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AGREEMENT AND PLAN OF MERGER
DATED AS OF
NOVEMBER 3, 1997
AMONG
PLASTI-LINE, INC.,
PL HOLDING CORP.,
PL ACQUISITION CORP.,
AND
JAMES R. MARTIN
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made as of November
3, 1997, by and among PLASTI-LINE, INC., a Tennessee corporation (the
"Company"), PL HOLDING CORP., a Tennessee corporation (the "Parent"), PL
ACQUISITION CORP., a Tennessee corporation and a wholly owned subsidiary of
Parent (the "Purchaser") and James R. Martin ("Martin").
WHEREAS, the Board of Directors of each of the Company, the Parent and the
Purchaser has approved, and deems its advisable and in the best interests of its
respective shareholders to consummate, the acquisition of the Company by the
Parent upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained herein, the parties hereto agree as
follows:
ARTICLE I
THE MERGER
Section 1.1 Company Actions. The Company represents that the
disinterested members of its Board of Directors, at a meeting duly called and
held and acting, in part, on the unanimous recommendation of a Special Committee
of the Board appointed on July 18, 1997 and comprised entirely of directors who
are neither members of management of the Company nor affiliated with Martin,
Parent or the Purchaser or any Affiliate thereof (the "Special Committee"), has
(i) unanimously determined that this Agreement and the transactions contemplated
hereby, including the Merger, are fair to and in the best interests of the
shareholders of the Company other than Martin, Parent or Purchaser or their
affiliates (the "Public Shareholders"), (ii) unanimously approved and adopted
this Agreement and the transactions contemplated hereby, including the Merger
(collectively, the "Transactions"), and such approval, to the extent necessary,
constitutes approval of the Transactions for purposes of Section 48-103-205 of
the Combination Act, such that Section 48-103-205 of the Combination Act will
not apply to the Transactions, and (iii) unanimously resolved to recommend
approval and adoption of this Agreement and the Transactions by the Company's
shareholders (the "Shareholders"), provided, that such recommendation may be
withdrawn, modified or amended by the Board of Directors of the Company if the
Board deems such withdrawal, modification or amendment necessary in light of its
fiduciary obligation to the Shareholders after consultation with counsel.
Section 1.2 The Merger. Subject to the terms and conditions of this
Agreement, and in accordance with Tennessee law, at the Effective Time, the
Company and the Purchaser shall consummate a merger (the "Merger") pursuant to
which (a) the Purchaser shall be merged with and into the Company and the
separate corporate existence of the Purchaser shall thereupon cease; (b) the
Company shall be the successor or surviving corporation in the Merger (sometimes
hereinafter referred to as the "Surviving Corporation") and shall continue to be
governed by the laws of the State of Tennessee; and (c) the separate corporate
existence of the Company with all its rights, privileges, immunities, powers and
franchises shall continue unaffected by the Merger, except as set forth in this
Section 1.2. Pursuant to the Merger, (i) the Company's Amended and Restated
Charter ("Charter") shall be amended in its entirety to read as the Charter of
the Purchaser, in effect immediately prior to the Effective Time, except that
Article FIRST thereof shall promptly be amended to read as follows: "FIRST: The
name of the corporation is Plasti-Line, Inc." and, as so amended, shall be the
Charter of the Surviving Corporation until thereafter amended as provided by
applicable Law and such Charter; and (ii) the Bylaws of the Purchaser (the
"Bylaws"), as in effect immediately prior to the Effective Time, shall be the
Bylaws of the Surviving Corporation until thereafter amended as provided by
applicable Law, by such Charter or by such Bylaws. The Merger shall have the
effects specified in the TBCA.
Section 1.3 Effective Time. Subject to the terms and conditions of this
Agreement, the Parent, the Purchaser and the Company will cause Articles of
Merger to be executed and filed on the Closing Date (or on such other date as
the Parent and the Company may agree) with the Secretary of State of the State
of Tennessee as provided in the TBCA. The Merger shall become effective on the
date on which the Articles of Merger are duly filed with the Secretary of State
of the State of Tennessee or such time as is agreed upon by
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the parties and specified in the Articles of Merger, and such time is
hereinafter referred to as the "Effective Time."
Section 1.4 Closing. The closing of the Merger (the "Closing") shall take
place at 10:00 a.m. on a date to be specified by the parties, which shall be no
later than the second Business Day after satisfaction or waiver of all of the
conditions set forth in Article 6 hereof (the "Closing Date"), at the corporate
offices of the Company, unless another date or place is agreed to in writing by
the parties hereto.
Section 1.5 Directors and Officers of the Surviving Corporation. The
directors of the Purchaser and the officers of the Company at the Effective Time
shall, from and after the Effective Time, be the directors and officers,
respectively, of the Surviving Corporation until their successors shall have
been duly elected or appointed or qualified or until their earlier death,
resignation or removal in accordance with applicable law, the Charter and the
Bylaws.
ARTICLE 2
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holders of any
shares of the Company Common Stock (the "Shares") or holders of any shares of
the Purchaser Common Stock:
(a) Purchaser Common Stock. Each issued and outstanding share of the
Purchaser Common Stock shall be converted into and become one fully paid
and nonassessable share of common stock of the Surviving Corporation.
(b) No Effect on Parent-Owned Stock. All Shares that are owned by the
Parent shall continue to remain issued and outstanding and shall not be
converted into the right to receive the Merger Consideration.
(c) Cancellation of Treasury Stock. All Shares that are owned by the
Company as treasury stock immediately prior to the Effective Time shall be
canceled and retired and shall cease to exist and no consideration shall be
delivered in exchange therefor.
(d) Exchange of Shares. Each issued and outstanding Share, and all
Shares subject to outstanding options that remain outstanding at the
Effective Time and not theretofore canceled as provided in Section 2.4
hereof (other than Shares held by the Parent as described in Section
2.1(b), Shares to be canceled in accordance with Section 2.1(c) and any
Shares which are held by shareholders exercising dissenters' rights
pursuant to Chapter 23 of the TBCA ("Dissenting Shareholders")) shall be
converted into the right to receive $14.50 in cash, payable to the holder
thereof, without interest (the "Merger Consideration"), upon surrender of
the certificate formerly representing such Share in the manner provided in
Section 2.2. All such Shares, when so converted, shall no longer be
outstanding and shall automatically be canceled and retired and shall cease
to exist, and each holder of a certificate representing any such Shares
shall cease to have any rights with respect thereto, except the right to
receive the Merger Consideration therefor upon the surrender of such
certificate in accordance with Section 2.2, without interest, or the right,
if any, to receive payment from the Surviving Corporation of the "fair
value" of such Shares as determined in accordance with Chapter 23 of the
TBCA.
Section 2.2 Exchange of Certificates. (a) Paying Agent. At or prior to
the Effective Time, the Parent shall designate a bank reasonably acceptable to
the Company to act as agent for the holders of the Shares in connection with the
Merger (the "Paying Agent"), and the Parent shall, or shall cause the Surviving
Corporation to, make available to the Paying Agent the funds to which holders of
the Shares shall become entitled pursuant to Section 2.1(d). Such funds shall be
invested by the Paying Agent as directed by the Parent or the Surviving
Corporation.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a stock
certificate or certificates, which immediately prior to the
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Effective Time represented outstanding Shares (the "Certificates"), whose Shares
were converted pursuant to Section 2.1 into the right to receive the Merger
Consideration: (i) 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 delivery of the Certificates to the Paying Agent and shall be in such
form and have such other provisions as the Parent and the Company may reasonably
specify), and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for payment of the Merger Consideration. Upon surrender
of a Certificate for cancellation to the Paying Agent, together with such letter
of transmittal, duly executed, the holder of such Certificate shall be entitled
to promptly receive in exchange therefor the Merger Consideration for each Share
formerly represented by such Certificate and the Certificate so surrendered
shall forthwith be canceled. If payment of the Merger Consideration is to be
made to a Person other than the Person in whose name the surrendered Certificate
is registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or shall be otherwise in proper form for
transfer and that the Person requesting such payment shall have paid any
transfer and other taxes required by reason of the payment of the Merger
Consideration to a Person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such tax either has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.2, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive the Merger Consideration in cash as contemplated by this Section 2.2.
(c) Transfer Books; No Further Ownership Rights in the Shares. At the
Effective Time, the stock transfer books of the Company shall be closed and
thereafter there shall be no further registration of transfers of the Shares on
the records of the Company. From and after the Effective Time, the holders of
Certificates evidencing ownership of the Shares outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such Shares,
except as otherwise provided for herein or by applicable Law. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged for the Merger Consideration as
provided in this Article 2.
(d) Termination of Fund; No Liability. At any time following twelve months
after the Effective Time, the Surviving Corporation shall be entitled to require
the Paying Agent to deliver to it any funds (including any interest received
with respect thereto) which had been made available to the Paying Agent and
which have not been disbursed to holders of Certificates, and thereafter such
holders shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat or other similar Laws) with respect to the Merger
Consideration payable upon due surrender of their Certificates, without any
interest thereon. Notwithstanding the foregoing, neither the Surviving
Corporation nor the Paying Agent shall be liable to any holder of a Certificate
for Merger Consideration delivered to a public official pursuant to any
applicable abandoned property, escheat or similar Law.
(e) Lost, Stolen or Destroyed Certificates. In the event any Certificate
for Shares shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by the Parent, the posting by such Person
of a bond in customary amount as indemnity against any claim that may be made
against it with respect to such Certificate, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
pursuant to Section 2.2(b).
Section 2.3 Dissenters' Rights. The Company shall notify NASDAQ National
Market System that the shares will not be listed on the National Market System
effective the day prior to the Effective Time, so that at the Effective Time
dissenting Shareholders shall be entitled to be paid the fair value of such
holder's Shares, as provided in Chapter 23 of the TBCA. The Company shall give
the Parent notice thereof and the Parent shall have the right to participate in
all negotiations and proceedings with respect to any such demands. Neither the
Company nor the Surviving Corporation shall, except with the prior written
consent of the Parent, voluntarily make any payment with respect to, or settle
or offer to settle, any such demand for payment. If any Dissenting Shareholder
shall fail to perfect or shall have effectively withdrawn or lost the right to
dissent, the Shares held by such Dissenting Shareholder shall thereupon be
treated as though such Shares had been converted into the right to receive, as
of the Effective Time, the Merger Consideration pursuant to Section 2.1.
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Section 2.4 Options and Other Stock Incentive Plans. At the Effective
Time, each holder of a then outstanding, immediately exercisable option to
purchase Company Common Stock under the Company's 1991 Stock Incentive Program
shall, in settlement thereof, receive from the Company for each share of Company
Common Stock subject to such option an amount (subject to any applicable
withholding tax) in cash equal to the excess of the Merger Consideration over
the per share exercise price of such option (such amount being hereinafter
referred to as the "Option Consideration"); provided, however, that with respect
to any person subject to Section 16(a) of the Exchange Act, any such amount
shall be paid as soon as practicable after the first date payment can be made
without liability to such person under Section 16(b) of the Exchange Act. Upon
receipt of the Option Consideration, the option shall be canceled. The surrender
of an option shall be deemed a release of any and all rights the holder had or
may have had in respect of such option. The Company shall take such steps as may
be necessary to acquire on the Effective Date for a nominal consideration the
shares of Common Stock held by certain officers of the Company pursuant to
restrictive agreements and subject to vesting upon achieving sales of $200
million and profits of $20 million.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent that
Section 3.1 Corporate Existence and Power. The Company and each of the
Company Subsidiaries is a corporation duly incorporated, validly existing and in
good standing under the Laws of the state of its incorporation, and has all
corporate powers and approvals required to carry on its business as now
conducted.
Section 3.2 Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the Transactions are within the Company's corporate powers and, except for
any required approval by the Shareholders and the Public Shareholders in
connection with the consummation of the Transactions, this Agreement will have
been duly authorized by all necessary corporate action. This Agreement
constitutes a valid and binding agreement of the Company.
Section 3.3 Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation of the
Transactions by the Company require no action by or in respect of, or filing
with, any Governmental Authority other than (i) the filing of Articles of Merger
in accordance with the TBCA; (ii) compliance with applicable requirements of the
Exchange Act; and (iii) filing under the HSR Act.
Section 3.4 Non-Contravention. The execution, delivery and performance by
the Company of this Agreement and the consummation by the Company of the
Transactions do not and will not (i) contravene or conflict with the Charter or
Bylaws of the Company, or (ii) assuming compliance with the matters referred to
in Section 3.3, contravene or conflict with or constitute a violation of any
provision of any Law or Order binding upon or applicable to the Company or any
Company Subsidiary.
Section 3.5 Capitalization. The authorized capital stock of the Company
consists of 20,000,000 authorized Shares of Company Common Stock and 5,000,000
authorized shares of Preferred Stock. As of the date hereof, (a) 3,720,092
Shares of Company Common Stock were issued and outstanding, (b) no Shares of
Company Common Stock were held in the treasury of the Company, (c) 144,500
Shares of Company Common Stock were reserved for future issuance pursuant to
outstanding employee stock options granted pursuant to the 1991 Stock Incentive
Program ("Option Plans"), (d) no shares of Preferred Stock were issued and
outstanding, and (e) no shares of Preferred Stock were held in the treasury of
the Company. Since August 1, 1997, the Company has not issued or granted
additional options or restricted stock under the Option Plans. All outstanding
Shares of Company Common Stock are, and all Shares that may be issued pursuant
to the exercise of outstanding options under the Option Plans will be, when
issued in accordance with the respective terms thereof, duly authorized, validly
issued, fully paid and nonassessable. There are no bonds, debentures, notes or
other indebtedness having general voting rights (or convertible into securities
having such rights) ("Voting Debt") of the Company outstanding. Except as set
forth in this Section, as of the date hereof there are (i) no shares of capital
stock or other voting securities of the Company authorized, issued or
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outstanding, (ii) no existing options, warrants, calls, pre-emptive rights,
subscriptions or other rights, agreements, arrangements or commitments of any
character, relating to the issued or unissued capital stock of the Company or
any of the Company Subsidiaries, obligating the Company or any of the Company
Subsidiaries to issue, transfer or sell or cause to be issued, transferred or
sold any shares of capital stock or Voting Debt of, or other equity interest in,
the Company or any of the Company Subsidiaries or securities convertible into or
exchangeable for such shares or equity interests, or obligating the Company or
any of the Company Subsidiaries to grant, extend or enter into any such option,
warrant, call, subscription or other right, agreement, arrangement or commitment
and (iii) no outstanding contractual obligations of the Company or any of the
Company Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or
the capital stock of the Company, or any Company Subsidiary or other Affiliate
of the Company or to provide funds to make any investment (in the form of a
loan, capital contribution or otherwise) in any Company Subsidiary or any other
entity other than loans to Company Subsidiaries in the ordinary course of
business.
Section 3.6 Company Subsidiaries. Other than the Company Subsidiaries,
the Company does not own any equity interest in any corporation or other entity
or any marketable securities where the Company's equity interest in any entity
exceeds five percent of the outstanding equity of such entity on the date
hereof. All of the outstanding capital stock of, or other ownership interest in,
each Company Subsidiary is owned by the Company and is owned free and clear of
any Lien and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests). There are no outstanding (i) securities of
the Company or any Company Subsidiary convertible into or exchangeable for
shares of capital stock or other voting securities or ownership interests in any
Company Subsidiary, or (ii) options or other rights to acquire from the Company
or any Company Subsidiary, and no other obligation of the Company or, to the
knowledge of the Company, any Company Subsidiary to issue, any capital stock,
voting securities or other ownership interests in, or any securities convertible
into or exchangeable for any capital stock, voting securities or ownership
interests in, any Company Subsidiary (the items in clauses (i) and (ii) being
referred to collectively as the "Subsidiary Securities"). There are no
outstanding obligations of the Company or, to the knowledge of the Company, any
Company Subsidiary to repurchase, redeem or otherwise acquire any outstanding
Subsidiary Securities.
Section 3.7 Disclosure Documents. (a) Each document required to be filed
by the Company with the SEC in connection with the Transactions contemplated by
this Agreement (the "Company Disclosure Documents"), including, without
limitation, the Proxy Statement will, when filed, comply as to form in all
material respects with the applicable requirements of the Exchange Act.
(b) At the time the Proxy Statement or any amendment or supplement thereto
is first mailed to Shareholders, at the time such Shareholders vote on adoption
of this Agreement, and at the Effective Time, the Proxy Statement, as
supplemented or amended, if applicable, will not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading. At the time of the filing of any Company Disclosure
Document other than the Proxy Statement and at the time of any distribution
thereof, such Company Disclosure Document will not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading.
(c) The representations and warranties contained in this Section 3.7 will
not apply to statements or omissions included in any Company Disclosure
Documents (including, without limitation, the Proxy Statement) based upon
information furnished to the Company by the Parent or the Purchaser specifically
for use therein.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE PURCHASER
The Parent and the Purchaser represent and warrant to the Company that:
Section 4.1 Corporate Existence and Power. Each of the Parent and the
Purchaser is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Tennessee, and each has all corporate
powers and all material governmental licenses, authorizations, consents and
approvals required to consummate the transactions contemplated by this
Agreement. Since the date of its incorporation, the Purchaser has not engaged in
any material activities other than in connection with or as contemplated by this
Agreement.
Section 4.2 Capitalization. The authorized capital stock of Purchaser
consists of 1,000 shares of common stock, par value $.001 per share, of which
1,000 shares are outstanding as of the Effective Time and are owned,
beneficially or of record, by Parent. All of the issued and outstanding shares
of capital stock of the Purchaser are validly issued, fully paid, nonassesable
and free of preemptive rights and all liens.
Section 4.3 Corporate Authorization. The execution, delivery and
performance by the Parent and the Purchaser of this Agreement and the
consummation by the Parent and the Purchaser of the Transactions contemplated
hereby are within the corporate powers of the Parent and the Purchaser and have
been duly authorized by all necessary corporate action. This Agreement
constitutes a valid and binding agreement of the Parent and the Purchaser.
Section 4.4 Governmental Authorization. The execution, delivery and
performance by the Parent and the Purchaser of this Agreement and the
consummation by the Parent and the Purchaser of the Transactions contemplated by
this Agreement require no action by or in respect of, or filing with, any
Governmental Authority other than (i) the filing of Articles of Merger in
accordance with the TBCA, (ii) compliance with any applicable requirements of
the Exchange Act, and (iii) filing under the HSR Act.
Section 4.5 Non-Contravention. The execution, delivery and performance by
the Parent and the Purchaser of this Agreement and the consummation by the
Parent and the Purchaser of the Transactions contemplated hereby do not and will
not (i) contravene or conflict with the charter or bylaws of the Parent or the
Purchaser, or (ii) assuming compliance with the matters referred to in Section
4.4, contravene or conflict with any material provision of Law or Order binding
upon or applicable to the Parent or the Purchaser.
Section 4.6 Disclosure Documents. The information with respect to the
Parent and its Affiliates that the Parent furnishes to the Company for use in
any Company Disclosure Document will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading (i) in the case of the Proxy Statement at the time the
Proxy Statement or any amendment or supplement thereto is first mailed to the
Shareholders, at the time the Shareholders vote on adoption of this Agreement
and at the Effective Time, and (ii) in the case of any Company Disclosure
Document other than the Proxy Statement, at the time of the filing thereof and
at the time of any distribution thereof.
Section 4.7 Finders' and Bankers' Fees. Except for William Blair & Co.,
there is no investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of the Parent or the
Purchaser who might be entitled to any fee or commission from the Parent and/or
the Purchaser in connection with the Transactions.
Section 4.8 Financing: Solvency Matters. (a) The Parent or Purchaser (as
the case may be) has engaged William Blair & Company to assist it and Company in
raising funds. Blair has obtained written commitments from Key Corporate Capital
Inc., KeyCorp Real Estate Capital Markets, Inc. (collectively the "Senior
Lenders")and RSTW Partners III, L.P. ("Subordinated Lender"), copies of which
have been provided to the Company and the Special Committee. The funds provided
by such commitments are sufficient to complete the merger contemplated
hereunder. Company and Parent shall use their reasonable business efforts to
close the loans reflected in the written commitments. Any material change in the
terms of the
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commitment or any new commitment must be approved by the Company and Parent,
which approval will not be unreasonable withheld by either party.
(b) Upon consummation of the Transactions, (i) the fair value of the
Surviving Corporation's assets will exceed the Surviving corporation's stated
liabilities and identified contingent liabilities, (ii) the Surviving
Corporation will be able to pay its debts as they become absolute and become due
in the usual course of business, and (iii) the capital remaining in the
Surviving Corporation after consummation of the Transactions will not be
unreasonably small for the business in which the Surviving corporation is
engaged and is proposed to be engaged following consummation of the
Transactions.
ARTICLE 5
COVENANTS
Section 5.1 Interim Operations of the Company. From the date hereof until
the Effective Time, the Company and the Company Subsidiaries shall conduct their
business in the ordinary course consistent with past practice and (except in
connection with the Merger) shall use all commercially reasonable efforts to
preserve intact their business organizations and relationships with third
parties and to keep available the services of their present officers and
employees. Without limiting the generality of the foregoing, from the date
hereof until the Effective Time, without the prior written consent of the
Parent:
(a) the Company will not, directly or indirectly, (i) except upon
exercise of employee stock options outstanding on the date hereof, issue,
sell, transfer or pledge or agree to sell, transfer or pledge any treasury
stock of the Company or any capital stock of any of the Company
Subsidiaries beneficially owned by it; (ii) amend its Charter or Bylaws or
similar organizational documents; or (iii) split, combine or reclassify the
outstanding Shares or Preferred Stock or any outstanding capital stock of
any of the Company Subsidiaries;
(b) neither the Company nor any of the Company Subsidiaries shall: (i)
declare, set aside or pay any dividend or other distribution payable in
cash, stock or property with respect to its capital stock, other than
dividends paid by Company Subsidiaries to the Company in the ordinary
course of business; (ii) issue, sell, pledge, dispose of or encumber any
additional shares of, or securities convertible into or exchangeable for,
or options, warrants, calls, commitments or rights of any kind to acquire,
any shares of capital stock of any class of the Company or the Company
Subsidiaries, other than Shares reserved for issuance on the date hereof
pursuant to the exercise of Company Options outstanding on the date hereof;
(iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or
encumber any assets other than in the ordinary and usual course of business
and consistent with past practice, or incur or modify any indebtedness or
other liability, other than in the ordinary and usual course of business
and consistent with past practice; or (iv) redeem, purchase or otherwise
acquire directly or indirectly any of its capital stock;
(c) neither the Company nor any of the Company Subsidiaries shall: (i)
grant any increase in the compensation payable or to become payable by the
Company or any of the Company Subsidiaries to any of its executive
officers; or (ii) adopt any new, or amend or otherwise increase, or
accelerate the payment or vesting of the amounts payable or to become
payable under, any existing bonus, incentive compensation, deferred
compensation, severance, profit sharing, stock option, stock purchase,
insurance, pension, retirement or other employee benefit plan, agreement or
arrangement; or (iii) enter into any employment or severance agreement with
or, except in accordance with the existing written policies of the Company,
grant any severance or termination pay to any officer, director or employee
of the Company or any of the Company Subsidiaries;
(d) neither the Company nor any of the Company Subsidiaries shall
permit any insurance policy naming it as a beneficiary or a loss payable
payee to be canceled or terminated without notice to the Parent, except in
the ordinary course of business and consistent with past practice;
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(e) neither the Company nor any of the Company Subsidiaries shall
enter into any contract or transaction relating to the purchase of assets
other than in the ordinary course of business consistent with prior
practice;
(f) neither the Company nor any of the Company Subsidiaries shall
change any of the accounting methods used by it unless required by GAAP,
neither the Company nor any of the Company Subsidiaries shall make any
material tax election except in the ordinary course of business consistent
with past practice, change any material tax election already made, adopt
any material tax accounting method except in the ordinary course of
business consistent with past practice, change any material tax accounting
method unless required by GAAP, enter into any closing agreement, settle
any tax claim or assessment or consent to any tax claim or assessment or
any waiver of the statute of limitations for any such claim or assessment;
(g) neither the Company nor any of the Company Subsidiaries shall: (i)
incur or assume any long-term debt; (ii) except in the ordinary course of
business and consistent with past practice, incur or assume any short-term
indebtedness; (iii) assume, guarantee, endorse or otherwise become liable
or responsible (whether directly, contingently or otherwise) for the
obligations of any other Person; (iv) make any loans, advances or capital
contributions to, or investment in, any other Person (other than to Company
Subsidiaries or customary loans or advances to employees in accordance with
past practice); or (v) enter into any material commitment or transaction
(including, but not limited to, any borrowing, capital expenditure or
purchase, sale or lease of assets);
(h) neither the Company nor any of the Company Subsidiaries shall
settle or compromise any material claim, lawsuit, liability or obligation,
and neither the Company nor any of the Company Subsidiaries shall pay,
discharge or satisfy any claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction of any such claims, liabilities or
obligation, (x) to the extent reflected or reserved against in, or
contemplated by, the consolidated financial statements (or the notes
thereto) of the Company and the Company Subsidiaries on a consolidated
basis, (y) incurred in the ordinary course of business and consistent with
past practice or (z) which are legally required to be paid, discharged or
satisfied;
(i) neither the Company nor any of the Company Subsidiaries will take,
or agree to commit to take, any action that would make any representation
or warranty of the Company contained herein inaccurate in any respect at,
or as of any time prior to, the Effective Time;
(j) neither the Company nor any of the Company Subsidiaries will enter
into an agreement, contract, commitment or arrangement to do any of the
foregoing, or to authorize, recommend, propose or announce an intention to
do any of the foregoing.
Section 5.2 Access to Information. From the date hereof until the
Effective Time, the Company will give the Parent and the Purchaser, and their
respective counsel, financial advisors, prospective lenders, auditors and other
authorized representatives full access to the offices, properties, books and
records of the Company and the Company Subsidiaries, will furnish to the Parent
and the Purchaser and their respective counsel, financial advisors, prospective
lenders, auditors and other authorized representatives such financial and
operating data and other information as such Persons may reasonably request and
will instruct the Company's employees, counsel, financial advisors and auditors
to cooperate with the Parent and the Purchaser in their investigation of the
business of the Company and the Company Subsidiaries; provided that no
investigation pursuant to this Section shall affect any representation or
warranty given by the Company to the Parent hereunder.
Section 5.3 Other Potential Bidders. The Company shall, directly or
indirectly, furnish information and access, in each case in response to
unsolicited requests therefor, received prior to or after the date of this
Agreement, to the same extent permitted by Section 5.2 hereof, to any Person
pursuant to appropriate confidentiality agreements, and may participate in
discussions and negotiate with any such Person concerning any merger, sale of
assets, sale of shares of capital stock or similar transaction involving the
Company or any Company Subsidiary or division of the Company (any such
transaction being referred to herein as a
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"Competing Transaction"), only if the Special Committee determines, that such
action is necessary in light of the fiduciary obligations of the Board of
Directors to the Public Shareholders after consultation with counsel. In such
event, the Company shall direct its officers and other appropriate personnel to
cooperate with and be reasonably available to consult with any such Person.
Except as set forth above, the Company shall not solicit, participate in or
initiate discussions or negotiations with, or provide any information to, any
Person (other than the Parent or the Purchaser) concerning any merger, sale of
assets, sale of shares of capital stock or similar transaction involving the
Company or any Company Subsidiary or division of the Company.
Section 5.4 Notices of Certain Events. Each party shall promptly notify
the other parties of:
(a) any notice or other communication received by such party from any
Person alleging that the consent of such Person is or may be required in
connection with the Transactions;
(b) any occurrence or non-occurrence of any event that would cause any
representation or warranty of such party contained in this Agreement to be
untrue or inaccurate in any material respect at or prior to the Effective
Time;
(c) any material failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; and
(d) any notice or other communication from any Governmental Authority
in connection with the Transactions; provided, however, that the delivery
of any notice pursuant to this Section 5.4 shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
Section 5.5 Voting of Shares. (a) In any vote of the Shareholders with
respect to this Agreement and the Transactions, Martin, the Parent and the
Purchaser shall vote or cause to be voted all of the shares of Company Common
Stock beneficially owned by each such party in favor of the approval and
adoption of this Agreement and the Transactions.
(b) All Directors of the Company have agreed with the Company that they
will also vote all shares in favor of the approval and adoption of this
Agreement and the Transactions.
Section 5.6 Director and Officer Liability. For six years from and after
the Effective Time, the Parent will or will cause the Surviving Corporation to
indemnify and hold harmless the present and former officers and directors of the
Company and the Company Subsidiaries ("Indemnified Persons") in respect of acts
or omissions occurring at or prior to the Effective Time to the fullest extent
provided under the TBCA or under the Company's Charter and Bylaws in effect on
the date hereof. For such six years from and after the Effective Time, the
Parent will use all commercially reasonable efforts to provide, or to cause the
Surviving Corporation to provide, officers' and directors' liability insurance
in respect of acts or omissions occurring at or prior to the Effective Time
covering each such Person currently covered by the Company's officers' and
directors' liability insurance policy on terms with respect to coverage and
amount no less favorable than those of such policy in effect on the date hereof,
provided that if such coverage is not obtainable at an aggregate amount per
annum less than or equal to two times the aggregate amount per annum the Company
paid in its last full fiscal year, the Parent will purchase, or cause the
Surviving Corporation to purchase, such lesser amount of coverage, on terms as
similar in coverage as practicable to such coverage in effect on the date
hereof, as may be obtained having an aggregate per annum cost not to exceed two
times the aggregate amount per annum the Company paid in its last full fiscal
year, which amount has been disclosed to the Parent. Notwithstanding any
provision herein to the contrary, the covenants contained in this Section 5.6
shall survive the Effective Time and the consummation of the Transactions, are
intended to benefit the Indemnified Persons, and shall be binding on all
successors and assigns of the Parent and the Surviving Corporation.
Section 5.7 Best Efforts. Subject to the terms and conditions of this
Agreement, each party will use its best efforts to take, or cause to be taken,
all actions and to do, or cause to be done all things necessary, proper or
advisable under applicable Laws to consummate the Transactions contemplated by
this Agreement. Without limiting the generality of the foregoing, the Company
shall, and shall cause the Company Subsidiaries to, assist the Parent and the
Purchaser in obtaining financing necessary or desirable to complete the
Transactions, including, without limitation, executing on or after the Effective
Date such loan agreements,
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notes, guarantees, security agreements, certificates of representations and
warranties and other documents, and obtaining such opinions of counsel and
accountants' comfort letters, as may be reasonably requested by the Parent, the
Purchaser or their prospective lenders in connection with the receipt of the
financing necessary or desirable to complete the Transactions. Martin will use
his best efforts to take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary, proper, or advisable under applicable laws to
consummate the Transactions contemplated by this Agreement, provided, however,
he (and the other stockholders of Parent) shall not be required to provide in
the aggregate more than $10 million of equity for the Parent. Martin shall keep
the Company informed of the progress in raising the necessary funds and shall
obtain binding commitments from reputable lenders for the necessary funds before
the Proxy Statement referred to in Section 5.11 is mailed.
Section 5.8 Certain Filings. The Company, the Parent and the Purchaser
shall cooperate with each other (a) in connection with the preparation of the
Company Disclosure Documents, (b) in determining whether any action by or in
respect of, or filing with, any Governmental Authority is required, or any
actions, consents, approvals or waivers are required to be obtained from parties
to any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement, and (c) in seeking any such
actions, consents, approvals or waivers or making any such filings, furnishing
information required in connection therewith or with the Company Disclosure
Documents and seeking timely to obtain any such actions, consents, approvals or
waivers.
Section 5.9 Public Announcements. The Parent and the Company will consult
with each other before issuing any press release or making any public statement
with respect to this Agreement or the Transactions and, except as may be
required by applicable Law or any listing agreement with any national securities
exchange, will not issue any such press release or make any such public
statement prior to such consultation.
Section 5.10 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or the Purchaser,
any deeds, bills of sale, assignments or assurances and to take and do, in the
name and on behalf of the Company or the Purchaser, any other actions and things
they may deem desirable to vest, perfect or confirm of record or otherwise in
the Surviving Corporation any and all right, title and interest in, to and under
any of the rights, properties or assets of the Company acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Merger.
Section 5.11 Shareholders' Meeting. The Company shall, in accordance with
applicable Law:
(a) duly call, give notice of, convene and hold a special meeting of
the Shareholders (the "Special Meeting") as soon as reasonably practicable
for the purpose of considering and voting upon the approval of the
Transactions and the adoption of this Agreement, and comply with all legal
requirements applicable to such meeting;
(b) in connection with such meeting, promptly prepare and file with
the SEC a preliminary proxy or information statement, and a Schedule 13E-3
Transaction Statement required pursuant to Section 13(e) of the Exchange
Act (the "Schedule 13E-3"), relating to the Transactions and this Agreement
and use its best efforts (x) to obtain and furnish the information required
to be included by the SEC in such preliminary proxy statement and Schedule
13E-3 and, after consultation with the Parent, to respond promptly to any
comments made by the SEC with respect to the preliminary proxy or Schedule
13E-3 and cause a definitive proxy or information statement, including any
amendment or supplement thereto (the "Proxy Statement") to be mailed to the
Shareholders, provided that no amendment or supplement to the Proxy
Statement will be made by the Company without consultation with the Parent
and its counsel, and (y) to obtain the necessary approvals of the
Transactions and this Agreement by the Shareholders; and
(c) include in the Proxy Statement the recommendation of the Board
that the Shareholders vote in favor of the approval of the Transactions and
the adoption of this Agreement.
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ARTICLE 6
CONDITIONS TO THE MERGER
Section 6.1 Conditions to the Obligations of Each Party. The obligations
of the Company, the Parent and the Purchaser to consummate the Transactions are
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, by each of
the parties intended to benefit therefrom, to the extent permitted by applicable
Law:
(a) this Agreement and the Transactions shall have been approved and
adopted by a majority of all Shares of the Company Common Stock entitled to
vote thereon, in accordance with Section 48-21-104 of the TBCA; and by a
majority of the shares of Company Common Stock entitled to vote thereon
held by the Public Shareholders.
(b) no Governmental Authority shall have enacted, issued, promulgated,
enforced or entered any Law or Order (whether temporary, preliminary or
permanent) which is in effect and which has the effect of making the
Transactions illegal or otherwise prohibiting consummation of the
Transactions;
(c) all actions by or in respect of or filings with any Governmental
Authority required to permit the consummation of the Transactions shall
have been obtained, other than the filing of the requisite Articles of
Merger with the Secretary of State of Tennessee;
(d) at the time of mailing of the Proxy Statement, at the time of the
Special Meeting, and at the Effective Time, J. C. Bradford & Co. shall have
reaffirmed in writing the fairness opinion previously prepared and
delivered by it to the Special Committee and shall not have withdrawn such
opinion; and
Section 6.2 Additional Conditions to the Obligations of the Parent and the
Purchaser. The obligations of the Parent and the Purchaser to consummate the
Merger are also subject to the satisfaction at or prior to the Effective Time of
the following further conditions, any or all of which may be waived, in whole or
in part, by each of the parties intended to benefit therefrom, to the extent
permitted by applicable Law:
(a) the Company shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Effective Time, the representations and warranties of the Company contained
in this Agreement and in any certificate delivered by the Company pursuant
hereto shall be true and correct in all respects, except where the breach
or inaccuracy thereof would not, individually or in the aggregate, have a
Material Adverse Effect, at and as of the Effective Time as if made at and
as of such time, except that those representations and warranties which
address matters only as of a particular date shall remain true and correct
as of such date, and the Parent shall have received a certificate signed by
the principal financial officer of the Company to the foregoing effect;
(b) no Material Adverse Effect shall have occurred;
(c) the Parent shall have received or be satisfied that it will
receive all consents and approvals contemplated by Section 3.3 and any
other consents of third parties necessary in connection with the
consummation of the Merger if the failure to obtain any such consent would
have a Material Adverse Effect;
(d) the Parent and the Purchaser shall have obtained equity and debt
funds necessary to finance the Transactions, either through direct
obligations or through obligations entered into by the Company; and
(e) the Parent shall have received all documents it may reasonably
request relating to the existence of the Company and the authority of the
Company to enter into this Agreement, all in form and substance reasonably
satisfactory to the Parent.
Section 6.3 Additional Conditions to the Obligations of the Company. The
obligations of the Company to consummate the Merger are also subject to the
satisfaction at or prior to the Effective Time of
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the following further conditions, any or all of which may be waived, in whole or
in part, by the Company to the extent permitted by applicable Law:
(a) the Parent and the Purchaser shall have performed in all material
respects all of their respective obligations hereunder required to be
performed by them at or prior to the Effective Time, the representations
and warranties of the Parent and the Purchaser contained in this Agreement
and in any certificate delivered by the Parent or the Purchaser pursuant
hereto shall be true and correct in all material respects at and as of the
Effective Time as if made at and as of such time, except that those
representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date, and the
Company shall have received a certificate signed by the President or any
Vice President of each of the Parent and the Purchaser to the foregoing
effect;
(b) the Company shall have received all documents it may reasonably
request relating to the existence of the Parent or the Purchaser and the
authority of the Parent or the Purchaser to enter into this Agreement, all
in form and substance reasonably satisfactory to the Company.
ARTICLE 7
TERMINATION
Section 7.1 Termination. This Agreement may be terminated and the
Transactions may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the Shareholders):
(a) by mutual written consent of the Company (such determination to be
made on behalf of the Company by the Special Committee in its sole
discretion) and the Parent;
(b) by either the Parent or the Company (such determination to be made
on behalf of the Company by the Special Committee in its sole discretion),
if the Merger has not been consummated by January 30, 1998; provided,
however, that the right to terminate this Agreement under this Section
7.1(b) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before such date;
(c) by either the Parent or the Company (such determination to be made
on behalf of the Company by the Special Committee in its sole discretion),
if there shall be any Law that makes consummation of the Transactions
illegal or otherwise prohibited or if any Order enjoining the Parent or the
Company from consummating the Transactions is entered and such Order shall
become final and nonappealable;
(d) by either the Parent or the Company if this Agreement and the
Transactions shall fail to be approved and adopted by the required vote of
the Shareholders and the Public Shareholders of the Company at the Special
Meeting called for such purpose, as set forth in Section 6.1(a) above;
(e) by either the Parent or the Company (such determination to be made
on behalf of the Company by the Special Committee in its sole discretion),
if, consistent with the terms of this Agreement, the Board of Directors of
the Company withdraws, modifies or changes its recommendation of this
Agreement or the Transactions in a manner adverse to the Parent or the
Purchaser or shall have resolved to do any of the foregoing or the Board of
Directors of the Company shall have recommended to the Shareholders of the
Company any Competing Transaction or resolved to do so.
Section 7.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 7.1, this Agreement shall become void and of no effect with
no liability on the part of any party hereto, except that the agreements
contained in Section 8.6 shall survive the termination hereof; provided,
however, that, except as specifically provided herein, nothing herein shall
relieve any party hereto of liability for any breach of this Agreement.
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ARTICLE 8
MISCELLANEOUS
Section 8.1 Definitions. As used herein, the following terms have the
following respective meanings (such meanings to be equally applicable to both
the singular and plural forms of the terms defined):
"Affiliate" means, with respect to a Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such given Person.
"Agreement" means this Agreement and Plan of Merger, as the same may be
supplemented, modified or amended from time to time.
"Combination Act" means the Tennessee Business Combination Act, as amended.
"Company Common Stock" means the common stock, $.001 par value per share,
of the Company.
"Company Subsidiaries" means American Sign & Marketing Services, Inc. and
Plasti-Line Columbia, Inc.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Expenses" means all reasonable out-of-pocket expenses (including, without
limitation, all fees and expenses of counsel, accountants, investment bankers,
experts and consultants and commitment fees and other financing fees and
expenses) incurred by the Parent, the Purchaser or the Company or on behalf of
any such party in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement, the preparation,
printing, filing and mailing of the Proxy Statement and Schedule 13E-3, the
solicitation of the shareholder approvals and all other matters related to the
consummation of the transactions contemplated hereby.
"GAAP" means United States generally accepted accounting principles
consistently applied.
"Governmental Authority" means any federal, state, county, local, foreign
or other governmental or public agency, instrumentality, commission, authority,
board or body, and any court, arbitrator, mediator or tribunal.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and all regulations promulgated thereunder.
"Law" means any code, law, ordinance, regulation, rule or statute of any
Governmental Authority.
"Lien" means any security interest, lien, mortgage, deed to secure debt,
deed of trust, pledge, charge, conditional sale or other title retention
agreement, or other encumbrance of any kind.
"Material Adverse Effect" means any matter that would reasonably be
expected to affect materially and adversely the business, condition (financial
or otherwise) or results of operations of the Company and the Company
Subsidiaries considered as a whole.
"Order" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or writ
of any federal, state, local or foreign or other court, arbitrator, mediator,
tribunal, administrative agency or other Governmental Authority.
"Person" means an individual, a corporation, a partnership, an association,
a trust, a limited liability company or any other entity or organization,
including a government or political subdivision or any agency or instrumentality
thereof.
"Preferred Stock" means the preferred stock, $.001 par value per share, of
the Company.
"Purchaser Common Stock" means the common stock, $.001 par value per share,
of the Purchaser.
"SEC" means the Securities and Exchange Commission.
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"Surviving Corporation" means the Company as the surviving corporation
resulting from the Merger.
"TBCA" means the Tennessee Business Corporation Act, as amended.
The following terms are defined in the following Sections of this
Agreement:
TERM SECTION
- -------------------------------- -----------------
"Bylaws" 1.2
"Certificates" 2.2(b)
"Charter" 1.2
"Closing" 1.4
"Closing Date" 1.4
"Company" Opening Paragraph
"Company Disclosure Documents" 3.9(a)
"Company 10-K" 3.7
"Company 10-Qs" 3.8
"Competing Transaction" 5.3
"Dissenting Shareholders" 2.1(d)
"Effective Time" 1.3
"Merger" 1.2
"Merger Consideration" 2.1(d)
"Parent" Opening Paragraph
"Paying Agent" 2.2(a)
"Proxy Statement" 1.6(b)
"Purchaser" Opening Paragraph
"Schedule 13E-3" 1.6(b)
"Share" 2.1
"Shareholders" 1.1
"Special Committee" 1.1
"Special Meeting" 1.6(a)
"Subsidiary Securities" 3.6
"Surviving Corporation" 1.2
"Transactions" 1.1
"Voting Debt" 3.5
Section 8.2 Notices. Unless otherwise specifically provided herein, any
notice, demand, request or other communication herein requested or permitted to
be given shall be in writing and may be personally served, sent by overnight
courier service, or sent by telecopy with a confirming copy sent by United
States first-class mail, each with any postage or delivery charge prepaid. For
the purposes hereof, the addresses of the parties hereto (until notice of a
change thereof is delivered as provided in this Section) shall be as follows:
If to the Company: Plasti-Line, Inc.
c/o James F. Smith, Jr.
5508 Heathrow Drive
Knoxville, Tennessee 37919
Telephone: (423) 588-2878
Telecopy: (423) 584-4971
With a copy (which shall
not constitute notice) to: Bass, Berry & Sims, L.L.P.
2700 First American Center
Nashville Tennessee 37238-2700
Attn: Bob F. Thompson
Telephone: (615) 742-6200
Telecopy: (615) 742-6293
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If to the Parent or the
Purchaser: PL Acquisition Corp.
P.O. Box 59043
Knoxville, Tennessee 37950-9043
Attn: James Martin
Telephone: (423) 947-8464
Telecopy: (423) 947-8565
With a copy (which shall
not constitute notice) to: Alston & Bird LLP
1201 West Peachtree Street
Atlanta, Georgia 30309
Attn: B. Harvey Hill, Jr.
Telephone: (404) 881-7446
Telecopy: (404) 881-777
Any notice provided hereunder shall be deemed to have been given on the
date delivered in person, or on the next business day after deposit with an
overnight courier service, or on the date received by telecopy transmissions.
Section 8.3 Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate delivered
pursuant hereto shall not survive the Effective Time or the termination of this
Agreement. Nothing in this Section 8.3 shall relieve any party for any breach of
any representation, warranty or agreement in this Agreement occurring prior to
termination, except that the Agreements in Article 2 and Section 5.6 hereof and
this Section 8.3 shall survive the Effective Time indefinitely and those set
forth in Section 8.6 hereof shall survive termination indefinitely.
Section 8.4 Enforcement of Agreement. Until the Effective Time, the
Special Committee shall continue in existence and shall have the right to cause
the Company to take any action necessary to enforce the rights of the Company
and the obligations of Martin, the Parent and the Purchaser under this
Agreement.
Section 8.5 Amendments; No Waivers. (a) Any provision of this Agreement
may be amended or waived prior to the Effective Time if, and only if, such
amendment or waiver is in writing and signed by all parties hereto, or in the
case of a waiver, by the party against whom the waiver is to be effective;
provided that any such amendment and any such waiver by the Company shall have
been approved by the Board of Directors of the Company, acting on the
recommendation of the Special Committee; and provided, further, that after the
adoption of this Agreement by the Shareholders and the Public Shareholders, no
such amendment or waiver shall, without the further approval of such
Shareholders and such Public Shareholders, alter or change (i) the amount or
kind of consideration to be received in exchange for any shares of capital stock
of the Company or (ii) any of the terms or conditions of this Agreement if such
alteration or change would adversely affect the holders of any shares of capital
stock of the Company.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 8.6 Expenses. All reasonable Expenses incurred by all parties in
connection with this Agreement and the consummation of the Transactions shall be
paid by the Company if the transaction is consummated. If the transaction is not
consummated, Parent shall pay its expenses related to the transaction of up to
$100,000 and the Company shall pay all other expenses, provided that Company
shall retain its rights, if any, under Section 7.2. Parent will not take any
action to change the Senior Lenders or Subordinated Lender so as to materially
increase the expenses payable by the Company without the prior consent of the
Company. The Company retains the right to negotiate directly any of the expenses
with the third parties that must be paid by the Company pursuant to this Section
8.6.
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Section 8.7 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto except that the Parent may
transfer or assign, in whole or from time to time in part, to one or more of its
Affiliates, its rights under this Agreement, but any such transfer or assignment
will not relieve the Parent of its obligations under this Agreement or prejudice
the rights of shareholders to receive the Merger Consideration for Shares
properly surrendered in accordance with Section 2.2. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement, and their respective successors and assigns.
Section 8.8 Governing Law. Regardless of the place or places where this
Agreement may be executed, delivered or consummated, this Agreement shall be
governed by and construed in accordance with the Laws of the State of Tennessee,
without regard to any applicable conflicts of Laws.
Section 8.9 Severability. Any term or provision of this Agreement which
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.
Section 8.10 Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
Section 8.11 Interpretations. Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against any party, whether
under any rule of construction or otherwise. No party to this Agreement shall be
considered the draftsman. The parties acknowledge and agree that this Agreement
has been reviewed, negotiated and accepted by all parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of all parties
hereto.
Section 8.12 Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures were upon the same instrument. This Agreement shall
become effective when each party hereto shall have received counterparts hereof
signed by all of the other parties hereto.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf as of the day and year first above written.
PLASTI-LINE, INC.
Attest:
By: /s/ JAMES F. SMITH, JR.
/s/ MARK J. DEUSCHLE -----------------------------------------
- -------------------------------------------- James F. Smith, Jr.
Mark J. Deuschle, Secretary Chairman of the Special Committee
of the Board of Directors
PL HOLDING CORP.
Attest:
By: /s/ JAMES R. MARTIN
/s/ MARK J. DEUSCHLE, -----------------------------------------
- -------------------------------------------- James R. Martin
Mark J. Deuschle, Secretary Chairman of the Board
and President
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