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EXHIBIT 2(b)(1)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of February 17, 1997 by and among
Substance Abuse Technologies, Inc., a Delaware corporation ("SAT"), Good Ideas
Acquisition Corp., a Delaware corporation ("Acquisition Corp."), and Good Ideas
Enterprises, Inc., a Delaware corporation ("Good Ideas").
WITNESSETH:
WHEREAS, of the 3,948,680 shares of the common stock, $.001 par value
(the "Good Ideas Common Stock"), of Good Ideas outstanding as of the date
hereof, SAT is the owner of 2,400,000 shares and 1,548,680 shares (the "Minority
Good Ideas Common Stock") are owned by persons other than SAT (the "Good Ideas
Minority Stockholders");
WHEREAS, the Board of Directors of each of SAT and Acquisition Corp.
have each adopted, approved and authorized the execution and delivery of this
Agreement and Plan of Merger (the "Agreement") so as to implement the subject
merger in compliance with the provisions of Section 251 of the General
Corporation Law of the State of Delaware (the "GCL");
WHEREAS, because of the relationships of three of the four directors of
Good Ideas to SAT as current directors and/or officers thereof and of all four
directors of Good Ideas as securityholders of SAT, the Board of Directors of
Good Ideas has only authorized execution and delivery of the Agreement on the
condition that approval of the subject merger by Good Ideas shall only be
effected as a result of the obtaining of consents thereto from the holders of
more than 50% of the Minority Good Ideas Common Stock;
WHEREAS, the Board of Directors of Good Ideas intends to, and shall,
submit this Agreement and the subject merger to the stockholders of Good Ideas
for approval to the extent required by the applicable provision of GCL; and
WHEREAS, in connection with the subject merger and solicitation of
stockholder consent thereto, SAT has filed a Registration Statement on Form S-4,
File No. 333-3734 (the "Registration Statement"), pursuant to the Securities Act
of 1933, as amended (the "Securities Act"), the Registration Statement to
include as Part I thereof the prospectus and consent solicitation statement to
be transmitted to the Good Ideas Minority Stockholders (such prospectus and
consent solicitation statement, as from time to time amended and/or
supplemented, hereinafter referred to as the "Consent Solicitation
Statement-Prospectus") (a) with respect to the solicitation of consents from the
Good Ideas Minority Stockholders to the subject merger pursuant to Section 228
of the GCL and Section 14(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and (b) with respect to the distribution of the shares of
the SAT common stock, $.01 par value (the "SAT Common Stock"), to the Good Ideas
Minority Stockholders in exchange for their shares of the Good Ideas Common
pursuant to the terms of this Agreement and the subject merger;
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NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements herein contained, the
parties hereto do hereby agree as follows:
1. THE MERGER. Subject to the terms and conditions hereinbelow set
forth, on the Effective Date (as hereinafter defined in Section 10 hereof)
Acquisition Corp. shall be merged with and into Good Ideas (the "Merger") and,
in connection therewith:
(a) except to the extent provided or permitted by applicable law,
the separate existence of Acquisition Corp. shall cease and terminate;
(b) Good Ideas, as the surviving corporation, shall continue its
corporate existence under the laws of the State of Delaware and shall possess
all of the rights, privileges, immunities, powers, franchises and authority
(both public and private) of, and be subject to all of the restrictions,
disabilities and duties of, Acquisition Corp.;
(c) all of the assets and property of Acquisition Corp. of every
kind, nature and description (real, personal and mixed and both tangible and
intangible) and every interest therein, wheresoever located, including, without
limitation, all debts or other obligations belonging or due to Acquisition
Corp., all stock subscriptions, claims and chooses in action shall be, and be
deemed to be, vested, absolutely and unconditionally, in Good Ideas (to the same
extent, degree and manner as previously vested in Acquisition Corp.); and
(d) all debts and obligations of Acquisition Corp., all rights of
creditors of Acquisition Corp. and all liens or security interests encumbering
any of the property of Acquisition Corp. shall be vested in Good Ideas and shall
remain in full force and effect without modification or impairment and shall be,
and be deemed to be, enforceable against Good Ideas and its assets and
properties with the same full force and effect as if such debts, obligations,
liens or security interests had been originally incurred or created by Good
Ideas in its own name and for its own behalf. Without limiting the generality of
the foregoing, Good Ideas specifically assumes all continuing obligations which
Acquisition Corp. would otherwise have to indemnify its officers and directors,
to the fullest extent currently provided in Acquisition Corp.'s By-Laws and/or
by resolution of its Board of Directors and pursuant to the GCL, with respect to
any and all claims arising out of actions taken or omitted by such officers and
directors prior to the Effective Date.
2. INSTRUMENTS OF CONVEYANCE. Without limiting the generality of the
provisions of Section 1 hereof and/or the succession provisions of applicable
law, the officers and directors of Acquisition Corp. last in office shall (to
the extent they, or any of them, possess and/or may exercise the power to do so)
execute, deliver and/or record such deeds and/or other instruments of transfer
and/or conveyance, and take or cause to be taken, such other and further
actions, as the case may be, as shall be reasonably requested by Good Ideas or
SAT, or their legal counsel, to vest, perfect, confirm, implement the transfer
of, or establish in the name, on behalf or for the account or the benefit of
Good Ideas, title and/or possession of any or all of the assets, property,
property interests, rights, privileges, immunities, powers and franchises owned
and/or exercisable by Acquisition Corp. (or in which Acquisition Corp. had an
interest and/or the power to exercise immediately prior
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to the Effective Date) and which was vested, or intended to be vested, in Good
Ideas pursuant to the provisions of this Agreement and the Merger.
3. CONSTITUTIONAL DOCUMENTS, DIRECTORS AND OFFICERS. On and as of the
Effective Date:
(a) The Certificate of Incorporation of Good Ideas on such date in
full force and effect shall be the Certificate of Incorporation of Good Ideas,
as the surviving corporation, until the same shall be altered, amended,
modified, terminated or rescinded in the manner provided by the GCL, which
rights of alteration, amendment, modification, termination and/or rescission are
hereby expressly reserved by Good Ideas;
(b) The By-Laws of Good Ideas on such date in full force and effect
shall be the By-Laws of Good Ideas, as the surviving corporation, until the same
shall be altered, amended, modified, terminated or rescinded in the manner
provided in the Certificate of Incorporation of Good Ideas and/or the GCL, which
rights of alteration, amendment, modification, termination and/or rescission are
hereby expressly reserved by Good Ideas.
(c) The members of the Board of Directors and the officers of Good
Ideas, the surviving corporation, shall consist of the persons described on
Exhibit "A" annexed hereto and made a part hereof, each of such persons to hold
such membership and/or officership as provided in the By-Laws and/or the GCL.
(d) The Certificate of Incorporation of SAT on such date in full
force and effect shall be the Certificate of Incorporation of SAT until the same
shall be altered, amended, modified, terminated or rescinded in the manner
provided by the GCL, which rights of alteration, amendment, modification,
termination and/or rescission are hereby expressly reserved by SAT.
(e) The By-Laws of SAT on such date in full force and effect shall
be the By-Laws of SAT until the same shall be altered, amended, modified,
terminated or rescinded in the manner provided in the Certificate of
Incorporation of SAT and/or the GCL, which rights of alteration, amendment,
modification, termination and/or rescission are hereby expressly reserved by
SAT.
4. CONVERSION RATES. On the Effective Date the shares of the Good Ideas
Common Stock shall be converted and exchanged into shares of the SAT Common
Stock (and warrants and similar rights exercisable with respect to shares of the
Good Ideas Common Stock shall become exercisable with respect to shares of the
SAT Common Stock) in the following manner:
(a) Each issued and outstanding share of the Good Ideas Common Stock
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted and exchanged into .36 of a share of the SAT Common Stock;
provided, however, that to the extent any holder of the Good Ideas Common Stock
shall be entitled, as a result of the foregoing conversion and exchange, to
receive less than a whole share of the SAT Common Stock, then and in any such
event:
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(i) no fractional share and/or fractional interest in
a whole share shall be issued and
(ii) the fractional interest of such holder shall be
liquidated for cash equivalent calculated on the basis of the closing sales
price of the SAT Common Stock on the Effective Date or on the first day
thereafter that such price is available.
The portion of a share of the SAT Common Stock to be exchanged for each share of
the Good Ideas Common Stock was determined by assuming that a share of the SAT
Common Stock has a market value of $1.625 per share (which was the closing sales
price reported by the American Stock Exchange on February 14, 1997, the last
trading date before the date of this Agreement) and that the Good Ideas Minority
Stockholder should receive between .25 of a share if the market value of the SAT
Common Stock was $2.50 per share and .375 of a share if the market value of the
SAT Common Stock was $1.50 per share for each share of the Minority Good Ideas
Common Stock.
(b) Each outstanding warrant expiring February 16, 1999 (the
"Warrant") to purchase shares of the Good Ideas Common Stock shall, by virtue of
the Merger and without any action on the part of the holder thereof, be
converted and exchanged into a warrant to purchase shares of the Good Ideas
Common Stock equal to the number of shares that the holder would have received
under Section 4(a) hereof had the warrant been exercised immediately prior to
the Effective Date. The exercise price shall be adjusted to the product of $7.50
and a fraction, the numerator of which shall be the number of shares of the Good
Ideas Common Stock issuable upon the exercise of the Warrant prior to the Merger
and the denominator of which shall be the number of shares of the SAT Common
Stock issuable upon the exercise of the Merger Warrant. The expiration date of
the Warrant shall not be changed.
(c) Anything in this Section 4 to the contrary
notwithstanding:
(i) Any and all issued shares of the Good Ideas Common
Stock owned by Good Ideas and held as treasury stock shall be canceled and
retired and no shares of the SAT Common Stock shall be issued with respect
thereto;
(ii) Any and all issued shares of the Good Ideas Common
Stock owned by SAT, except for ten (10) shares, shall be canceled and retired
and no shares of the SAT Common Stock shall be issued to SAT with respect
thereto;
(iii) Upon the issuance of shares of the SAT Common Stock
to the Good Ideas Minority Stockholders in exchange for their shares of the Good
Ideas Common Stock, there shall be credited to the capital account of SAT an
amount equal to $1.625 and, of the amount so credited, the portion thereof in
excess of the aggregate par value thereof shall be credited to the capital
surplus account; and
(iv) Upon the issuance of shares of the SAT Common Stock
to the Good Ideas Minority Stockholders all shares of the Good Ideas Common
Stock shall be canceled except for the ten (10) shares held by SAT as described
in subsection (d)(ii) of this Section 4.
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5. APPOINTMENT OF EXCHANGE AGENT. Prior to the Effective Date SAT
shall, subject to the provisions of Paragraph 8 hereof:
(a) Designate U.S. Stock Transfer Corporation (the "Exchange Agent")
to implement the exchange (subsequent to the Effective Date) of certificates
representing shares of the Good Ideas Common Stock (the "Old Certificates") for
certificates representing shares of the SAT Common Stock (the "New
Certificates");
(b) engage the Exchange Agent for a period of the lesser of (i) 12
consecutive months following the Effective Date and (ii) the date on which all
of the Old Certificates held by the Good Ideas Minority Stockholders have been
surrendered for the New Certificates; and
(c) provide to the Exchange Agent sufficient supplies of New
Certificates so as to enable a holder of an Old Certificate(s) to surrender such
Certificate(s) and receive New Certificate(s).
6. CERTIFICATE EXCHANGE. Subsequent to the Effective Date the issuance
and distribution of New Certificates in exchange for Old Certificates shall be
implemented as follows:
(a) As promptly after the Effective Date as shall be reasonably
possible, the Exchange Agent shall be directed to, and shall, notify (the
"Notification") each holder of an Old Certificate of the consummation of the
Merger, the availability of New Certificates and a description of the procedure
to be followed (and documents to be executed and submitted) in connection with
the surrender of the Old Certificate and the issuance of the New Certificate.
Upon compliance by a holder thereof with the requirements for the certificate
surrender and issuance specified in the Notification, the Exchange Agent shall
be directed to, and shall, issue and transmit to such holder New Certificates
(representing that number of shares of the SAT Common Stock to which such holder
shall be entitled as herein provided). Until surrendered and replaced as
aforesaid:
(i) each Old Certificate shall, and be deemed to, represent
and evidence (for all corporate purposes other than the payment of dividends and
other distributions) that number of shares of the SAT Common Stock into which
the shares of the Good Ideas Common Stock therein referred to are convertible
and exchangeable as herein provided and
(ii) each Old Certificate shall not be transferable on the
books and records of Good Ideas and/or SAT.
(b) From and after the Effective Date any and all dividends and/or
distributions of every kind, nature or description declared and payable by SAT
on, or with respect to, the SAT Common Stock to any holder of an Old Certificate
(collectively "Distributions") shall be paid, retained, invested and paid over
as follows:
(i) Until such time as the Old Certificate is surrendered for
replacement by a New Certificate(s) as herein provided, no Distribution shall be
paid over by SAT and/or the Exchange Agent to such holder on, or with respect
to, the shares of the SAT Common Stock evidenced by such Old Certificate;
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(ii) All Distributions payable on, or with respect to, shares
of the SAT Common Stock represented by Old Certificates shall be paid over by
SAT to the Exchange Agent and dealt in and with by the Exchange Agent as
follows:
(A) All Distributions in cash shall be deposited by the
Exchange Agent in an interest bearing account (the "Distribution Account") and
retained and disposed of as hereinbelow provided;
(B) Upon surrender by, or on behalf of, a holder of an Old
Certificate for surrender and replacement as hereinabove provided (or
satisfactory proof of loss and an indemnity in favor of, and acceptable to, SAT
and the Exchange Agent), the Exchange Agent shall pay over and/or deliver to
such holder (in addition to the New Certificate(s) to which such holder shall be
entitled) (y) the principal amount of any cash dividends and any property (other
than shares of the SAT Common Stock) previously received by the Exchange Agent
with respect to the shares of the SAT Common Stock evidenced by such Old
Certificate and (z) a certificate representing any shares of the SAT Common
Stock forming part of any Distribution made prior to the date of any such
surrender;
(C) Any and all interest earned and/or credited on, or
with respect to, Distributions shall be applied by the Exchange Agent to the
payment of its fees and disbursements and the remainder, if any, paid over to
SAT upon the termination of the engagement of the Exchange Agent.
(c) From and after the Effective Date the sole rights of the holders
of Old Certificates (except as otherwise provided by law) shall be those to
which they are entitled as owners of the SAT Common Stock into which the shares
of the Good Ideas Common Stock evidenced by such Old Certificates shall have
been converted as herein provided.
7. TRANSFERS. If the holder of any Old Certificate desires that the New
Certificate to be issued in replacement therefor (as hereinabove provided) is to
be issued in a name other than that on the Old Certificate which it replaces,
any such issuance shall be subject to and conditioned upon:
(a) Delivery to the Exchange Agent of the Old Certificate duly
endorsed in blank or accompanied by a duly executed stock assignment power and
otherwise in form for transfer acceptable to the Exchange Agent and
(b) Payment to SAT or the Exchange Agent of any and all transfer
and/or other taxes payable, in the opinion of the Exchange Agent, by reason of
the issuance and/or transfer of such New Certificate and/or the shares of the
SAT Common Stock evidenced thereby.
8. TERMINATION OF EXCHANGE AGENT. Upon the termination of the Exchange
Agent's engagement as hereinabove provided, the Exchange Agent shall deliver to
SAT the then balance of the Distribution Account and, upon such delivery, the
Exchange Agent shall have no further duties or obligations as exchange agent to
SAT, Acquisition Corp., Good Ideas or their respective stockholders. Thereafter,
the duties to be performed by the Exchange Agent as described in
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Sections 6 and 7 hereof shall be performed by SAT in lieu of, and instead of,
the Exchange Agent. All blank stock certificates evidencing the SAT Common Stock
shall be retained by the Exchange Agent for utilization by it in the performance
of its duties as transfer agent for, and with respect to, the SAT Common Stock.
9. THE CLOSING. The closing of the transactions contemplated by this
Agreement shall take place on such date, at such place and at such time within
five (5) business days after the satisfaction or waiver of the last of the
conditions set forth in Sections 17 and 18 hereof as shall be designated by SAT.
The closing of such transactions shall be referred to herein as the "Closing"
and the date of the Closing shall be referred to herein as the "Closing Date";
and the Closing Date may be the same as the Effective Date.
10. THE EFFECTIVE DATE. Subject to the satisfaction and/or waiver of
the conditions herein described, the Merger shall become effective (the
"Effective Date") as at the close of business on the date specified in the
Certificate of Merger to be filed in the manner required by the GCL or, if none,
on the date of filing. Upon the receipt by Good Ideas of consents from the
holders of more than 50% of the outstanding shares of the Minority Good Ideas
Common Stock held by the Good Ideas Minority Stockholders and of a consent from
SAT to the Merger, Good Ideas and Acquisition Corp. shall cause to be filed the
Certificate of Merger in the manner required by the GCL. Subject to the
provisions of Section 19 hereof, such filing shall be made on, or as soon as
practicable after, the Closing Date; and the parties hereto shall thereafter
execute, acknowledge, deliver and/or record such other and further instruments,
documents or certificates and/or take and perform such other and further actions
as may be required to effect and/or implement the Merger. If the Merger is
consummated, SAT will take such actions as are necessary to deregister the Good
Ideas Common Stock pursuant to Section 12(b) of the Exchange Act.
11. THE REGISTRATION STATEMENT AND CONSENT SOLICITATION STATEMENT. In
connection with the preparation, utilization and/or distribution of the Consent
Solicitation Statement-Prospectus to be issued and distributed to the Good Ideas
Minority Stockholders in connection with the Merger and the preparation and
utilization of the Registration Statement of which the Consent Solicitation
Statement-Prospectus constitutes Part I thereof, the parties shall follow the
procedures as provided in this Section 11.
(a) The parties hereto shall cooperate in the preparation thereof
consistent with the applicable requirements of the GCL, the Securities Act and
the Exchange Act and the rules and regulations promulgated under the Securities
Act and the Exchange Act by the Securities and Exchange Commission (the "SEC");
and, without limiting the generality of the foregoing, each of SAT and Good
Ideas shall promptly supply to the other any and all information and material
(relating to itself and/or the subject transaction) as may be requested or
required in connection with the preparation and filing of the Registration
Statement, including, without limitation, all information concerning their
respective officers, directors and principal stockholders that is reasonably
requested for inclusion in the Consent Solicitation Statement-Prospectus; and
each shall take and perform such other and further acts and actions as shall be
necessary or appropriate to cause the prompt preparation, completion, filing,
review, finalization and clearance of the Registration Statement.
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(b) Subject to the Registration Statement being declared
effective by the SEC, the Consent Solicitation Statement-Prospectus and any
other communication required by the Exchange Act or the rules and regulations
promulgated thereunder or reasonably requested by SAT shall be mailed by Good
Ideas or its transfer agent to the Good Ideas Minority Stockholders as soon
after such effective date as is reasonably possible. Subsequent thereto Good
Ideas shall transmit to the Good Ideas Minority Stockholders such amended and/or
supplemental consent solicitation materials as may be necessary, in light of
subsequent developments or otherwise, to render the Consent Solicitation
Statement-Prospectus, as so amended or supplemented, not false or misleading
with respect to any material fact and so as not to omit to state any information
necessary to make the statements made, within the context made, not misleading.
Prior to the Effective Date (or earlier termination of this Agreement) neither
party hereto shall distribute any material (other than the Consent Solicitation
Statement-Prospectus as herein provided) which might constitute, or be deemed to
constitute, a "prospectus" relating to the Merger within the meaning of the
Securities Act without the prior written consent of all of the parties hereto in
each instance.
(c) Good Ideas hereby authorizes the utilization by SAT in the
Registration Statement or in any filing with a state securities administrator of
all information concerning Good Ideas either provided to SAT by Good Ideas in
connection with or contained in the Consent Solicitation Statement-Prospectus
and/or contained in any filings heretofore made by Good Ideas pursuant to the
Securities Act and/or the Exchange Act. Good Ideas shall promptly advise SAT if
at any time any of such information or material is or becomes incorrect,
inaccurate or incomplete in any material respect and, in connection therewith,
Good Ideas shall provide SAT with such information and material as shall be
needed to correct any such inaccuracy or omission. SAT shall promptly advise
Good Ideas if at any time any of the information or material contained in the
Registration Statement and supplied by SAT is or becomes incorrect, inaccurate
or incomplete in any material respect. SAT shall cause the preparation, review,
clearance, approval and distribution of such amended or supplemented material as
shall be necessary to correct or eliminate any such inaccuracies and/or
omissions as provided in this Section 11(c).
(d) Each of SAT and Good Ideas covenants and warrants to the
other that any and all information and/or material supplied by it to the other
and/or in connection with the Registration Statement and/or the within
transactions (i) will, at the time made and at each Relevant Date (as
hereinafter defined), be true and correct in all material respects; (ii) will
comply in all material respects with the requirements of the Securities Act and
the Exchange Act and the rules and regulations promulgated thereunder by the
SEC; and (iii) will not contain any statement which, at the time made and at
each Relevant Date and in light of the circumstances under which it is made, is
false or misleading with respect to any material fact, or which omits to state
any material fact necessary in order to make the statements therein made not
false or misleading. For the purposes of this Agreement, the term "Relevant
Date" shall be and mean each of (x) the effective date of the Registration
Statement, (y) the mailing date of the Consent Solicitation Statement-Prospectus
and (z) the Effective Date. Each of SAT and Good Ideas specifically agrees to
indemnify and hold harmless the other (and their respective officers, directors,
employees, agents and representatives) from and against any and all costs,
expenses, losses, demands, claims and liabilities of every kind, nature and
description (including reasonable attorneys' fees) arising out of, or relating
to, any breach or anticipatory breach by it of its duties and obligations
pursuant to this Section 11(d).
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(e) SAT does hereby agree to indemnify and hold harmless Good Ideas
and each of its directors and officers, and each person, if any, other than SAT
who controls Good Ideas within the meaning of Section 15 of the Securities Act,
from and against any and all losses, claims, damages, expenses or liabilities,
joint or several (including, without limitation, reasonable attorneys' fees as
herein provided), to which they or any of them may become subject under the
Securities Act, any other statute, common law or otherwise and, except as
provided below, shall reimburse Good Ideas and each such director, officer or
controlling person for any legal or other expenses reasonably incurred by them
or any of them in connection with investigating or defending any actions and/or
claims, whether or not resulting in any liability, insofar as such losses,
claims, damages, expenses, liabilities or actions result from a breach or
alleged breach of the representations and warranties contained in Sections 13 or
14 hereof or are based upon any untrue statement of alleged untrue statement of
a material fact contained in the Registration Statement or the Consent
Solicitation/Prospectus or arise out of, or are based upon, the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only insofar as
any such untrue statement or omission or alleged untrue statement or omission is
with respect to the description of SAT or as to the terms of its offer. Promptly
after receipt by a party to be indemnified pursuant to this Section 11(e) (the
"Indemnitee") of notice of the commencement of any action in respect of which
indemnity may be sought against SAT hereunder, the Indemnitee will promptly
notify SAT in writing of the commencement thereof and SAT shall, subject to the
provisions stated below, assume the defense of the action (including the
employment of counsel, who shall be counsel reasonable satisfactory to Good
Ideas), and shall make payment of expenses (including attorneys' fees as herein
provided) insofar as such action shall relate to any alleged liability in
respect of which indemnity may be sought against SAT. The Indemnitee or
Indemnitees shall have the right to employ separate counsel in any such action
and to participate in the defense thereof, but the fees and expenses of such
separate counsel shall not be at the expense of SAT unless the employment of
such separate counsel has been specifically authorized by SAT or there is a
conflict of interest which under the canon of ethics requires the employment of
separate counsel. SAT shall not be liable to any Indemnitee for any settlement
of any action effected without SAT's consent. Notwithstanding any provision of
this Agreement to the contrary, the obligations of SAT hereunder shall survive
the consummation of the transactions contemplated by this Agreement.
12. GOOD IDEAS REPRESENTATIONS AND WARRANTIES. In order to induce SAT
and Acquisition Corp. to execute and perform this Agreement, Good Ideas does
hereby represent, warrant, covenant and agree (which representations,
warranties, covenants and agreements shall be, and be deemed to be, continuing
and survive the execution and delivery of this Agreement, the Closing and the
Effective Date) as follows:
(a) Good Ideas is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, with full power and
authority, corporate and otherwise, and with all licenses, permits,
certifications, registrations, approvals, consents and franchises necessary to
own or lease and operate its properties and to conduct its business as presently
being conducted.
(b) Subject only to the consent of its stockholders as required by
the GCL: (i) Good Ideas has the full power and authority, corporate and
otherwise, to execute, deliver and
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perform this Agreement and to consummate the transactions contemplated hereby;
(ii) the execution, delivery and performance of this Agreement, the consummation
by Good Ideas of the transactions herein contemplated and the compliance by Good
Ideas with the terms of this Agreement have been duly authorized by Good Ideas;
(iii) this Agreement is the valid and binding obligation of Good Ideas,
enforceable in accordance with its terms, subject, as to enforcement of
remedies, to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the rights of creditors generally and the discretion of
courts in granting equitable remedies; (iv) the execution, delivery and
performance of this Agreement by Good Ideas and the consummation by Good Ideas
of the transactions herein contemplated do not, and will not, with or without
the giving of notice or the lapse of time, or both, (A) result in any violation
of the Certificate of Incorporation or By-Laws of Good Ideas or (B) result in a
breach of, or a conflict with, any of the terms or provisions of, or constitute
a default under, or result in the modification or termination of, or result in
the creation or imposition of any lien, security interest, charge or encumbrance
upon any of the properties or assets of Good Ideas pursuant to, any indenture,
mortgage, note, contract, commitment or other agreement or instrument to which
Good Ideas is a party or by which it is, or any of its respective properties or
assets are, or may be, bound or affected.
13. SAT REPRESENTATIONS AND WARRANTIES. In order to induce Good Ideas
to execute and perform this Agreement, SAT does hereby represent, warrant,
covenant and agree (which representations, warranties, covenants and agreements
shall be, and be deemed to be, continuing and survive the execution and delivery
of this Agreement, the Closing and the Effective Date) as follows:
(a) SAT is a corporation duly organized, validly existing and in
standing under the laws of the State of Delaware, with full power and authority,
corporate and otherwise, and with all licenses, permits, certifications,
registrations, approvals, consents and franchises necessary to own or lease and
operate its properties and to conduct its business as presently being conducted.
SAT is duly qualified to do business as a foreign corporation, and is in good
standing, in all jurisdictions, if any, wherein such qualification is necessary
and where failure so to qualify would have a material adverse effect on the
business, properties or financial conditions of SAT. SAT has no subsidiaries
other than as set forth on Exhibit "B" annexed hereto and made a part hereof
(the "Subsidiaries"). SAT owns and has and marketable title in and to 100% of
the issued and outstanding capital stock (of all classes) of each of the
Subsidiaries, free and clear of all liens, security interests, claims and
encumbrances and rights and options of others, except as set forth on Exhibit
"B".
(b) Each of the Subsidiaries (other than Good Ideas as to which SAT
makes no representation) is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation, with full
power and authority, corporate and otherwise, and with all licenses, permits,
certifications, registrations, approvals, consents and franchises necessary to
own or lease and operate its properties and to conduct its business as presently
being conducted. Each such Subsidiary is duly qualified to do business as a
foreign corporation, and is in good standing, in all jurisdictions, if any,
wherein such qualification is necessary and where failure so to qualify would
have a material adverse effect on the business, properties or finances of such
Subsidiary.
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(c) (i) SAT has the full power and authority, corporate and
otherwise, to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby; (ii) the execution, delivery and performance
of this Agreement, the consummation by SAT of the transactions herein
contemplated and the compliance by SAT with the terms of this Agreement have
been duly authorized by SAT; (iii) this Agreement is the valid and binding
obligation of SAT, enforceable in accordance with its terms, subject, as to
enforcement of remedies, to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the rights of creditors generally and the
discretion of courts in granting equitable remedies; (iv) the execution,
delivery and performance of this Agreement by SAT and the consummation by SAT of
the transactions herein contemplated do not, and will not, with or without the
giving of notice or the lapse of time, or both, (A) result in any violation of
the Certificate of Incorporation (except possibly as indicated in Section 16(g)
hereof) or By-Laws of SAT, (B) result in a breach of, or a conflict with, any of
the terms or provisions of, or constitute a default under, or result in the
modification or termination of, or result in the creation or imposition of any
lien, security interest, charge or encumbrance upon any of the properties or
assets of SAT pursuant to, any indenture, mortgage, note, contract, commitment
or other agreement or instrument to which SAT is a party or by which it is, or
any of its respective properties or assets are, or may be, bound or affected;
(C) to the best knowledge of SAT, after due investigation, violate any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over SAT and/or any of
the Subsidiaries (other than Good Ideas as to which SAT makes no
representation), or any of their respective properties or businesses; or (D)
have any effect on any license, permit, certification, registration, approval,
consent or other authorization necessary for SAT and/or any of the Subsidiaries
(other than Good Ideas as to which SAT makes no representation) to own or lease
and operate any of its respective properties and to conduct its businesses or
the ability of SAT and/or any of the Subsidiaries (other than Good Ideas as to
which SAT makes no representation) to make use thereof. No consent, approval,
authorization or order of any court, governmental agency, authority or body
(other than as required pursuant to the Securities Act, the Exchange Act and/or
state securities or "take over" statutes and the rules and regulations
promulgated under any of the foregoing and/or any party to an agreement to which
SAT is a party and/or by which it is bound) is required in connection with the
execution, delivery and performance of this Agreement and/or the consummation by
SAT of the transactions contemplated by this Agreement.
(d) Neither SAT nor any of the Subsidiaries (other than Good Ideas
as to which SAT makes no representation) is in violation of, or in default
under, (i) any term or provision of its Certificate of Incorporation or By-Laws;
(ii) any material term or provision of any financial covenant of any indenture,
mortgage, contract, commitment or other agreement or instrument to which it is a
party or by which it or any or its properties or business is, or may be, bound
or affected; or (iii) any existing applicable law, rule, regulation, judgment,
order or decree of any governmental agency or court, domestic or foreign, having
jurisdiction over it or any of its properties or business, including, without
limitation, all reporting obligations pursuant to the Exchange Act and the rules
and regulations promulgated thereunder. SAT and each Subsidiary (other than Good
Ideas as to which SAT makes no representation) owns, possesses or has obtained
all governmental and other licenses, permits, certifications, registrations,
approvals or consents and other authorizations necessary to own or lease, as the
case may be, and to operate its properties and to conduct its business or
operations as presently conducted and all such governmental and other licenses,
permits,
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certifications, registrations, approvals, consents and other authorizations are
outstanding and in good standing and there are no proceedings pending or, to the
best of its knowledge, threatened or any basis therefor existing, seeking to
cancel, terminate or limit such licenses, permits, certifications,
registrations, approvals or consents or authorizations.
(e) Prior to the date hereof SAT has delivered to Good Ideas the
audited consolidated financial statements (the "SAT Audited Financial
Statements") and unaudited interim financial statements (the "SAT Interim
Financial Statements") described on Exhibit "C" annexed hereto and made a part
hereof (collectively the "SAT Financial Statements). The SAT Audited Financial
Statements fairly present the financial position of SAT and the Subsidiaries as
of the respective dates thereof and the results of operations, and the changes
in financial position of SAT and the Subsidiaries, for each of the periods
covered thereby. The SAT Audited Financial Statements have been prepared in
conformity with generally accepted accounting principles, applied on a
consistent basis throughout the entire periods involved. The SAT Unaudited
Financial Statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and the instructions to
Form 10-Q and Item 310 of Regulation S-K of the SEC. Accordingly, the interim
financial statements may not include all of the information and footnotes
required by generally accepted accounting principles. In the opinion of SAT's
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. As of the date
of any balance sheet forming a part of the SAT Financial Statements and, except
as and to the extent reflected or reserved against therein, neither SAT nor any
of the Subsidiaries (other than Good Ideas as to which SAT makes no
representation) had any material liabilities, debts, obligations or claims
(absolute or contingent) asserted against it or them and/or which should have
been reflected in a balance sheet or the notes thereto; and all assets reflected
thereon are properly reported and present fairly the value of the assets therein
stated in accordance with generally accepted accounting principles.
(f) The financial and other books and records of SAT and each of the
Subsidiaries (other than Good Ideas as to which SAT makes no representation) are
in all material respects true, complete and correct and have, at all times, been
maintained in accordance with good business and accounting practices.
(g) SAT and the Subsidiaries (other than Good Ideas as to which SAT
makes no representation) own and have good and marketable title in and to all of
their respective assets, properties and interests in properties (both real and
personal) which are reflected in the latest balance sheet included in the SAT
Financial Statements and/or are utilized in connection with the operation of the
business of SAT and such Subsidiaries as presently constituted and/or acquired
after that date (except to the extent any of the same were disposed of since
such date in the ordinary course of business), in all cases free and clear of
all liens, security interests, claims and encumbrances of every kind, nature and
description and rights and options of others except as expressly set forth in
such balance sheet.
(h) Except as is set forth on Exhibit "D" hereto, SAT and the
Subsidiaries (other than Good Ideas as to which SAT makes no representation) own
all trademarks, service marks, tradenames, copyrights, similar rights and their
registrations, trade secrets, methods, practices, systems, ideas, know how and
confidential materials used or proposed to be used in the conduct of
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their respective businesses as conducted as of the date hereof (collectively the
"Intangibles") free and clear of all liens, security interests, claims and
encumbrances and rights and options of third parties (including, without
limitation, former or current officers, directors, stockholders, employees and
agents); neither SAT nor any such Subsidiary has licensed or leased any of the
Intangibles and/or any interest therein to any person and/or entity except a
Subsidiary; neither SAT nor any such Subsidiary has infringed, nor is
infringing, upon the rights of others with respect to the Intangibles; neither
SAT nor any such Subsidiary has received any notice of conflict with the
asserted rights of others with respect to the Intangibles which could, singly or
in the aggregate, materially adversely affect its business as currently
conducted or prospects, financial condition or results of operations and SAT
knows of no basis therefor; and, to the best of the knowledge of SAT, no others
have infringed upon the Intangibles.
(i) Except as and to the extent reflected or reserved against in the
SAT Financial Statements and/or as set forth on Exhibit "E" annexed hereto and
made a part hereof, neither SAT nor any of the Subsidiaries (other than Good
Ideas as to which SAT makes no representation) had, as at the respective date of
such SAT Financial Statements, any material liabilities, debts, obligations or
claims asserted against it, whether accrued, absolute, contingent or otherwise,
and whether due or to become due, including, but not limited to, liabilities on
account of due and unpaid taxes, other governmental charges or lawsuits.
(j) Since the date of the most recent balance sheet included in the
SAT Financial Statements, neither SAT nor any Subsidiary (other than Good Ideas
as to which SAT makes no representation) has, except as set forth on Exhibit "F"
annexed hereto and made a part hereof, (i) incurred any obligation or liability
(absolute or contingent, secured or unsecured) except obligations and
liabilities incurred in the ordinary course of the operation of its business as
carried on at and prior to such date; (ii) canceled, without payment in full,
any notes, loans or other obligations receivable or other debts or claims held
by it other than in the ordinary course of business; (iii) sold, assigned,
transferred, abandoned, mortgaged, pledged or subjected to lien or security
interest any of its material properties, tangible or intangible, or rights under
any contract, permit, license, franchise or other agreement other than sales or
other dispositions of goods or services in the ordinary course of business at
customary prices; (iv) entered into any line of business other than that
conducted by it on such date or entered into any transaction not in the ordinary
course of its business; (v) conducted any line of business in any manner except
by transactions customary in the operation of its business as conducted on such
date; or (vi) declared, made or paid, or set aside for payment, any cash or
non-cash dividends or other distribution on any shares of its capital stock.
(k) Except as set forth on Exhibit "G" annexed hereto and made a
part hereof, neither SAT nor any of the Subsidiaries (other than Good Ideas as
to which SAT makes no representation) is in default, in any material respect,
under the terms of any outstanding agreement which is material to the business,
operations, properties, assets or condition of SAT and/or the Subsidiaries
(other than Good Ideas as to which SAT makes no representation); and there
exists no event of default or event which, with notice and/or the passage of
time, or both, would constitute any such default.
(l) Except as reported in the SAT Financial Statements and/or as set
forth on Exhibit "H" hereto and made a part hereof, there are no claims,
actions, suits, proceedings,
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arbitrations, investigations or inquiries before any court or governmental
agency, court or tribunal, domestic, or foreign, or before any private
arbitration tribunal, pending or, to the best of the knowledge of SAT,
threatened against SAT and/or any Subsidiary (other than Good Ideas as to which
SAT makes no representation) or involving their respective properties or
businesses which, if determined adversely to SAT or such Subsidiary, would,
individually or in the aggregate, result in a material adverse change in the
financial position, stockholders' equity, results of operations, properties,
business, management or affairs of SAT or such Subsidiary, or which question the
validity of this Agreement or of any action taken, or to be taken, by SAT
pursuant to, or in connection with, this Agreement; nor, to the best of the
knowledge of SAT, is there any basis for any such claim, action, suit,
proceeding, arbitration, investigation or inquiry to be made by any person
and/or entity, including, without limitation, any customer, supplier, lender,
stockholder, former or current employee, agent or landlord. There are no
outstanding orders, judgments or decrees of any court, governmental agency or
other tribunal specifically naming SAT and/or any Subsidiary (other than Good
Ideas as to which SAT makes no representation) and/or enjoining SAT and/or any
such Subsidiary from taking, or requiring SAT and/or any such Subsidiary to
take, any action and/or by which SAT and/or any such Subsidiary is, and/or their
respective properties or businesses are, bound or subject.
(m) SAT and each of the Subsidiaries (other than Good Ideas as to
which SAT makes no representation) has filed all federal, state, municipal and
local tax returns (whether relating to income, sales, franchise, withholding,
real or personal property or otherwise) required to be filed under the laws of
the United States and all applicable states and has paid in full all taxes which
are due pursuant to such returns or claimed to be due by any taxing authority or
otherwise due and owing. No penalties or other charges are, or will become, due
with respect to the late filing of any such return. To the best of the knowledge
of SAT, after due investigation, each such tax return heretofore filed by SAT
and each of such Subsidiaries correctly and accurately reflects the amount of
its tax liability thereunder. SAT has withheld, collected and paid all other
levies, assessments, license fees and taxes to the extent required and, with
respect to payments, to the extent that the same have become due and payable.
(n) The authorized and outstanding capitalization of SAT is as set
forth on Exhibit "I" annexed hereto and made a part hereof; as of the date
hereof and the Closing Date, there shall not be authorized and/or issued and
outstanding any shares of capital stock of SAT and/or rights to purchase shares
of capital stock of SAT except as set forth on Exhibit "I" or upon the exercise
of outstanding warrants or the conversion of outstanding shares of preferred
stock or convertible notes. The issued and outstanding shares of the SAT Common
Stock and outstanding options, warrants and other similar rights to purchase or
convert into the SAT Common Stock have been duly authorized and validly issued.
All such outstanding shares of the SAT Common Stock are fully paid and
nonassessable. All such outstanding warrants and similar rights to purchase or
convert into the SAT Common Stock constitute the valid and binding obligations
of SAT, enforceable in accordance with their respective terms, subject, as to
enforcement of remedies, to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the rights of creditors generally and the
discretion of courts in granting equitable remedies. There are no preemptive
rights. SAT has no reason to believe that any holder of such outstanding shares
of the SAT Common Stock is subject to personal liability solely by reason of
being such a holder. The offers and sales of such outstanding shares of the SAT
Common Stock and outstanding warrants
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and similar rights to purchase or convert into the SAT Common Stock were, at all
relevant times, either registered under the applicable provisions of the
Securities Act and the applicable state securities laws or exempt from such
registration or prospectus filing requirements pursuant to an exemption for
which SAT and/or such offering or sale fully qualified, or any claim arising out
of, or relating to, any such offering and/or sale are barred by the statute of
limitations. The authorized shares of the SAT Common Stock and outstanding
warrants and similar rights to purchase or convert into the SAT Common Stock
conform to the description thereof contained in the current filings by SAT
pursuant to the Exchange Act. No dividends or other distributions of the assets
of SAT have been or will be declared and/or paid prior to the Closing Date on or
with respect to the SAT Common Stock.
(o) Except as is set forth on Exhibit "J" hereto, since the date of
the most recent balance sheet included in the SAT Financial Statements, there
has not been, with respect to SAT and/or the Subsidiaries (other than Good Ideas
as to which SAT makes no representation), except as set forth in or permitted by
this Agreement, or, in the ordinary course of business:
(i) Any change in their respective business, operations or
financial condition, or the manner of managing or conducting their respective
business and operations; none of which changes, if any, has had a material
adverse effect on such business, operations or financial condition, taken as a
whole;
(ii) Any change in their respective accounting methods or
practices (including, without limitation, any change in depreciation,
amortization and/or good will policies or rates);
(iii) Any damage, destruction or loss (whether or not covered
by insurance) materially and adversely affecting their respective assets,
business, operations or financial condition;
(iv) Any declaration, setting, or payment of a dividend or
other distribution with respect to the SAT Common Stock or any direct or
indirect redemption, purchase or other acquisition by SAT of any of the shares
of the SAT Common Stock;
(v) Any issuance or sale of any shares of their respective
capital stock of any class or any other securities, except for the exercise of
warrants to purchase shares of the SAT Common Stock outstanding prior to the
date hereof;
(vi) Any loan by any of them to any person or entity and/or
the issuance of any guaranty by any of them for or with respect to their own or
another's obligations;
(vii) Any waiver or release of any material right or claim;
(viii) Any sale, lease, abandonment, assignment, transfer,
license or other disposition (including any agreement and/or option for, or with
respect to, any of the foregoing) by any of them of any material real property
or tangible or intangible assets, property or rights (and/or interest therein);
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(ix) Any incurrence of any material obligation or liability,
absolute or contingent;
(x) Any payment of any material obligation or liability,
absolute or contingent, except for current liabilities reflected in, or shown
on, the SAT Financial Statements and/or incurred subsequent to the date thereof
in the ordinary course of business and/or in connection with the transactions
contemplated by this Agreement;
(xi) Any labor problems and/or other events or conditions of
any character materially and/or adversely affecting, or which might materially
and/or adversely affect, the financial condition, business, assets or prospects
of any of them;
(xii) Any amendment, termination or modification of any
material agreement or license to which any of them is a party which has or may
have a material affect on the financial condition, business, assets or prospects
of any of them; and
(xiii) Any agreement by any of them to do or perform any of the
things described in this Section 13(o).
(p) At the Closing, all of the shares of the SAT Common Stock to be
issued by SAT pursuant to this Agreement shall be, and be deemed to be, duly and
validly authorized and, when issued to the Good Ideas Minority Stockholders in
exchange for their shares of the Good Ideas Common Stock, duly and validly
issued, fully paid and nonassessable and free and clear of all federal and state
issuance, stock and/or company taxes, liens, claims, encumbrances and charges.
14. ACQUISITION CORP. REPRESENTATIONS AND WARRANTIES. In order to
induce Good Ideas to execute and perform this Agreement, Acquisition Corp. does
hereby represent, warrant, covenant and agree (which representations,
warranties, covenants and agreements shall be, and be deemed to be, continuing
and survive the execution and delivery of this Agreement, the Closing and the
Effective Date) as follows:
(a) Acquisition Corp. is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with full
power and authority, corporate and otherwise, and with all licenses, permits,
certifications, registrations, approvals, consents and franchises necessary to
own or lease and operate its properties and to conduct its business as presently
being conducted. Neither prior to the date hereof has Acquisition Corp. engaged,
nor prior to the Closing Date will Acquisition Corp. engage, in any business
activity of any kind nature or description except in connection with the
implementation of the transactions herein described. Acquisition Corp. has no
subsidiaries, nor, at the present time is it, or at the Closing will it be, a
partner or joint venturer with any other person or entity.
(b) (i) Acquisition Corp. has the full power and authority,
corporate and otherwise, to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby; (ii) the execution, delivery
and performance of this Agreement, the consummation by Acquisition Corp. of the
transactions herein contemplated and the compliance by Acquisition Corp. with
the terms of this Agreement have been duly authorized by Acquisition
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Corp.; (iii) this Agreement is the valid and binding obligation of Acquisition
Corp., enforceable in accordance with its terms, subject, as to enforcement of
remedies, to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the rights of creditors generally and the discretion of
courts in granting equitable remedies; (iv) the execution, delivery and
performance of this Agreement Corp. by Acquisition Corp. and the consummation by
Acquisition Corp. of the transactions herein contemplated do not, and will not,
with or without the giving of notice or the lapse of time, or both, (A) result
in any violation of the Certificate of Incorporation or By-Laws of Acquisition,
(B) result in a breach of, or a conflict with, any of the terms or provisions
of, or constitute a default under, or result in the modification or termination
of, or result in the creation or imposition of any lien, security interest,
charge or encumbrance upon any of the properties or assets of Acquisition Corp.
pursuant to, any indenture, mortgage, note, contract, commitment or other
agreement or instrument to which Acquisition Corp. is a party or by which it is,
or any of its respective properties or assets are, or may be, bound or affected;
or (C) to the best knowledge of Acquisition, after due investigation, violate
any existing applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having jurisdiction over
Acquisition Corp. or its assets. No consent, approval, authorization or order of
any court, governmental agency, authority or body (other than as required
pursuant to the Securities Act, the Exchange Act and/or state securities or
"take over" statutes and/or any party to an agreement to which Acquisition Corp.
is a party and/or by which it is bound, is required in connection with the
execution, delivery and performance of this Agreement, and/or the consummation
by Acquisition Corp. of the transactions contemplated by this Agreement.
(c) Acquisition is not in violation of, or in default under, (i) any
term or provision of its Certificate of Incorporation or By-Laws; (ii) any
material term or provision of any financial covenant of any indenture, mortgage,
contract, commitment or other agreement or instrument to which it is a party or
by which it or any or its properties is, or may be, bound or affected; or (iii)
any existing applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having jurisdiction over it
or any of its assets.
(d) Acquisition was incorporated on December 18, 1995 and its sole
asset is the $1,000 which SAT paid in subscription for 100 shares of its
authorized 1,500 shares of common stock, without par value, and it has incurred
no liabilities other than its incorporation costs. Prior to the date hereof,
Acquisition Corp. has conducted no business operations and, prior to the
Effective Date, its sole activities will be in connection with the transactions
contemplated by this Agreement.
(e) The financial and other books and records of Acquisition Corp.
are in all material respects true, complete and correct and have, at all times,
been maintained in accordance with good business and accounting practices.
(f) Except as set forth on Exhibit "K" hereto and made a part
hereof, there are no claims, actions, suits, proceedings, arbitrations,
investigations or inquiries before any court or governmental agency, court or
tribunal, domestic, or foreign, or before any private arbitration tribunal,
pending or, to the best of the knowledge of Acquisition, threatened against
Acquisition Corp. or involving its assets which, if determined adversely to
Acquisition, would, individually or in the aggregate, result in a material
adverse change in the financial position, stockholders' equity, results of
operations, properties, business, management or affairs of Acquisition, or which
question
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the validity of this Agreement or of any action taken or to be taken by
Acquisition Corp. pursuant to, or in connection with, this Agreement; nor, to
the best of the knowledge of Acquisition, is there any basis for any such claim,
action, suit, proceeding, arbitration, investigation or inquiry to be made by
any person and/or entity. There are no outstanding orders, judgments or decrees
of any court, governmental agency or other tribunal specifically naming
Acquisition Corp. and/or enjoining Acquisition from taking, or requiring
Acquisition Corp. to take, any action, and/or by which Acquisition Corp. is,
and/or its assets are, bound or subject.
15. GOOD IDEAS COVENANTS, Good Ideas shall, during the period
commencing on the date hereof and terminating immediately following the close of
business on the Effective Date (or earlier, upon the failure or refusal of the
Good Ideas Minority Stockholders to approve this Agreement and/or the
termination of this Agreement as herein provided):
(a) Take and perform any and all actions necessary to render
accurate, and/or maintain the accuracy of, all of the representations and
warranties of Good Ideas herein contained and/or satisfy each covenant or
condition required to be performed or satisfied by Good Ideas at or prior to the
Closing and/or to cause or permit the implementation of the Merger;
(b) Not take or perform any action which would or might cause any
representation or warranty made by Good Ideas herein to be rendered inaccurate,
in whole or in part, and/or which would prevent, inhibit or preclude the
satisfaction, in whole or in part, of any covenant required to be performed or
satisfied by Good Ideas at or prior to the Closing and/or the implementation of
the Merger;
(c) Not make, or permit to be made on its behalf, any announcement
to the public in general and/or within its industry and/or otherwise with
respect to this Agreement, the Merger and the current or future business or
operations of any party hereto without the prior written consent of SAT or, in
the case of an announcement required by applicable securities laws, prior
consultation with SAT; and
(d) Immediately advise SAT of any event, condition or occurrence
which constitutes, or may, with the passage of time and/or giving of notice,
constitute, a breach of any representation or warranty of Good Ideas herein
contained and/or which prevents, inhibits or limits or may prevent, inhibit or
limit Good Ideas from satisfying, in full and on a timely basis, any covenant,
term or condition herein contained and/or implementing this Agreement; and
(e) Extend the terms of the notes due from SAT to Good Ideas, if and
only if the consent solicitation for the Merger is still in progress on April
30, 1997, to the earlier of (i) five business days after the results of the
solicitation are known and the results are that the Merger has not been approved
or (ii) the Effective Date.
16. SAT COVENANTS. SAT shall, during the period commencing on the date
hereof and terminating immediately following the close of business on the
Effective Date (or earlier, upon the failure or refusal of the Good Ideas
Minority Stockholders to approve this Agreement and/or the termination of this
Agreement as herein provided):
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(a) Take and perform any and all actions necessary to render
accurate, and/or maintain the accuracy of, all of the representations and
warranties of SAT herein contained and/or satisfy each covenant or condition
required to be performed or satisfied by SAT at or prior to the Closing and/or
to cause or permit the implementation of the Merger;
(b) Not take or perform any action which would or might cause any
representation or warranty made by SAT herein to be rendered inaccurate, in
whole or in part, and/or which would prevent, inhibit or preclude the
satisfaction, in whole or in part, of any covenant required to be performed or
satisfied by SAT at or prior to the Closing and/or the implementation of the
Merger;
(c) Carry on and maintain its business in substantially the same
form, style and manner as heretofore operated by it; perform, in all material
respects, all of its obligations under all material agreements, leases and
documents relating to or affecting its assets, properties and business; and use
its best efforts to preserve intact its business organization and the good will
and relationships with its suppliers, customers and others having business
relations with it;
(d) Not make any announcement to the public in general and/or within
its industry and/or otherwise with respect to this Agreement, the Merger and the
current or future business or operations of any party hereto without the prior
written consent of Good Ideas or, in the case of an announcement required by
applicable securities laws, prior consultation with Good Ideas; and
(e) Immediately advise Good Ideas of any event, condition or
occurrence which constitutes, or may, with the passage of time and/or giving of
notice, constitute, a breach of any representation or warranty of SAT herein
contained and/or which prevents, inhibits or limits or may prevent, inhibit or
limit SAT from satisfying, in full and on a timely basis, any covenant, term or
condition herein contained and/or implementing this Agreement.
(f) Subject to Good Ideas' compliance with its obligations under
Section 11 hereof, use its best efforts to have the Registration Statement
declared effective under the Securities Act; and
(g) Call a Special Meeting of Stockholders to approve an amendment
to SAT's Certificate of Incorporation to increase the authorized shares of the
SAT Common Stock in an amount sufficient to permit the Merger, the merger of
U.S. Drug Testing with and into U.S. Drug Acquisition Corp., the conversion of
all outstanding convertible notes and shares of the preferred stock and the
exercise of all outstanding warrants.
17. SAT AND ACQUISITION CORP. CONDITIONS PRECEDENT. The obligations of
SAT and Acquisition to implement this Agreement and consummate the Merger are,
at their respective elections, subject to, and conditioned upon, the
satisfaction (and/or waiver except as to Section 17(a), (b) and (g)) of each of
the following conditions:
(a) Prior to the Closing Date the holders of more than 50% of the
shares of the Good Ideas Common Stock owned by the Good Ideas Minority
Stockholders shall have adopted this
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Agreement by consenting to the adoption of this Agreement pursuant to the
Consent Solicitation Statement-Prospectus.
(b) The Registration Statement shall have been declared effective by
the SEC and all appropriate state securities administrators and no "stop orders"
shall have been issued and/or be in effect or a proceeding for such purpose
shall have been instituted and be pending.
(c) The representations and warranties of Good Ideas contained in
this Agreement shall be true and correct in all respects as of the Effective
Date with the same effect as if made on and as of the Effective Date and Good
Ideas shall have performed in all material respects all of its covenants and
obligations contemplated hereunder to be performed on or prior to the Effective
Date. At the Closing, SAT shall have received a certificate, executed by the
President and the Secretary of Good Ideas (effective as of the Closing and the
Effective Date) and in form reasonably acceptable to SAT, certifying as of both
the date of this Agreement and the Closing Date, the truth and accuracy of (and
the remaking of) the representations and warranties of Good Ideas herein
contained, including, without limitation, those set forth in Section 12 hereof.
(d) Prior to the Closing, all corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be in form and
content reasonably satisfactory to SAT and its counsel and SAT and its counsel
shall have received all counterpart originals or certified or other copies of
such documents and instruments as they may reasonably request.
(e) No action or proceeding shall have been instituted and be
pending by any private party and/or governmental agency or authority challenging
the legality of this Agreement or the Merger and/or seeking to prevent or delay
consummation of the transactions herein contemplated, which action or proceeding
shall have resulted in an order granting preliminary or permanent injunctive
relief prohibiting consummation of this Agreement and/or the Merger and which
order shall not have been vacated as of the Closing.
(f) All statutory requirements for the valid consummation by Good
Ideas of the transactions herein described shall have been fully and timely
satisfied; all authorizations, consents and approvals of all Federal, state and
local governmental agencies and authorities required to be obtained in order to
permit consummation by Good Ideas of the transactions herein described and/or to
permit the businesses currently carried on by Good Ideas to continue unimpaired
in all material respects immediately following the Effective Date shall have
been obtained and shall be in full force and effect; and no action or proceeding
to suspend, revoke, cancel, terminate, modify or alter any of such
authorizations, consents or approvals shall be pending or threatened.
(g) Good Ideas shall have received a written opinion from Whale
Securities Co., L.P., satisfactory to SAT in form and content, regarding the
fairness, from a financial point of view, to the Good Ideas Minority
Stockholders of (i) the terms of the Merger and (ii) the agreements among SAT,
Good Ideas and Acquisition Corp. described in this Agreement.
18. GOOD IDEAS CONDITIONS PRECEDENT. The obligation of Good Ideas to
implement this Agreement and consummate the Merger is, at its election, subject
to, and conditioned upon, the
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satisfaction (and/or waiver except as to Section 18(a), (c) and (i)) of each of
the following conditions:
(a) Prior to the Closing Date the holders of a majority of the
shares of Good Ideas Common owned by the Good Ideas Minority Stockholders shall
have adopted this Agreement by consenting to the adoption of this Agreement
pursuant to the Consent Solicitation/Prospectus.
(b) Prior to the Closing Date SAT shall have adopted this Agreement
by filing with Good Ideas a consent to its adoption.
(c) The Registration Statement shall have been declared effective by
the SEC and all appropriate state securities administrators and no "stop orders"
shall have been issued and/or be in effect or a proceeding for such purpose
shall have been instituted and be pending.
(d) The representations and warranties of SAT and Acquisition Corp.
contained in this Agreement shall be true and correct in all material respects
as of the Effective Date with the same effect as if made on and as of the
Effective Date. At the Closing, Good Ideas shall have received a certificate,
executed by the Chairman of the Board and the Secretary of SAT and Acquisition
Corp. (effective as of the Closing and the Effective Date) and in form and
content reasonably acceptable to Good Ideas, certifying, as to both the date of
this Agreement and the Closing Date the truth and accuracy of (and the remaking
of) the representations and warranties of SAT and Acquisition Corp. herein
contained, including, without limitation, those set forth in Sections 13 and 14
hereof.
(e) Prior to the Closing, there shall not have occurred any material
adverse change in the financial condition, business or operations of SAT and the
Subsidiaries (excluding Good Ideas) as a consolidated entity, nor shall any
event have occurred or condition exist which, with the passage of time or the
giving of notice, may cause or create any such adverse material change.
(f) Prior to the Closing, all corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be in form and
content reasonably satisfactory to Good Ideas and its counsel and Good Ideas and
its counsel shall have received all counterpart originals or certified or other
copies of such documents and instruments as they may reasonably request.
(g) No action or proceeding shall have been instituted and be
pending by any private party and/or governmental agency or authority challenging
the legality of this Agreement or the Merger and/or seeking to prevent or delay
consummation of the transactions herein contemplated, which action or proceeding
shall have resulted in an order granting preliminary or permanent injunctive
relief prohibiting consummation of this Agreement and/or the Merger and which
order shall not have been vacated as of the Closing.
(h) All statutory requirements for the valid consummation by SAT of
the transactions herein described shall have been fully and timely satisfied;
all authorizations, consents and approvals of all Federal, state and local
governmental agencies and authorities required to be obtained in order to permit
consummation by SAT of the transactions herein described and/or to
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permit the businesses currently carried on by SAT to continue unimpaired in all
material respects immediately following the Effective Date shall have been
obtained and shall be in full force and effect; and no action or proceeding to
suspend, revoke, cancel, terminate, modify or alter any of such authorizations,
consents or approvals shall be pending or threatened.
(i) Good Ideas shall have received a written opinion from Whale
Securities Co., L.P., satisfactory to Good Ideas in form and content, regarding
the fairness, from a financial point of view, to the Good Ideas Minority
Stockholders of (i) the terms of the Merger and (ii) the agreements among SAT,
Good Ideas and Acquisition Corp. described in this Agreement.
19. TERMINATION.
(a) This Agreement may be terminated and the Merger abandoned at any
time prior to the Effective Date, whether before or after submission to, or
approval by, the Good Ideas Minority Stockholders as herein provided either: (a)
by mutual agreement of the Boards of Directors of Good Ideas and SAT; or (b) by
the Board of Directors of either Good Ideas or SAT if either (i) the Closing
shall not have taken place by September 30, 1997 (other than by reason of the
default hereunder by the terminating party) or (ii) there is any statute, rule
or regulation which makes consummation of the Merger illegal or otherwise
prohibited or any order, decree, injunction or judgment enjoining SAT, Good
Ideas or Acquisition Corp. from consummating the Merger is issued by a court of
competent jurisdiction and such order, decree, injunction or judgment has become
final and non-appealable; or (c) by the Board of Directors of either SAT or Good
Ideas if, based upon the opinion of its outside counsel, the Board of Directors
determines that making a recommendation to the Good Ideas Minority Stockholders
to adopt the Merger Agreement would reasonably cause the members of such Board
of Directors to breach their fiduciary duties under applicable law to their
respective stockholders.
(b) If this Agreement shall be terminated and/or the Merger
abandoned pursuant to the provisions of subsection (a) of this Section 19 hereof
(other than by reason of the default of any party hereunder), then and in that
event SAT shall bear all of the costs and its special expenses except for those
of Whale Securities Co., L.P. and of special counsel to Good Ideas and there
shall be no liability on the part of any party hereto (and/or their respective
officers, directors, agents and employees) to any other party hereto (and/or
their respective officers, directors, agents and employees).
20. COSTS AND EXPENSES. SAT shall pay all costs and expenses relating
to the transactions contemplated by this Agreement, including, without
limitation, the costs and expenses relating to the preparation of this Agreement
and the Registration Statement, such as attorneys' fees, accounting fees,
printing expenses and consent solicitation expenses, except that Good Ideas will
pay all costs and expenses of Whale Securities Co., L.P. and of its special
counsel.
21. NOTICES. Any and all notices, requests or instructions desired to
be given by any party hereto to any other party hereto shall be in writing and
shall be either be hand delivered or mailed to the recipient first class,
postage prepaid, certified, return receipt requested at the following respective
addresses:
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To: Good Ideas Enterprises, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
With a copy to:
Rosenman & Colin LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
To: SAT or Acquisition Corp.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chairman of the Board
With a copy to:
Gold & ▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
or to such other address as any party hereto shall designate in a writing
complying with the provisions of this Section 21.
22. WAIVER. Each of the parties hereto may, by written instrument, (a)
extend the time for the performance of any of the obligations or other acts of
any party hereto; (b) waive any inaccuracies of such other party in the
representations and warranties contained herein or in any document delivered
pursuant to this Agreement; (c) waive compliance with any of the covenants of
such other party contained in this Agreement; (d) waive such other party's
performance of any of such party's obligations set out in this Agreement; and
(e) waive any condition to its obligation to effect the Merger. Anything in this
Section 22 to the contrary notwithstanding, no party hereto may waive the
requirement that the holders of a majority of the shares of the Good Ideas
Common owned by the Good Ideas Minority Stockholders must consent to the
adoption of this Agreement and the Merger.
23. AMENDMENTS. This Agreement may be amended at any time prior to the
Effective Date (whether before or after the consent of stockholders of Good
Ideas as herein provided) by a writing executed by the respective Presidents of
SAT, Good Ideas and Acquisition (upon due authorization by their respective
Boards of Directors); provided, however, that after the satisfaction of the
condition set forth in Sections 17(a) and 18(a) in no event may the amount or
the form of the
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consideration to be received by the holders of the Good Ideas Minority
Stockholders be changed without the approval of the Good Ideas Minority
Stockholders.
24. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware applicable to contracts
executed and to be fully performed therein and without regard to principles of
conflicts of laws.
25. EFFECTIVENESS. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and any controlling person of any party hereof
as provided in Section 15 of the Securities Act and their respective successors,
transferees, heirs, assigns and beneficiaries.
26. COUNTERPARTS. This Agreement may be executed in multiple copies,
each of which shall constitute an original, but all of which shall constitute
one and the same agreement.
27. PARTIAL INVALIDITY. If any term, covenant or condition in this
Agreement, or the application thereof to any person or circumstance, shall be
invalid or unenforceable, the remainder of this Agreement or the application of
such term, covenant or condition to persons or circumstances, other than those
as to which it is held invalid, shall be unaffected thereby and each term,
covenant or condition of this Agreement shall be enforced to fullest extent
permitted by law.
28. INTEGRATION. This Agreement (including the Exhibits hereto, the
documents and instruments delivered by the parties hereto and any other
documents executed and delivered and/or to be executed and delivered pursuant to
the provisions of this Agreement as herein provided) sets forth the entire
agreement among the parties hereto with respect to the subject matter herein
contained. There are no covenants, promises, agreements, conditions or
understandings, either oral or written, between or among the parties hereto with
respect to the subject matter hereof except as herein and in such ancillary
documents provided. This Agreement can only be altered, amended, modified,
terminated or rescinded by a writing executed by the party to be charged.
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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.
ATTEST: SUBSTANCE ABUSE TECHNOLOGIES, INC.
By:
--------------------------- -----------------------------------------
Secretary Chairman of the Board
GOOD IDEAS ACQUISITION CORP.
--------------------------------------------
By:
-----------------------------------------
Secretary, Chairman of the Board
GOOD IDEAS ENTERPRISES, INC.
-------------------------------------------
By:
-----------------------------------------
Secretary, President,
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