions of this Agreement proposed in
writing by COLA in response to such Acquisition Proposal); provided,
that in making such determination, the Special Committee shall
consider, among other factors and without limitation, whether or not
the Acquisition Proposal is subject to any material contingency to
which the other party thereto has not reasonably demonstrated in its
written offer its ability to overcome or address, including the receipt
of government consents or approvals, and whether the Acquisition
Proposal is reasonably likely to be consummated and is in the best
interests of the stockholders of the Company; and
(ii) the Special Committee, after consultation with
independent legal counsel (who may be the Company's regularly engaged
independent counsel), determines in good faith that such action is
necessary for the Special Committee to comply with its fiduciary
obligations under applicable law.
(d) by COLA at any time prior to the Effective Time if the Board of
Directors, based upon the recommendation of the Special Committee, (i) withdraws
or modifies in a manner adverse to COLA the Board of Director's favorable
recommendation of the transactions contemplated hereby or (ii) shall have
recommended any Acquisition Proposal;
(e) by COLA at any time prior to the Effective Time, if the Company
shall be in material breach of its obligations hereunder (except for a breach of
its representations or warranties or a
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breach that was not the result of the action or inaction of the Special
Committee) and such breach is not cured within five Business Days after notice
thereof is received by the Company; provided that COLA is not in material breach
of any of its representations, warranties, covenants or agreements contained in
this Agreement; or
(f) by the Company at any time prior to the Effective Time, if COLA
shall be in material breach of its obligations hereunder (including a material
breach of its representations or warranties) and such breach is not cured within
five Business Days after notice thereof is received by COLA; provided that the
Company is not in material breach of any of its representations, warranties,
covenants or agreements contained in this Agreement.
8.2. Effect of Termination and Abandonment. Except as provided in
Article 8.3, in the event of the termination of this Agreement pursuant to
Article 8.1, this Agreement shall forthwith become void, there shall be no
liability on the part of any party hereto, or any of their respective officers
or directors, to the other and all rights and obligations of any party hereto
shall cease; provided, however, that nothing herein shall relieve any party from
liability for the willful breach of any of its representations, warranties,
covenants or agreements set forth in this Agreement.
8.3. Fees and Expenses. In the event that this Agreement shall have
been terminated by the Company pursuant to Article 8.1(c) or by COLA pursuant to
Article 8.1(d) or 8.1(e) the Company shall pay COLA's Transaction Expenses (as
defined below) plus a termination fee of $500,000 within sixty days after
termination of this Agreement; provided, however, that no fees or expenses shall
be paid to COLA upon any termination pursuant to Article 8.1(e) if the breach
giving rise to the right of termination was not the result of the action or
inaction of the Special Committee. "Transaction Expenses" shall mean an amount,
not to exceed $200,000, equal to COLA's actual out-of-pocket expenses directly
attributable to the proposed acquisition of the Company (including negotiation
and execution of this Agreement and reasonable attorneys' fees and expenses) and
the attempted financing and completion of the Merger.
8.4. Amendment. Before or after adoption of this Agreement by the
stockholders of the Company, this Agreement may be amended by the parties hereto
at any time prior to the Effective Time; provided, however, that (a) any such
amendment shall, on behalf of the Company, have been approved by the Special
Committee and (b) after adoption of this Agreement by the stockholders of the
Company, no amendment which under applicable law may not be made without the
approval of the stockholders of the Company may be made without such approval.
Any amendment pursuant to this Article shall be made by an instrument in writing
signed by the parties hereto.
8.5. Extension; Waiver. Subject to Article 6.10 hereof, at any time
prior to the Effective Time, any party hereto may, to the extent legally
allowed, (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties made to such party contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions for the benefit of such party contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing
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signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
ARTICLE IX
GENERAL PROVISIONS
9.1. Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement shall survive the Closing. This
Article 9.1 shall not limit any covenant or agreement of the parties which by
its terms contemplated performance after such time and date, including without
limitation Article 6.5.
9.2. Definitions. For purposes of this Agreement:
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act; and
(b) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
9.3. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given upon (a) transmitter's confirmation of
receipt of a facsimile transmission, (b) confirmed delivery by a standard
overnight carrier or when delivered by hand or (c) the expiration of five
business days after the day when mailed in the United States by certified or
registered mail, postage prepaid, addressed at the following addresses (or at
such other address for a party as shall be specified by like notice):
If to the Company:
TransFinancial Holdings, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xx. Xxxxxx Xxxx
Fax: (000) 000-0000
With copies to:
Xx. Xxxxxx Xxxx
Xxxxx 0, Xxx 000
Xxxxxxx Xxxxx, XX 00000
Fax: (000) 000-0000
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Xx. Xxxx X. Xxxxxxxxx, Esq.
Xxxxxxxx & Xxxxxx L.L.P.
0000 Xxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
If to COLA:
COLA Acquisitions, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xx. Xxxxxxx X. X'Xxxx
Fax: (000) 000-0000
With a copy to:
Xx. Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
9.4. Assignment; Binding Effect. This Agreement shall not be assigned,
by operation of law or otherwise, and any purported assignment shall be null and
void. This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, except for the provisions
of Articles 6.5, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
9.5. Entire Agreement. This Agreement and any other documents delivered
by the parties in connection herewith constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings among the parties with respect thereto.
9.6. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to the
conflict of laws rules thereof.
9.7. Fee and Expenses. Except as provided in Article 8.3, whether or
not the Merger is consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby (including without
limitation, fees and disbursements of counsel, financial advisors and
accountants) shall be paid by the party incurring such costs
A-24
and expenses. The expenses of filing, printing and mailing the Proxy Statement
shall be borne by the Company. The expenses of filing the Schedule 13E-3 shall
be borne by COLA.
9.8. Headings. Headings of the Articles and Articles of this Agreement
are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
9.9. 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. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
9.10. Specific Performance. The parties hereto each acknowledge that,
in view of the uniqueness of the subject matter hereof, the parties hereto would
not have an adequate remedy at law for money damages in the event that this
Agreement were not performed in accordance with its terms, and therefore agree
that the parties hereto shall be entitled to specific enforcement of the terms
hereof in addition to any other remedy to which the parties hereto may be
entitled at law or in equity.
9.11. Interpretation. Words of the masculine gender shall be deemed to
include the feminine and neuter genders, and vice versa, where applicable. Words
of the singular number shall be deemed to include the plural number, and vice
versa, where applicable.
9.12. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which, when so executed and delivered,
shall be an original. All such counterparts shall together constitute one and
the same instrument. Each counterpart may consist of a number of copies hereof,
each signed by less than all, but together signed by all, of the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPANY:
TRANSFINANCIAL HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxx, Xx.
Name: Xxxxxx X. Xxxx, Xx.
Title: Chairman - Special Committee of
Independent Directors
COLA:
COLA ACQUISITIONS, INC.
By: /s/ Xxxxxxx X. X'Xxxx
Name: Xxxxxxx X. X'Xxxx
Title: President
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