Exhibit 2.1
EXECUTION
COPY
AGREEMENT AND PLAN OF
MERGER
BY AND AMONG
MOSSIMO HOLDING
CORP.,
MOSSIMO ACQUISITION
CORP.,
MOSSIMO GIANNULLI
AND
MOSSIMO, INC.
DATED AS OF SEPTEMBER 21,
2005
TABLE OF CONTENTS
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AGREEMENT AND PLAN OF
MERGER
THIS AGREEMENT AND PLAN OF MERGER,
dated as of September 21, 2005 (this “Agreement”),
is entered into by and among Mossimo Holding Corp., a Delaware
corporation (“Parent”), Mossimo Acquisition Corp., a
Delaware corporation and wholly owned subsidiary of Parent (the
“Purchaser”), Mossimo Giannulli, an individual (for
purposes of Section 5.10 only) (“Giannulli”), and
Mossimo, Inc., a Delaware corporation (the
“Company”).
WHEREAS, Giannulli beneficially owns
10,272,822 shares of the common stock, par value $0.001 per share,
of the Company (the “Company Common Stock”),
representing 65.23% of the outstanding shares of Company Common
Stock, and Giannulli owns all of the outstanding shares of the
capital stock of the Parent;
WHEREAS, Giannulli has formed Parent
and Parent in turn has formed the Purchaser for the purpose of
making a tender offer (the “Offer”) to purchase all of
the Company Common Stock (the “Shares”) (other than
Shares beneficially owned by Giannulli or Shares held in the
treasury of the Company or any of its wholly owned subsidiaries),
at a price per Share of $5.00 in cash (the “Offer
Price”), subject to the terms and conditions set forth in
this Agreement;
WHEREAS, the Board of Directors of
Parent, the Board of Directors of the Purchaser and the Board of
Directors of the Company (the “Company Board”) and the
Special Committee of independent directors of the Company Board
(the “Special Committee”) have approved the merger of
the Purchaser with and into the Company with the Company as the
survivor (the “Surviving Corporation”), as set forth
below (the “Merger”), in accordance with
Section 253 of the General Corporation Law of the State of
Delaware (the “DGCL”) and upon the terms and subject to
the conditions set forth in this Agreement, whereby each issued and
outstanding Share not owned directly or indirectly by Giannulli,
Parent, the Purchaser or the Company will be converted into the
right to receive the Offer Price in cash;
WHEREAS, immediately prior to the
effective time of the Merger, Giannulli intends to contribute the
shares of Company Common Stock owned by him to Parent, and Parent
in turn will contribute such shares of Company Common Stock to the
Purchaser (collectively, the
“Contribution”);
WHEREAS, each of Parent and the
Purchaser has required as a condition and an inducement to its
willingness to enter into this Agreement that concurrently with the
execution and delivery of this Agreement and incurring the
obligations set forth herein, with the approval of the Company
Board and the Special Committee, the Company, Parent and the
Purchaser shall enter into and deliver a Purchaser Stock Option
Agreement in substantially the form attached hereto as
Exhibit A (the “Purchaser Stock Option
Agreement”);
WHEREAS, the Company Board and the
Special Committee have, on the terms and subject to the conditions
set forth herein, (i) determined that each of the Offer and
the Merger is advisable, fair to and in the best interest of the
stockholders of the Company (other than Parent, the Purchaser and
Giannulli), (ii) approved the Offer and (iii) approved
and adopted this Agreement and are recommending that the
Company’s stockholders accept the Offer and tender their
Shares to the Purchaser;
WHEREAS, Parent, the Purchaser and
the Company intend that the Offer, the Contribution and the Merger
(collectively, the “Transaction”) shall be treated as
an integrated
transaction, after which Giannulli will own,
through Parent, all of the outstanding stock of the Surviving
Corporation, and Parent, the Purchaser and the Company do not
intend to consummate any step of the Transaction without also
consummating the other steps of the Transaction; and
WHEREAS, Parent, the Purchaser and
the Company desire to make certain representations, warranties,
covenants and agreements in connection with the Offer and the
Merger and also to prescribe various conditions to the Offer and
the Merger;
NOW, THEREFORE, in consideration of
the foregoing and the respective representations, warranties,
covenants and agreements set forth in this Agreement and intending
to be legally bound hereby, the parties hereto agree as
follows:
Article 1
The Offer
Section 1.1
The Offer .
Section 1.1.1
Provided that
this Agreement shall not have been terminated in accordance with
Article 7 hereof and none of the events set forth in Annex I
hereto (the “Tender Offer Conditions”) shall have
occurred, the Purchaser shall (A) commence (within the meaning
of Rule 14d-2 under the Securities Exchange Act of 1934, as
amended (including the rules and regulations promulgated
thereunder, the “Exchange Act”)) as promptly as
practicable, an offer to purchase all outstanding Shares at the
Offer Price, (B) in cooperation with Parent and after
affording the Company a reasonable opportunity to review and
comment thereon, file a Tender Offer Statement on Schedule TO
and a Transaction Statement on Schedule 13E-3 and all other
necessary documents with the Securities and Exchange Commission
(the “SEC”), make all deliveries, mailings and
telephonic notices required by Rule 14d-3 under the Exchange
Act, and publish, send or give the disclosure required by
Rule 14d-6 under the Exchange Act by complying with the
dissemination requirements of Rule 14d-4 under the Exchange
Act in each case in connection with the Offer (collectively,
together with any amendments or supplements thereto, the
“Offer Documents”) and (C) use reasonable efforts
to consummate the Offer, subject to the terms and conditions
thereof. Each of Parent and the Purchaser, on the one hand,
and the Company, on the other hand, agrees promptly to correct any
information provided by it for use in the Offer Documents if and to
the extent that it shall have become false or misleading in any
material respect, and each of Parent and the Purchaser further
agrees to take all steps necessary to cause the Offer Documents as
so corrected to be filed with the SEC and to be disseminated to
stockholders of the Company, in each case as and to the extent
required by applicable federal securities laws. The
obligation of the Purchaser to accept for payment or pay for any
Shares tendered pursuant to the Offer will be subject only to the
satisfaction of the Tender Offer Conditions.
Section 1.1.2
Without the prior
written consent of the Company, the Purchaser shall not decrease
the Offer Price or change the form of consideration payable in the
Offer, decrease the number of Shares sought to be purchased in the
Offer or impose additional conditions to the Offer or amend any
other term of the Offer in any manner adverse to the holders of
Shares. The Offer shall remain open until the date that is 20
business days (as such term is defined in
Rule 14d-1(g)(3) under the Exchange Act) after the
commencement of the Offer (the “Expiration Date”),
unless the Purchaser shall have extended the period of time for
which the Offer is open pursuant to, and in accordance with, the
terms of this Agreement or as
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may be required by
applicable law, in which event the term “Expiration
Date” shall mean the latest time and date as the Offer, as so
extended, may expire. If, at any Expiration Date, any of the
Tender Offer Conditions are not satisfied or waived by the
Purchaser, the Purchaser may, but shall not be required to, extend
the Offer. Subject to the terms of the Offer and this
Agreement and the satisfaction of all the Tender Offer Conditions
as of any Expiration Date, the Purchaser will accept for payment
and pay for all Shares validly tendered and not validly withdrawn
pursuant to the Offer as soon as practicable after such Expiration
Date. In addition, if, at the Expiration Date, all of the
conditions to the Offer have been satisfied (or, to the extent
permitted by this Agreement, waived by Purchaser), but the number
of Shares validly tendered and not withdrawn pursuant to the Offer,
when taken together with the shares of Company Common Stock
beneficially owned by Giannulli, constitute less than 90% of the
Shares then outstanding, the Purchaser shall (subject to applicable
law) have the right to provide, but shall not be required to
provide, a subsequent offering period after the Expiration Date, in
accordance with Rule 14d-11 under the Exchange Act, for up to
20 business days after Purchaser’s acceptance for purchase of
the Shares then tendered and not withdrawn pursuant to the Offer,
in which case Purchase shall (i) give the required notice of
such subsequent offering period and (ii) immediately accept
for purchase, and promptly pay for, all Shares tendered and not
withdrawn as of the Expiration Date. Without the prior
written consent of the Company, the Purchaser shall not accept for
payment or pay for any Shares in the Offer if, as a result, the
Purchaser would acquire less than the number of Shares necessary to
satisfy the Minimum Condition (as defined in Annex I
hereto).
Section 1.2
Company Actions .
Section 1.2.1
The Company
shall, after affording each of Parent and the Purchaser a
reasonable opportunity to review and comment thereon, file with the
SEC and mail to the holders of Shares an Information Statement on
Schedule 14D-9 (together with any amendments or supplements
thereto, the “Schedule 14D-9”) reflecting the
recommendation of the Company Board that holders of Shares tender
their Shares pursuant to the Offer and shall disseminate the
Schedule 14D-9 as required by Rule 14d-9 promulgated
under the Exchange Act. The Schedule 14D-9 will set
forth, and the Company hereby represents, that the Company Board,
based on the recommendation of the Special Committee, at a meeting
duly called and held at which a quorum was present throughout, has
(A) determined by unanimous vote of all of its directors in
attendance that each of the transactions contemplated hereby,
including each of the Offer and the Merger, is advisable, fair to
and in the best interests of the Company and its stockholders,
(B) approved the Offer and adopted this Agreement in
accordance with the DGCL, (C) recommended acceptance of the
Offer, and (D) taken all other action necessary to render
Section 203 of the DGCL inapplicable to the Offer, the Merger
and the Purchaser Stock Option Agreement; provided ,
however , that such recommendation and approval may be
withdrawn, modified or amended to the extent permitted by
Section 5.3.3. In addition, the Schedule 14D-9 will
set forth, and the Company further represents, that, prior to the
execution hereof, Houlihan Lokey Howard & Zukin (the
“Company Financial Advisor”) has delivered to the
Special Committee its written opinion that, as of
September 21, 2005 the consideration to be received by the
holders of Shares pursuant to the Offer and the Merger is fair to
the holders of Shares from a financial point of view. The
Company hereby consents to the inclusion in the Offer Documents of
the recommendations of the Company Board described in this
Section 1.2.1 and the terms of the opinion of the Company
Financial Advisor. Each of the Company, on the one hand, and
each of Parent and the Purchaser, on the other hand, agree promptly
to correct
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any information provided by
any of them for use in the Schedule 14D-9 if and to the extent
that it shall have become false or misleading, and each of the
Company, Parent and the Purchaser further agree to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be
filed with the SEC and to be disseminated to the holders of Shares,
in each case as and to the extent required by applicable federal
securities laws.
Section 1.2.2
The Company will
promptly, and from time to time as requested by the Purchaser,
furnish the Purchaser with mailing labels, security position
listings, any non-objecting beneficial owner lists and any listing
or computer list containing the names and addresses of the record
holders of the Shares as of the most recent practicable date that
are in the Company’s possession or control and shall furnish
the Purchaser with such additional available information
(including, but not limited to, updated lists of holders of Shares
and their addresses, mailing labels and lists of security positions
and non-objecting beneficial owner lists) and such other assistance
as the Purchaser or its agents may reasonably request in
communicating to the Company’s record and beneficial
stockholders.
Article 2
The Merger
Section 2.1
The Merger . Upon the terms and subject to
satisfaction or waiver of the conditions set forth in this
Agreement, and in accordance with the DGCL, the Purchaser shall be
merged with and into the Company. As a result of the Merger,
the separate corporate existence of the Purchaser shall cease, and
the Company shall continue as the Surviving Corporation.
Section 2.2
Effective Time . As soon as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth
in Section 6.1, the parties hereto shall cause the Merger to be
consummated by filing a certificate of ownership and merger (the
“Certificate of Ownership and Merger”), with the
Secretary of State of the State of Delaware, in such form as
required by, and executed in accordance with the relevant
provisions of, the DGCL (the date and time of such filing, or if
another date and time is specified in such filing, such specified
date and time, being the “Effective Time”).
Section 2.3
Effect of the Merger . At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of the
DGCL. Without limiting the generality of the foregoing, at
the Effective Time, except as otherwise provided herein, all the
property, rights, privileges, powers and franchises of the Company
and the Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and the Purchaser
shall become the debts, liabilities and duties of the Surviving
Corporation.
Section 2.4
Certificate of Incorporation; By-laws .
At the Effective Time, the
Certificate of Incorporation and the By-laws of the Company shall
be amended to read as set forth on Exhibit B and
Exhibit C hereto, respectively, and, as so amended, shall be
the Certificate of Incorporation and Bylaws of the Surviving
Corporation.
Section 2.5
Directors and Officers . The directors of the Purchaser
immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation, each to hold office in
accordance with the Certificate of Incorporation and By-laws of the
Surviving Corporation. The officers of the Company
immediately prior to the Effective
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Time shall be the initial officers of the
Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and By-laws of the Surviving
Corporation.
Section 2.6
Conversion of Securities . At the Effective Time, by virtue of the
Merger and without any action on the part of Parent, the Purchaser,
the Company or the holders of any of the following
securities:
Section 2.6.1
Conversion Generally . Each Share issued and
outstanding immediately prior to the Effective Time (other than
(i) any Shares held by Giannulli, Parent, the Purchaser, in
the treasury of the Company or by any wholly-owned subsidiary of
the Company, which Shares, by virtue of the Merger and without any
action on the part of the holder thereof, shall be cancelled and
retired and shall cease to exist with no payment being made with
respect thereto, and (ii) Dissenting Shares), shall be
cancelled and retired and shall be converted into the right to
receive $5.00, or any higher price per Share paid pursuant to the
Offer, in cash (the “Merger Consideration”), payable to
the holder thereof, without interest thereon, upon surrender of the
certificate formerly representing such Shares.
Section 2.6.2
Purchaser Common Stock . Each share of common
stock, par value $0.001 per share, of the Purchaser (the
“Purchaser Common Stock”) issued and outstanding
immediately prior to the Effective Time shall be converted into and
become one newly and validly issued, fully paid and nonassessable
share of common stock of the Surviving Corporation.
Section 2.7
Options; Stock Plans . Prior to the Effective Time, the Company Board
(or, if appropriate, any committee thereof) shall adopt appropriate
resolutions and take all other actions necessary and appropriate to
provide that, immediately prior to the Effective Time, each
unexpired and unexercised option or similar rights to purchase
Shares, under any stock option plan of the Company, including the
1995 Stock Plan (pursuant to which the Company has issued the
“Company Options”) and the 1995 Directors Stock Option
Plan (pursuant to which the Company has issued the “Director
Options”) or any other plan, agreement or arrangement,
excluding the Purchaser Stock Option Agreement (the “Company
Stock Option Plans”), whether or not then exercisable or
vested, shall be cancelled and, in exchange therefor, each former
holder of any such cancelled Company Option or Director Option
shall be entitled to receive, in consideration of the cancellation
of such Company Option or Director Option and in settlement
therefor, a payment in cash (subject to any applicable withholding
or other taxes required by applicable law to be withheld) of an
amount equal to the product of (A) the total number of Shares
previously subject to such Company Option or Director Option and
(B) the excess, if any, of the Merger Consideration over the
exercise price per Share previously subject to such Company Option
or Director Option (such amounts payable hereunder being referred
to as the “Option Payment”). From and
after the Effective Time, any such cancelled Company Option or
Director Option shall no longer be exercisable by the former holder
thereof, but shall only entitle such holder to the payment of the
Option Payment, and the Company will use its reasonable best
efforts to obtain all necessary consents to ensure that former
holders of Company Options and Director Options will have no rights
other than the right to receive the Option Payment. After the
Effective Time, all Company Stock Option Plans shall be terminated
and no further Company Options, Director Options or other rights
with respect to Shares shall be granted thereunder.
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Section 2.8
Merger Without Meeting of Stockholders .
In the event that the
Purchaser shall acquire and then hold at least 90% of the
outstanding Shares that, absent Section 253 of the DGCL, would
be entitled to vote on the merger pursuant to the Offer or
otherwise (including Shares acquired upon exercise of the option
granted pursuant to the Purchaser Stock Option Agreement), the
parties hereto agree to take all necessary and appropriate action
to cause the Merger to become effective as soon as practicable
after the acceptance for payment of Shares by the Purchaser
pursuant to the Offer without a meeting of stockholders of the
Company, in accordance with Section 253 of the
DGCL.
Section 2.9
Dissenting Shares . Notwithstanding Section 2.6.1,
Shares outstanding immediately prior to the Effective Time and held
by a holder who has not voted in favor of the Merger or consented
thereto in writing and who has demanded appraisal for such Shares
in accordance with the DGCL (“Dissenting Shares”) shall
not be converted into a right to receive the Merger Consideration
but shall be entitled only to such rights as are granted by the
DGCL to a holder of Dissenting Shares, unless such holder fails to
perfect or withdraws or otherwise loses such holder’s right
to appraisal. If after the Effective Time such holder fails
to perfect or withdraws or loses his right to appraisal in respect
of his Shares, such Shares shall be treated as if they had been
converted as of the Effective Time into a right to receive the
Merger Consideration in accordance with Section 2.6, without
interest thereon, upon the surrender of certificates representing
such shares. Notwithstanding anything to the contrary in this
Section 2.9, if the Merger is rescinded or abandoned, the
right of any holder to receive the fair value of his Dissenting
Shares shall cease. The Company shall give the Purchaser
prompt notice of any demands received by the Company for appraisal
of Shares, and the Purchaser shall have the right to participate in
and to control all negotiations and proceedings with respect to
such demands. The Company shall not, except with the prior
written consent of the Purchaser, make any payment with respect to,
or settle or offer to settle, any such demands.
Section 2.10
Payment for Shares .
Section 2.10.1
From and after
the Effective Time, such bank or trust company as shall be
designated by the Purchaser and reasonably acceptable to the
Company shall act as paying agent (the “Paying Agent”)
in effecting the payment of the Merger Consideration in respect of
certificates (the “Certificates”) that, prior to the
Effective Time, represented Shares entitled to payment of the
Merger Consideration pursuant to Section 2.6.1. Promptly
following the Effective Time, the Purchaser shall deposit, or cause
to be deposited, with the Paying Agent the aggregate Merger
Consideration to which holders of Shares shall be entitled at the
Effective Time pursuant to Section 2.6.1.
Section 2.10.2
Promptly after
the Effective Time, the Purchaser shall cause the Paying Agent to
mail to each record holder of Certificates that, immediately prior
to the Effective Time, represented Shares a form of 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 Paying Agent, and
instructions for use in surrendering such Certificates and
receiving the Merger Consideration in respect thereof. Upon
the surrender of each such Certificate, the Paying Agent shall pay
the holder of such Certificate the Merger Consideration multiplied
by the number of Shares formerly represented by such Certificate,
in consideration therefor, and such Certificate shall forthwith be
cancelled. Until so surrendered, each such Certificate (other
than Certificates representing Shares held by Parent, the
Purchaser, any wholly-owned subsidiary of either Parent or the
Purchaser, in the treasury of the Company
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or by any wholly-owned
subsidiary of the Company or Dissenting Shares) shall represent
solely the right to receive the aggregate Merger Consideration
relating thereto. No interest or dividends shall be paid or
accrue on the Merger Consideration. If the Merger
Consideration (or any portion thereof) is to be delivered to any
person other than the person in whose name the Certificate formerly
representing Shares surrendered therefor is registered, it shall be
a condition to such right to receive such Merger Consideration that
the Certificate so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the person
surrendering such Shares shall pay to the Paying Agent any transfer
or other similar 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 establish to the
satisfaction of the Paying Agent that such tax has been paid or is
not applicable.
Section 2.10.3
If any
Certificate 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
Purchaser, the posting by such person of a bond, in such reasonable
amount as the Purchaser may direct, as indemnity against any claim
that may be made against any of Parent, the Purchaser, the
Surviving Corporation or the Paying Agent with respect to such
Certificate, the Purchaser will pay to the holder of such lost,
stolen or destroyed Certificate the aggregate Merger Consideration
relating thereto, without any interest thereon.
Section 2.10.4
Promptly
following the date which is 180 days after the Effective Time, the
Paying Agent shall deliver to the Surviving Corporation all cash,
Certificates and other documents in its possession relating to the
transactions described in this Agreement, and the Paying
Agent’s duties shall terminate. Thereafter, each holder
of a Certificate formerly representing a Share may surrender such
Certificate to the Surviving Corporation and (subject to applicable
abandoned property, escheat and similar laws) receive in
consideration therefor the aggregate Merger Consideration relating
thereto, without any interest thereon. None of Parent, the
Purchaser or the Company shall be liable to any holder of Shares
for any cash delivered to a public official pursuant to any
abandoned property, escheat or similar Law.
Section 2.10.5
After the
Effective Time, there shall be no transfers on the stock transfer
books of the Surviving Corporation of any Shares which were
outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates formerly representing Shares
are presented to the Surviving Corporation or the Paying Agent,
they shall be surrendered and cancelled in return for the payment
of the aggregate Merger Consideration relating thereto, as provided
in this Article 2.
Section 2.11
Withholding . The Purchaser and the Paying Agent, as
applicable, shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any
stockholder in the Offer or Merger such amounts as the Purchaser
and the Paying Agent are required to deduct and withhold under the
Internal Revenue Code of 1986, as amended, or any Tax law, with
respect to the making of such payment. To the extent that
amounts are so withheld by the Purchaser or the Paying Agent, such
withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the stockholders in respect of
whom such deduction and withholding was made by the Purchaser or
the Paying Agent.
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Article 3
Representations and Warranties of the Company
Except as set forth in the
Disclosure Schedule delivered by the Company to each of Parent
and the Purchaser prior to the execution of this Agreement (the
“Company Disclosure Schedule”), which identifies
exceptions by specific Section references, the Company hereby
represents and warrants to each of Parent and the Purchaser as
follows:
Section 3.1
Organization and Qualification; Subsidiaries .
The Company is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware. Each subsidiary of the Company
(each a “Company Subsidiary” and, collectively, the
“Company Subsidiaries”) has been duly organized, and is
validly existing and in good standing, under the laws of the
jurisdiction of its incorporation or organization, as the case may
be. Each of the Company and each Company Subsidiary 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 for such failures
to have such power and authority or approvals would not,
individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect. Each of the Company and each
Company Subsidiary is duly qualified or licensed to do business,
and is in good standing, in each jurisdiction where the character
of the properties owned, leased or operated by it or the nature of
its business makes such qualification, licensing or good standing
necessary, except for such failures to be so qualified, licensed or
in good standing that would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse
Effect.
Section 3.2
Capitalization . The authorized capital stock of the
Company consists of 30,000,000 shares of Company Common Stock and
3,000,000 shares of preferred stock, par value $0.001 per share
(the “Company Preferred Stock”). As of the date
hereof (A) 15,748,442 shares of Company Common Stock (other
than treasury shares) were issued and outstanding, all of which
were validly issued and fully paid, nonassessable and free of
preemptive rights, (B) no shares of Company Common Stock were
held in the treasury of the Company or by the Company Subsidiaries,
(C) 601,310 shares of Company Common Stock were issuable (and
such number was reserved for issuance) upon exercise of Company
Options and Directors Options outstanding as of such date and
(D) no shares of Company Preferred Stock are issued or
outstanding. Except for the Purchaser Stock Option Agreement,
the Company Options and the Director Options to purchase not more
than 601,310 shares of Company Common Stock, there are no options,
warrants or other rights, agreements, arrangements or commitments
of any character to which the Company or any Company Subsidiary is
a party or by which the Company or any Company Subsidiary is bound
relating to the issued or unissued capital stock or other Equity
Interests of the Company or any Company Subsidiary, or securities
convertible into or exchangeable for such capital stock or other
Equity Interests, or obligating the Company or any Company
Subsidiary to issue or sell any shares of capital stock or other
Equity Interests, or securities convertible into or exchangeable
for such capital stock of, or other Equity Interests in, the
Company or any Company Subsidiary. The Company also has
reserved shares of Common Stock for issuance upon exercise of the
Purchaser Stock Option Agreement. The Company has previously
provided the Purchaser with a true and complete list, as of the
date hereof, of the prices at which outstanding Company Options and
Director Options may be exercised under the applicable Company
Stock Option Plan and the number of Company Options and Director
Options outstanding at each such price. All shares of Company
Common Stock subject to
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issuance under the Company Stock Option Plans,
upon issuance prior to the Effective Time on the terms and
conditions specified in the instruments pursuant to which they are
issuable, will be duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights.
Section 3.3
Authority .
Section 3.3.1
The Company has
all necessary corporate power and authority to execute and deliver
this Agreement and the Purchaser Stock Option Agreement, to perform
its obligations hereunder and thereunder and to consummate the
transactions contemplated by this Agreement and the Purchaser Stock
Option Agreement to be consummated by the Company. The
execution and delivery of this Agreement and the Purchaser Stock
Option Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary corporate action and no
other corporate proceedings on the part of the Company and no
stockholder votes are necessary to authorize this Agreement or the
Purchaser Stock Option Agreement or to consummate the transactions
contemplated hereby or thereby, including the Offer and the
Merger. This Agreement and the Purchaser Stock Option
Agreement have been duly authorized and validly executed and
delivered by the Company and constitute a legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with their respective terms.
Section 3.3.2
The Company has
taken all appropriate actions so that the restrictions on business
combinations contained in Section 203 of the DGCL will not
apply with respect to or as a result of this Agreement or the
Purchaser Stock Option Agreement and the transactions contemplated
hereby and thereby, including the Offer and the Merger, without any
further action on the part of the stockholders or the Company
Board. No other state takeover statute or similar statute or
regulation applies or purports to apply to the Offer, the Merger or
any other transaction contemplated by this Agreement or the
Purchaser Stock Option Agreement.
Section 3.4
No Conflict; Required Filings and Consents .
Section 3.4.1
The execution and
delivery of this Agreement and the Purchaser Stock Option Agreement
by the Company does not, and the performance of this Agreement and
the Purchaser Stock Option Agreement by the Company will not,
(A) conflict with or violate any provision of the Company
Certificate or Company By-laws or any equivalent organizational
documents of any Company Subsidiary, (B) assuming that all
consents, approvals, authorizations and permits described in
Section 3.4.2 have been obtained and all filings and
notifications described in Section 3.4.2 have been made and
any waiting periods thereunder have terminated or expired, conflict
with or violate any Law 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) require any
consent or approval under, result in any breach of or any loss of
any benefit under, or constitute a change of control or default (or
an event which with notice or lapse of time or both would become a
default) under, or give to others any right of termination,
vesting, amendment, acceleration or cancellation of, or result in
the creation of a lien or other encumbrance on any property or
asset of the Company or any Company Subsidiary pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease,
license, Company Permit or other instrument or obligation, except,
with respect to clauses (B) and (C), for any such conflicts,
violations, breaches, defaults or other
9
occurrences which would not,
individually or in the aggregate, reasonably be expected to
(1) prevent or materially delay consummation of the Offer or
the Merger, (2) otherwise prevent or materially delay
performance by the Company of any of its material obligations under
this Agreement or the Purchaser Stock Option Agreement or
(3) have a Company Material Adverse Effect.
Section 3.4.2
The execution and
delivery of this Agreement and the Purchaser Stock Option Agreement
by the Company does not, and the performance of this Agreement and
the Purchaser Stock Option Agreement by the Company will not,
require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Entity or any
other person, except (A) under the Exchange Act, Securities
Act, any applicable Blue Sky Law, the rules and regulations of
the Exchange and the filing and recordation of the Certificate of
Ownership and Merger as required by the DGCL and (B) where
failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications to a person other
than a Governmental Entity, would not, individually or in the
aggregate, reasonably be expected to (1) prevent or materially
delay consummation of the Offer or the Merger, (2) otherwise
prevent or materially delay performance by the Company of any of
its material obligations under this Agreement or the Purchaser
Stock Option Agreement or (3) have a Company Material Adverse
Effect.
Section 3.5
Opinion of Financial Advisor . The Company Financial Advisor has
delivered to the Special Committee its written opinion that, as of
September 21, 2005, the consideration to be received by the
holders of Shares pursuant to the Offer and the Merger is fair to
the holders of Shares from a financial point of view, a copy of
which has been delivered to the Purchaser.
Section 3.6
Brokers .
No broker, finder or investment banker (other than the Company
Financial Advisor) is entitled to any brokerage, finder’s or
other fee or commission in connection with the Offer, the Merger or
any other transaction contemplated by this Agreement or the
Purchaser Stock Option Agreement based upon arrangements made by or
on behalf of the Company or any Company Subsidiary. The
Company has previously provided the Purchaser with a true and
complete copy of each agreement between the Company and the Company
Financial Advisor pursuant to which such firm would be entitled to
any payment in connection with the Offer, the Merger or any other
transaction contemplated by this Agreement or the Purchaser Stock
Option Agreement.
Article 4
Representations and Warranties of Parent and the
Purchaser
Parent and the Purchaser hereby
jointly and severally represent and warrant to the Company as
follows:
Section 4.1
Organization and Qualification; Capitalization of the
Purchaser .
Each of Parent and the Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware. The authorized capital stock of Parent consists
of 1,000 shares of common stock, $0.001 par value per share (the
“Parent Common Stock”), of which 1,000 shares are
outstanding. All of the issued and outstanding shares of
Parent Common Stock are validly issued, fully paid and non
assessable and are owned, beneficially and of record, by Giannulli,
free and clear of all security interests, liens, claims, pledges,
options, rights of first
10
refusal, agreements, limitations on
Giannulli’s voting rights, charges and other encumbrances of
any nature whatsoever. The authorized capital stock of the
Purchaser consists of 1,000 shares of Purchaser Common Stock,
$0.001 par value per share, of which 1,000 shares are
outstanding. All of the issued and outstanding shares of
Purchaser Common Stock are validly issued, fully paid and non
assessable and are owned, beneficially and of record, by Parent,
free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on
Parent’s voting rights, charges and other encumbrances of any
nature whatsoever. Each of Parent and the Purchaser was
formed solely for the purpose of engaging in the transactions
contemplated by this Agreement and has engaged in no other business
activities. Each of Parent and the Purchaser has not entered
into or become subject to any liability or obligation to any other
person that would adversely affect its ability to perform its
obligations under this Agreement or consummate the transactions
contemplated by this Agreement.
Section 4.2
Authority .
Each of Parent and the Purchaser has all necessary corporate power
and authority to execute and deliver this Agreement and the
Purchaser Stock Option Agreement, to perform its obligations
hereunder and thereunder, and to consummate the transactions
contemplated by this Agreement and the Purchaser Stock Option
Agreement to be consummated by it. The execution and delivery
of this Agreement and the Purchaser Stock Option Agreement by each
of Parent and the Purchaser and the consummation by each of Parent
and the Purchaser of the transactions contemplated hereby or
thereby have been duly and validly authorized by all necessary
corporate action (including approval by Giannulli as the sole
stockholder of Parent and approval by Parent as the sole
stockholder of the Purchaser), and no other corporate proceedings
on the part of either Parent or the Purchaser are necessary to
authorize this Agreement or the Purchaser Stock Option Agreement or
to consummate the transactions contemplated hereby and
thereby. This Agreement and the Purchaser Stock Option
Agreement to have been duly authorized and validly executed and
delivered by each of Parent and the Purchaser and constitute a
legal, valid and binding obligation of each of Parent and the
Purchaser, enforceable against them in accordance with their
terms.
Section 4.3
No Conflict; Required Filings and Consents .
Section 4.3.1
The execution and
delivery of this Agreement and the Purchaser Stock Option Agreement
do not, and the performance thereof by each of Parent and the
Purchaser will not (A) conflict with or violate any provision
of the Certificate of Incorporation or By-laws of Parent or the
Purchaser, (B) (assuming that all consents, approvals,
authorizations and permits described in Section 4.3.2 have
been obtained and all filings and notifications described in
Section 4.3.2 have been made and any waiting periods
thereunder have terminated or expired) conflict with or violate any
Law applicable to either Parent or the Purchaser or by which any
property or asset of either Parent or the Purchaser is bound or
affected or (C) result in any breach of, any loss of any
benefit under or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or
give to others any right of termination, amendment, acceleration or
cancellation of, or result in the
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