AGREEMENT AND PLAN OF MERGER AND REORGANIZATION dated as of October 1, 2000 (the
"Agreement") by and among Adar Alternative One, Inc, a Florida corporation
("Adar One") and Impulse Communications, Inc., a Nevada corporation ("Impulse
Communications").
R E C I T A L S
The respective Boards of Directors of ADAR ONE and Impulse Communications
deem it desirable and in the best interests of their respective corporations,
and of their respective shareholders, subject to, among other things, the
approval of the shareholders of ADAR ONE and Impulse Communications, Impulse
Communications shall merge with and into ADAR ONE; as a result of which the
holders of shares of capital stock of Impulse Communications will, in the
aggregate, receive the consideration hereinafter set forth (collectively, the
"Merger"). Upon the terms and subject to the conditions of this Agreement, at
the Effective Date (as defined in Section 2.3 of this Agreement) in accordance
with the merger laws of the state of Nevada ("MERGER LAWS"), Impulse
Communications shall be merged with and into ADAR ONE and the separate existence
of Impulse Communications shall thereupon cease. ADAR ONE shall be the surviving
corporation in the Merger and is hereinafter sometimes referred to as the
"Surviving Corporation."
NOW, THEREFORE, in consideration of the terms, conditions, agreements and
covenants contained herein, and in reliance upon the representations and
warranties contained in this Agreement, the parties hereto agree as follows:
I. RECITALS; TRUE AND CORRECT
The above stated recitals are true and correct and are incorporated into
this Agreement.
II. MERGER
2.1 Merger. In the manner and subject to the terms and conditions set forth
herein, Impulse Communications shall merge with and into ADAR ONE, and ADAR ONE
shall be the surviving corporation after the Merger and shall continue to exist
as a corporation governed by the laws of Nevada.
2.2 Incorporation and Name Change. Prior to the closing of the merger, ADAR
ONE shall change its state of incorporation to Nevada and in so doing adopt
Impulse Communications' Articles of Incorporation and ByLaws (the
"Reincorporation"). Upon the Closing of the Merger, ADAR ONE shall change its
name to Impulse Communications, Inc. (the "Name Change").
2.3 Effective Date. If all of the conditions precedent to the obligations
of each of the parties hereto as hereinafter set forth shall have been satisfied
or shall have been waived, the Merger shall become effective on the date (the
"Effective Date") the Articles of Merger, together with Plans of Merger
reflecting the Merger, shall be accepted for filing by the Secretary of State of
Nevada.
2.4 Securities of the Corporations. The authorized capital stock of Impulse
Communications is comprised of 75,000,000 shares of Common Stock, (the "Impulse
Communications Stock"), of which 10,008,000 shares are issued and outstanding.
The authorized capital stock of ADAR ONE is comprised of 50,000,000 shares of
Common Stock, no par value per share (the "ADAR ONE Stock"), of which 400,000
shares will be issued and outstanding as of the date of closing of the Merger.
In addition, ADAR ONE has authorized but unissued 20,000,000 shares of no par
value Preferred Stock
2.5 Shares of the Constituent and Surviving Corporations. The manner and
basis of converting the shares of Impulse Communications Stock into shares of
ADAR ONE Stock shall be as follows:
At the Effective Date, by virtue of the Merger and without any action on the
part of any holder of any capital stock of either ADAR ONE or Impulse
Communications, each share of Impulse Communications Stock issued and
outstanding shall be converted into the right to receive one share of ADAR ONE
Stock (the "Exchange Ratio").
2.6 Effect of the Merger. As of the Effective Date, all of the following
shall occur:
(a) The separate existence and corporate organization of Impulse
Communications shall cease (except insofar as it may be continued by statute),
ADAR ONE shall exist as a surviving corporation.
(b) Except as otherwise specifically set forth herein, the corporate
identity, existence, purposes, powers, franchises, rights and immunities of ADAR
ONE shall continue unaffected and unimpaired by the Merger, and the corporate
identity, existence, purposes, powers, franchises and immunities of Impulse
Communications shall be merged with and into ADAR ONE as the surviving
corporation, shall be fully vested therewith.
(c) Neither the rights of creditors nor any liens upon or security
interests in the property of Impulse Communications shall be impaired by the
Merger.
(d) All corporate acts, plans, policies, agreements approvals and
authorizations of the shareholders and Board of Directors of Impulse
Communications and of its respective officers, directors and agents, which were
valid and effective immediately prior to the Effective Date, shall be the acts,
plans, policies, agreements, approvals and authorizations of ADAR ONE and shall
be as effective and binding on ADAR ONE as the same were on Impulse
Communications.
(e) ADAR ONE shall be liable for all of the obligations and
liabilities of Impulse Communications.
(f) The rights, privileges, goodwill, inchoate rights, franchises and
property, real, personal and mixed, and debts due on whatever account and all
other things in action belonging to Impulse Communications, shall be, and they
hereby are, bargained, conveyed, granted, confirmed, transferred, assigned and
set over to and vested in ADAR ONE, without further act or deed.
(g) No claim pending at the Effective Date by or against any of
Impulse Communications, or any stockholder, officer or director thereof, shall
xxxxx or be discontinued by the Merger, but may be enforced, prosecuted, settled
or compromised as if the Merger had not occurred.
(h) All rights of employees and creditors and all liens upon the
property of Impulse Communications shall be preserved unimpaired, limited in
lien to the property affected by such liens at the Effective Date, and all the
debts, liabilities and duties of Impulse Communications shall attach to ADAR ONE
and shall be enforceable against ADAR ONE to the same extent as if all such
debts, liabilities and duties had been incurred or contracted by Impulse
Communications.
(i) The Articles of Incorporation of ADAR ONE, as in effect on the
Effective Date, shall continue to be the Articles of Incorporation of ADAR ONE
without change or amendment.
(j) The Bylaws of ADAR ONE, as in effect on the Effective Date, shall
continue to be the Bylaws of ADAR ONE without change or amendment until such
time, if ever, as it is amended thereafter in accordance with the provisions
thereof and applicable laws.
(k) Upon the Effective Date, the Board of Directors of ADAR ONE shall
consist of those persons set forth in the registration statement, and the
officers of ADAR ONE shall be the officers specified in the registration
statement.
III. CONDUCT OF BUSINESS PENDING CLOSING; STOCKHOLDER APPROVAL
Impulse Communications and ADAR ONE covenant that between the date hereof
and the date of the Closing:
3.1 Access to Impulse Communications. Impulse Communications shall (a) give
to ADAR ONE and to ADAR ONE's counsel, accountants and other representatives
reasonable access, during normal business hours, throughout the period prior to
the Closing Date (as defined in Section 6.1), to all of the books, contracts,
commitments and other records of Impulse Communications and shall furnish ADAR
ONE during such period with all information concerning Impulse Communications
that ADAR ONE may reasonably request; and (b) afford to ADAR ONE and to ADAR
ONE's representatives, agents, employees and independent contractors reasonable
access, during normal business hours, to the properties of Impulse
Communications, in order to conduct inspections at ADAR ONE's expense to
determine that Impulse Communications is operating in compliance with all
applicable federal, state, local and foreign statutes, rules and regulations,
and all material building, fire and zoning laws or regulations and that the
assets of Impulse Communications are substantially in the condition and of the
capacities represented and warranted in this Agreement; provided, however, that
in every instance described in (a) and (b), ADAR ONE shall make arrangements
with Impulse Communications reasonably in advance and shall use its best efforts
to avoid interruption and to minimize interference with the normal business and
operations of Impulse Communications. Any such investigation or inspection by
ADAR ONE shall not be deemed a waiver of, or otherwise limit, the
representations, warranties or covenants of Impulse Communications contained
herein.
3.2 Conduct of Business. During the period from the date hereof to the
Closing Date, Impulse Communications shall and shall use reasonable efforts, to
the extent such efforts are within Impulse Communications' control, to cause its
business to be operated in the usual and ordinary course of business and in
material compliance with the terms of this Agreement.
3.3 Exclusivity to ADAR ONE. Neither Impulse Communications nor its
respective officers, directors, representatives or agents, as appropriate, from
the date hereof until the Closing or the earlier termination of this Agreement,
shall solicit any inquiries, proposals or offers to purchase the business of
Impulse Communications or the shares of capital stock of Impulse Communications,
from any person other than ADAR ONE. Any person inquiring as to the availability
of the business or shares of capital stock of Impulse Communications or making
an offer therefor shall be told that Impulse Communications is bound by the
provisions of this Agreement. Impulse Communications as well as its officers,
directors, representatives or agents further agree to advise ADAR ONE promptly
of any such inquiry or offer.
3.4 Access to ADAR ONE. ADAR ONE shall (a) give to Impulse Communications
and to Impulse Communications' counsel, accountants and other representatives
reasonable access, during normal business hours, throughout the period prior to
the Closing Date, to all of the books, contracts, commitments and other records
of ADAR ONE and shall furnish Impulse Communications during such period with all
information concerning ADAR ONE that Impulse Communications may reasonably
request; and (b) afford to Impulse Communications and to Impulse Communications'
representatives, agents, employees and independent contractors reasonable
access, during normal business hours, to the properties of ADAR ONE in order to
conduct inspections at Impulse Communications' expense to determine that ADAR
ONE is operating in compliance with all applicable federal, state, local and
foreign statutes, rules and regulations, and all material building, fire and
zoning laws or regulations and that the assets of ADAR ONE are substantially in
the condition and of the capacities represented and warranted in this Agreement;
provided, however, that in every instance described in (a) and (b), Impulse
Communications shall make arrangements with ADAR ONE reasonably in advance and
shall use its best efforts to avoid interruption and to minimize interference
with the normal business and operations of ADAR ONE. Any such investigation or
inspection by Impulse Communications shall not be deemed a waiver of, or
otherwise limit, the representations, warranties or covenants of ADAR ONE
contained herein.
3.5 Conduct of Business. During the period from the date hereof to the
Closing Date, the business of ADAR ONE shall be operated by ADAR ONE in the
usual and ordinary course of such business and in material compliance with the
terms of this Agreement. Without limiting the generality of the foregoing:
(a) ADAR ONE shall comply in all material respects with all laws
applicable to it; and
(b) ADAR ONE shall timely file all reports required to be filed by it
with the Securities and Exchange Commission (the "SEC").
3.6 Exclusivity to Impulse Communications. ADAR ONE and its officers,
directors, representatives or agents, as appropriate, shall not, from the date
hereof until the Closing or the earlier termination of this Agreement, solicit
any inquiries, proposals or offers to purchase the business of ADAR ONE or the
shares of capital stock of ADAR ONE from any person other than Impulse
Communications. Any person inquiring as to the availability of the business or
shares of capital stock of ADAR ONE or making an offer therefor shall be told
that ADAR ONE is bound by the provisions of this Agreement. Each of ADAR ONE and
its officers, directors, representatives or agents further agree to advise
Impulse Communications promptly of any such inquiry or offer.
3.7 Stockholder Approval. (a) As promptly as reasonably practicable
following the date of this Agreement, ADAR ONE shall take all action reasonably
necessary in accordance with the laws of the State of Florida and its Articles
of Incorporation and Bylaws to secure written consents for the approval and
adoption of the Merger and the Merger Agreement, as well as the Reincorporation
and Name Change. The Board of Directors of ADAR ONE shall unanimously recommend
that ADAR ONE's shareholders vote to approve and adopt the Merger, this
Agreement and any other matters to be submitted to ADAR ONE's shareholders in
connection therewith. ADAR ONE shall, subject as aforesaid, use its best efforts
to solicit and secure from shareholders of ADAR ONE such approval and adoption.
(b) As promptly as reasonably practicable following the date of this
Agreement, ADAR ONE shall prepare and file with the SEC under the Securities Act
of 1933, as amended (the "Securities Act"), and the rules and regulations
promulgated by the SEC thereunder a registration statement on Form S-4 (or other
form of registration statement as agreed by the parties) (the "registration
statement")covering all shares of ADAR ONE Stock issuable as a consequence of
the Merger. ADAR ONE may also register shares of existing shareholders for
resale on a companion S-1 or SB-2 filing. Impulse Communications shall cooperate
fully with ADAR ONE in the preparation and filing of the Registration Statement
and any amendments and supplements thereto, including, without limitation, the
furnishing to ADAR ONE of such information regarding Impulse Communications as
shall be required by each of the Securities Act and the Exchange Act and the
respective rules and regulations promulgated by the SEC thereunder.
(d) As promptly as practicable but in no event later than the Effective
Date, ADAR ONE shall prepare and file with the NASD OTC Bulletin Board ("BB"),
an application to have the ADAR ONE Stock listed for trading on BB.
IV. REPRESENTATIONS AND WARRANTIES OF Impulse Communications
Impulse Communications represents and warrants to ADAR ONE as follows, with the
knowledge and understanding that ADAR ONE is relying materially upon such
representations and warranties:
4.1 Organization and Standing. Impulse Communications is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Nevada. Impulse Communications has all requisite corporate power to carry on its
business as it is now being conducted and is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where such
qualification is necessary under applicable law, except where the failure to
qualify (individually or in the aggregate) does not have any material adverse
effect on the assets, business or financial condition of Impulse Communications,
and all states in which each is qualified to do business as of the date hereof,
are listed in the information in the registration statement concerning Impulse
Communications. The copies of the Articles of Incorporation and Bylaws of
Impulse Communications, as amended to date, delivered to ADAR ONE, are true and
complete copies of these documents as now in effect. Except as otherwise set
forth in the information in the registration statement concerning Impulse
Communications, Impulse Communications does not own any interest in any other
corporation, business trust or similar entity. The minute book of Impulse
Communications contains accurate records of all meetings of its respective Board
of Directors and shareholders since its incorporation.
4.2 Capitalization. The authorized capital stock of Impulse Communications,
the number of shares of capital stock which are issued and outstanding and par
value thereof are as set forth in the Registration Statement. All of such shares
of capital stock are duly authorized, validly issued and outstanding, fully paid
and nonassessable, and were not issued in violation of the preemptive rights of
any person. There are no subscriptions, options, warrants, rights or calls or
other commitments or agreements to which Impulse Communications is a party or by
which it is bound, calling for any issuance, transfer, sale or other disposition
of any class of securities of Impulse Communications. There are no outstanding
securities convertible or exchangeable, actually or contingently, into shares of
common stock or any other securities of Impulse Communications. Impulse
Communications has no subsidiaries.
4.3 Authority. This Agreement constitutes, and all other agreements
contemplated hereby will constitute, when executed and delivered by Impulse
Communications in accordance therewith (and assuming due execution and delivery
by the other parties hereto), the valid and binding obligation of Impulse
Communications, enforceable in accordance with their respective terms, subject
to general principles of equity and bankruptcy or other laws relating to or
affecting the rights of creditors generally.
4.4 Properties. Except as set forth on the information in the registration
statement concerning Impulse Communications, Impulse Communications has good
title to all of the assets and properties which it purports to own as reflected
on the balance sheet included in the Financial Statements (as hereinafter
defined), or thereafter acquired. Impulse Communications has a valid leasehold
interest in all material property of which it is the lessee and each such lease
is valid, binding and enforceable against Impulse Communications, as the case
may be, and, to the knowledge of Impulse Communications, the other parties
thereto in accordance with its terms. Neither Impulse Communications nor the
other parties thereto are in material default in the performance of any material
provisions thereunder. Neither the whole nor any material portion of the assets
of Impulse Communications is subject to any governmental decree or order to be
sold or is being condemned, expropriated or otherwise taken by any public
authority with or without payment of compensation therefor, nor, to the
knowledge of Impulse Communications, any such condemnation, expropriation or
taking been proposed. None of the assets of Impulse Communications is subject to
any restriction which would prevent continuation of the use currently made
thereof or materially adversely affect the value thereof.
4.5 Contracts Listed; No Default. All contracts, agreements, licenses,
leases, easements, permits, rights of way, commitments, and understandings,
written or oral, connected with or relating in any respect to present or
proposed future operations of Impulse Communications (except employment or other
agreements terminable at will and other agreements which, in the aggregate, are
not material to the business, properties or prospects of Impulse Communications
and except governmental licenses, permits, authorizations, approvals and other
matters referred to in Section 4.17), which would be required to be listed as
exhibits to a Registration Statement on Form S-4 or an Annual Report on Form
10-K if Impulse Communications were subject to the reporting requirements of the
Exchange Act (individually, the "Impulse Communications Contract" and
collectively, the "Impulse Communications Contracts"), are listed and described
in the information in the registration statement concerning Impulse
Communications. Impulse Communications is the holder of, or party to, all of the
Impulse Communications Contracts. To the knowledge of Impulse Communications,
the Impulse Communications Contracts are valid, binding and enforceable by the
signatory thereto against the other parties thereto in accordance with their
terms. Neither Impulse Communications nor any signatory thereto is in default or
breach of any material provision of the Impulse Communications Contracts.
Impulse Communications' operation of its business has been, is, and will,
between the date hereof and the Closing Date, continue to be, consistent with
the material terms and conditions of the Impulse Communications Contracts.
4.6 Litigation. Except as disclosed in the information in the registration
statement concerning Impulse Communications, there is no claim, action,
proceeding or investigation pending or, to the knowledge of Impulse
Communications, threatened against or affecting Impulse Communications before or
by any court, arbitrator or governmental agency or authority which, in the
reasonable judgment of Impulse Communications, could have any materially adverse
effect on Impulse Communications. There are no decrees, injunctions or orders of
any court, governmental department, agency or arbitration outstanding against
Impulse Communications.
4.7 Taxes. For purposes of this Agreement, (A) "Tax" (and, with correlative
meaning, "Taxes") shall mean any federal, state, local or foreign income,
alternative or add-on minimum, business, employment, franchise, occupancy,
payroll, property, sales, transfer, use, value added, withholding or other tax,
levy, impost, fee, imposition, assessment or similar charge, together with any
related addition to tax, interest, penalty or fine thereon; and (B) "Returns"
shall mean all returns (including, without limitation, information returns and
other material information), reports and forms relating to Taxes or to any
benefit plans.
Impulse Communications has duly filed all Returns required by any law or
regulation to be filed by it, except for extensions duly obtained. All such
Returns were, when filed, and to the knowledge of Impulse Communications are,
accurate and complete in all material respects and were prepared in conformity
with applicable laws and regulations in all material respects. Impulse
Communications has paid or will pay in full or has adequately reserved against
all Taxes otherwise assessed against it through the Closing Date, and the
assessment of any material amount of additional Taxes in excess of those paid
and reported is not reasonably expected.
Impulse Communications is not a party to any pending action or proceeding by
any governmental authority for the assessment of any Tax, and no claim for
assessment or collection of any Tax has been asserted against Impulse
Communications that has not been paid. There are no Tax liens upon the assets
(other than the lien of property taxes not yet due and payable) of Impulse
Communications. There is no valid basis, to the knowledge of Impulse
Communications, except as set forth in the information in the registration
statement concerning Impulse Communications, for any assessment, deficiency,
notice, 30-day letter or similar intention to assess any Tax to be issued to
Impulse Communications by any governmental authority.
4.8 Compliance with Laws and Regulations. To its knowledge, Impulse
Communications is in compliance, in all material respects, with all laws, rules,
regulations, orders and requirements (federal, state and local) applicable to it
in all jurisdictions where the business of Impulse Communications is currently
conducted or to which Impulse Communications is currently subject which has a
material impact on Impulse Communications, including, without limitation, all
applicable civil rights and equal opportunity employment laws and regulations,
and all state and federal antitrust and fair trade practice laws and the Federal
Occupational Health and Safety Act. Impulse Communications knows of no assertion
by any party that Impulse Communications is in violation of any such laws,
rules, regulations, orders, restrictions or requirements with respect to its
current operations, and no notice in that regard has been received by Impulse
Communications. To the knowledge of Impulse Communications, there is not
presently pending any proceeding, hearing or investigation with respect to the
adoption of amendments or modifications to existing laws, rules, regulations,
orders, restrictions or requirements which, if adopted, would materially
adversely affect the current operations of Impulse Communications.
4.9 Compliance with Laws. (a) To its knowledge, the business, operations,
property and assets of Impulse Communications (and, to the knowledge of Impulse
Communications, the business of any sub-tenant or licensee which is occupying or
has occupied any space on any premises of Impulse Communications and the
activities of which could result in any material adverse liability to Impulse
Communications) (i) conform with and are in compliance in all material respects
with all, and are not in material violation of any applicable federal, state and
local laws, rules and regulations, including, but not limited to, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended (including the 1986 Amendments thereto and the Superfund Amendments and
Reauthorization Act) ("CERCLA"), and the Resource Conservation and Recovery Act
("RCRA"), as well as any other laws, rules or regulations relating to tax,
product liability, controlled substances, product registration, environmental
protection, hazardous or toxic waste, employment, or occupational safety
matters; and (ii) have been conducted and operated in a manner such that, to
Impulse Communications' knowledge, Impulse Communications has foreseeable
potential liabilities for environmental clean-up under CERCLA, RCRA or under any
other law, rule, regulation or common or civil law doctrine.
(b) To its knowledge, no predecessor-in-title to any real property now or
previously owned or operated by Impulse Communications, nor any predecessor
operator thereof conducted its business or operated such property in violation
of CERCLA and RCRA or any other applicable federal, state and local laws, rules
and regulations relating to environmental protection or hazardous or toxic waste
matters.
(c) Except as disclosed in the information in the registration statement
concerning Impulse Communications, no suit, action, claim, proceeding, nor
investigation, review or inquiry by any court or federal, state, county,
municipal or local governmental department, commission, board, bureau, agency or
instrumentality, including, without limitation, any state or local health
department (all of the foregoing collectively referred to as "Governmental
Entity") concerning any such possible violations by Impulse Communications is
pending or, to the knowledge of Impulse Communications, threatened, including,
but not limited to, matters relating to diagnostic tests and products and
product liability, environmental protection, hazardous or toxic waste,
controlled substances, employment, occupational safety or tax matters. Impulse
Communications does not know of any reasonable basis or ground for any such
suit, claim, investigation, inquiry or proceeding. For purposes of this Section
4.9, the term "inquiry" includes, without limitation, all pending regulatory
issues (whether before federal, state, local or inter-governmental regulatory
authorities) concerning any regulated product, including, without limitation,
any diagnostic drugs and products.
4.10 Reserved.
4.11 Condition of Assets. The equipment, fixtures and other personal
property of Impulse Communications, taken as a whole, is in good operating
condition and repair (ordinary wear and tear excepted) for the conduct of the
business of Impulse Communications as is contemplated to be conducted.
4.12 No Breaches. To its knowledge, the making and performance of this
Agreement and the other agreements contemplated hereby by Impulse Communications
will not (i) conflict with or violate the Articles of Incorporation or the
Bylaws of Impulse Communications; (ii) violate any material laws, ordinances,
rules or regulations, or any order, writ, injunction or decree to which Impulse
Communications is a party or by which Impulse Communications or any of its
respective assets, businesses, or operations may be bound or affected; or (iii)
result in any breach or termination of, or constitute a default under, or
constitute an event which, with notice or lapse of time, or both, would become a
default under, or result in the creation of any encumbrance upon any asset of
Impulse Communications under, or create any rights of termination, cancellation
or acceleration in any person under, any Impulse Communications Contract.
4.13 Employees. Except as set forth in the information in the registration
statement concerning Impulse Communications, none of the employees of Impulse
Communications is represented by any labor union or collective bargaining unit
and, to the knowledge of Impulse Communications, no discussions are taking place
with respect to such representation.
4.14 Financial Statements. To its knowledge, the information in the
registration statement concerning Impulse Communications contains, as to Impulse
Communications, an unaudited balance sheet as of * and related statements of
operations, statements of cash flows and statements of shareholders' equity of
Impulse Communications for the one-year period ended * and an unaudited balance
sheet as of * and related statements of operations, statements of cash flows and
statement of shareholders' equity for the nine-month period ended *
(collectively, the "Financial Statements"). The Financial Statements present
fairly, in all respects, the consolidated financial position and results of
operations of Impulse Communications as of the dates and periods indicated,
prepared in accordance with generally accepted accounting principles
consistently applied ("GAAP"). The Financial Statements, when submitted to ADAR
ONE for inclusion in the Registration Statement, will have been prepared in
accordance with Regulation S-X of the SEC and, in particular, Rules 1-02 and
3-05 promulgated thereunder. Without limiting the generality of the foregoing,
(i) there is no basis for any assertion against Impulse Communications as of the
date of the Financial Statements of any debt, liability or obligation of any
nature not fully reflected or reserved against in the Financial Statements; and
(ii) there are no assets of Impulse Communications as of the date of the
Financial Statements, the value of which is overstated in the Financial
Statements. Except as disclosed in the Financial Statements, Impulse
Communications has no known contingent liabilities (including liabilities for
Taxes), forward or long-term commitments or unrealized or anticipated losses
from unfavorable commitments other than in the ordinary course of business.
Impulse Communications is not a party to any contract or agreement for the
forward purchase or sale of any foreign currency that is material to Impulse
Communications taken as a whole.
4.15 Absence of Certain Changes or Events. Except as set forth in the
information in the registration statement concerning Impulse Communications,
since December 31, 1996, there has not been:
(a) Any material adverse change in the financial condition,
properties, assets, liabilities or business of Impulse Communications;
(b) Any material damage, destruction or loss of any material
properties of Impulse Communications, whether or not covered by insurance;
(c) Any material change in the manner in which the business of Impulse
Communications has been conducted;
(d) Any material change in the treatment and protection of trade
secrets or other confidential information of Impulse Communications;
(e) Any material change in the business or contractual relationship of
Impulse Communications with any customer or supplier which might reasonably be
expected to materially and adversely affect the business or prospects of Impulse
Communications;
(f) Any agreement by Impulse Communications, whether written or oral,
to do any of the foregoing; and
(g) Any occurrence not included in paragraphs (a) through (f) of this
Section 4.16 which has resulted, or which Impulse Communications has reason to
believe, in its reasonable judgment, might be expected to result, in a material
adverse change in the business or prospects of Impulse Communications.
4.16 Governmental Licenses, Permits, Etc. To its knowledge, Impulse
Communications has all governmental licenses, permits, authorizations and
approvals necessary for the conduct of its business as currently conducted
("Licenses and Permits"). The information in the registration statement
concerning Impulse Communications includes a list of all Licenses and Permits.
All Licenses and Permits are in full force and effect, and no proceedings for
the suspension or cancellation of any thereof is pending or threatened.
4.17 Employee Agreements. (a) For purposes of this Agreement, the following
definitions apply:
(1) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any regulations promulgated thereunder.
(2) "Multi-employer Plan" means a plan, as defined in ERISA Section
3(37), to which Impulse Communications contributes or is required to contribute.
(3) "Employee Plan" means any pension, retirement, profit sharing,
deferred compensation, vacation, bonus, incentive, medical, vision, dental,
disability, life insurance or any other employee benefit plan as defined in
Section 3(3) of ERISA other than a Multi-employer Plan to which Impulse
Communications contributes, sponsors, maintains or otherwise is bound to with
regard to any benefits on behalf of the employees of Impulse Communications.
(4) "Employee Pension Plan" means any Employee Plan for the provision
of retirement income to employees or which results in the deferral of income by
employees extending to the termination of covered employment or beyond as
defined in Section 3(2) of ERISA.
(5) "Employee Welfare Plan" means any Employee Plan other than an
Employee Pension Plan.
(6) "Compensation Arrangement" means any plan or compensation
arrangement other than an Employee Plan, whether written or unwritten, which
provides to employees of Impulse Communications, former employees, officers,
directors or shareholders of Impulse Communications any compensation or other
benefits, whether deferred or not, in excess of base salary or wages, including,
but not limited to, any bonus or incentive plan, stock rights plan, deferred
compensation arrangement, life insurance, stock purchase plan, severance pay
plan and any other employee fringe benefit plan.
(b) The information in the registration statement concerning Impulse
Communications lists, all (1) employment agreements and collective bargaining
agreements to which Impulse Communications is a party; (2) Compensation
Arrangements of Impulse Communications; (3) Employee Welfare Plans; (4) Employee
Pension Plans; and (5) consulting agreements under which Impulse Communications
has or may have any monetary obligations to employees or consultants of Impulse
Communications or their beneficiaries or legal representatives or under which
any such persons may have any rights. Impulse Communications has previously made
available to ADAR ONE true and complete copies of all of the foregoing
employment contracts, collective bargaining agreements, Employee Plans and
Compensation Arrangements, including descriptions of any unwritten contracts,
agreements, Compensation Arrangements or Employee Plans, as amended to date. In
addition, with respect to any Employee Plan which continues after the Closing
Date, Impulse Communications has previously delivered or made available to ADAR
ONE (1) any related trust agreements, master trust agreements, annuity contracts
or insurance contracts; (2) certified copies of all Board of Directors'
resolutions adopting such plans and trust documents and amendments thereto; (3)
current investment management agreements; (4) custodial agreements; (5)
fiduciary liability insurance policies; (6) indemnification agreements; (7) the
most recent determination letter (and underlying application thereof and
correspondence and supplemental material related thereto) issued by the Internal
Revenue Service with respect to the qualification of each Employee Plan under
the provisions of Section 401(a) of the Code; (8) copies of all "advisory
opinion letters," "private letter rulings," "no action letters," and any similar
correspondence (and the underlying applications therefor and correspondence and
supplemental material related thereto) that was issued by any governmental or
quasigovernmental agency with respect to the last plan year; (9) Annual Reports
(Form 5500 Series) and Schedules A and B thereto for the last plan year; (10)
all actuarial reports prepared for the last plan year; (11) all certified
Financial Statements for the last plan year; and (12) all current Summary Plan
Descriptions, Summaries of Material Modifications and Summary Annual Reports.
All documents delivered by Impulse Communications to ADAR ONE as photocopies
faithfully reproduce the originals thereof, such originals are authentic and
were, to the extent execution was required, duly executed.
(c) Except as otherwise disclosed in the information in the registration
statement concerning Impulse Communications:
(1) It is not a party to and has, in effect or to become effective
after the date of this Agreement, any bonus, cash or deferred compensation,
severance, medical, health or hospitalization, pension, profit sharing or
thrift, retirement, stock option, employee stock ownership, life or group
insurance, death benefit, welfare, incentive, vacation, sick leave, cafeteria,
so-called "golden parachute" payment, disability or trust agreement or
arrangement.
4.18 Brokers. Impulse Communications has not made any agreement or taken
any action with any person or taken any action which would cause any person to
be entitled to any agent's, broker's or finder's fee or commission in connection
with the transactions contemplated by this Agreement.
4.19 Business Locations. Impulse Communications does not nor does it own or
lease any real or personal property in any state except as set forth on the
information in the registration statement concerning Impulse Communications.
Impulse Communications does not have a place of business (including, without
limitation, Impulse Communications' executive offices or place where Impulse
Communications' books and records are kept) except as otherwise set forth on the
information in the registration statement concerning Impulse Communications.
4.20 Intellectual Property. The information in the registration statement
concerning Impulse Communications lists all of the Intellectual Property (as
hereinafter defined) used by Impulse Communications which constitutes a material
patent, trade name, trademark, service xxxx or application for any of the
foregoing. "Intellectual Property" means all of Impulse Communications' right,
title and interest in and to all patents, trade names, assumed names,
trademarks, service marks, and proprietary names, copyrights (including any
registration and pending applications for any such registration for any of
them), together with all the goodwill relating thereto and all other
intellectual property of Impulse Communications. Other than as disclosed in the
information in the registration statement concerning Impulse Communications,
Impulse Communications does not have any licenses granted by or to it or other
agreements to which it is a party, relating in whole or in part to any
Intellectual Property, whether owned by Impulse Communications or otherwise. All
of the patents, trademark registrations and copyrights listed in the information
in the registration statement concerning Impulse Communications that are owned
by Impulse Communications are valid and in full force and effect. To the
knowledge of Impulse Communications, it is not infringing upon, or otherwise
violating, the rights of any third party with respect to any Intellectual
Property. No proceedings have been instituted against or claims received by
Impulse Communications, nor to its knowledge are any proceedings threatened
alleging any such violation, nor does Impulse Communications know of any valid
basis for any such proceeding or claim. To the knowledge of Impulse
Communications, there is no infringement or other adverse claims against any of
the Intellectual Property owned or used by Impulse Communications. To the
knowledge of Impulse Communications, its use of software does not violate or
otherwise infringe the rights of any third party. 4.21 Warranties. The
information in the registration statement concerning Impulse Communications sets
forth a true and complete list of the forms of all express warranties and
guaranties made by Impulse Communications to third parties with respect to any
services rendered by Impulse Communications.
4.22 Suppliers. Except as set forth in the information in the registration
statement concerning Impulse Communications, Impulse Communications knows and
has no reason to believe that, either as a result of the transactions
contemplated hereby or for any other reason (exclusive of expiration of a
contract upon the passage of time), any present material supplier of Impulse
Communications will not continue to conduct business with Impulse Communications
after the Closing Date in substantially the same manner as it has conducted
business prior thereto.
4.23 Accounts Receivable. The accounts receivable reflected on the balance
sheets included in the Financial Statements, or thereafter acquired by Impulse
Communications, consists, in the aggregate in all material respects, of items
which are collectible in the ordinary and usual course of business.
4.24 Governmental Approvals. To its knowledge, other than as set forth
herein, no authorization, license, permit, franchise, approval, order or consent
of, and no registration, declaration or filing by Impulse Communications with,
any governmental authority, federal, state or local, is required in connection
with Impulse Communications' execution, delivery and performance of this
Agreement.
4.25 No Omissions or Untrue Statements. None of the information relating to
Impulse Communications supplied or to be supplied in writing by it specifically
for inclusion in the Registration Statement, at the respective times that the
Registration Statement becomes effective (or any registration statement included
therein), the Proxy Statement is first mailed to ADAR ONE's shareholders and the
meeting of ADAR ONE's shareholders takes place, as the case may be, contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. ADAR ONE shall give notice to Impulse Communications in
advance of the dates of such effectiveness, mailing and meeting sufficient to
permit Impulse Communications to fulfill its obligations under the second
sentence of this Section.
4.26 information in the registration statement concerning Impulse
Communications Complete. Impulse Communications shall promptly supplement the
information in the registration statement concerning Impulse Communications if
events occur prior to the Closing Date that would have been required to be
disclosed had they existed at the time of executing this Agreement. The
information in the registration statement concerning Impulse Communications, as
supplemented prior to the Closing Date, will contain a true, correct and
complete list and description of all items required to be set forth therein. The
information in the registration statement concerning Impulse Communications, as
supplemented prior to the Closing Date, is expressly incorporated herein by
reference. Notwithstanding the foregoing, any such supplement to the information
in the registration statement concerning Impulse Communications following the
date hereof shall not in any way affect ADAR ONE's right not to consummate the
transactions contemplated hereby as set forth in Section 8.2 hereof.
V. REPRESENTATIONS AND WARRANTIES OF ADAR ONE
ADAR ONE represents and warrants to Impulse Communications as follows, with
the knowledge and understanding that Impulse Communications is relying
materially on such representations and warranties:
5.1 Organization and Standing of ADAR ONE. ADAR ONE is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida, and has the corporate power to carry on its business as now conducted
and to own its assets and it not required to qualify to transact business as a
foreign corporation in any state or other jurisdiction. The copies of the
Articles of Incorporation and Bylaws of ADAR ONE, delivered to Impulse
Communications, are true and complete copies of those documents as now in
effect. ADAR ONE does not own any capital stock in any other corporation,
business trust or similar entity, and is not engaged in a partnership, joint
venture or similar arrangement with any person or entity. The minute books of
ADAR ONE contain accurate records of all meetings of its incorporator,
shareholders and Board of Directors since its date of incorporation.
5.2 ADAR ONE's Authority. ADAR ONE's Board of Directors has approved and
adopted this Agreement and the Merger and has resolved to recommend approval and
adoption of this Agreement and the Merger by ADAR ONE's shareholders. This
Agreement constitutes, and all other agreements contemplated hereby will
constitute, when executed and delivered by ADAR ONE in accordance herewith (and
assuming due execution and delivery by the other parties hereto), the valid and
binding obligations of ADAR ONE, enforceable in accordance with their respective
terms, subject to general principles of equity and bankruptcy or other laws
relating to or affecting the rights of creditors generally.
5.4 No Breaches. To its knowledge, the making and performance of this
Agreement (including, without limitation, the issuance of the ADAR ONE Stock) by
ADAR ONE will not (i) conflict with the Articles of Incorporation or the Bylaws
of ADAR ONE; (ii) violate any order, writ, injunction, or decree applicable to
ADAR ONE; or (iii) result in any breach or termination of, or constitute a
default under, or constitute an event which, with notice or lapse of time, or
both, would become a default under, or result in the creation of any encumbrance
upon any asset of ADAR ONE under, or create any rights of termination,
cancellation or acceleration in any person under, any agreement, arrangement or
commitment, or violate any provisions of any laws, ordinances, rules or
regulations or any order, writ, injunction or decree to which ADAR ONE is a
party or by which ADAR ONE or any of its assets may be bound.
5.5 Capitalization. The ADAR ONE Stock consists of 50,000,000 shares of
common stock, no par value per share, of which 1,000,000 shares are issued and
outstanding. All of the outstanding ADAR ONE Stock is duly authorized, validly
issued, fully paid and nonassessable, and was not issued in violation of the
preemptive rights of any person. The ADAR ONE Stock to be issued upon
effectiveness of the Merger, when issued in accordance with the terms of this
Agreement shall be duly authorized, validly issued, fully paid and
nonassessable. Other than as stated in this Section 5.5, there are no
outstanding subscriptions, options, warrants, calls or rights of any kind issued
or granted by, or binding upon, ADAR ONE, to purchase or otherwise acquire any
shares of capital stock of ADAR ONE, or other equity securities or equity
interests of ADAR ONE or any debt securities of ADAR ONE. There are no
outstanding securities convertible or exchangeable, actually or contingently,
into shares of ADAR ONE Stock or other stock of ADAR ONE.
5.6 Business. ADAR ONE, since its formation, has engaged in no business
other than to seek to serve as a vehicle for the acquisition of an operating
business, and, except for this Agreement, is not a party to any contract or
agreement for the acquisition of an operating business.
5.7 Governmental Approval; Consents. To its knowledge, except for the
reports required to be filed in the future by ADAR ONE, as a reporting company,
under the Exchange Act, and under the Securities Act with respect to the shares
of ADAR ONE Stock issuable upon exercise of the ADAR ONE Warrants, the filing of
the Registration Statement under the Securities Act, the Proxy Statement under
the Exchange Act for the purpose of seeking stockholder approval of the Merger
referred to in Section 2.1 and the issuance of the ADAR ONE Stock pursuant to
the Merger and the filing of the S-4 Registration Statement (or other form of
registration statement as agreed by the parties), no authorization, license,
permit, franchise, approval, order or consent of, and no registration,
declaration or filing by ADAR ONE with, any governmental authority, federal,
state or local, is required in connection with ADAR ONE's execution, delivery
and performance of this Agreement. No consents of any other parties are required
to be received by or on the part of ADAR ONE to enable ADAR ONE to enter into
and carry out this Agreement.
5.8 Financial Statements. To its knowledge, the financial statements of
ADAR ONE included in ADAR ONE's SEC Reports, as hereinafter defined
(collectively, the "ADAR ONE Financial Statements") present fairly, in all
material respects, the financial position of ADAR ONE as of the respective dates
and the results of its operations for the periods covered in accordance with
GAAP. Without limiting the generality of the foregoing, (i) except as set forth
in the ADAR ONE Disclosure Schedule, there is no basis for any assertion against
ADAR ONE as of the date of said balance sheets of any material debt, liability
or obligation of any nature not fully reflected or reserved against in such
balance sheets or in the notes thereto; and (ii) there are no assets of ADAR
ONE, the value of which (in the reasonable judgment of ADAR ONE) is materially
overstated in said balance sheets. Except as disclosed therein, ADAR ONE has no
known material contingent liabilities (including liabilities for taxes), unusual
forward or long-term commitments or unrealized or anticipated losses from
unfavorable commitments. ADAR ONE is not a party to any contract or agreement
for the forward purchase or sale of any foreign currency.
5.9 Adverse Developments. Except as expressly provided or set forth in, or
required by, this Agreement, or as set forth in the ADAR ONE Financial
Statements, since March, 1997, there have been no materially adverse changes in
the assets, liabilities, properties, operations or financial condition of ADAR
ONE, and no event has occurred other than in the ordinary and usual course of
business or as set forth in ADAR ONE's SEC Reports or in the ADAR ONE Financial
Statements which could be reasonably expected to have a materially adverse
effect upon ADAR ONE, and ADAR ONE does not know of any development or
threatened development of a nature that will, or which could be reasonably
expected to, have a materially adverse effect upon ADAR ONE's operations or
future prospects.
5.10 Reserved.
5.11 Contracts Listed; No Default. All material contracts, agreements,
licenses, leases, easements, permits, rights of way, commitments, and
understandings, written or oral, connected with or relating in any respect to
the present operations of ADAR ONE are, with the exception of this Agreement,
described in ADAR ONE's SEC Reports. All of such contracts, agreements, leases,
commitments and understandings, written or oral, and any other contract,
agreement, lease, commitment or understanding, written or oral, binding upon
ADAR ONE, are listed in the ADAR ONE Disclosure Schedule (the "ADAR ONE
Contracts"). To the knowledge of ADAR ONE, the ADAR ONE Contracts are valid,
binding and enforceable by ADAR ONE against the other parties thereto in
accordance with their terms. Neither ADAR ONE nor, to the knowledge of ADAR ONE,
any of the other parties thereto is in default or breach of any material
provision of the ADAR ONE Contracts. ADAR ONE has furnished Impulse
Communications with a true and complete copy of each ADAR ONE Contract, as
amended.
5.12 Taxes. ADAR ONE has duly filed all Returns required by any law or
regulation to be filed by it except for extensions duly obtained. All such
Returns were, when filed, and to the best of ADAR ONE's knowledge are, accurate
and complete in all material respects and were prepared in conformity with
applicable laws and regulations. ADAR ONE has paid or will pay in full or has
adequately reserved against all Taxes otherwise assessed against it through the
Closing Date, and the assessment of any material amount of additional Taxes in
excess of those paid and reported is not reasonably expected.
ADAR ONE is not a party to any pending action or proceeding by any
governmental authority for the assessment of any Tax, and no claim for
assessment or collection of any Tax has been asserted against ADAR ONE that has
not been paid. There are no Tax liens upon the assets of ADAR ONE (other than
the lien of personal property taxes not yet due and payable). There is no valid
basis, to the best of ADAR ONE's knowledge, except as set forth in the ADAR ONE
Disclosure Schedule, for any assessment, deficiency, notice, 30-day letter or
similar intention to assess any Tax to be issued to ADAR ONE by any governmental
authority.
5.13 Litigation. Except as disclosed in the ADAR ONE Disclosure Schedule,
there is no claim, action, proceeding or investigation pending or, to ADAR ONE's
knowledge, threatened against or affecting ADAR ONE before or by any court,
arbitrator or governmental agency or authority which, in the reasonable judgment
of ADAR ONE, could have a materially adverse effect on ADAR ONE. There are no
decrees, injunctions or orders of any court, governmental department, agency or
arbitration outstanding against ADAR ONE.
5.14 Compliance with Laws and Regulations. To its knowledge, ADAR ONE is in
compliance, in all material respects, with all laws, rules, regulations, orders
and requirements (federal, state and local) applicable to it in all
jurisdictions in which the business of ADAR ONE is currently conducted or to
which ADAR ONE is currently subject, which may have a material impact on ADAR
ONE, including, without limitation, all applicable civil rights and equal
opportunity employment laws and regulations, all state and federal antitrust and
fair trade practice laws and the Federal Occupational Health and Safety Act.
ADAR ONE does not know of any assertion by any party that ADAR ONE is in
violation of any such laws, rules, regulations, orders, restrictions or
requirements with respect to its current operations, and no notice in that
regard has been received by ADAR ONE. To ADAR ONE's knowledge, there is not
presently pending any proceeding, hearing or investigation with respect to the
adoption of amendments or modifications of existing laws, rules, regulations,
orders, restrictions or requirements which, if adopted, would materially
adversely affect the current operations of ADAR ONE.
5.15 Compliance with Laws. (a) To its knowledge, the business operations,
property and assets of ADAR ONE (and to the knowledge of ADAR ONE, the business
of any sub-tenant or license which is occupying or has occupied any space on any
premises of ADAR ONE and the activities of which could result in any material
adverse liability to ADAR ONE) (i) conform with and are in compliance in all
material respects with all, and are not in material violation of any applicable
federal, state and local laws, rules and regulations, including, but not limited
to, CERCLA and RCRA, as well as any other laws, rules or regulations relating to
tax, product liability, controlled substances, product registration,
environmental protection, hazardous or toxic waste, employment, or occupational
safety matters; and (ii) have been conducted and operated in a manner such that,
to ADAR ONE's knowledge, ADAR ONE has no foreseeable potential liabilities for
environmental clean-up under CERCLA, RCRA or under any law, rule, regulation or
common or civil law doctrine.
(b) To its knowledge, no predecessor-in-title to any real property now or
previously owned or operated by ADAR ONE, nor any predecessor operator thereof
conducted its business or operated such property in violation of CERCLA and RCRA
or any other applicable, federal, state and local laws, rules and regulations
relating to environmental protection or hazardous or toxic waste matters.
(c) Except as disclosed in the ADAR ONE Disclosure Schedule, no suit,
action, claim, proceeding nor investigation review or inquiry by any Government
Entity (as defined in Section 4.9) concerning any such possible violations by
ADAR ONE is pending or, to ADAR ONE's knowledge, threatened, including, but not
limited to, matters relating to diagnostic tests and products and product
liability, environmental protection, hazardous or toxic waste, controlled
substances, employment, occupational safety or tax matters. ADAR ONE does not
know of any reasonable basis or ground for any such suit, claim, investigation,
inquiry or proceeding.
5.16 Governmental Licenses, Permits, Etc. To its knowledge, ADAR ONE has
all governmental licenses, permits, authorizations and approvals necessary for
the conduct of its business as currently conducted. All such licenses, permits,
authorizations and approvals are in full force and effect, and no proceedings
for the suspension or cancellation of any thereof is pending or threatened.
5.17 Brokers. ADAR ONE has not made any agreement or taken any action with any
person or taken any action which would cause any person to be entitled to any
agent's, broker's or finder's fee or commission in connection with the
transactions contemplated by this Agreement.
5.18 Employee Plans. Except as listed in ADAR ONE's SEC Reports, ADAR ONE
has no employees, consultants or agents, and ADAR ONE has no Employee Plans or
Compensation Arrangements.
VI. STOCKHOLDER APPROVAL; CLOSING DELIVERIES
6.1 Stockholder Approval. Impulse Communications shall submit the Merger
and this Agreement to its shareholders for approval and adoption at the Meeting
or by written consent as soon as practicable following the date the SEC declares
the registration statement effective in accordance with Section 3.7 hereof.
Subject to the Merger and this Agreement receiving all approvals of Impulse
Communications and Impulse Communications shareholders and regulatory approvals
and the absence of 96% or more of the non-affiliated shareholders of Impulse
Communications (i) voting against the Merger; and (ii) requesting redemption of
their shares of Impulse Communications Stock in the manner to be set forth in
the Information Statement, and subject to the other provisions of this
Agreement, the parties shall hold a closing (the "Closing") no later than the
fifth business day (or such later date as the parties hereto may agree)
following the later of (a) the date of the Meeting of Shareholders of Impulse
Communications to consider and vote upon the Merger and this Agreement or the
receipt of the requisite percentage of written consents or (b) the business day
on which the last of the conditions set forth in Articles VII and VIII hereof is
fulfilled or waived (such later date, the "Closing Date"), at 10:00 A.M. at the
offices of XXXXXXXX LAW GROUP, P.A., or at such other time and place as the
parties may agree upon.
6.2 Closing Deliveries of Impulse Communications. At the Closing, Impulse
Communications shall deliver, or cause to be delivered, to ADAR ONE:
(a) A certificate dated as of the Closing Date, to the effect that the
representations and warranties of Impulse Communications contained in this
Agreement are true and correct in all material respects at and as of the Closing
Date and that Impulse Communications has complied with or performed in all
material respects all terms, covenants and conditions to be complied with or
performed by Impulse Communications on or prior to the Closing Date;
(b) An opinion of Impulse Communications' counsel, in form and
substance reasonably satisfactory to ADAR ONE, in a form to be mutually agreed
to prior to the Closing;
(c) a certificate, dated as of the Closing Date, certifying as to the
Articles of Incorporation and Bylaws of Impulse Communications, the incumbency
and signatures of the officers of each of Impulse Communications and copies of
the directors' and shareholders' resolutions of Impulse Communications approving
and authorizing the execution and delivery of this Agreement, and the
consummation of the transactions contemplated hereby;
(d) Such other documents, at the Closing or subsequently, as may be
reasonably requested by ADAR ONE as necessary for the implementation and
consummation of this Agreement and the transactions contemplated hereby.
6.3 Closing Deliveries of ADAR ONE. At the Closing, ADAR ONE shall deliver
to Impulse Communications:
(a) A certificate of ADAR ONE, dated as of the Closing Date, to the
effect that the representations and warranties of ADAR ONE contained in this
Agreement are true and correct in all material respects and that ADAR ONE has
complied with or performed in all material respects all terms, covenants and
conditions to be complied with or performed by ADAR ONE on or prior to the
Closing Date;
(b) A certificate, dated as of the Closing Date, executed by the
Secretary of ADAR ONE, certifying the Articles of Incorporation, Bylaws,
incumbency and signatures of officers of ADAR ONE and copies of ADAR ONE's
directors' and shareholders' resolutions approving and authorizing the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby;
(c) An opinion of ADAR ONE's counsel, XXXXXXXX LAW GROUP, P.A., in
form and substance reasonably satisfactory to Impulse Communications, in a form
to be mutually agreed to prior to the Closing;
(d) The written resignations of all officers, and all directors of
ADAR ONE.
(e) Certificates representing the ADAR ONE Stock issuable upon
consummation of the Merger;
(f) The books and records of ADAR ONE; and
(h) Documentation satisfactory to Impulse Communications evidencing
the fact that the signatories on all relevant bank accounts of ADAR ONE have
been changed to signatories designated by Impulse Communications.
VII. CONDITIONS TO OBLIGATIONS OF Impulse Communications
The obligation of Impulse Communications to consummate the Closing is
subject to the following conditions, any of which may be waived by Impulse
Communications in its sole discretion:
7.1 Compliance by ADAR ONE. ADAR ONE shall have performed and complied in
all material respects with all agreements and conditions required by this
Agreement to be performed or complied with by ADAR ONE prior to or on the
Closing Date.
7.2 Accuracy of ADAR ONE's Representations. ADAR ONE's representations and
warranties contained in this Agreement (including the ADAR ONE Disclosure
Schedule) or any schedule, certificate or other instrument delivered pursuant to
the provisions hereof or in connection with the transactions contemplated hereby
shall be true and correct in all material respects at and as of the Closing Date
(except for such changes permitted by this Agreement) and shall be deemed to be
made again as of the Closing Date.
7.3 Material Adverse Change. No material adverse change shall have occurred
subsequent to March, 1999 in the financial position, results of operations,
assets, liabilities or prospects of ADAR ONE, nor shall any event or
circumstance have occurred which would result in a material adverse change in
the financial position, results of operations, assets, liabilities or prospects
of ADAR ONE within the reasonable discretion of Impulse Communications.
7.4 Documents. All documents and instruments delivered by ADAR ONE to
Impulse Communications at the Closing shall be in form and substance reasonably
satisfactory to Impulse Communications and its counsel.
7.5 Capitalization. At the Closing Date, ADAR ONE shall have, other than
with respect to the issuance of shares underlying the ADAR ONE Warrants, not
more than 400,000 shares of ADAR ONE Stock issued and outstanding.
7.6 Effectiveness of Registration Statement; No Stop Order. The
Registration Statement shall be effective under the Securities Act and shall not
be subject to a stop order or any threatened stop order.
7.7 Reorganization. The Merger shall qualify as a tax-free reorganization
under Section 368 of the Code.
7.8 Litigation. No litigation seeking to enjoin the transactions
contemplated by this Agreement or to obtain damages on account hereof shall be
pending or, to Impulse Communications' knowledge, be threatened.
VIII. CONDITIONS TO ADAR ONE'S OBLIGATIONS
ADAR ONE's obligation to consummate the closing is subject to the following
conditions, any of which may be waived by ADAR ONE in its sole discretion:
8.1 Compliance by Impulse Communications. Impulse Communications shall have
performed and complied in all material respects with all agreements and
conditions required by this Agreement to be performed or complied with prior to
or on the Closing Date.
8.2 Accuracy of Impulse Communications' Representations. Impulse
Communications' representations and warranties contained in this Agreement
(including the exhibits hereto and the ADAR ONE Disclosure Schedule) or any
schedule, certificate or other instrument delivered pursuant to the provisions
hereof or in connection with the transactions contemplated hereby shall be true
and correct in all material respects at and as of the Closing Date (except for
such changes permitted by this Agreement) and shall be deemed to be made again
as of the Closing Date.
8.3 Material Adverse Change. No material adverse change shall have occurred
subsequent to * in the financial position, results of operations, assets,
liabilities or prospects of Impulse Communications taken as a whole, nor shall
any event or circumstance have occurred which would result in a material adverse
change in the business, assets or condition, financial or otherwise, of Impulse
Communications taken as a whole, within reasonable discretion of ADAR ONE.
8.4 Litigation. No litigation seeking to enjoin the transactions
contemplated by this Agreement or to obtain damages on account hereof shall be
pending or, to ADAR ONE's knowledge, be threatened.
8.5 Reorganization. The Merger shall qualify as a tax-free reorganization
under Section 368 of the Code and there are no material adverse tax consequences
to the Merger.
8.6 Documents. All documents and instruments delivered by Impulse
Communications to ADAR ONE at the Closing shall be in form and substance
reasonably satisfactory to ADAR ONE and its counsel.
IX. INDEMNIFICATION
9.1 By Impulse Communications. Subject to Section 9.4, Impulse
Communications shall indemnify, defend and hold ADAR ONE, its directors,
officers, shareholders, attorneys, agents and affiliates, harmless from and
against any and all losses, costs, liabilities, damages, and expenses (including
legal and other expenses incident thereto) of every kind, nature and
description, including any undisclosed liabilities (collectively, "Losses") that
result from or arise out of (i) the breach of any representation or warranty of
Impulse Communications set forth in this Agreement or in any certificate
delivered to ADAR ONE pursuant hereto; or (ii) the breach of any of the
covenants of Impulse Communications contained in or arising out of this
Agreement or the transactions contemplated hereby.
9.2 By ADAR ONE. Subject to Section 9.4, ADAR ONE shall indemnify, defend,
and hold Impulse Communications its directors, officers, shareholders,
attorneys, agents and affiliates harmless from and against any and all Losses
that arise out of (i) the breach of any representation or warranty of ADAR ONE
set forth in this Agreement or in any certificate delivered to Impulse
Communications pursuant hereto; or (ii) the breach of any of the covenants of
ADAR ONE contained in or arising out of this Agreement or the transactions
contemplated hereby.
9.3 Claims Procedure. Should any claim covered by Sections 9.1 or 9.2 be
asserted against a party entitled to indemnification under this Article (the
"Indemnitee"), the Indemnitee shall promptly notify the party obligated to make
indemnification (the "Indemnitor"); provided, however, that any delay or failure
in notifying the Indemnitor shall not affect the Indemnitor's liability under
this Article if such delay or failure was not prejudicial to the Indemnitor. The
Indemnitor upon receipt of such notice shall assume the defense thereof with
counsel reasonably satisfactory to the Indemnitee and the Indemnitee shall
extend reasonable cooperation to the Indemnitor in connection with such defense.
No settlement of any such claim shall be made without the consent of the
Indemnitor and Indemnitee, such consent not to be unreasonably withheld or
delayed, nor shall any such settlement be made by the Indemnitor which does not
provide for the absolute, complete and unconditional release of the Indemnitee
from such claim. In the event that the Indemnitor shall fail, within a
reasonable time, to defend a claim, the Indemnitee shall have the right to
assume the defense thereof without prejudice to its rights to indemnification
hereunder.
9.4 Limitations on Liability. Neither Impulse Communications nor ADAR ONE
shall be liable hereunder as a result of any misrepresentation or breach of such
party's representations, warranties or covenants contained in this Agreement
unless and until the Losses incurred by each, as the case may be, as a result of
such misrepresentations or breaches under this Agreement shall exceed, in the
aggregate, $200,000 (in which case the party liable therefor shall be liable for
the entire amount of such claims, including the first $200,000).
X. TERMINATION
10.1 Termination Prior to Closing. (a) If the Closing has not occurred by
any date as mutually agreed upon by the parties (the "Termination Date"), any of
the parties hereto may terminate this Agreement at any time thereafter by giving
written notice of termination to the other parties; provided, however, that no
party may terminate this Agreement if such party has willfully or materially
breached any of the terms and conditions hereof.
(b) Prior to the Termination Date either party to this Agreement may
terminate this Agreement following the insolvency or bankruptcy of the other, or
if any one or more of the conditions to Closing set forth in Article VI, Article
VII or Article VIII shall become incapable of fulfillment and shall not have
been waived by the party for whose benefit the condition was established, then
either party may terminate this Agreement.
10.2 Consequences of Termination. Upon termination of this Agreement
pursuant to this Article X or any other express right of termination provided
elsewhere in this Agreement, the parties shall be relieved of any further
obligation to the others except as specified in Section 12.3. No termination of
this Agreement, however, whether pursuant to this Article X hereof or under any
other express right of termination provided elsewhere in this Agreement, shall
operate to release any party from any liability to any other party incurred
before the date of such termination or from any liability resulting from any
willful misrepresentation made in connection with this Agreement or willful
breach hereof.
XI. ADDITIONAL COVENANTS
11.1 Mutual Cooperation. The parties hereto will cooperate with each other,
and will use all reasonable efforts to cause the fulfillment of the conditions
to the parties' obligations hereunder and to obtain as promptly as possible all
consents, authorizations, orders or approvals from each and every third party,
whether private or governmental, required in connection with the transactions
contemplated by this Agreement.
11.2 Changes in Representations and Warranties of Impulse Communications.
Between the date of this Agreement and the Closing Date, Impulse Communications
shall not, directly or indirectly, except as contemplated in the information in
the registration statement concerning Impulse Communications, enter into any
transaction, take any action, or by inaction permit an event to occur, which
would result in any of the representations and warranties of Impulse
Communications herein contained not being true and correct at and as of (a) the
time immediately following the occurrence of such transaction or event or (b)
the Closing Date. Impulse Communications shall promptly give written notice to
ADAR ONE upon becoming aware of (i) any fact which, if known on the date hereof,
would have been required to be set forth or disclosed pursuant to this Agreement
and (ii) any impending or threatened breach in any material respect of any of
the representations and warranties of Impulse Communications contained in this
Agreement and with respect to the latter shall use all reasonable efforts to
remedy same.
11.3 Changes in Representations and Warranties of ADAR ONE. Between the
date of this Agreement and the Closing Date, ADAR ONE shall not, directly or
indirectly, enter into any transaction, take any action, or by inaction permit
an event to occur, which would result in any of the representations and
warranties of ADAR ONE herein contained not being true and correct at and as of
(a) the time immediately following the occurrence of such transaction or event
or (b) the Closing Date. ADAR ONE shall promptly give written notice to Impulse
Communications upon becoming aware of (i) any fact which, if known on the date
hereof, would have been required to be set forth or disclosed pursuant to this
Agreement and (ii) any impending or threatened breach in any material respect of
any of the representations and warranties of ADAR ONE contained in this
Agreement and with respect to the latter shall use all reasonable efforts to
remedy same.
XII. MISCELLANEOUS
12.1 Expenses. ADAR ONE will pay for its counsel and financial consultant
and all their costs. Impulse Communications will pay for your accountants and
attorneys and all their costs. Impulse Communications will be responsible for
paying the SEC filing fee, and state filing fees and all costs of converting
your documents to they can be filed with the SEC. .
12.2 Survival of Representations, Warranties and Covenants. All statements
contained in this Agreement or in any certificate delivered by or on behalf of
Impulse Communications or ADAR ONE pursuant hereto or in connection with the
transactions contemplated hereby shall be deemed representations, warranties and
covenants by Impulse Communications or ADAR ONE, as the case may be, hereunder.
All representations, warranties and covenants made by Impulse Communications and
by ADAR ONE in this Agreement, or pursuant hereto, shall survive through the
Closing Date.
12.3 Nondisclosure. ADAR ONE will not at any time after the date of this
Agreement, without Impulse Communications' consent, divulge, furnish to or make
accessible to anyone (other than to its representatives as part of its due
diligence or corporate investigation) any knowledge or information with respect
to confidential or secret processes, inventions, discoveries, improvements,
formulae, plans, material, devices or ideas or know-how, whether patentable or
not, with respect to any confidential or secret aspects (including, without
limitation, customers or suppliers) ("Confidential Information") of Impulse
Communications.
Impulse Communications will not at any time after the date of this Agreement,
without ADAR ONE's consent (except as may be required by law), use, divulge,
furnish to or make accessible to anyone any Confidential Information (other than
to its representatives as part of its due diligence or corporate investigation)
with respect to ADAR ONE. The undertakings set forth in the preceding two
paragraphs of this Section 12.3 shall lapse if the Closing takes place as to
ADAR ONE and Impulse Communications, but shall not lapse as to the officers and
directors of ADAR ONE, individually.
Any information, which (i) at or prior to the time of disclosure by either
of Impulse Communications or ADAR ONE was generally available to the public
through no breach of this covenant, (ii) was available to the public on a
non-confidential basis prior to its disclosure by either of Impulse
Communications or ADAR ONE or (iii) was made available to the public from a
third party, provided that such third party did not obtain or disseminate such
information in breach of any legal obligation to Impulse Communications or ADAR
ONE, shall not be deemed Confidential Information for purposes hereof, and the
undertakings in this covenant with respect to Confidential Information shall not
apply thereto.
12.4 Succession and Assignments; Third Party Beneficiaries. This Agreement
may not be assigned (either voluntarily or involuntarily) by any party hereto
without the express written consent of the other party. Any attempted assignment
in violation of this Section shall be void and ineffective for all purposes. In
the event of an assignment permitted by this Section, this Agreement shall be
binding upon the heirs, successors and assigns of the parties hereto. Except as
expressly set forth in this Section, there shall be no third party beneficiaries
of this Agreement.
12.5 Notices. All notices, requests, demands or other communications with
respect to this Agreement shall be in writing and shall be (i) sent by facsimile
transmission, (ii) sent by the United States Postal Service, registered or
certified mail, return receipt requested, or (iii) personally delivered by a
nationally recognized express overnight courier service, charges prepaid, to the
addresses specified in writing by each party.
Any such notice shall, when sent in accordance with the preceding sentence,
be deemed to have been given and received on the earliest of (i) the day
delivered to such address or sent by facsimile transmission, (ii) the fifth
(5th) business day following the date deposited with the United States Postal
Service, or (iii) twenty-four (24) hours after shipment by such courier service.
12.6 Construction. This Agreement shall be construed and enforced in accordance
with the internal laws of the State of Florida without giving effect to the
principles of conflicts of law thereof, except to the extent that the Securities
Act or the Exchange Act applies to the Registration Statements and the Proxy
Statement.
12.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same Agreement.
12.8 No Implied Waiver; Remedies. No failure or delay on the part of the
parties hereto to exercise any right, power or privilege hereunder or under any
instrument executed pursuant hereto shall operate as a waiver, nor shall any
single or partial exercise of any right, power or privilege preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. All rights, powers and privileges granted herein shall be in addition
to other rights and remedies to which the parties may be entitled at law or in
equity.
12.9 Entire Agreement. This Agreement, including the Exhibits and Schedules
attached hereto, sets forth the entire understandings of the parties with
respect to the subject matter hereof, and it incorporates and merges any and all
previous communications, understandings, oral or written, as to the subject
matter hereof, and cannot be amended or changed except in writing, signed by the
parties.
12.10 Headings. The headings of the Sections of this Agreement, where
employed, are for the convenience of reference only and do not form a part
hereof and in no way modify, interpret or construe the meanings of the parties.
12.11 Severability. To the extent that any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted herefrom and
the remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect.
12.12 Public Disclosure. From and after the date hereof through the Closing
Date, ADAR ONE shall not issue a press release or any other public announcement
with respect to the transactions contemplated hereby without the prior consent
of Impulse Communications, which consent shall not be unreasonably withheld or
delayed. It is understood by Impulse Communications that ADAR ONE is required
under the Exchange Act to make prompt disclosure of any material transaction.
THE PARTIES TO THIS AGREEMENT HAVE READ THIS AGREEMENT, HAVE HAD THE
OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL OF THEIR OWN CHOICE, AND
UNDERSTAND EACH OF THE PROVISIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
Adar Alternative One, Inc,
By:____________________________
Its:_____________________________
Impulse Communications, Inc,
By:____________________________
Its:____________________________
