Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into this ____day of June, 2001, by and between Decorate, Inc., a
Missouri corporation ("Decorate"), and Xxxxxxxx.xxx, L.L.C., a Missouri limited
liability company, ("Xxxxxxxx.xxx").
WITNESSETH:
WHEREAS, Decorate is a corporation duly organized and validly existing
under the laws of the State of Missouri and, as of the date hereof, has
authorized capital consisting of One Million (1,000,000) shares of voting common
stock with a par value of One Cent ($.01) per share, of which 10 shares are
issued and outstanding, (the "Organizational Stock");
WHEREAS, Xxxxxxxx.xxx is a limited liability company duly organized and
validly existing under the laws of the State of Missouri;
WHEREAS, Decorate and Xxxxxxxx.xxx desire to merge Xxxxxxxx.xxx into
Decorate to convert the legal structure of Xxxxxxxx.xxx from a limited liability
company to a corporation, in accordance with the terms and conditions
hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements hereinafter set forth and other good and valuable consideration, the
receipt, adequacy and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
Article I
MERGER
1.1 Surviving Corporation. In accordance with the terms and conditions
of this Agreement, including without limitation, the conditions precedent set
forth in Article VI hereof, Xxxxxxxx.xxx shall be merged with and into Decorate
(the "Merger") effective as of the Effective Time (as defined in ss.1.2 below).
Decorate shall be the surviving corporate entity (the "Surviving Corporation")
and shall continue its corporate existence under the laws of the State of
Missouri.
1.2 Effective Time. The Merger shall become effective upon the issuance
of a Certificate of Merger by the Missouri Secretary of State. The date and time
when the Merger becomes effective are herein referred to as the "Effective
Time."
1.3 Succession and Assumption. Immediately as of the Effective Time, by
virtue of the Merger and without any action by Decorate or Xxxxxxxx.xxx: (a)
Decorate shall succeed to all present and future rights, titles, privileges,
powers and franchises of Decorate and Xxxxxxxx.xxx, and (b) Decorate shall
assume all liabilities, duties and obligations of Decorate and Xxxxxxxx.xxx, as
they exist immediately prior to the Effective Time.
1.4 Articles of Incorporation. At the Effective Time, the Articles of
Incorporation of Decorate in effect immediately prior to the Effective Time
shall become the Articles of Incorporation of the Surviving Corporation, until
thereafter amended as provided by law.
1.5 Bylaws. At the Effective Time, the Bylaws of Decorate in effect
immediately prior to the Effective Time shall become the Bylaws of the Surviving
Corporation, until thereafter amended as provided by law.
1.6 Officers and Directors. At the Effective Time, the officers and
directors of Decorate existing immediately prior to the Effective Time shall
become the officers and directors of the Surviving Corporation, each to hold
office in accordance with the Articles of Incorporation and Bylaws of the
Surviving Corporation.
Article II
CONVERSION OF MEMBERSHIP INTERESTS
2.1 Conversion of Stock. At the Effective Time, by virtue of the Merger
and without any action on the part of the holders thereof:
(a) Each share of voting common stock of Decorate, one cent ($.01) par
value per share (the "Decorate Stock"), issued and outstanding immediately prior
to the Effective Time shall continue to represent the same number of outstanding
shares of the Surviving Corporation;
(b) Each "A" Membership Units of Xxxxxxxx.xxx shall be converted at the
ratio of 5.373 to 1, thereby giving the owner of such A Membership Units the
right to receive one (1) fully paid and non-assessable voting share of the
Surviving Corporation in exchange for every 5.373 A Membership Units so owned;
(c) Each "A1" Membership Units of Xxxxxxxx.xxx shall be converted at
the ratio of 5.373 to 1, thereby giving the owner of such A1 Membership Units
the right to receive one (1) fully paid and non-assessable voting share of the
Surviving Corporation in exchange for every 5.373 A1 Membership Units so owned;
(d) Each B Membership Unit of Xxxxxxxx.xxx shall be converted into the
right to receive One (1) fully paid and non-assessable voting share of the
Surviving Corporation for each B Membership Unit so owned;
(e) The owner of the Organizational Stock shall be entitled to the
shares provided for in this section, less the Organizational Stock already
issued to him.
2.2 Closing of Transfer Books. At the Effective Time, the stock
transfer books of Decorate shall be closed and no transfer of shares of Decorate
shall thereafter be made. After the Effective Time, certificates previously
representing shares of Xxxxxxxx.xxx Stock shall be cancelled and exchanged for
shares of the Surviving Corporation as provided in ss. 2.3 hereof.
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2.3 Exchange of Xxxxxxxx.xxx Membership Units. As soon as practicable
after the Effective Time, the Surviving Corporation shall mail to each member of
Xxxxxxxx.xxx, a form letter of transmittal for return to the Surviving
Corporation, containing instructions for use in effecting the surrender of
certificates of Xxxxxxxx.xxx membership units for certificates of stock in the
Surviving Corporation. Upon the proper surrender of such certificates, the
record holder thereof shall be issued the number of fully paid and nonassessable
shares of the Surviving Corporation as such holder is entitled to receive under
ss. 2.1 and ss. 2.2 hereof and such surrendered certificates shall be cancelled.
Until surrendered, each certificate of Xxxxxxxx.xxx Stock shall represent solely
the right to receive shares of the Surviving Corporation into which the
Xxxxxxxx.xxx Stock shall have been converted pursuant toss.2.1 andss. 2.2
hereof.
Article III
REPRESENTATIONS AND WARRANTIES OF XXXXXXXX.XXX
Xxxxxxxx.xxx hereby represents and warrants to Decorate as follows:
3.1 Organization. Xxxxxxxx.xxx is a limited liability company
organized, validly existing and in good standing under the laws of the State of
Missouri with all requisite power and authority to own, operate and lease its
properties and to carry on its business as it is now being conducted.
3.2 Capitalization of Xxxxxxxx.xxx. As of the date hereof, there are
800,000 A Membership Units, 46,257 A1 Membership Units and 157,500 B Membership
Units. Except as otherwise disclosed, as of the date hereof, there is no
outstanding option, warrant, subscription or other right obligating Xxxxxxxx.xxx
to issue any additional membership units in the company.
3.3 Authorization. Xxxxxxxx.xxx has the necessary power and authority
to enter into this Agreement and this Agreement has been duly authorized by its
members. This Agreement is a legal, valid and binding obligation of
Xxxxxxxx.xxx.
3.4 No Violation. Neither the execution and delivery of this Agreement
by Xxxxxxxx.xxx, the performance by Xxxxxxxx.xxx of its obligations hereunder
nor the consummation by it of the transactions contemplated hereby will (i)
violate any provision of the Operating Agreement of Xxxxxxxx.xxx, (ii)
constitute a default under or cause the acceleration of the maturity of any debt
or obligation which, individually or in the aggregate with all other such debts
and obligations, is material to Xxxxxxxx.xxx taken as a whole, or (iii) to the
best knowledge of Xxxxxxxx.xxx, violate any statute or law or any judgment,
decree, order, regulation or rule of any court or governmental authority to
which Xxxxxxxx.xxx is subject, which would have a material adverse effect on the
financial condition, business or operations of Xxxxxxxx.xxx taken as a whole.
3.5 Litigation. To the best knowledge of Xxxxxxxx.xxx, there is no
action, proceeding or investigation pending or threatened against or involving
Xxxxxxxx.xxx or any properties or rights of Xxxxxxxx.xxx which, if determined
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adversely, could materially and adversely affect the financial condition,
business or operations of Xxxxxxxx.xxx taken as a whole. Xxxxxxxx.xxx is not in
violation of any order, judgment, injunction or decree outstanding against it
the effect of which would be materially adverse to the financial condition,
business or operations of Xxxxxxxx.xxx taken as a whole.
Article IV
REPRESENTATIONS AND WARRANTIES OF Decorate
Decorate hereby represents and warrants to Xxxxxxxx.xxx as follows:
4.1 Corporate Organization. Decorate is a corporation duly organized,
validly existing and in good standing under the laws of the State of Missouri
with all requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as it is now being conducted.
4.2 Capitalization of Decorate. As of the date hereof, the authorized
capital stock of Decorate consists of One Million (1,000,000) shares of common
stock, par value of One Cent ($.01) per share, and there are issued and
outstanding ten (10) shares of such common stock. All of such outstanding shares
have been validly issued and are fully paid and nonassessable with no personal
liability attaching to the ownership thereof. As of the date hereof, there is no
outstanding option, warrant, subscription or other right obligating Decorate to
issue any shares of its capital stock or other securities convertible into any
shares of its capital stock.
4.3 Authorization. Decorate has the necessary corporate power and
authority to enter into this Agreement and this Agreement has been duly
authorized by its board of directors and shareholders. This Agreement is a
legal, valid and binding obligation of Decorate.
4.4 No Violation. Neither the execution and delivery of this Agreement
by Decorate, the performance by Decorate of its obligations hereunder nor the
consummation by it of the transactions contemplated hereby will (i) violate any
provision of the Articles of Incorporation or Bylaws of Decorate, (ii)
constitute a default under or cause the acceleration of the maturity of any debt
or obligation which, individually or in the aggregate with all other such debts
and obligations, is material to Decorate taken as a whole, or (iii) to the best
knowledge of Decorate, violate any statute or law or any judgment, decree,
order, regulation or rule of any court or governmental authority to which
Decorate is subject, which would have a material adverse effect on the financial
condition, business or operations of Decorate taken as a whole.
4.5 Litigation. To the best knowledge of Decorate, there is no action,
proceeding or investigation pending or threatened against or involving Decorate
or any properties or rights of Decorate which, if determined adversely, could
materially and adversely affect the financial condition, business or operations
of Decorate taken as a whole. Decorate is not in violation of any order,
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judgment, injunction or decree outstanding against it the effect of which would
be materially adverse to the financial condition, business or operations of
Decorate taken as a whole.
Article V
COVENANTS
5.1 Conduct of Business Prior to the Effective Time. Each of Decorate
and Xxxxxxxx.xxx agrees that prior to the Effective Time:
(a) its business shall be conducted only in the ordinary course;
(b) except as required in connection with the Merger, it shall not (i)
amend its Articles of Incorporation, Bylaws or Operating Agreement, as the case
may be, (ii) change the number of authorized shares of its capital stock, or
(iii) declare, set aside or pay any dividend or other distribution or payment in
cash, stock or property in respect of shares of its capital stock;
(c) it shall not (i) issue, grant or sell any shares or rights of any
kind to acquire any shares of its capital stock or membership units, as the case
may be, (ii) acquire any assets or enter into any other transaction, other than
in the ordinary course of business, (iii) dispose of, encumber or mortgage any
assets or properties which are material to it taken as a whole other than in the
ordinary course of business, (iv) waive, release, grant or transfer any rights
of value or modify or change in any material respect any existing license,
lease, contract or other document other than in the ordinary course of business,
or (v) enter into any contract, agreement, commitment or arrangement with
respect to any of the foregoing; and
(d) it shall use its best efforts to preserve intact its business
organization, to keep available the service of its present officers and key
employees, and to preserve the goodwill of those having business relationships
with it.
5.2 Compliance With Laws. Each of Decorate and Xxxxxxxx.xxx shall duly
comply in all material respects with all laws applicable to it and its
properties, operations, business and assets.
5.3 Access to Properties and Records. Each of Decorate and Xxxxxxxx.xxx
shall, upon reasonable request, afford to the other's accountants, counsel and
other authorized representatives, full access during normal business hours
throughout the period prior to the Effective Time to all of its properties,
books, contracts, commitments and records.
5.4 Further Actions. Subject to the terms and conditions hereof,
Decorate and Xxxxxxxx.xxx each agree to use all reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement, including without limitation, using all
reasonable efforts (i) to obtain all necessary waivers, consents and approvals,
to give all notices and to effect all necessary registrations and filings, and
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(ii) to defend any lawsuits or other legal proceedings, whether judicial or
administrative and whether brought derivatively or on behalf of third parties
challenging this Agreement or the consummation of the transactions contemplated
hereby.
Article VI
CONDITIONS PRECEDENT
6.1 Conditions to the Obligation of Xxxxxxxx.xxx to Effect the Merger.
Each and every obligation of Xxxxxxxx.xxx under this Agreement to be performed
on or before the Effective Time shall be subject to the fulfillment of the
following additional conditions:
(a) Decorate shall have performed in all material respects its
obligations under this Agreement required to be performed by it on or prior to
the Effective Time pursuant to the terms hereof;
(b) the representations and warranties of Decorate contained in this
Agreement 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 as affected by the
transactions contemplated hereby; and
(c) there shall have been no material adverse change in the business,
assets, financial condition or results of operations of Decorate taken as a
whole since the date of the financial statements furnished to Xxxxxxxx.xxx.
6.2 Conditions to the Obligation of Decorate to Effect the Merger. Each
and every obligation of Decorate under this Agreement to be performed on or
before the Effective Time shall be subject to the fulfillment of the following
additional conditions:
(a) Xxxxxxxx.xxx shall have performed in all material respects its
obligations under this Agreement required to be performed by it on or prior to
the Effective Time pursuant to the terms hereof;
(b) the representations and warranties of Xxxxxxxx.xxx contained in
this Agreement 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 as affected by the
transactions contemplated hereby;
(c) there shall have been no material adverse change in the business,
assets, financial condition or results of operations of Xxxxxxxx.xxx taken as a
whole since the date of the financial statements furnished to Decorate.
Article VII
TERMINATION
7.1 Termination. This Agreement may be terminated and the Merger may be
abandoned at any time before the Effective Time at the election of either
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Decorate or Xxxxxxxx.xxx, by written notice from the party so electing to the
other party, if the board of directors of either Decorate or Xxxxxxxx.xxx, in
its sole and absolute discretion, deems for any reason that consummation of the
Merger is inadvisable.
7.2 Effect of Termination. In the event of the termination of this
Agreement by either Decorate or Xxxxxxxx.xxx, as provided above:
(a) this Agreement shall be void and of no further effect, and there
shall be no liability by reason of this Agreement or the termination thereof on
the part of either Decorate or Xxxxxxxx.xxx, or on the part of their respective
directors, members, manager, officers, employees, agents or shareholders; and
(b) all information received by either party hereto with respect to the
business of the other party or its divisions, affiliates or associates (other
than information which is a matter of public knowledge or which has heretofore
been or is hereafter published in any publication for public distribution or
filed as public information with any governmental authority) shall not at any
time be used for the advantage of, or disclosed to third parties for any reason
whatsoever.
Article VIII
MISCELLANEOUS
8.1 Amendment. This Agreement may be amended by the parties hereto by
action taken by their respective board of directors or members, as the case may
be, at any time prior to the Effective Time, but no such amendment shall (i)
alter the amount or change the form of consideration into which shares of
Xxxxxxxx.xxx membership units are to be converted as provided in ss.2.1 and
ss.2.2 hereof, or (ii) alter or change any of the terms and conditions of this
Agreement if such alteration or change would adversely affect the holders of any
class of capital stock of Decorate or the members of Xxxxxxxx.xxx. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
8.2 Fees and Expenses. Except as otherwise provided herein, the parties
hereto shall bear their own costs and expenses incurred in connection herewith
and with the transactions contemplated hereby, whether the Effective Time occurs
or this Agreement shall be terminated. Decorate and Xxxxxxxx.xxx agree to
indemnify and hold the other harmless from any claim (together with costs and
expenses, including attorneys fees, incurred in connection with such claims) for
compensation by any person, firm or corporation claiming to have been requested,
authorized or employed to act as lender, broker or agent in connection with the
subject matter of this Agreement or negotiations leading thereto.
8.3 Assignment. No party shall assign this Agreement or any of its
rights and obligations hereunder without the prior written consent of the other
party.
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8.4 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, their heirs, legal representatives,
successors and permitted assigns.
8.5 Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties with respect to the subject matter hereof,
superseding any and all prior agreements, understandings, negotiations and
discussions. No amendment, alteration, modification or waiver of this Agreement
shall be binding unless evidenced by an instrument in writing signed on behalf
of each of the parties hereto.
8.6 Construction. The captions and headings of this Agreement are for
convenience and reference only, and shall not control or affect the meaning or
construction of this Agreement. Use of the masculine gender shall also be deemed
to refer to the feminine gender and neuter gender and the singular to the plural
unless the context clearly requires otherwise.
8.7 Choice of Law. This Agreement shall be construed, governed, and
enforced in accordance with the laws of the State of Missouri.
8.8 Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision hereof and this Agreement shall be construed in all respects as if
such invalid or unenforceable provision was omitted. The invalidity or
unenforceability of any provision of this Agreement to any person or
circumstance shall not affect the validity or enforceability of such provision
as it may apply to any other persons or circumstances.
8.9 Waiver. The failure in one or more instances of a party to insist
upon performance of any of the terms, conditions and covenants set forth in this
Agreement, or the failure of a party to exercise any right or privilege
conferred by this Agreement, shall not be construed thereafter as waiving their
right to insist upon the performance of such terms, conditions and covenants or
the right to exercise such rights and privileges, which rights shall continue
and remain in full force and effect as if no forbearance had occurred.
8.10 Attorney Fees. In the event it becomes necessary for either party
to file a suit to enforce this Agreement or any provision contained herein, and
either party prevails in such action, then such party shall be entitled to
recover, in addition to all other remedies or damages, reasonable attorney fees
and court costs incurred in such suit.
8.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original instrument, but all of
which together will constitute for all purposes one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
Plan of Merger as of the date first above written.
DECORATE, INC.
By:
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Its:
XXXXXXXX.XXX, L.L.C.
By:
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Its:
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