LOCK-UP AGREEMENT
Exhibit
99.2
EXECUTION
VERSION
LOCK-UP
AGREEMENT
(this
“AGREEMENT”), dated as of October 31, 2006, by and among Iconix Brand Group,
Inc., a Delaware corporation (“Acquisition Co.”), Xxxxxxx Xxxxxxxxx and Xxxxx
Xxxxx, each a stockholder (each individually, a “Stockholder” and together, the
“Stockholders”) of Mossimo, Inc., a Delaware corporation (the
“Company”).
RECITALS
WHEREAS,
Acquisition
Co., Xxxx Acquisition Corp., a Delaware corporation and wholly-owned subsidiary
of Acquisition Co. (“Acquisition Sub”), and the Company have entered into an
Agreement and Plan of Merger, dated as of March 31, 2006 (the “Merger
Agreement”), pursuant to which the Company will be merged with and into the
Acquisition Sub, and the Acquisition Sub shall be the surviving corporation
following the merger (the “Merger”).
WHEREAS,
as of
the date hereof, each Stockholder is a Beneficial Owner (as defined below)
of
Subject Shares (as defined below).
WHEREAS,
in order
to induce Acquisition Co. to enter into the Merger Agreement, the Stockholders
have agreed to enter into this Agreement.
NOW,
THEREFORE, intending
to be legally bound, the parties hereto agree as follows:
1. Definitions.
(a) “Beneficially
Own” or “Beneficial Owner” with respect to any securities means having
“beneficial ownership” as determined pursuant to Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).
(b) “Company
Capital Stock” means shares of common stock, par value $0.001 per share, of the
Company.
(c) “Company
Options and Other Rights” means options, warrants and other rights to acquire,
directly or indirectly, shares of Company Capital Stock.
(d) “Expiration
Date” means the earlier to occur of (i) the Effective Time (as defined in the
Merger Agreement) or (ii) the date on which the Merger Agreement is terminated
pursuant to its terms.
(e) “Subject
Shares” means (i) all shares of Company Capital Stock Beneficially Owned by each
Stockholder as of the date of this Agreement and (ii) all additional shares
of
Company Capital Stock of which each Stockholder acquires Beneficial Ownership
during the period from the date of this Agreement through the Expiration
Date.
(f) Unless
otherwise specifically defined herein, all capitalized terms used herein shall
have the respective meanings assigned to them in the Merger
Agreement.
(a) In
consideration of the issuance of common stock of Acquisition Co. in exchange
for
the Subject Shares (the “Acquisition Co. Shares”) to each of the Stockholders
pursuant to the terms of the Merger Agreement, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and
notwithstanding any registration of the Acquisition Co. Shares under the
Securities Act of 1933, as amended (the “Securities Act”), each Stockholder
agrees that, during the period beginning from the Effective Time (as defined
in
the Merger Agreement) and continuing for ninety (90) days thereafter (as the
same may be extended pursuant to this Section 2(a), the “Release Date”)
(the “Lock-up Period”), each Stockholder will not, directly or indirectly,
through an “affiliate” or “associate” (as such terms are defined in the General
Rules and Regulations under the Securities Act), a family member or otherwise,
(a) offer, sell, contract to sell, pledge, hypothecate, encumber, assign,
tender, make any short sale or otherwise dispose of, or enter into any contract,
or other arrangement or understanding with respect to the sale or other
disposition or transfer or grant any rights with respect to any Acquisition
Co.
Shares, privately or publicly, pursuant to Rule 144 of the General Rules and
Regulations under the Securities Act or otherwise, or (b) engage directly or
indirectly in any transaction the likely result of which would involve a
transaction prohibited by clause (a), except as permitted by Section 2(e) below.
Notwithstanding the foregoing provisions of this Section 2(a), at the request
of
underwriters or the managing underwriter in connection with a proposed
transaction or public offering by Acquisition Co., each Stockholder will agree
to extend the Lock-up Period for a term consistent with the period for which
the
Chief Executive Officer of Acquisition Co. enters into an agreement imposing
on
his shares of Acquisition Co. Common Stock similar restrictions on
transfer.
(b) The
foregoing restriction is expressly agreed to preclude each of the Stockholders
from engaging in any hedging or other transaction which is designed to, or
reasonably expected to lead to, or result in, a sale or disposition of the
Acquisition Co. Shares even if such shares would be disposed of by someone
other
than the Stockholders. Such prohibited hedging or other transactions would
include without limitation any short sale or any purchase, sale or grant of
any
right (including without limitation any put or call option) with respect to
any
of the Acquisition Co. Shares or with respect to any security that includes,
relates to, or derives any significant part of its value from the Acquisition
Co. Shares.
(c) Each
Stockholder further represents and agrees that he has not taken and will not
take, directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of Acquisition Co.
to
facilitate the sale or resale of the Acquisition Co. Shares, or which has
otherwise constituted or will constitute any prohibited bid for or purchase
of
the Acquisition Co. Shares or any related securities.
(d) Each
Stockholder acknowledges and agrees that, prior to the Release Date, any
additional Acquisition Co. Shares acquired by such Stockholder, including in
connection with the exercise of any options, may not be sold or otherwise
transferred, notwithstanding that a registration statement may be effective
with
respect thereto.
(e) Notwithstanding
the foregoing restrictions on transfer, each Stockholder may transfer all or
any
part of his Acquisition Co. Shares (i) to the other Stockholder (provided,
however, that no transfer may be in respect of any Contingent Share Rights);
(ii) by will or intestacy, (iii) to any trust for the direct or indirect benefit
of such Stockholder or the immediate family of such Stockholder, provided that
any such transfer shall not involve a disposition for value, or (iii) in a
private transaction prior to the Release Date so long as the acquirer of
Acquisition Co. Shares, by written agreement with Acquisition Co. entered into
at the time of acquisition and delivered to Acquisition Co. prior to the
consummation of such acquisition, agrees to be bound by the restrictions set
forth herein. For purposes of this letter agreement, “immediate family” shall
mean any relationship by blood, marriage or adoption, not more remote than
first
cousin. Any Stockholder may pledge Acquisition Co. Shares to secure indebtedness
incurred by such Stockholder (in such amount as is necessary to pay taxes or
estimated taxes related to the Merger), such pledge to be subject to the prior
written approval of Acquisition Co., which approval shall not be unreasonably
withheld.
(f) Each
of
the Stockholders agrees and consents to the entry of stop transfer instructions
with Acquisition Co.’s transfer agent and registrar against the transfer of the
Acquisition Co. Shares except in compliance with the foregoing restrictions
of
this Section 2. Each of the Stockholders understands that the restrictions
with
respect to the Acquisition Co. Shares set forth herein are in addition to any
other restrictions upon transfer that may arise pursuant to any other agreement
to which either of the Stockholders is a party or under applicable securities
laws.
3. Written
Consent of Stockholders.
Upon
the U.S. Securities and Exchange Commission’s declaration of the effectiveness
of the Registration Statement on Form S-4 filed by Acquisition Co. in connection
with the Merger, each Stockholder shall deliver to the Company (with a copy
thereof concurrently delivered to Acquisition Co.) a proxy in favor of the
adoption of the Merger Agreement and the Merger.
Such
proxy may be revoked or withdrawn if Company’s Board of Directors withdraws its
recommendation of the Merger and terminates the Merger Agreement.
4. Representations
and Warranties of Stockholders.
Each
Stockholder represents and warrants to Acquisition Co. as follows:
(a) As
of the
date of this Agreement and at all times through the Expiration
Date:
(i) Such
Stockholder is the Beneficial Owner (free and clear of any encumbrances or
restrictions, except as set forth on Exhibit A hereto) of the outstanding shares
of Company Capital Stock set forth under the heading “Number and Class of Shares
of Company Capital Stock”, on Exhibit A hereto;
(ii) Such
Stockholder is the Beneficial Owner (free and clear of any encumbrances or
restrictions) of the outstanding Company Options and Other Rights set forth
under the heading “Number of Company Options and Other Rights” on
Exhibit A; and
(iii) Such
Stockholder does not directly or indirectly Beneficially Own any shares of
Company Capital Stock or Company Options or Other Rights or other securities
of
the Company, other than the shares of Company Capital Stock and Company Options
and Other Rights on Exhibit A.
(b) Each
Stockholder has the legal capacity, power and authority to enter into and
perform all of its obligations under this Agreement. This Agreement has been
duly executed and delivered by such Stockholder, and upon its execution and
delivery by Acquisition Co., will constitute a legal, valid and binding
obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to creditors rights generally, and the availability of
injunctive relief and other equitable remedies.
(c) The
execution, delivery and performance by each Stockholder of this Agreement will
not conflict with, require a consent, waiver or approval under, or result in
a
breach of or default under, any of the terms of any contract, commitment or
other obligation (written or oral) to which such Stockholder is a party or
by
which any of such Stockholder’s assets may be bound.
(d) No
filing
with, and no permit, authorization, consent or approval of, any state or federal
public body or authority is necessary for the execution of this Agreement by
such Stockholder and the consummation by such Stockholder of the transactions
contemplated hereby.
5. Covenants
of Each Stockholder.
Each
Stockholder covenants and agrees for the benefit of Acquisition Co. that, until
the Expiration Date, such Stockholder will not:
(a) offer,
sell, contract to sell, pledge, hypothecate, encumber, assign, tender or
otherwise dispose of, or enter into any contract, option or other arrangement
or
understanding with respect to the sale, transfer, pledge, hypothecation,
encumbrance, assignment, tender or other disposition of, or the transfer or
grant of any rights with respect to (i) any Subject Shares or any interest
therein, or (ii) any Company Options and Other Rights or any interest therein;
provided, however, that such Stockholder may convert, exercise or exchange
Company Options and Other Rights into or for shares of Company Capital Stock
in
which event such shares of Company Capital Stock shall become and be deemed
Subject Shares subject to all the terms and conditions of this
Agreement;
(b) acquire
any Company Capital Stock except pursuant to existing Company Options and Other
Rights or transfers from the other Stockholder;
(c) grant
any
powers of attorney or proxies or consents in respect of any of the Subject
Shares, deposit any of such Subject Shares into a voting trust, or enter into
a
Agreement with respect to any of such Subject Shares; and
(d) take
any
other action with respect to the Subject Shares that would in any way restrict,
limit or interfere with the performance of such Stockholder’s obligations
hereunder or the transactions contemplated hereby and the Merger
Agreement.
6. Adjustments;
Additional Shares.
In the
event (a) of any stock dividend, stock split, merger, recapitalization,
reclassification, combination, exchange of shares or the like of the capital
stock of the Company on, of or affecting the Subject Shares or (b) that a
Stockholder shall become the Beneficial Owner of any additional shares of
Company Capital Stock, then the terms of this Agreement shall apply to the
shares of Company Capital Stock or other instruments or documents held by such
Stockholder immediately following the effectiveness of the events described
in
clause (a) or such Stockholder becoming the Beneficial Owner thereof as
described in clause (b), as though, in either case, they were Subject Shares
hereunder. The foregoing shall apply (mutatis
mutandis)
to the
Acquisition Co. Shares and Section 2
of this
Agreement.
7. Covenant
of Acquisition Co. Regarding Additional Merger Consideration.
Acquisition Co. recognizes that the Stockholders may lose the intended benefit
of the Additional Merger Consideration (as provided in the Merger Agreement)
if
the circumstances causing the Contingent Share Rights to become void occur
during the period prior to the Release Date. In such event, Acquisition Co.
agrees to promptly thereafter issue to each Stockholder the Additional Merger
Consideration attributable to such Stockholder’s Company Common Stock unless the
circumstances causing the Contingent Share Rights to become void are satisfied
following the Release Date (including any extension of the Lock-up Period under
Section 2(a) of this Agreement).
8. Amendments
and Waivers.
Any
provision of this Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and is signed, in the case of an amendment,
by
each party to this Agreement, or in the case of a waiver, by the party against
whom the waiver is to be effective. No failure or delay by any party in
exercising any right 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. To
the
maximum extent permitted by law, (a) no waiver that may be given by a party
shall be applicable except in the specific instance for which it was given
and
(b) no notice to or demand on one party shall be deemed to be a waiver of any
obligation of such party or the right of the party giving such notice or demand
to take further action without notice or demand.
9. Assignment.
This
Agreement may not be assigned by any party hereto without the prior written
consent of the other parties. Subject to the foregoing, all of the terms and
provisions of this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective executors, heirs, personal
representatives, successors and permitted assigns. Notwithstanding the
foregoing, no rights may under any circumstances be transferred in respect
of
any Contingent Share Rights.
10. Entire
Agreement.
This
Agreement and the documents, instruments and other agreements specifically
referred to herein or the Merger Agreement or delivered pursuant hereto or
thereto, set forth the entire understanding of the parties with respect to
the
subject matter hereof. Any and all previous agreements and understandings
between or among the parties regarding the subject matter hereof, whether
written or oral, are superseded by this Agreement.
11. Notices.
Any
notice, request, demand, waiver, consent, approval or other communication which
is required or permitted hereunder shall be in writing and shall be deemed
given
(a) on the date established by the sender as having been delivered personally;
(b) on the date delivered by a private courier as established by the sender
by
evidence obtained from the courier; (c) on the date sent by facsimile, with
confirmation of transmission, if sent during normal business hours of the
recipient, if not, then on the next business day; or (d) on the fifth day after
the date mailed, by certified or registered mail, return receipt requested,
postage prepaid. Such communications, to be valid, must be addressed as
follows:
If
to
Acquisition Co., to:
0000
Xxxxxxxx, 0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxx Xxxx
Fax:
(000) 000-0000
With
a
copy to:
Blank
Rome LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx X. Xxxxxxx, Esq.
Fax:
(000) 000-0000
If
to:
Xxxxxxx
Xxxxxxxxx or Xxxxx Xxxxx
c/o
Mossimo, Inc.
0000
Xxxxxxxx
Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Fax:
(000) 000-0000
With
a
copy to:
Paul,
Hastings, Xxxxxxxx & Xxxxxx
000
Xxxx
Xxxxxx Xxxxx, 00xx
Xxxxx
Xxxxx
Xxxx, Xxxxxxxxxx 00000
Attn:
Xxxxx X. Xxxxxxxx, Esq.
Fax:
(000) 000-0000
or
to
such other address or to the attention of such person or persons as the
recipient party has specified by prior written notice to the sending party
(or
in the case of counsel, to such other readily ascertainable business address
as
such counsel may hereafter maintain). If more than one method for sending notice
as set forth above is used, the earliest notice date established as set forth
above shall control.
12. Captions.
All
captions contained in this Agreement are for convenience of reference only,
do
not form a part of this Agreement and shall not affect in any way the meaning
or
interpretation of this Agreement.
13. Severability;
Enforcement.
Any
provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall be ineffective to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
provisions hereof, and any such invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction.
14. Specific
Performance.
Each
Stockholder acknowledges that the agreements contained in this Agreement are
an
integral part of the transactions contemplated by the Merger Agreement, and
that, without these agreements, Acquisition Co. would not enter into the Merger
Agreement, and acknowledges that damages would be an inadequate remedy for
any
breach by such Stockholder of the provisions of this Agreement. Accordingly,
each Stockholder agrees that such Stockholder’s obligations hereunder shall be
specifically enforceable and such Stockholder shall not take any action to
impede the other from seeking to enforce such right of specific
performance.
15. Consent
to Jurisdiction.
Each
party irrevocably submits to the exclusive jurisdiction of (a) New York County,
New York, and (b) the United States District Court for the Southern District
of
New York, for the purposes of any action, suit or proceeding arising out of
this
Agreement or any transaction contemplated hereby. Each party agrees to commence
any such action, suit or proceeding either in the United States District Court
for the Southern District of New York or if such action, suit or proceeding
may
not be brought in such court for jurisdictional reasons, in the Supreme Court
sitting in New York County (including its Appellate Division). Each party
further agrees that service of any process, summons, notice or document by U.S.
registered mail to such party’s respective address set forth above shall be
effective service of process for any action, suit or proceeding in New York
with
respect to any matters to which it has submitted to jurisdiction in this Section
14. Each party irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement
or the transactions contemplated hereby in (i) the United States District Court
for the Southern District of New York, or (ii) the Supreme Court sitting in
New
York County (including its Appellate Division), and hereby further irrevocably
and unconditionally waives and agrees not to plead or claim in any such court
that any such action, suit or proceeding brought in any such court has been
brought in an inconvenient forum. EACH
PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF.
16. Governing
Law.
This
Agreement shall be governed by and interpreted and enforced in accordance with
the laws of the State of New York, without giving effect to any choice of law
or
conflict of laws rules or provisions (whether of the State of New York or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.
IN
WITNESS WHEREOF,
this
Agreement has been duly executed by the parties hereto all as of the day and
year first above written.
|
By:
/s/
Xxxx
Xxxx
Name:
Xxxx Xxxx
Title:
President and CEO
Address:
0000 Xxxxxxxx, 0xx
Xxxxx
Xxx
Xxxx, XX 00000
XXXXXXX
XXXXXXXXX
Signature:
/s/
Xxxxxxx
Xxxxxxxxx
Address:
XXXXX
XXXXX
Signature:
/s/
Xxxxx
Xxxxx
Address:
|
[SIGNATURE
PAGE TO LOCK-UP AGREEMENT]
EXHIBIT
A
|
Stockholder
|
Number
and Class of Shares of Company Stock
|
Number
of Company Options and Other Rights
|
|
Xxxxxxx
Xxxxxxxxx
|
10,272,8221
shares of
Common
Stock
|
None
|
|
Xxxxx
Xxxxx
|
None2
|
None3
|
1
Xx.
Xxxxxxxxx’x shares are “encumbered” in the sense that they are subject to
restrictions on transfer under securities laws. Although there is no agreement,
express or implied, to do so, Xx. Xxxxxxxxx is considering a possible transfer
of up to one-half the after-tax proceeds received by him in the merger
to Xx.
Xxxxx in recognition of the role Xx. Xxxxx has played in
Mossimo.
2
See
footnote 1.
3
See
footnote 1.
