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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;
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.;
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(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 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
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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:
(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
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(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.
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;
(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
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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 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
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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.
(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
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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).
(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.
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(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 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.
(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,
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(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, 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
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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 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
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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, arbitration's, 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
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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 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);
(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;
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(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 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
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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, arbitration's,
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 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
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(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):
(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.
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00. 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 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.
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00. 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 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 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
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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:
To: Good Ideas Enterprises, Inc.
00000 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: President
With a copy to:
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
To: SAT or Acquisition Corp.
0000 X.X. 00xx Xxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Chairman of the Board
With a copy to:
Xxxxxxx & Masyr, LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
or to such other address as any party hereto shall designate in a
writing complying with the provisions of this Section 21.
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00. 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 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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