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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made and entered
into as of May 1, 1999, by and among D'ARTAGNAN ASSOCIATES, INC., a Delaware
corporation ("APG Sub"), AUTOMOTIVE PERFORMANCE GROUP, INC., a Delaware
corporation ("APG"), D'ARTAGNAN ASSOCIATES, INC., a California corporation
("D'Artagnan") and the shareholders of D'Artagnan (individually, a "Shareholder"
and collectively, the "Shareholders").
WITNESSETH
WHEREAS, pursuant to an agreement dated December 1, 1998 (the "Letter
Agreement"), APG and D'Artagnan agreed to the principal terms of a merger of
D'Artagnan into APG;
WHEREAS, in order to implement the merger contemplated by the Letter
Agreement, APG has caused APG Sub to be incorporated under the laws of the State
of Delaware as a wholly owned subsidiary of APG ("APG Sub") into which
D'Artagnan will be merged;
WHEREAS, the respective boards of directors of APG, APG Sub and
D'Artagnan have determined that the merger of D'Artagnan with and into APG Sub
(the "Merger"), upon the terms and subject to the conditions set forth in this
Agreement is advisable, and have approved the Merger in accordance with the
terms and conditions set forth herein; and
WHEREAS, APG, D'Artagnan and the Shareholders desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger; Effect of Merger. On the Effective Date (as hereinafter
defined), D'Artagnan shall merge with and into APG Sub pursuant to the
provisions of, and with the effect provided in, the Delaware General Corporation
Law (the "DGCL"). The separate corporate existence of D'Artagnan shall thereupon
cease and APG Sub shall become the owner, without other transfer, of all of the
assets, rights and property of D'Artagnan, and APG Sub shall become subject to
all the debts, obligations and liabilities of D'Artagnan in the same manner as
if APG Sub had itself incurred them. APG Sub shall be the surviving corporation
in the Merger ("Surviving Corporation"). The Surviving Corporation shall
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continue to be governed by the DGCL, and its separate corporate existence and
all of its rights, privileges, immunities, powers and franchises shall continue
unaffected by the Merger.
1.2 Closing. The closing of the Merger (the "Closing") shall take place
on (i) May 3, 1999, or, if later, the first business day on which the last to be
fulfilled or waived of the conditions set forth in Article VIII shall be
satisfied or waived in accordance with this Agreement or (ii) on such other date
as the parties hereto may agree in writing (the "Closing Date"). At the Closing,
(i) the Shareholders shall deliver to APG the certificates representing all of
the Common Stock of D'Artagnan and the other documents and instruments provided
for herein and (ii) APG shall deliver to the Shareholders (a) satisfactory
evidence of APG's delivery of instructions to the transfer agent for the APG
Common Stock ("Transfer Agent") instructing the Transfer Agent to issue to the
Shareholders certificates evidencing 1,000,000 shares of APG Common Stock as
provided in Section 3.1(a) of this Agreement, and to deliver to the Pledgeholder
(as hereinafter defined) certificates evidencing an additional 1,000,000 shares
of APG Common Stock issued to the Shareholders, as provided in Section 3.1(b) of
this Agreement, and (b) all other documents and instruments provided for herein.
1.3 Effective Date and Time. As soon as practicable following the
Closing, APG Sub and D'Artagnan shall cause (i) a Certificate of Merger (the
"Merger Certificate") to be executed, acknowledged and filed with the Secretary
of State of the State of Delaware (the "Secretary") as provided in Section 252
of the DGCL and (ii) the certificate and other documentation required by Section
1108 of the California Corporations Code (the "California Certificate") to be
executed and filed with the Secretary of State of the State of California. The
Merger shall become effective at the time the Secretary accepts for record the
Merger Certificate (the "Effective Date").
ARTICLE II
CHARTER, BYLAWS AND OFFICERS AND DIRECTORS
OF THE SURVIVING CORPORATION
2.1 Charter. The Certificate of Incorporation of APG Sub in effect on
the Effective Date shall be the charter of the Surviving Corporation (the
"Charter"), until duly amended as provided therein or by applicable law.
2.2 Bylaws. The Bylaws of APG Sub in effect on the Effective Date shall
be the Bylaws of the Surviving Corporation (the "Bylaws"), until thereafter
amended as provided therein or in the Charter or by applicable law.
2.3 Directors. The Directors of APG Sub on the Effective Date shall,
from and after the Effective Date, be the Directors of the Surviving
Corporation, until their successors have been duly elected or appointed and
qualified or until their death, resignation or removal in accordance with the
Charter and the Bylaws.
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2.4 Officers. The officers of APG Sub on the Effective Date shall, from
and after the Effective Date, be the officers of the Surviving Corporation,
until the their successors have been duly appointed and qualified or until their
earlier death, resignation or removal in accordance with the Charter and the
Bylaws.
ARTICLE III
MERGER CONSIDERATION; CONTINGENT STOCK; REGISTRATION RIGHTS
3.1 Merger Consideration. On the Effective Date, by virtue of the
Merger and subject to the conditions set forth in Article VIII hereof:
(a) The record shareholders of each of the outstanding shares
of D'Artagnan Common Stock shall become entitled to receive ten thousand
(10,000) shares of APG Common Stock, representing in the aggregate 1,000,000
shares of APG Common Stock.
(b) The record shareholders of each of the outstanding shares
of D'Artagnan Common Stock shall also become entitled to receive an additional
ten thousand (10,000) shares of APG Common Stock, representing in the aggregate
an additional 1,000,000 shares of APG Common Stock ("Contingent Stock"), subject
to the obligation (the "Return Obligation", which shall commence on the
Effective Date and continue in force as provided herein) of the Shareholders to
return to APG all or a portion of the Contingent Stock if the APG Common Stock
does not attain specified prices ("Trigger Prices," as set forth below) during
the two-year period beginning with the earlier of (1) one year after the
Effective Date or (2) the date on which the APG Common Stock is first listed on
a national securities exchange (the "Contingency Period"). The parties'
respective rights and obligations with respect to the Contingent Stock shall be
as set forth in this Section 3.1(b):
(i) The Contingent Stock shall be owned by the
Shareholders for all purposes from the Effective Date, subject to the Return
Obligation. The Shareholders' rights with respect to the Contingent Stock shall
include, without limitation, the right to vote the Contingent Stock and all
dividend rights with respect to the Contingent Stock. Any dividends paid with
respect to the Contingent Stock then subject to the Pledge Agreement (as
described below) shall also be held subject to the provisions of said Pledge
Agreement.
(ii) To secure APG's rights, and the Shareholders'
obligations, under the Return Obligation, the Contingent Stock shall be held by
U.S. Trust Company N.A. (the "Pledgeholder"), pursuant to a Pledge Agreement in
the form and content of Exhibit "A", attached hereto (the "Pledge Agreement").
(iii) Two hundred fifty thousand (250,000) shares of
Contingent Stock shall be deemed to have been released from the Return
Obligation (without any further action or consent of APG) upon the attainment of
each Trigger Price specified in Subparagraph 3.1
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(b)(iv) below. Upon the attainment of each such Trigger Price, APG shall
instruct the Pledgeholder to release to the Shareholders certificates evidencing
two hundred fifty thousand (250,000) shares of APG Common Stock, to be issued to
the Shareholders pro-rata in accordance with their respective ownership of
D'Artagnan Common Stock. Any Contingent Stock that has not been released from
the Return Obligation at the end of the Contingency Period (the "Returnable
Shares") shall be deemed to have been returned to APG (without any further
action or consent of the Shareholders). To effect such return, the Shareholders
shall execute, in blank, a stock assignment separate from certificate and shall
deliver said stock assignment to the Pledgeholder. At the end of the Contingency
Period, the Shareholders shall instruct the Pledgeholder to return to APG the
certificates evidencing the Returnable Shares, together with the stock
assignment assigning the Returnable Shares to APG.
(iv) The Trigger Prices with respect to the
Contingent Stock shall be Five Dollars ($5.00), Seven Dollars and Fifty Cents
($7.50), Ten Dollars ($10.00) and Twelve Dollars and Fifty Cents ($12.50),
respectively. For purposes of this Agreement, a Trigger Price shall be deemed to
have been attained on the first date ("Trigger Date") on which the average price
of the APG Common Stock during the 125 trading days prior to and including the
Trigger Date ("Six Month Average") equals or exceeds the Trigger Price. The
price of the APG Common Stock on any date shall be the closing price at which
the stock is traded on such date. If the price of the APG Common Stock on a
Trigger Date is lower than a Trigger Price, but the Six Month Average of the APG
Common Stock as of such Trigger Date equals or exceeds the Trigger Price, the
Trigger Price shall be deemed to have been attained on such Trigger Date. If the
Six Month Average of the APG Common Stock on a Trigger Date equals or exceeds
more than one Trigger Price, all such Trigger Prices shall be deemed to have
been attained on such Trigger Date.
(v) Notwithstanding the foregoing provisions of this
Section 3.1(b), in the event of a sale or other disposition (whether by merger,
reorganization, liquidation or otherwise) of substantially all of the stock or
assets of APG ("Capital Event"), all Contingent Stock then remaining subject to
the Return Obligation shall be deemed to have been released from the Return
Obligation (without any further action or consent of APG) immediately prior to
the closing of the Capital Event; provided, however, that the greater of (1) the
price of the APG Common Stock immediately prior to the closing of the Capital
Event or (2) the price at which the APG Common Stock is valued for purposes of
the Capital Event, equals or exceeds $7.50 (the foregoing condition is
hereinafter referred to as the "Valuation Condition"). Prior to the closing of a
Capital Event with respect to which the Valuation Condition is satisfied, APG
shall instruct the Pledgeholder to release to the Shareholders the certificates
evidencing all of the shares of Contingent Stock then remaining subject to the
Return Obligation. If the shareholders of APG receive stock or securities in
exchange for the APG Common Stock ("Exchange Securities") in a Capital Event
with respect to which the Valuation Condition is not satisfied, the Shareholders
shall be entitled to exchange the Contingent Stock then remaining subject to the
Return Obligation for such Exchange Securities, upon the same basis as the other
APG shareholders. In such event, the Exchange Securities shall remain subject to
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the Return Obligation, but the Trigger Prices applicable to the Exchange
Securities shall be appropriately adjusted by taking into account the relative
prices of the APG Common Stock and the Exchange Securities as of the closing of
the Capital Event and the ratio at which the APG Common Stock was exchanged for
the Exchange Securities. Upon the occurrence of a Capital Event with respect to
which (a) the Valuation Condition is not satisfied and (b) the APG shareholders
receive consideration other than Exchange Securities, any Contingent Stock then
remaining subject to the Return Obligation shall be deemed to have been returned
to APG (without any further action or consent of the Shareholders) immediately
prior to the closing of the Capital Event.
(c) Each share (if any) of D'Artagnan Common Stock then held
in the treasury of D'Artagnan shall be cancelled, and no payment shall be paid
nor other consideration received with respect thereto.
(d) Each share of APG Common Stock and each share of the
common stock of APG Sub issued and outstanding on the Effective Date shall
remain issued and outstanding.
3.2 Procedure for Exchange of Certificates. Immediately after the
Effective Date, APG will furnish to the Transfer Agent a stock certificate,
issued in the name of the Transfer Agent or its nominee, evidencing 2,000,000
shares of APG Common Stock and will instruct the Transfer Agent to issue to each
Shareholder a certificate evidencing the number of shares of APG Common Stock to
which the Shareholder is entitled under Section 3.1 hereof and to deliver to the
Pledgeholder stock certificates issued to the Shareholders evidencing the
Contingent Stock.
3.3 Registration Rights. All APG Common Stock issued to the
Shareholders under Section 3.1 of this Agreement shall be subject to the
registration rights provided in a Rights Agreement in the form and content of
Exhibit "B", attached hereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDERS AND D'ARTAGNAN
The Shareholders hereby represent and warrant to APG that:
4.1 Authority of Shareholders. Each Shareholder has the requisite power
and authority to execute this Agreement, perform the Shareholder's obligations
hereunder and consummate the transactions contemplated hereby. Each Shareholder
has duly executed and delivered this Agreement. This Agreement is a valid, legal
and binding obligation of the Shareholders enforceable against the Shareholders
in accordance with its terms. No other action will be necessary by the
Shareholders to authorize the execution and delivery of this
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Agreement and the consummation of the transactions contemplated hereby, except
as specifically provided herein.
4.2 No Conflict for Shareholders.
(a) The execution and delivery of this Agreement by each
Shareholder and the consummation of the transactions contemplated hereby do not,
and the performance of this Agreement and the transactions contemplated hereby
by each Shareholder will not, conflict with or violate any foreign, federal,
state or local law, statute, treaty, ordinance, rule, regulation, order, writ,
injunction, decree or judgment (individually, a "Law" and collectively, "Laws")
applicable to any Shareholder.
(b) The execution and delivery of this Agreement by each
Shareholder does not, and the performance of this Agreement by such Shareholder
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority, either
domestic or foreign (individually, a "Governmental Entity" and collectively,
"Governmental Entities"), other than any such consents, approvals,
authorizations or permits that have been obtained or such filings or
notifications that have been made or will have been obtained or made as of the
Effective Date.
4.3 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Shareholders or D'Artagnan.
4.4 Title. Each Shareholder has title to the D'Artagnan Common Stock
set forth opposite such Shareholder's name on Schedule 4.4 attached hereto, and
full right, power and authority to sell, assign, transfer and deliver such
D'Artagnan Common Stock, free and clear of all voting trust arrangements, liens,
encumbrances, equities, security interests, restrictions and claims whatsoever
(other than those imposed by the Securities Act of 1933 and the securities or
Blue Sky laws of the State of California).
D'Artagnan hereby represents and warrants to APG that:
4.5 Organization and Qualification; Subsidiaries. D'Artagnan is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California, having full power and authority to own its own
properties and to carry on its business as conducted.
4.6 Articles of Incorporation and Bylaws. D'Artagnan has heretofore
furnished to APG complete and correct copies of the Articles of Incorporation
and Bylaws of D'Artagnan, in each case as amended or restated (collectively,
"Organizational Documents"). The Organizational Documents are in full force and
effect. D'Artagnan is not in violation of any of the provisions of any of its
Organizational Documents.
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4.7 Capitalization; Title to Shares.
(a) The authorized capital stock of D'Artagnan consists of
10,000 authorized shares of D'Artagnan Common Stock, of which, as of the date
hereof 100 shares are issued and outstanding. All of the outstanding shares of
D'Artagnan Common Stock are duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights created by statute,
D'Artagnan's Organizational Documents or any agreement to which D'Artagnan is a
party or is bound.
(b) There are no options, warrants or other rights (including
registration rights), agreements, arrangements or commitments of any character
to which D'Artagnan is a party relating to the issued or unissued capital stock
of, or other equity interests in, D'Artagnan, or obligating D'Artagnan to grant,
issue or sell any shares of the capital stock of, or other equity interests in,
D'Artagnan, by sale, lease, license or otherwise. There are no obligations,
contingent or otherwise, of D'Artagnan to repurchase, redeem or otherwise
acquire any shares of D'Artagnan Common Stock. There are no voting trusts,
proxies or other agreements or understandings to which D'Artagnan is a party or
by which D'Artagnan is bound with respect to the voting of any shares of capital
stock of D'Artagnan.
4.8 Authority of D'Artagnan; Approval. D'Artagnan has all requisite
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by D'Artagnan and the
consummation by D'Artagnan of the transactions contemplated hereby have been
duly authorized by all necessary corporate action and no other corporate
proceedings on the part of D'Artagnan are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by D'Artagnan and constitutes the legal,
valid and binding obligation of D'Artagnan , enforceable against D'Artagnan in
accordance with its terms.
4.9 No Conflict of D'Artagnan.
(a) The execution and delivery of this Agreement by D'Artagnan
does not, and the performance of this Agreement and the Merger by D'Artagnan
will not, (i) conflict with or violate the Organizational Documents of
D'Artagnan, or (ii)conflict with or violate any Laws applicable to D'Artagnan or
by which any of its properties is bound or affected.
(b) The execution and delivery of this Agreement by D'Artagnan
does not, and the performance of this Agreement and the Merger by D'Artagnan
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any Governmental Entities, other than (i) any such
consents, approvals, authorizations or permits that have been obtained or such
filings or notifications that have been made or will have been obtained or made
as of the Closing Date, (ii) where the failure to obtain such consents,
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approvals, authorizations or permits, or to make such filings or notifications,
would not, either individually or in the aggregate, prevent or delay
consummation of the transactions contemplated by this Agreement, or otherwise,
either individually or in the aggregate, prevent D'Artagnan and the Shareholders
from performing its and their obligations under this Agreement and could not
reasonably be expected to result in a Material Adverse Effect on APG or APG Sub,
and (iii) filing of the Merger Certificate with the Secretary and the California
Certificate with the Secretary of State of the State of California.
4.10 Books and Records; Balance Sheet. D'Artagnan has previously made
available to APG complete and correct copies of all of the books and records of
D'Artagnan. A true and correct balance sheet of D'Artagnan listing the assets
and liabilities of D'Artagnan as of the Closing Date is attached hereto as
Exhibit "C".
ARTICLE V
REPRESENTATION AND WARRANTIES OF APG
APG hereby represents and warrants to the Shareholders and D'Artagnan
that:
5.1 Organization and Qualification. APG is and, at the time of the
Merger APG Sub will be, a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, having full power and
authority to own its properties and to carry on its business as conducted.
5.2 Authority. APG has all requisite corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by APG and the consummation by APG of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
and no other corporate proceedings on the part of APG are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by APG and constitutes the legal,
valid and binding obligation of APG enforceable against APG in accordance with
its terms. APG Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, having full power and
authority to own its properties, to carry on its business as conducted, and to
perform its obligations pursuant to this Agreement. At the time of the Merger,
APG Sub will have all requisite corporate power and authority to consummate the
transactions contemplated hereby, and the consummation by APG Sub of the
transactions contemplated hereby shall have been duly authorized by all
necessary corporate action and no other corporate proceedings on the part of APG
Sub shall be necessary to consummate the transactions contemplated hereby.
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5.3 No Conflict.
(a) The execution and delivery of this Agreement by APG does
not, and the performance of this Agreement and the Merger by APG will not, (i)
conflict with or violate the Organizational Documents of APG, (ii) conflict with
or violate any Laws applicable to APG or by which any of its properties is bound
or affected, (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of any encumbrance on any of the properties or assets
of APG pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which APG
is a party or any of its properties is bound or affected, except, in the case of
breaches, defaults, rights or encumbrances which could not reasonably be
expected to result, individually or in the aggregate, in a Material Adverse
Effect on APG.
(b) The execution and delivery of this Agreement by APG does
not, and the performance of this Agreement and the Merger by APG will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entities, other than (i) any such consents,
approvals, authorizations or permits that have been obtained or such filings or
notifications that have been made or will have been obtained or made as of the
Closing Date, (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not,
either individually or in the aggregate, prevent or delay consummation of the
transactions contemplated by this Agreement, or otherwise, either individually
or in the aggregate, prevent APG from performing its obligations under this
Agreement, and could not reasonably be expected to result in a Material Adverse
Effect on D'Artagnan, and (iii) filing of the Merger Certificate with the
Secretary and the California Certificate with the Secretary of State of the
State of California.
5.4 Articles of Incorporation and Bylaws. APG has heretofore furnished
to D'Artagnan complete and correct copies of its Certificate of Incorporation
and Bylaws, in each case as amended or restated as of the date hereof
(collectively, "APG Organizational Documents"), which are in full force and
effect. APG is not in violation of any of the provisions of any of the APG
Organizational Documents. APG has heretofore furnished to D'Artagnan copies of
the Certificate of Incorporation and Bylaws of APG Sub, in substantially the
form that will be effective immediately prior to the Merger.
5.5 Capital Stock. Immediately prior to the Closing, the authorized
capital stock of APG shall consist of 130,000,000 shares of common stock, $.0001
par value, of which 6,234,656 shares are issued and outstanding, and 13,000,000
authorized shares of preferred stock, $.0001 par value, of which 4,658,000
shares are issued and outstanding. Each of the outstanding shares of capital
stock of APG is duly authorized, validly issued, fully paid and
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nonassessable and issued in full compliance with the preemptive rights of any
existing shareholder and in full compliance with all applicable federal and
state securities law.
5.6 Validity of Shares. The outstanding shares of APG Common Stock to
be delivered to the Shareholders pursuant to this Agreement, when issued in
accordance with the terms and provisions of this Agreement, will be validly
authorized, validly issued, fully paid, and nonassessable.
5.7 Broker. No broker, finder or investment banker is entitled to any
brokerage, finder's fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
APG.
5.8 Books and Records. APG has previously made available to D'Artagnan
and the Shareholders complete and accurate copies of all of the books and
records of APG.
ARTICLE VI
COVENANTS
6.1 Negative Covenants of D'Artagnan. Except as expressly contemplated
by this Agreement or otherwise consented to in writing by APG, from the date of
this Agreement until the Closing, D'Artagnan shall not:
(a) Take any action, or omit to take any action, the effect of
which would reasonably be expected to cause any of the representations and
warranties contained in Article IV of this Agreement to be inaccurate as of the
Closing or any time prior thereto;
(b) Declare, set aside or pay any dividend on the outstanding
shares of capital stock of D'Artagnan, or redeem, repurchase or otherwise
acquire any of its capital stock.
(c) (i) Issue, deliver, award, pledge, grant or sell, or
authorize or propose to enter into any contract, understanding, agreement or
arrangement with respect to the issuance, delivery, award, grant or sale
(including the grant of any security interests or other encumbrances) of, any
shares of any class of its capital stock (including shares held in treasury),
any securities convertible into or exercisable or exchangeable for any such
shares, or any rights, warrants or options to acquire any such shares, (ii)amend
or otherwise modify the terms of any such rights, warrants or options the effect
of which shall be to make such terms more favorable to the holders thereof, or
(iii) except for the transactions contemplated hereby, enter into any
arrangement, understanding or contract with respect to the purchase or voting of
shares of its capital stock;
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(d) Engage in any business other than the business in which it
is presently engaging or fail to continue its business in the ordinary course in
all material respects; or
(e) Sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge,
transfer or otherwise dispose of, any of its assets, except for dispositions of
immaterial assets in the ordinary course of business and consistent with past
practice (in amount and form).
6.2 Negative Covenants of APG. Except as expressly contemplated by this
Agreement or otherwise consented to in writing by D'Artagnan, from the date of
this Agreement until the Closing, APG shall not:
(a) Take any action, or omit to take any action, the effect of
which would reasonably be expected to cause any of the representations and
warranties contained in Article V of this Agreement to be inaccurate as of the
Closing or any time prior thereto;
(b) Declare, set aside or pay any dividend on, or make any
other distribution or payment (whether in cash, stock or property) in respect
of, the outstanding shares of capital stock of D'Artagnan, or redeem, repurchase
or otherwise acquire any of its capital stock;
(c) Except for proceeding with the Loctite acquisition and any
other transaction pending as of the date hereof, engage in any business other
than the business in which it is presently engaging; or
(d) Sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge,
transfer or otherwise dispose of, any of its assets, except for dispositions of
immaterial assets in the ordinary course of business and consistent with past
practice (in amount and form).
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Best Efforts; Consents; Filings. Subject to the terms and
conditions of this Agreement, APG, APG Sub, D'Artagnan and the Shareholders
shall use their reasonable best efforts to (i) take promptly, or cause to be
taken, all appropriate action, and to do promptly, or cause to be done, all
things necessary, proper or advisable under applicable Laws or otherwise to
consummate and make effective as soon as possible the transactions contemplated
by this Agreement, (ii) obtain from any Governmental Entities any consents,
licenses, permits, waivers, approvals, authorizations or orders required to be
obtained or made by APG, APG Sub, D'Artagnan or the Shareholders in connection
with the authorization, execution and delivery of this Agreement and the
consummation of the transactions contemplated herein, (iii) make all necessary
filings, and thereafter make any other required submissions, notifications
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and filings with respect to this Agreement, provided, however, that APG, APG Sub
and D'Artagnan shall cooperate with each other in connection with the making of
all such filings, including, without limitation, providing copies of all such
documents to the non-filing party and its advisors prior to any filing and, if
requested, to accept all reasonable additions, deletions or changes suggested by
the non-filing party in connection therewith, (iv) satisfy the requirements of
any Laws, and (v) remove any injunctions or other impediments or delays, legal
or otherwise, in order to consummate and make effective the transactions
contemplated by this Agreement for the purpose of securing to the parties hereto
all of the benefits contemplated by this Agreement. APG, APG Sub and D'Artagnan
shall furnish all information required for any application or other filing to be
made pursuant to the rules and regulations of any applicable Laws in connection
with the transactions contemplated by this Agreement.
7.2 Full Access. APG and D'Artagnan shall permit representatives of the
other to have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the party being reviewed, to
all premises, properties, personnel, books and records (including tax records),
contracts and documents of or pertaining to the party being reviewed. Each party
shall treat and hold as such any confidential information it receives from the
other in the course of the reviews contemplated by this Section 7.2, and shall
not use any of the confidential information except in connection with the
Merger. From the date hereof and until the Closing, APG and D'Artagnan shall
give prompt notice to the other of any Material Adverse Change affecting said
party. No such disclosure, however, shall be deemed to amend or supplant any
provision of this Agreement or to prevent or cure any misrepresentation, breach
of warranty or breach of covenant. Each party shall also keep the other fully
informed of all aspects of its business.
ARTICLE VIII
CLOSING CONDITIONS
8.1 Additional Conditions to the Obligations of Each Party. The
respective obligations of each party to effect the Merger shall be subject to
the satisfaction at or prior to the Closing Date of the following conditions,
any or all of which may be waived, in whole or in part, to the extent permitted
by applicable law:
(a) No Order. No Governmental Entity or federal or state court
of competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree, injunction or
other order (whether temporary, preliminary or permanent) which is in effect and
which restricts, prevents or prohibits consummation of this Agreement and the
transactions contemplated hereby.
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(b) Government Consents. All consents, waivers, approvals and
authorizations required to be obtained in order to consummate the Merger shall
have been obtained from all appropriate Governmental Entities.
(c) Required Shareholder Approvals. The Agreement and the
Merger shall have requisite shareholder approval for APG Sub, as required under
DGCL Section 251(c), and the requisite approval by the Shareholders of
D'Artagnan as required under Section 1201 of the California Corporations Code.
8.2 Additional Conditions to the Obligations of D'Artagnan and the
Shareholders.
The obligations of D'Artagnan and the Shareholders to effect
the Merger and the other transactions contemplated herein are also subject to
the following conditions:
(a) Representations and Warranties. Each of the
representations and warranties of APG contained in this Agreement shall be true
and correct in all material respects (except that where any statement in a
representation or warranty expressly includes a standard of materiality, such
statement shall be true and correct in all respects giving effect to such
standard) when made and as of the Closing Date as though made on and as of the
Closing Date.
(b) Agreements and Covenants. APG shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date.
(c) Securities Act and "Blue Sky" Law Compliance. The offer,
sale, and delivery of the shares of APG Common Stock under the circumstances
contemplated by this Agreement are made in full compliance with all applicable
federal and state Securities laws.
(d) Bankruptcy. No case or proceeding shall have been
commenced under any federal or state bankruptcy or equivalent law by or against
APG or APG Sub.
8.3 Additional Conditions to Obligations of APG and APG Sub. The
obligation of APG and APG Sub to effect the Merger and the other transactions
contemplated by this Agreement is also subject to the following conditions:
(a) Representations and Warranties. Each of the
representations and warranties of D'Artagnan and the Shareholders contained in
this Agreement shall be true and correct in all material respects (except that
where any statement in a representation or warranty expressly includes a
standard of materiality, such statement shall be true and correct in all
respects giving effect to such standard) when made and as of the Closing Date,
as though made on and as of the Closing Date.
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(b) Agreements and Covenants. Each of D'Artagnan and the
Shareholders shall have performed or complied in all material respects with all
agreements and covenants required by this Agreement to be performed or complied
with by them on or prior to the Closing Date.
(c) Bankruptcy. No case or proceeding shall have been
commenced under any federal or state bankruptcy or equivalent law by or against
D'Artagnan.
ARTICLE IX
GENERAL PROVISIONS
9.1 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered, mailed or transmitted, and shall be effective
upon receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the address
provided by the parties for purpose of notice (or at such other address for a
party as shall be specified by like changes of address) or sent by electronic
transmission (provided that a confirmation copy is sent by another approved
means) to the telecopier numbers specified by the parties.
9.2 Certain Definitions. For purposes of this Agreement, the term:
"APG Common Stock" shall mean the common stock of
APG, par value $.0001.
"APG Sub Common Stock" shall mean common stock of APG
Sub, par value $.0001.
"Affiliate" means a person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first
mentioned person.
"D'Artagnan Common Stock" shall mean the common stock
of D'Artagnan, no par value.
"Encumbrances" shall mean, with respect to any real
or personal, tangible or intangible property, any lien,
charge, reservation, right of entry, possibility of reverter,
encroachment, easement, right of way, restrictive covenant,
lease, security interest (whether based on common law, statute
or contract and, including without limitation, any interest
arising from any capitalized lease, conditional sale, trust
receipt or deposit interest), option, right
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of first refusal, right of first offer or any other
imperfection of title or right by any person to assert a claim
with respect to such property.
"Knowledge" shall mean, with respect to any matter in
question, (i) actual knowledge or (ii) actual knowledge as
would be possessed of such matter if due diligence had been
conducted.
The term "Material Adverse Effect" as used in this
Agreement shall mean any change or effect that, individually
or when taken together with all other such changes or effects
of the same general type, is or is reasonably likely to be
materially adverse to the assets, financial condition,
business, operations or prospects of D'Artagnan or APG, as the
case may be.
"Person" means an individual, corporation,
partnership, association, trust, unincorporated organization,
other entity or group (as defined in Section 13(d) of the
Securities Exchange Act).
9.3 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.4 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
9.5 Entire Agreement. This Agreement constitutes the entire agreement
of the parties and supersedes all prior agreements and undertakings, both
written and oral, between the parties, or any of them, with respect to the
subject matter hereof.
9.6 Successors and Assigns. Except as provided herein to the contrary,
this Agreement shall be binding upon and inure to the benefit of the parties,
their respective successors and permitted assigns. The rights and obligations of
the parties hereunder may not be assigned prior to the Closing Date.
9.7 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
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9.8 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty or agreement herein, nor shall any
single or partial exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
9.9 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware without regard to rules
respecting conflicts of law.
9.10 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
9.11 Construction. All Schedules, section and article references are to
this Agreement, unless otherwise expressly provided. As used in this Agreement,
(a) "hereof", "hereunder", "herein" and words of like import shall be deemed to
refer to this Agreement in its entirety and not just a particular section of
this Agreement and (b) unless the context otherwise requires, words in the
singular number or in the plural number shall each include the singular number
or the plural number, words of the masculine gender shall include the feminine
and neuter, and, when the sense so indicates, words of the neuter gender shall
refer to any gender.
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IN WITNESS WHEREOF, APG, D'Artagnan and the Shareholders have caused
this Agreement to be executed as of the date first written above by their
respective officers and representatives thereunto duly authorized.
AUTOMOTIVE PERFORMANCE GROUP, INC.
By:/s/ Xxxx Xxxxxx
-------------------------------
ATTEST: Its: Secretary
-------------------------------
/s/ Xxxxxx Xxxxxxx
-------------------------------
D'ARTAGNAN ASSOCIATES, INC.,
a Delaware corporation
By:/s/ Xxxx Xxxxxx
-------------------------------
ATTEST: Its: Secretary
-------------------------------
/s/ Xxxxxx Xxxxxxx
-------------------------------
D'ARTAGNAN ASSOCIATES, INC.,
a California corporation
By:/s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx
ATTEST: Its: President
-------------------------------
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx, Secretary
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/s/ Xxxx X. Xxxxxxx
----------------------------------
XXXX X. XXXXXXX
XXXXXXX CHILDREN'S TRUST
By:/s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx, Co-Trustee
By:/s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx, Co-Trustee
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