ACQUISITION AGREEMENT AND PLAN OF REVERSE MERGER
DATED
DECEMBER 3, 1999
BY AND BETWEEN
STEREO VISION ENTERTAINMENT, INC.
A NEVADA CORPORATION,
AND
KESTREL EQUITY CORPORATION
AN ARIZONA CORPORATION
ACQUISITION AGREEMENT AND PLAN OF REVERSE MERGER
BY AND BETWEEN
STEREO VISION ENTERTAINMENT, INC.
AND
KESTREL EQUITY CORPORATION
TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS ......................................................1
1.1 Acquiror .........................................................1
1.2 Acquiror's Common Stock ..........................................1
1.3 Acquiror's Financial Statements ..................................1
1.4 Acquiror's Stock Options .........................................2
1.5 Agreement ........................................................2
1.6 Articles of Merger................................................2
1.7 Closing...........................................................2
1.8 Closing Date......................................................2
1.9 Code..............................................................2
1.10 Commission........................................................2
1.11 Dissenting Shares.................................................2
1.12 Dissenting Stockholder............................................2
1.13 Effective Date....................................................2
1.14 Employee Benefit Plan(s)..........................................2
1.15 Encumbrances......................................................2
1.16 Environmental Law.................................................2
1.17 ERISA ...........................................................3
1.18 Exchange Act......................................................3
1.19 Government Communications.........................................3
1.20 Hazardous Substance(s)............................................3
1.21 Intellectual Property.............................................3
1.22 Licenses..........................................................3
1.23 Material Adverse Effect...........................................3
1.24 Merger............................................................3
1.25 NRS ..............................................................3
1.26 Price Per Share...................................................3
1.27 Proxy Statement...................................................3
1.28 Regulatory Action(s)..............................................3
1.29 Securities Act....................................................4
1.30 Subsidiary........................................................4
1.31 Surviving Corporation.............................................4
1.32 Survivor..........................................................4
1.33 Survivor's Common Stock...........................................4
1.34 Survivor's Financial Statements...................................4
1.35 Tax(es)...........................................................4
1.36 Tax Return(s).....................................................4
1.37 ARS...............................................................4
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TABLE OF CONTENTS (CONTINUED)
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ARTICLE 2. THE MERGER........................................................4
2.1 The Merger........................................................5
2.2 Execution of Articles of Merger...................................5
2.3 Effect of the Merger..............................................5
2.4 Certificate of Incorporation......................................5
2.5 Name Change.......................................................5
2.6 Bylaws............................................................5
2.7 Directors.........................................................5
2.8 Officers..........................................................5
2.9 Closing...........................................................6
2.10 Dissenting Shares and Dissenters' Rights
- Survivor's Shareholders ........................................6
2.11 Dissenting Shares and Dissenters' Rights
- Acquiror's Shareholders ........................................6
ARTICLE 3. STATUS OF SURVIVOR SHARES; STATUS
AND CONVERSION OF ACQUIROR SHARES..........................................7
3.1 Survivor's Common Stock ..........................................7
3.2 Acquiror's Common Stock...........................................7
3.3 Fractional Shares ................................................7
3.4 Exchange of Certificates .........................................8
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SURVIVOR .......................8
4.1 Organization and Good Standing of Survivor .......................9
4.2 Articles of Incorporation and Bylaws .............................9
4.3 Corporate Minutes ................................................9
4.4 Qualification ....................................................9
4.5 Capitalization of Survivor........................................9
4.6 Ownership of Stock Options of Survivor............................9
4.7 Subsidiaries and Other Affiliates................................10
4.8 Authority........................................................10
4.9 Survivor's Financial Statements..................................10
4.10 Undisclosed Liabilities..........................................11
4.11 Absence of Certain Changes.......................................11
4.12 Assets...........................................................13
4.13 Intellectual Property............................................13
4.14 Tax Matters......................................................14
4.15 Legal and Regulatory Matters.....................................14
4.16 Employees........................................................15
4.17 Non-Assignable Rights............................................15
4.18 Personnel........................................................15
4.19 ERISA............................................................15
4.20 Notes and Accounts Receivable; Inventories.......................16
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TABLE OF CONTENTS (CONTINUED)
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4.21 Compliance with Environmental Laws ..............................16
4.22 Bank and Brokerage Accounts......................................17
4.23 Contracts........................................................17
4.24 Offer and Sale of Securities.....................................18
4.25 Broker's Fees ...................................................18
4.26 Material Misstatements or Omissions ............................18
4.27 Exhibits ........................................................19
ARTICLE 5. COVENANTS OF SURVIVOR ...........................................19
5.1 Approval of Shareholders ........................................19
5.2 Conduct of Survivor's Business ..................................19
5.3 Access and Information ..........................................19
5.4 Further Efforts ................................................19
5.5 Confidentiality..................................................20
5.6 Financial Information............................................20
5.7 Subsequent Events................................................20
5.8 Public Announcement..............................................20
5.9 No Inconsistent Activities.......................................20
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF ACQUIROR ......................21
6.1 Organization and Good Standing ..................................21
6.2 Certificate of Incorporation and Bylaws .........................21
6.3 Corporate Minutes................................................21
6.4 Qualification....................................................21
6.5 Capitalization of Acquiror.......................................21
6.6 Ownership of Stock Options of Acquiror...........................22
6.7 Subsidiaries and Other Affiliates................................22
6.8 Authority........................................................22
6.9 Broker's Fees....................................................23
6.10 Proxy Statement..................................................23
6.11 Exhibits.........................................................23
ARTICLE 7. COVENANTS OF ACQUIROR ...........................................23
7.1 Further Efforts .................................................23
7.2 Confidentiality .................................................23
7.3 Public Announcement .............................................23
ARTICLE 8. GENERAL CONDITIONS PRECEDENT ....................................24
8.1 Shareholder Approval ............................................24
8.2 No Injunctions ..................................................24
8.3 No Governmental Proceedings .....................................24
8.4 Governmental Approvals ..........................................24
8.5 Dissenter's Rights of Survivor's Stockholders ...................24
8.6 Dissenter's Rights of Acquiror's Stockholders ...................24
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TABLE OF CONTENTS (CONTINUED)
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ARTICLE 9. CONDITIONS PRECEDENT TO ACQUIROR'S OBLIGATION
TO CLOSE .................................................................25
9.1 Due Diligence ......................................................25
9.2 Certificate of Survivor ......................................... ..25
9.3 No Material Adverse Effect .........................................25
9.4 Third Party Consents ...............................................25
9.5 Legal Opinion of Survivor's Counsel ................................25
9.6 Certified Resolutions ..............................................25
9.7 Certificate of Shareholder Approval ................................25
9.8 Letters of Resignation..............................................25
9.9 Proceedings Satisfactory to Counsel.................................25
ARTICLE 10. CONDITIONS PRECEDENT TO SURVIVOR'S OBLIGATION
TO CLOSE .................................................................26
10.1 Certificate of Acquiror ............................................26
10.2 Certified Resolutions ..............................................26
10.3 Legal Opinion of Acquiror's Counsel ................................26
ARTICLE 11. SURVIVAL OF REPRESENTATIONS AND
INDEMNIFICATIONS .........................................................26
11.1 Survival of Representations .....................................26
(a) Survivor's Representations .............................26
(b) Acquiror's Representations .............................26
(c) Agreement to Indemnify .................................26
ARTICLE 12. TERMINATION ....................................................27
12.1 Termination ........................................................28
12.2 Effect of Termination ..............................................28
12.3 Waiver of Conditions ...............................................28
12.4 Payment of Expenses ................................................28
ARTICLE 13. GENERAL ........................................................28
13.1 Amendments .........................................................28
13.2 Assignment .........................................................28
13.3 Notices ............................................................28
13.4 Further Assurances .................................................28
13.5 Remedies Not Exclusive..............................................29
13.6 Entire Agreement....................................................29
13.7 Counterparts........................................................30
13.8 Governing Law.......................................................30
13.9 Resolution of Indemnification Disputes..............................30
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ACQUISITION AGREEMENT AND PLAN OF REVERSE MERGER
------------------------------------------------
THIS ACQUISITION AGREEMENT AND PLAN OF REVERSE MERGER (the "Agreement")
is entered into as of December 3, 1999, by and between STEREO VISION
ENTERTAINMENT, INC., a Nevada Corporation (the "Acquiror"), on the one hand,
with its principal place of business located ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and KESTREL EQUITY CORPORATION, an Arizona
Corporation STEREO VISION ENTERTAINMENT, INC., a Arizona Corporation (the
"Survivor"), with its principal place of business located at 185 West "F"
Street, Seventh Floor, San Diego, California 92101, on the other hand.
WHEREAS, Acquiror is a duly incorporated Nevada corporation with an
authorized capital stock consisting of 25,000 shares of common stock, no par
value per share, of which 25,000 shares are issued and outstanding and options
to purchase an additional 0 shares of common stock are issued and outstanding;
and,
WHEREAS, Survivor is a duly incorporated Arizona corporation with an
authorized capital stock consisting of 100,000,000 shares of common stock,
$.001 par value per share, of which 1,000,000 shares are issued and
outstanding; and
WHEREAS, the respective Boards of Directors of Acquiror and Survivor
have approved the acquisition of Survivor by Acquiror by means of a reverse
merger (the "Merger") of Acquiror with and into Survivor pursuant to the terms
of this Agreement.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by each signatory hereto, intending to
be legally bound, the parties to this Agreement hereby agree as follows:
ARTICLE 1.
DEFINITIONS
As used in this Agreement, the listed terms shall have the following
meanings:
1.1 "Acquiror" has the meaning specified in the recital paragraphs
contained in the preamble to this Agreement.
1.2 "Acquiror's Common Stock" means the common stock of Acquiror, no
par value per share.
1.3 "Acquiror's Financial Statements" means the audited balance sheets
of Acquiror as of October 31, 1999 (the "Acquiror's Financial Statements").
Page 1
1.4 "Acquiror's Stock Options" means all options granted by Acquiror
for the purchase of shares of the capital stock of Acquiror that are outstanding
as of the Closing, including, but not limited to any warrants to purchase shares
of capital stock.
1.5 "Agreement" means this Acquisition Agreement and Plan of Reverse
Merger, including the schedules and exhibits referred to herein.
1.6 "Articles of Merger" refers to the articles of merger to be filed
with the Secretary of State of Arizona and the Secretary of State of Nevada to
evidence the Merger, in the form of Exhibit "1.6" attached hereto.
1.7 "Closing" means the closing of the transactions contemplated in
this Agreement.
1.8 "Closing Date" means the date upon which the Closing occurs.
1.9 "Code" means the Internal Revenue Code of 1986, as amended.
1.10 "Commission" means the United States Securities and Exchange
Commission.
1.11 "Dissenting Shares" means (a) the issued and outstanding shares of
Survivor as to which holders thereof have duly demanded appraisal pursuant to
sections 10-1101 to 10-1106 of the ARS, and (b) the issued and outstanding
shares of Acquiror as to which holders thereof have duly demanded appraisal
pursuant to sections 78.471 to 78.502 of the NRS.
1.12 "Dissenting Stockholder" means a holder of Dissenting Shares.
1.13 "Effective Date" means the date and time the Articles of Merger
are filed with the Secretary of State of the State of Arizona.
1.14 "Employee Benefit Plan(s)" means any `employee benefit plan' as
defined in Section 3(3) of ERISA and any other plan, policy, program, practice
or arrangement providing compensation or other benefits to any current or former
officer or employee of Survivor or any beneficiary or dependent thereof that is
or was maintained by Survivor.
1.15 "Encumbrances" means any mortgage, chattel mortgage, conditional
sales contract, pledge, lien, charge, security interest, encumbrance, option,
lease, license or easement.
1.16 "Environmental Law" means all federal, state, and local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directives, requests, licenses, authorizations,
permits, and agreements issued or signed by any federal, state, or local
government authority, relating to environmental, health, or safety matters,
including but not limited to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980; Clean Water Act of 1977; Clean Air Act;
Resource Conservation and Recovery Act of 1976; Federal Insecticide, Fungicide,
and Rodenticide Act; Toxic Substances Control Act; Emergency Planning and
Community Right-to-Know Act of 1986; Occupational Safety and Health Act of 1970;
and Safe Drinking Water Act, and state and local counterparts to these acts.
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1.17 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.18 "Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
1.19 "Government Communications" means all inspection reports,
complaints and other communications received by Survivor from government and
regulatory agencies and authorities.
1.20 "Hazardous Substance(s)" means (a) any substance, the presence of
which requires investigation or remediation under any Environmental Law or under
common law; (b) any dangerous, toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous
substance which is regulated by any Environmental Law; (c) any substance, the
presence of which causes or threatens to cause a nuisance upon property
presently and/or previously owned, leased or otherwise used by Survivor (or
poses or threatens to pose a hazard to the health or safety of persons on or
about the property or adjacent properties); and (d) radon, ureaformaldehyde,
polychlorinated biphenyls, asbestos or asbestos containing materials, petroleum
and petroleum products.
1.21 "Intellectual Property" has the meaning specified in Section 4.13
of this Agreement.
1.22 "Licenses" means all governmental licenses, permits, approvals and
registrations necessary for the ownership of Survivor's properties and the
conduct of its business as currently conducted.
1.23 "Material Adverse Effect" means any material adverse effect on the
business, assets, properties, operations or condition (financial or otherwise)
of Survivor.
1.24 "Merger" has the meaning specified in the recital paragraphs
contained in the preamble to this Agreement.
1.25 "NRS" means Nevada Revised Statutes.
1.26 "Price Per Share" means the closing bid price of the Surviving
Corporation's Common Stock on the Record Date, as such term is defined in the
proxy Statement.
1.27 "Proxy Statement" means that certain Proxy Statement of Survivor,
describing this transaction, among other things.
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1.28 "Regulatory Action(s)" means any material claim, demand, action or
proceeding brought or instigated by any governmental authority in connection
with any Environmental Law (including without limitation civil, criminal and/or
administrative proceedings), whether or not seeking costs, damages, penalties or
expenses.
1.29 "Securities Act" means the Securities Act of 1933, as amended.
1.30 "Subsidiary" means each of Survivor's subsidiaries, if any.
1.31 "Surviving Corporation" means Survivor as the surviving
corporation subsequent to the Merger.
1.32 "Survivor" has the meaning specified in the recital paragraphs
contained is in the preamble to this Agreement.
1.33 "Survivor's Common Stock" means the shares of common stock of
Survivor, $0.001 par value.
1.34 "Survivor's Financial Statements" means the audited balance sheets
of Survivor as of October 31, 1999, the related statements of operations,
stockholders' equity and cash flows for the three years then ended, including
notes thereto (the "Survivor's Financial Statements").
1.35 "Tax(es)" means all taxes, charges, fees, levies or other
assessments of any nature whatsoever, including, without limitation, all net
income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, withholding, payroll, employment, excise,
estimated, severance, stamp, occupation, property or other taxes, customs,
duties, fees, assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts imposed by
any taxing authority (domestic or foreign) upon the company to which reference
is being made or any affiliate thereof or upon any consolidated, combined or
unitary group of which any such entity is or was a member.
1.36 "Tax Return(s)" means all federal, state, foreign, local and other
tax returns, reports and statements heretofore required to be filed by the
company to which reference is being made or by any consolidated, combined or
unitary group of which such company is or was a member.
1.37 "ARS" means the Arizona Revised Statutes.
ARTICLE 2.
THE MERGER
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2.1 THE MERGER. Subject to the terms and conditions hereof, the Merger
shall be consummated in accordance with the ARS and the applicable provisions of
the NRS as promptly as practicable following the satisfaction or waiver of the
Page 4
conditions set forth in ARTICLES 7, 9, AND 10. At the Effective Date, subject to
the terms and conditions of this Agreement and in accordance with the laws of
the States of Nevada and Arizona, Acquiror shall be merged with and into
Survivor, whereupon the separate existence of Acquiror shall cease and the
Survivor shall be the Surviving Corporation. The Surviving Corporation shall
continue its corporate existence under the laws of the State of Arizona.
From and after the Effective Date, the Surviving Corporation shall
possess all of the rights, privileges, powers, purposes and franchises of a
public as well as a private nature, and be subject to all restrictions,
disabilities and duties of Acquiror and Survivor, all of the foregoing being in
accordance with the applicable provisions of the ARS.
2.2 EXECUTION OF ARTICLES OF MERGER. Prior to the Closing, Acquiror and
Survivor shall complete and execute the Articles of Merger, in substantially the
form attached hereto as EXHIBIT "1.6", and cause the Articles of Merger to be
delivered to the Secretary of State of the States of Nevada and Arizona for
filing as part of the Closing as provided in Section 78.458 of the NRS and
Section 10-1105 of the ARS. The parties hereto will also execute and deliver
such other documents or certificates as may be required to effect the Merger.
2.3 EFFECT OF THE MERGER. The Merger shall have the effects set forth
in applicable provisions of the ARS and the NRS.
2.4 CERTIFICATE OF INCORPORATION. As of the Effective Date, Acquiror
and Survivor shall complete and execute the Amended and Restated Articles of
Incorporation, in substantially the form attached hereto as EXHIBIT "2.4", and
cause the Amended and Restated Articles of Incorporation to be delivered to the
Secretary of State of the State of Arizona for filing as part of the Closing as
provided in Section 10-1105 of the ARS.
2.5 NAME CHANGE. As of the Effective Date, the name of the Surviving
Corporation will be changed to "STEREO VISION ENTERTAINMENT, INC." pursuant to
the Amended and Restated Articles of Incorporation which will be filed with the
Articles of Merger on the Effective Date.
2.6 BYLAWS. As of the Effective Date, the Bylaws, in the form attached
hereto as EXHIBIT "2.6", will be the Bylaws of the Surviving Corporation.
2.7 DIRECTORS. The directors of Survivor immediately prior to the
Effective Date shall resign in favor of those directors named in the Proxy
Statement and specified on EXHIBIT "2.7", which directors, if elected, shall be
the directors of the Surviving Corporation and will hold office from the
Effective Date until their respective successors are duly elected or appointed
and qualified in the manner provided in the Certificate of Incorporation and
Bylaws of the Surviving Corporation, or as otherwise provided by law.
2.8 OFFICERS. The officers of Survivor immediately prior to the
Effective, Date shall resign in favor of those officers named in the Proxy
Statement and specified on EXHIBIT "2.7", which officers shall be the officers
of the Surviving Corporation and will hold office from the Effective Date until
their respective successors are duly elected or appointed and qualified in the
manner provided in the Certificate of Incorporation and Bylaws of the Surviving
Corporation, or as otherwise provided by law.
Page 5
2.9 CLOSING. Unless this Agreement shall have been terminated pursuant
to the provisions of ARTICLE 12, the Closing of the transactions contemplated by
this Agreement shall take place at the offices of Wenthur & Chachas located at
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as soon as
practicable following the satisfaction or waiver of the conditions set forth in
ARTICLES 8, 9 AND 10.
2.10 DISSENTING SHARES AND DISSENTERS' RIGHTS - SURVIVOR'S
SHAREHOLDERS.
(a) Notwithstanding anything in this Agreement to the contrary,
Dissenting Shares shall be entitled to receive such consideration as may be
determined to be due with respect to such Dissenting Shares pursuant to Chapter
13 of the ARS; PROVIDED, HOWEVER, that if such holder shall have failed to
perfect or shall have effectively withdrawn or lost his, her or its right to
appraisal and payment under ARS, such holder's shares of Survivor's Common Stock
shall thereupon be deemed to have been converted into, and to have become
exchangeable for, as of the Effective Date, that number of shares calculated
pursuant to Section 3.1 and such shares shall no longer be Dissenting Shares and
shall be canceled and retired.
(b) Survivor shall give Acquiror prompt notice of any demand
received by Survivor for appraisal of issued and outstanding Survivor's Common
Stock, and Acquiror shall have the right to participate in all negotiations and
proceedings with respect to such demand. Survivor agrees that, except with the
prior written consent of Acquiror, or as required under the ARS, it will not
voluntarily make any payment with respect to, or settle or offer to settle, any
such demand for appraisal. Each Dissenting Shareholder who, pursuant to the
provisions of Chapter 13 of the ARS, becomes entitled to payment of the value of
shares of Survivor's Common Stock, shall receive payment therefor (but only
after the value therefor shall have been agreed upon or finally determined
pursuant to such provisions). In the event of a legal obligation, after the
Effective Date, to deliver the shares into which the Dissenting Shares would be
converted pursuant to Section 3.1 to any Dissenting Shareholder holding
Survivor's Common Stock who shall have failed to make an effective demand for
appraisal or shall have lost his, her or its status as a Dissenting Shareholder
for any other reason, the Surviving Corporation shall issue and deliver, upon
surrender by such Dissenting Shareholder of his, her or its certificate or
certificates representing shares of issued and outstanding Survivor's Common
Stock, the number of shares in the Surviving Corporation to which such
Dissenting Shareholder is then entitled under Section 3.1 of this Agreement.
2.11 DISSENTING SHARES AND DISSENTERS' RIGHTS - ACQUIROR'S
SHAREHOLDERS.
(a) Notwithstanding anything in this Agreement to the contrary,
Dissenting Shares shall be entitled to receive such consideration as may be
determined to be due with respect to such Dissenting Shares pursuant to NRS
78.471 to 78.502, inclusive; PROVIDED, HOWEVER, that if such holder shall have
failed to perfect or shall have effectively withdrawn or lost his, her or its
right to appraisal and payment under NRS, such holder's shares of Acquiror's
Page 6
Common Stock shall thereupon be deemed to have been converted into, and to have
become exchangeable for, as of the Effective Date, that number of shares
calculated pursuant to Section 3.1 and such shares shall no longer be Dissenting
Shares and shall be canceled and retired.
(b) Acquiror shall give Survivor prompt notice of any demand
received by Acquiror for appraisal of issued and outstanding Acquiror's Common
Stock, and Survivor shall have the right to participate in all negotiations and
proceedings with respect to such demand. Acquiror agrees that, except with the
prior written consent of Survivor, or as required under the NRS, it will not
voluntarily make any payment with respect to, or settle or offer to settle, any
such demand for appraisal. Each Dissenting Shareholder who, pursuant to the
provisions of NRS 78.471 to 78.502, becomes entitled to payment of the value of
shares of Acquiror's Common Stock, shall receive payment therefor (but only
after the value therefor shall have been agreed upon or finally determined
pursuant to such provisions). In the event of a legal obligation, after the
Effective Date, to deliver the shares into which the Dissenting Shares would be
converted pursuant to Section 3.1 to any Dissenting Shareholder holding
Acquiror's Common Stock who shall have failed to make an effective demand for
appraisal or shall have lost his, her or its status as a Dissenting Shareholder
for any other reason, the Surviving Corporation shall issue and deliver, upon
surrender by such Dissenting Shareholder of his, her or its certificate or
certificates representing shares of issued and outstanding Acquiror's Common
Stock, the number of shares in the Surviving Corporation to which such
Dissenting Shareholder is then entitled under Section 3.1 of this Agreement.
ARTICLE 3.
STATUS OF SURVIVOR SHARES;
STATUS AND CONVERSION OF ACQUIROR SHARES;
3.1 SURVIVOR'S COMMON STOCK. Immediately prior to the Effective Date
Prior there shall be 1,000,000 shares of Common Stock, $0.001 par value of the
Survivor issued and outstanding.
3.2 ACQUIROR'S COMMON STOCK. Immediately prior to the Effective Date
there shall be 25,000 shares of Common Stock, no par value of the Acquiror
issued and outstanding. By virtue of the Merger and without any action on the
part of the holders thereof, each share of Common Stock of the Acquiror shall be
converted into 120 shares of the common stock of the Surviving Corporation,
which in the aggregate will represent approximately seventy-five percent (75%)
of the post-merger outstanding shares of the common stock of Surviving
Corporation on a fully diluted basis after taking into consideration any
fractional shares for which the holders thereof will receive cash pursuant to
Section 3.3 below. Each current (pre-merger) shareholder of Acquiror shall
receive that number of shares of the Surviving Corporation as are set forth on
EXHIBIT "6.5(a)". Each share of Acquiror's Common Stock held in Acquiror's
treasury, if any, and any authorized but unissued shares, immediately prior to
the Effective Date shall, by virtue of the Merger, be canceled and retired and
cease to exist, without any conversion thereof.
Page 7
3.3 FRACTIONAL SHARES. No fractional shares of the Surviving
Corporation's Common Stock shall be issued in connection with the Merger. In
lieu thereof, each holder of Survivor's Common Stock otherwise entitled to a
fraction of a share of the Surviving Corporation's Common Stock shall receive
from Acquiror an amount of cash equal to the product of (A) the Price Per Share
multiplied by (B) the fraction of a share of Surviving Corporation's Common
Stock to which such holder of Survivor's Common Stock would otherwise be
entitled. No such holder shall be entitled to dividends or other rights in
respect of any such fraction.
3.5 EXCHANGE OF CERTIFICATES. From and after the Effective Date, each
holder of an outstanding certificate which immediately prior to the Effective
Date, represented outstanding shares of the Acquiror's Common Stock shall be
entitled to receive in exchange therefor, upon surrender thereof to ▇▇▇▇▇▇▇▇
Stock Transfer, Inc., the transfer agent of the Surviving Corporation, whose
address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, a certificate or
certificates representing the number of shares of the Surviving Corporation into
which such holder's shares were converted. No holder of a certificate or
certificates which immediately prior to the Effective Date represented shares of
the Acquiror's Common Stock shall be entitled to receive any dividend or other
distribution from the Surviving Corporation until surrender of such holder's
certificate or certificates for a certificate or certificates representing
shares of the Surviving Corporation's Common Stock. Upon such surrender, there
shall be paid to the holder the amount of any dividends or other distributions
(without interest) which theretofore became payable, but which were not paid by
reason of the foregoing, with respect to the number of shares of the Surviving
Corporation's Common Stock represented by the certificates issued upon such
surrender. After the Effective Date, there shall be no further registration of
transfers of the Acquiror's Common Stock. If, after the Effective Date,
certificates representing the Acquiror's Common Stock are presented to the
Surviving Corporation, they shall be canceled and exchanged for a certificate
representing the number of shares of the Surviving Corporation into which such
pre-merger shares in the Acquiror were converted. From and after the Effective
Date, the Surviving Corporation shall, however, be entitled to treat
certificates for shares of the Acquiror's Common Stock which have not yet been
surrendered for exchange as evidencing solely the right to receive the number of
shares of the Surviving Corporation into which such pre-merger shares in the
Acquiror are to be converted, as represented by such certificates,
notwithstanding any failure to surrender such certificates in exchange therefor.
If any certificate for shares of the Surviving Corporation's Common Stock is to
be issued in a name other than that in which the certificate for shares of the
Acquiror's Common Stock surrendered in exchange therefor is registered, it shall
be a condition of such issuance that the person requesting such issuance shall
pay any transfer or other tax required by reason of the issuance of certificates
for such shares of Surviving Corporation's Common Stock in a name other than
that of the registered holder of the certificate surrendered, or shall establish
to the satisfaction of the Surviving Corporation or its agent that such tax has
been paid or is not applicable.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF SURVIVOR
------------------------------------------
Survivor represents and warrants to Acquiror as follows:
Page 8
4.1 ORGANIZATION AND GOOD STANDING OF SURVIVOR; NON-REPORTING PUBLICLY
TRADED STATUS. Survivor and each of the Subsidiaries, if any, is a corporation
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or organization, and each has all
requisite corporate power and authority, and is entitled to carry on its
business as now being conducted and to own, lease and operate its properties.
Survivor and each Subsidiary is duly organized and in good standing as a foreign
corporation authorized to do business in each jurisdiction where the nature of
the business and activities conducted by Survivor and each Subsidiary requires
such qualification.
The Common Stock of the Survivor is currently listed on the Over the
Counter Pink Sheets under the symbol "KSEQ". The Survivior is a non-reporting
public company. It is NOT SUBJECT to the filing and reporting requirements of
the Securities Exchange Act of 1934 and as such DOES NOT FILE any period or
annual reports with the Securities and Exchange Commission.
4.2 ARTICLES OF INCORPORATION AND BYLAWS. Survivor has delivered to
Acquiror true, correct and complete copies of its Articles of Incorporation
(certified by the Secretary of State of Arizona) and Bylaws (certified by its
corporate secretary) together with all amendments to each through the date
hereof. Both the Articles of Incorporation and the Bylaws are in full force and
effect. Copies are attached hereto as EXHIBIT "4.2(a)" AND "4.2(b)",
respectively.
4.3 CORPORATE MINUTES. Survivor has made available to Acquiror true,
correct and complete copies of its minute books, stock certificate books and
corporate records; such books and records reflect all issuances of equity and
debt securities of Survivor or rights to acquire any such securities, and
contain true and complete records of all meetings and consents in lieu of
meetings of Survivor's Board of Directors (and any committees thereof) and
shareholders.
4.4 QUALIFICATION. Survivor is qualified to do business and is in good
standing in each jurisdiction where the character or location of property owned
and leased, the employment of personnel or the nature of the business and
activities conducted by Survivor, requires such qualification, licensing or
domestication. Survivor does not file franchise, income or other tax returns in
any jurisdiction based upon the ownership or use of property therein or the
derivation of income therefrom.
4.5 CAPITALIZATION OF SURVIVOR. As of the date of this Agreement, the
authorized capital stock of Survivor consists of: 100,000,000 shares of
Survivor's Common Stock, of which 1,000,000 shares are issued and outstanding
and no shares of which are held in Survivor's treasury. All issued and
outstanding shares of Common Stock of Survivor have been duly authorized and are
validly issued, fully paid and non-assessable and are not subject to, nor were
any issued in violation of its Articles of Incorporation. There are not
presently and, as of the Closing, there will not be any outstanding securities
of Survivor or options, warrants, subscriptions, convertible debentures or other
rights, commitments or any other similar agreements for the purchase of any
securities of Survivor. Survivor is not a party to, nor has knowledge that any
of its shareholders are parties to, any voting trust agreements or other
contracts, agreements or arrangements restricting voting rights or
transferability with respect to the outstanding Common Stock of Survivor.
Page 9
4.6 OWNERSHIP OF STOCK OPTIONS OF SURVIVOR. There are not presently
and, as of the Closing, there will not be any outstanding securities of Survivor
or options, warrants, subscriptions, convertible debentures or other rights,
commitments or any other similar agreements for the purchase of any securities
of Survivor.
4.7 SUBSIDIARIES AND OTHER AFFILIATES. Survivor does not have any
subsidiaries, and, does not own, either directly or indirectly, any interest or
investment, whether debt or equity (other than an interest as a creditor holding
a trade account receivable), or any obligation, option or right to acquire any
interest, direct or indirect, in any other corporation or other entity.
4.8 AUTHORITY.
(a) Survivor has the necessary corporate power and authority to
enter into and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated herein
by Survivor have been duly authorized by the Board of Directors of Survivor in
accordance with applicable law. After the requisite approval of the shareholders
of Survivor is obtained, no further action will be necessary on the part of
Survivor to make this Agreement valid and binding upon Survivor in accordance
with its terms. This Agreement has been duly and validly authorized, executed
and delivered by Survivor and this Agreement (assuming due authorization,
execution and delivery by the other parties hereto) constitutes the legal, valid
and binding obligation of Survivor, enforceable in accordance with its terms
(except as such enforcement may be limited by applicable bankruptcy, insolvency,
moratorium or similar laws affecting the rights of creditors generally or by
general principles of equity). Neither the execution, delivery or performance of
this Agreement by Survivor, nor the consummation of the transactions
contemplated hereby, nor compliance by Survivor with the terms and provisions of
this Agreement, or the Articles of Merger will result in a violation or breach
of any term or provision of Survivor's Articles of Incorporation or Bylaws, or
of any statute, rule or regulation applicable to Survivor, or its businesses,
properties, assets or personnel, nor conflict with or constitute a violation or
breach of, or a default under (or an event which, with the passage of time or
the giving of notice, or both, would constitute a default under), nor give any
party a right to accelerate the due date of any indebtedness or obligation
under, any indenture, mortgage, deed of trust, contract or agreement to which
Survivor is a party or to which its properties or assets are subject, or any
instrument, judgment, decree, writ, or other restriction to which Survivor is a
party or by which Survivor or its businesses, properties, assets or personnel
are bound.
(b) Except for (i) filing the Articles of Merger with the
Secretary of State of Arizona, (ii) obtaining the consent of its shareholders,
and (iii) obtaining any necessary third-party consents which will been obtained
prior to the Closing, Survivor is not required to submit any notice, report or
other filing with any federal, state or local governmental authority in
connection with the execution or delivery or performance by Survivor of this
Agreement or the consummation of the transactions contemplated herein.
Page 10
4.9 SURVIVOR'S FINANCIAL STATEMENTS. Survivor has delivered to Acquiror
true, complete and correct copies of Survivor's Financial Statements. Except as
set forth on EXHIBIT "4.9", Survivor's Financial Statements (i) present fairly
the financial condition of Survivor at such dates and the results of its
operations, changes in shareholders' equity and cash flows for the periods
therein specified, and (ii) have been prepared from the books and records of
Survivor in accordance with generally accepted accounting principles,
consistently applied and maintained throughout the periods indicated, except as
otherwise stated or referred to in such Survivor's Financial Statements.
4.10 NO UNDISCLOSED LIABILITIES. Survivor does not have any direct or
indirect indebtedness, liability, loss or obligation, accrued, absolute or
contingent whether or not of a kind required by generally accepted accounting
principles to be set forth on a balance sheet (the "Survivor Liabilities").
4.11 ABSENCE OF CERTAIN CHANGES. Except as set forth on EXHIBIT "4.11"
since October 31, 1999, Survivor has conducted its business only in the ordinary
course and consistent with prior practice, and Survivor has not:
(a) discharged or satisfied any lien, charge or encumbrance other
than those then required to be discharged or satisfied, or paid any obligation
or liability, absolute, accrued, contingent or otherwise, whether due or to
become due, other than current liabilities shown on Survivor's Financial
Statements and current liabilities incurred since October 31, 1999, in the
ordinary course of business and consistent with prior practice;
(b) declared or made any payment of any dividend, or made any
other distribution upon or in respect of any of its shares of capital stock, or
purchased, retired or redeemed any of the shares of its capital stock or any
other securities, including any warrants or options to purchase any capital
stock, or obligated itself to do any of the foregoing;
(c) mortgaged, pledged or subjected (or permitted to be subjected)
to lien, charge, security interest or any other encumbrance or restriction any
of its property, business or assets, tangible or intangible;
(d) sold, transferred, leased to others or otherwise disposed of
any of its assets (other than inventory sold in the ordinary course of business
and consistent with prior practice) or canceled or compromised any debt or
claim, or waived or released any claim or right of substantial value;
(e) terminated or received any notice of termination of any
contract, lease or other agreement or suffered any damage, destruction or loss
(whether or not covered by insurance) which, individually or in the aggregate,
has had or might have a Material Adverse Effect;
(f) encountered any labor union organizing activity, had any
actual or threatened employee strikes, work stoppages, slowdowns or lockouts, or
had any material change in its relations with its employees, agents,
distributors, formulators, customers or suppliers;
Page 11
(g) transferred or granted any rights under, or entered into any
settlement regarding the breach or infringement of, or entered into any
agreement or commitment relating to, any license, patent, copyright, trademark,
trade name, permit, consent, approval, invention, product registration or
similar rights, domestic or foreign, or modified any existing rights with
respect thereto;
(h) adopted, entered into or amended any Employee Benefit Plan or
made any change in the actuarial methods or assumptions used in funding or
determining benefit equivalencies thereunder, made any change in the rate of
compensation, commission, bonus, deferred compensation arrangement or other
direct or indirect remuneration payable, or paid or agreed or orally promised to
pay, conditionally or otherwise, any bonus (cash or non-cash), extra
compensation, deferred compensation arrangement or severance or vacation pay, to
any shareholder, director, officer, employee, salesman or distributor of
Survivor or any Subsidiary or hired or entered into any employment agreement or
arrangement with any person;
(i) issued or sold any shares of its capital stock or other
securities, or issued, granted or sold any options, rights or warrants with
respect thereto, or acquired any capital stock or other securities of any
corporation, business or entity, or any interest in any business enterprise or
otherwise made any loan or advance to or investment in any person, entity, firm
or corporation, except for short-term investments in cash and cash equivalents
made in the ordinary course of business and consistent with prior practice;
(j) made any capital expenditures or capital additions or
betterments or commitments therefor in excess of $1,000 individually or $2,000
in the aggregate;
(k) instituted, settled or agreed to settle, or suffered any
adverse determination in, any litigation, action or proceeding before any court
or governmental body (domestic or foreign) relating to Survivor or its
businesses, assets or properties.
(1) made any change in the type, nature, composition or quality of
the inventory of its products in its warehouse or delivered to its distributors
or customers except in the ordinary course of business and consistent with prior
practice, failed to replenish such inventory in a normal and customary manner
consistent with its prior practice and prudent business practices prevailing in
the industry or made any purchase commitment with any supplier, distributor or
customer in excess of the normal, ordinary and usual requirements of its
business or at any price in excess of the then current market price, or upon
terms and conditions more onerous than those usual and customary in the
industry, accepted any contract for performance of services or orders from any
customer under conditions relating to price, terms of payment, time of delivery
or performance or like matters differing from the conditions regularly and
usually specified on acceptance of contract or orders for similar services or
merchandise from customers who are similarly situated, or made any change in its
selling, pricing, advertising or personnel practices, inconsistent with its
prior practices and prudent business practices prevailing in the industry;
Page 12
(m) revalued any of its assets or written off as uncollectible any
notes or accounts receivable, except write-downs and write-offs in the ordinary
course of business, none of which, individually or in the aggregate, is material
to Survivor or its businesses;
(n) entered into any agreement or made any commitment to take any
of the actions described in paragraphs (a) through (m) above; or
(o) experienced any Material Adverse Effect.
4.12 ASSETS.
(a) Survivor has good and marketable title to, or a valid
leasehold interest in, or other legal right to use, all of the properties and
assets owned or used in its business or purports to own, except inventory sold
after October 31, 1999, in the ordinary course of business. None of such assets
or properties are subject to any Encumbrance, except (i) liens and encumbrances
and leases incurred or made in the ordinary course of business which are not
substantial in character, amount or extent and do not materially impair the
usefulness of such properties and assets in the conduct of the business of
Survivor; (ii) liens for taxes, assessments or other governmental charges or
levies which are either not yet delinquent or are being contested in good faith
and by appropriate proceedings, can be paid without penalty and which do not
materially impair the usefulness of such properties and assets in the conduct of
the business of Survivor; and (iii) as reflected on Survivor's Financial
Statements.
(b) Survivor has previously delivered to Acquiror a complete list,
which is true and correct in all material respects, of all machinery, tools,
equipment, motor vehicles, rolling stock and other tangible personal property
owned, leased or used by Survivor, except for items having a cost less than $500
and which are not required to be capitalized in accordance with generally
accepted accounting principles.
(c) Survivor does not currently own, lease or use any real
property because either (i) all such property has been previously transferred to
third parties or, (ii) with respect to any real estate lease, it has expired
pursuant to its terms with no additional liability to Survivor.
4.13 INTELLECTUAL PROPERTY. EXHIBIT "4.13" sets forth all patents,
trademarks, service marks, trade names, copyrights and franchises, all
applications for any of the foregoing, if any, and all permits, grants and
licenses or other rights running to or from Survivor relating to any of the
foregoing that are material to the business of Survivor, as applicable
(collectively, the "Intellectual Property"). Survivor owns, or is licensed to,
or otherwise has, the right to use the Intellectual Property that is required
for the conduct of the business of Survivor. To the best of Survivor's
knowledge, Survivor is not in violation of, or infringing upon, any patent,
trademark, service ▇▇▇▇, trade name, copyright or franchise of any third party,
and no claims have been asserted, nor is there any litigation pending or
Page 13
threatened claiming such infringement. Survivor has not licensed or encumbered
any of its Intellectual Property to any third party, nor have any other
distribution rights been granted by Survivor to a third party. Survivor has not
entered into any other agreements whereby Survivor has been appointed as a
distributor or licensee of any products, patents or trademarks owned by a third
party. Survivor has not entered into any agreement which restricts or affects
the use of any Intellectual Property. Survivor is not in breach of any
agreement, nor have any claims with respect to any agreement been asserted nor
is there any litigation pending or threatened claiming any such breach, nor have
any claims been asserted that any of the terms and conditions of such agreements
violate the laws of any jurisdiction or treaty. Survivor owns or has licensed
from third parties, and has the right to use, any and all necessary Intellectual
Property in order to conduct its business in all material respects as currently
conducted and has used reasonable efforts to protect its rights in and to
maintain the secrecy of its trade secrets and other proprietary rights and
information.
4.14 TAX MATTERS. Survivor and each other corporation (or a
predecessor) that has at any time been a member of a consolidated, combined or
unitary group of which Survivor is or was a member, including all Subsidiaries
(the 'Tax Affiliates') have timely and correctly filed or caused to be filed all
Tax Returns. All Taxes payable in respect of such Tax Returns have been or will
be by Closing paid in full. Survivor and the Tax Affiliates have no current
extensions for the filing of any Tax Returns. Adequate provisions have been made
for the payment of all accrued and unpaid Taxes as of the date thereof, whether
or not then due and payable and whether or not disputed, except as may be set
forth in explanatory notes thereto. The Tax Returns of or relating to Survivor
and the Tax Affiliates have not been examined (nor are they currently in the
process of being examined), by the Internal Revenue Service or any other tax
authority for any of the past six (6) years, and such Tax Returns constitute a
complete and accurate representation of the Tax liabilities of Survivor, the Tax
Affiliates and any combined, consolidated or unitary group of which Survivor is
or was a member.
4.15 LEGAL AND REGULATORY MATTERS.
(a) there is no criminal or civil claim, suit, action,
arbitration, governmental investigation or other proceeding, nor any order,
decree or judgment pending or in effect, or threatened by, against or relating
to Survivor, any Subsidiary, any officer or director of Survivor, or any of
their properties, or the transactions contemplated hereby;
(b) there are no judgments, decrees or orders enjoining Survivor
or any Subsidiary in respect of, or the effect of which is to prohibit any
business practice or the acquisition of any property or the conduct of any
aspect of the business of Survivor or any Subsidiary;
(c) Survivor and each Subsidiary has complied and is complying
with all laws, ordinances, treaties and governmental rules, orders and
regulations applicable to it or its proper-ties, assets, personnel or business,
non-compliance with which could have a Material Adverse Effect;
Page 14
(d) Survivor and each Subsidiary has obtained all Licenses
necessary for the ownership of its properties and the conduct of their
respective businesses as currently conducted, and all such Licenses are
currently in full force and effect; and
(e) Survivor has provided Acquiror with access to all Government
Communications and has delivered to Acquiror a true and complete copy of all
Government Communications received by Survivor or any Subsidiary since the
incorporation of Survivor or any Subsidiary, as applicable.
4.16 EMPLOYEES.
(a) Survivor has not been nor is it a party to any collective
bargaining agreements with respect to any of its employees or with respect to
any contract or agreement with a labor union or any local or subdivision
thereof, nor has it been charged with any unresolved unfair labor practices, nor
is there any present union organizing activity among any of its employees. There
are no material controversies, claims, suits, actions or proceedings pending or
threatened between Survivor and its respective employees. Survivor has complied
in all material respects with all laws and regulations relating to the
employment of labor, including and without limitation any provisions thereof
relating to wages, hours, employment practices, terms and conditions of
employment, collective bargaining, equal opportunity or similar laws and the
payment of social security and similar taxes, and is not liable for, any arrears
of wages or any taxes or penalties for failure to comply with any of the
foregoing.
(b) Survivor has no existing pension, stock option, bonus,
deferred compensation, profit-sharing or other plans with respect to its
employees in a fashion which results in any continuing liability with respect to
the Surviving Corporation.
4.17 NON-ASSIGNABLE RIGHTS. Neither the execution, delivery or
performance of this Agreement by Survivor nor the consummation of the
transactions contemplated hereby will (a) conflict with or result in a breach or
termination of, or prevent Survivor from realizing the benefits otherwise
obtainable by Survivor under, any permits or property interests of Survivor or
any contract, agreement, arrangement or commitment of Survivor or (b) require
the affirmative consent or approval of any third party (other than Survivor's
Shareholders as contemplated by Section 8.1 hereof).
4.18 PERSONNEL.
(a) Survivor has separately delivered to Acquiror the names and
addresses of all directors, officers and employees of Survivor, indicating (i)
the positions within Survivor held by each such person and (ii) the current
annual salary rates for each such person and the amounts payable as bonus or
other compensation for each such person.
Page 15
(b) Survivor has separately delivered to Acquiror a description of
all severance or other benefits that would be payable to any employee of
Survivor if his or her employment were terminated.
(c) The names and addresses of all officers, directors and
employees of Survivor furnished to Acquiror prior to the date of this Agreement,
are still current and accurately reflect the status of the officers, directors
and employees of the Survivor as of the date hereof.
4.19 ERISA. Survivor does not maintain or make contributions to and has
not at any time in the past maintained or made contributions to any Employee
Benefit Plan that is subject to the minimum funding standards of ERISA, or any
similar applicable law or regulation (domestic or foreign). Survivor does not
maintain or make contributions to and has not at any time in the past maintained
or made contributions to any multi-employer plan subject to the terms of the
Multi-Employer Pension Plan Amendment Act of 1980. Survivor does not have any
affiliates for purposes of ERISA.
4.20 NOTES AND ACCOUNTS RECEIVABLE; INVENTORIES.
(a) All notes and accounts receivable of Survivor reflected on the
Survivor's Balance Sheet as of October 31, 1999, have been collected or are
collectible in the amounts shown when due without offset or counterclaim in the
aggregate face amount thereof net of any reserves therefor reflected thereon and
all such accounts receivable shall have arisen only from bona fide transactions
in the ordinary course of business. The notes and accounts receivable of
Survivor which have arisen since October 31, 1999, have been collected or are
collectible when due without offset or counterclaim in the aggregate face amount
thereof, except to the extent of the normal reserves for accounts receivable
computed as a percentage of sales consistent with prior practice and generally
accepted accounting principles consistently applied and all such accounts
receivable shall have arisen only from bona fide transactions in the ordinary
course of business.
(b) Based on Survivor's best estimates and past experience and
consistent with its prevailing practices and policies (which practices and
policies are in accordance with generally accepted accounting principles), the
inventories shown on Survivor's Balance Sheet as of October 31, 1999, consist of
items of a quality and quantity usable or saleable in the normal course of its
business and in conformity with all applicable laws and regulations, and the
value of all obsolete materials or materials of below standard quality have been
written down to realizable market value or reserves which, in the aggregate, are
adequate have been provided therefor; and the value at which the inventories are
reflected on Survivor's Balance Sheet as of October 31, 1999, reflects its
normal inventory valuation policy of stating inventories at the lower of cost
(on a first-in, first-out basis) or fair market value. All inventories acquired
by Survivor since October 31, 1999, consist of items of a quality and quantity
usable or saleable in the normal course of its business and are in conformity
with all applicable laws and regulations.
Page 16
4.21 COMPLIANCE WITH ENVIRONMENTAL LAW.
(a) Survivor and all its operations are and have been in
compliance with all Environmental Laws as currently in effect;
(b) Neither Survivor nor any of its or predecessors used, released
or disposed of any Hazardous Substance in any manner that could reasonably be
expected to result in material liability;
(c) None of the property ever owned, leased or operated by
Survivor is contaminated by any Hazardous Substance;
(d) None of the property ever owned, leased or operated by
Survivor is affected by any condition that could reasonably be expected to
result in liability under any Environmental Law as currently in effect; and
(e) There is and has been no condition, activity or event
respecting Survivor or any of the properties ever owned, leased or operated by
any of them that could reasonably be expected to subject Survivor to any
material liability under any Environmental Law as currently in effect.
4.22 BANK AND BROKERAGE ACCOUNTS. EXHIBIT "4.22" lists (a) the names
and addresses of all banks and brokerage firms in which Survivor has accounts
or safe deposit boxes, lock boxes, vaults and the account numbers relating
thereto, (b) the name of each person authorized to draw on any such account or
have access to any such boxes or vaults and (c) the names of all persons, if
any, holding tax or other powers of attorney from Survivor and a summary of
the terms thereof.
4.23 CONTRACTS.
(a) Survivor is not a party to any:
(i) contract, agreement or commitment for the employment or
retention of, or collective bargaining, severance or termination agreement with,
any of its directors, officers, employees, consultants or agents or groups of
employees;
(ii) profit sharing, thrift, bonus, incentive, deferred plan
compensation, stock option, stock purchase, severance pay, pension, retirement,
hospitalization, insurance or other employee benefit plan,and agreement or
arrangement;
(iii) agreement or arrangement for the sale of any of its
assets, property or rights outside the ordinary course of business consistent
with prior practice (other than this Agreement);
(iv) contract that contains any provisions requiring Survivor
to indemnify or act as a indemnitor, guarantor, surety, co-signer, co-maker or
endorser for any other person or entity including, without limitation, any
contract which request the indemnification of such party to which Survivor or
its respective personnel provide services;
Page 17
(v) agreement restricting Survivor from conducting business
anywhere in the world;
(vi) agreement, note, debenture, loan, mortgage, to indenture
or other obligation for or relating to borrowed money or commitments for
obtaining borrowed money;
(vii) contract, lease or commitment which involves the future
payment by or to it of more than $1,000, with the exception of the commitment of
Survivor under the Letter Agreement;
(viii) letter of credit or power of attorney;
(ix) joint venture contract or similar arrangement or to
agreement which is likely to involve future payments by it; or
(x) personal service, licensing, distributor, supplier,
dealer, franchise, advertising, sales or manufacturer's representative, agency
or other similar contract, arrangement or commitment; or
(xi) agreement to which any shareholder, officer or director
of Survivor or any "affiliate" or "associate" of such persons (as such terms are
defined in the rules and regulations promulgated under the Securities Act), is
presently a party, including, without limitation, any agreement or other
arrangement providing for the furnishing of services by, rental of real or
personal property from, or otherwise requiring payments to, any such person or
entity.
(b) All agreements, contracts, plans, instruments, arrangements
and commitments to which the Survivor is a party to, is valid and binding,
enforceable in accordance with their respective terms and in full force and
effect, and the continuation, validity and effectiveness of such items will in
no way be affected by the consummation of the transactions contemplated by this
Agreement. Neither Survivor or any other party thereto, is in breach of any
provision of or in default under any term of any such agreement, and there
exists no condition or event which after lapse of time or notice (or both) would
constitute any such breach or default or result in any right to accelerate or
loss of rights. True and complete copies of all such agreements, contracts,
plans, instruments, arrangements and commitments have been delivered to
Acquiror.
4.24 OFFER AND SALE OF SECURITIES. (a) All shares of capital stock of
Survivor, (b) all interests in any properties, and (c) all interests in any
trust or partnership with which Survivor has been affiliated, have been offered
and sold in compliance with all applicable federal and state laws, rules and
regulations.
Page 18
4.25 BROKER'S FEES. There are no other broker's or finder's fees or
obligations due to persons engaged by Survivor or any of its employees, officers
or directors in connection with the transactions contemplated by this Agreement,
except for fees and expenses of its counsel and accountants.
4.26 MATERIAL MISSTATEMENTS OR OMISSIONS. The statements,
representations and warranties of Survivor contained in this Agreement
(including the schedules hereto), in the Proxy Statement and in each document,
statement, certificate or exhibit furnished or to be furnished by or on behalf
of Survivor pursuant hereto, or in connection with the transactions contemplated
hereby, taken together, do not contain and will not contain any untrue statement
of a material fact and do not or will not omit to state a material fact
necessary to make the statements or facts contained herein or therein, in light
of the circumstances made, not misleading.
4.27 EXHIBITS. If any fact or matter is disclosed by Survivor on any
Exhibit to this Agreement, it shall be deemed disclosed for purposes of all
representations contained herein.
ARTICLE 5.
COVENANTS OF SURVIVOR
---------------------
Survivor hereby covenants and agrees as follows:
5.1 APPROVAL OF SHAREHOLDERS. As promptly as is practicable following
the execution of this Agreement, Survivor shall submit this Agreement to its
shareholders and duly call and give notice of a meeting for the purpose of
voting on the adoption and approval of this Agreement and the consummation of
the transactions contemplated hereby. The Board of Directors of Survivor shall
recommend adoption and approval of this Agreement and the consummation of the
transaction contemplated hereby.
5.2 CONDUCT OF SURVIVOR'S BUSINESS. From and after the date of this
Agreement to and including the Effective Date, Survivor shall (a) not enter into
any agreement or make any commitment to take any of the actions set forth in
Section 4.11 (a) THROUGH (o), inclusive, of this Agreement; (b) not become a
party to commit to enter into any of the types of contracts, agreements,
arrangements or commitments set forth in Section 4.23 of this Agreement, (c) not
amend, terminate or change in any material respect any contract and will not
knowingly do any act or omit to do any act, or permit an act or omission to act,
that will cause it to breach any such contract; and (d) not amend its
Certificate of Incorporation or Bylaws.
5.3 ACCESS AND INFORMATION. Subject to the terms of the Confidentiality
Agreement, Survivor will grant unrestricted access to Acquiror and its legal
counsel, accountants and other representatives, during reasonable working hours
throughout the period from the date hereof to the Closing and upon reasonable
prior notice, to all of Survivor's properties, books, contracts, commitments and
records, and will furnish Acquiror during such period with access to key
Survivor employees and to all such information concerning the affairs of
Survivor as Acquiror reasonably requests, including copies and/or extracts of
Page 19
pertinent records, documents and contracts. Survivor will cause its accountants
to furnish to Acquiror during such period any and all of their statements,
working papers and other records and data as Acquiror reasonably may request. No
investigation by Acquiror or its counsel, accountants and other representatives
as contemplated by this Section 5.3 shall affect any representation or warranty
given by Survivor under this Agreement.
5.4 FURTHER EFFORTS.
(a) Survivor agrees to use diligent effort and take all actions
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the Merger and
the other transactions contemplated hereby in accordance with the terms of this
Agreement. In case at any time any further action is necessary or desirable to
carry out the purposes of this Agreement, Survivor will use diligent efforts to
effectuate all such action.
(b) As soon as reasonably practicable after the date hereof, and in
any event on or prior to the Closing Date, Survivor will use diligent efforts to
obtain the consents of all necessary governmental entities and other persons to
the Merger and the continued operation by Survivor of its business, properties,
assets, leaseholds, licenses, contracts and agreements.
5.5 CONFIDENTIALITY. In the event of the termination of this Agreement,
Survivor and its representatives shall keep all information with respect to
Acquiror which has been disclosed to Survivor pursuant to this Agreement
confidential in accordance with the terms of the Letter Agreement and shall
promptly return to Acquiror all written information provided to Survivor by
Acquiror.
5.6 FINANCIAL INFORMATION. From and after the date hereof and until the
Closing, Survivor will deliver to Acquiror as soon as practicable and in any
event within thirty (30) days after the end of each quarter, a copy of
Survivor's unaudited internal financial statements.
5.7 SUBSEQUENT EVENTS. Survivor shall promptly, and in any event prior
to the Closing, advise Acquiror in writing of the occurrence of any material
event or the existence of any state of facts which would render any
representation or warranty of Survivor hereunder inaccurate or which would
preclude satisfaction of any condition contained in ARTICLE 7 or ARTICLE 9 of
this Agreement; provided, that no such notification shall affect any such
representation, warranty or condition.
5.8 PUBLIC ANNOUNCEMENT. Except as provided below, so long as this
Agreement is in effect, Survivor shall not, and shall not cause its affiliates
and representatives to issue or cause the publication of any press release or
any other public announcement (including, without limitation, disclosure to
employees) with respect to the Merger or any other transaction contemplated by
this Agreement without the prior review and written consent of Acquiror.
Page 20
5.9 NO INCONSISTENT ACTIVITIES. For a period of one hundred twenty
(120) days after the date of this Agreement, neither Survivor nor any of their
respective directors, officers, employees, representatives or agents shall,
directly or indirectly, solicit or initiate discussions or negotiations with, or
provide any information to, any corporation, partnership, person or other entity
or group (other than Acquiror or an officer or authorized representative of
Acquiror) concerning any tender offer, merger, sale of substantial assets, sale
of shares of capital stock or similar transaction involving Survivor (any such
transaction being referred to herein as an "Acquisition Transaction"), or
participate in any negotiation regarding any Acquisition Transaction or
otherwise cooperate in any way with or encourage any effort or attempt by any
other person to effectuate an Acquisition Transaction. Survivor will promptly
communicate to Acquiror the terms of any proposal they may receive from any
other party in respect of any Acquisition Transaction.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
------------------------------------------
Acquiror hereby represents and warrants to Survivor as follows:
6.1 ORGANIZATION AND GOOD STANDING. Acquiror is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and has all requisite corporate power and authority and is entitled to
carry on its business as now being conducted and to own, lease and operate its
properties. Acquiror is duly organized and in good standing as a foreign
corporation authorized to do business in each jurisdiction where the nature of
the business and activities conducted by Acquiror requires such qualification.
6.2 CERTIFICATE OF INCORPORATION AND BYLAWS. Acquiror has delivered to
Survivor true, correct and complete copies of its Certificate of Incorporation
(certified by the Secretary of State of Nevada) and Bylaws (certified by its
corporate secretary) together with all amendments to each through the date
hereof. Both the Certificate of Incorporation and the Bylaws are in full force
and effect. Copies are attached hereto as EXHIBIT "6.2(a)" and EXHIBIT "6.2(b)",
respectively.
6.3 CORPORATE MINUTES. Acquiror has made available to Survivor true,
correct and complete copies of its minute books, stock certificate books and
corporate records; such books and records reflect all issuances of equity and
debt securities of Survivor or rights to acquire any such securities, and
contain true and complete records of all meetings and consents in lieu of
meetings of Acquiror's Board of Directors (and any committees thereof) and
shareholders.
6.4 QUALIFICATION. Acquiror is qualified to do business and is in good
standing in each jurisdiction where the character or location of property owned
and leased, the employment of personnel or the nature of the business and
activities conducted by Acquiror, as the case may be, requires such
qualification, licensing or domestication. Acquiror does not file franchise,
income or other tax returns in any jurisdiction based upon the ownership or use
of property therein or the derivation of income therefrom.
Page 21
6.5 CAPITALIZATION OF ACQUIROR. As of the date of this Agreement, the
authorized capital stock of Acquiror consists of 25,000 shares of Acquiror's
Common Stock, no par value each, of which 25,000 shares are issued and
outstanding. There are no issued or outstanding options, warrants or other
instruments entitling anyone to acquire any additional shares of common stock of
Acquiror. No shares are held in Acquiror's treasury. As of the date of this
Agreement and as of the Closing Date, the stockholders specified on EXHIBIT
"6.5", hold all of the issued and outstanding Common Stock of Acquiror. All
issued and outstanding shares of Acquiror's Common Stock have been duly
authorized and are validly issued, fully paid and nonassessable. The rights,
powers, preferences and relative participating, optional or other special
rights, qualifications, limitations or restrictions applicable to Acquiror's
Common Stock are as set forth in Acquiror's Certificate of Incorporation. There
are not presently and as of the Closing, there will not be any outstanding
options, warrants, subscriptions, convertible debentures or other rights,
commitments or any other similar agreements for the purchase of any securities
of Acquiror. Acquiror is not a party to, nor has knowledge that any of its
shareholders are parties to, any voting trust agreements or other contracts,
agreements or arrangements restricting voting rights or transferability with
respect to the outstanding Common Stock of Acquiror.
6.6 OWNERSHIP OF STOCK OPTIONS OF ACQUIROR. As of the date of this
Agreement and as of the Closing Date, there are not and there will not be any
outstanding options, warrants, subscriptions, convertible debentures or other
rights, commitments or any other similar agreements for the purchase of any
securities of Acquiror.
6.7 SUBSIDIARIES AND OTHER AFFILIATES. Acquiror does not have any
subsidiaries, and does not own, either directly or indirectly, any interest or
investment, whether debt or equity (other than an interest as a creditor holding
a trade account receivable), or any obligation, option or right to acquire any
interest, direct or indirect, in any other corporation or other entity (other
than hereunder).
6.8 AUTHORITY.
(a) Acquiror has the necessary corporate power and authority to
enter into and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
by Acquiror have been duly authorized by the Board of Directors of Acquiror in
accordance with applicable law (see EXHIBIT "6.8"). After the requisite approval
of the stockholders of Acquiror is obtained, no further action will be necessary
on the part of Acquiror to make this Agreement valid and binding upon Acquiror
in accordance with its terms. This Agreement has been duly and validly
authorized, executed and delivered by Acquiror and this Agreement (assuming due
authorization, execution and delivery by the other parties hereto) constitutes
the legal, valid and binding obligation of Acquiror, enforceable in accordance
with its terms (except as such enforcement may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws affecting the rights of
creditors generally or by general principles of the equity). Neither the
Page 22
execution, delivery or performance of this Agreement by Acquiror, nor the
consummation of the transactions contemplated hereby, nor compliance by Acquiror
with the terms and provisions of this Agreement, or the Articles of Merger will
result in a violation or breach of any term or provision of Acquiror's
Certificate of Incorporation or Bylaws, or of any statute, rule or regulation
applicable to Acquiror or its businesses, properties, assets or personnel, nor
conflict with or constitute a violation or breach of, or a default under (or an
event which, with the passage of time or the giving of notice, or both, would
constitute a default under), nor give any party a right to accelerate the due
date of any indebtedness or obligation under, any indenture, mortgage, deed of
trust, contract or agreement to which Acquiror is a party or to which its
properties or assets are subject, or any instrument, judgment, decree, writ, or
other restriction to which Acquiror is a party or by which Acquiror or its
businesses, properties, assets or personnel are bound.
(b) Except for (i) filing the Articles of Merger with the
Secretary of State of Nevada, (ii) obtaining the consent of its stockholders,
and (iii) obtaining any necessary third party consents, Acquiror is not required
to submit any notice, report or other filing with any federal, state or local
governmental authority in connection with the execution or delivery or
performance by Acquiror of this Agreement or the consummation of the
transactions contemplated herein.
6.9 BROKER'S FEES. There are no broker's or finder's fees or
obligations due to persons engaged by Acquiror or any of its employees,
officers, or directors in connection with the transactions contemplated by this
Agreement, except for the fees and expenses of its counsel and accountants.
6.10 PROXY STATEMENT. The statements and disclosures concerning
Acquirer included in the Proxy Statement shall be deemed to be further
disclosures hereunder and shall be incorporated into this Agreement and the
attached Schedules, where applicable.
6.11 EXHIBITS. If any fact or matter is disclosed by Acquiror on any
Exhibit to this Agreement, it shall be deemed disclosed for purposes of all
representations contained herein.
ARTICLE 7.
COVENANTS OF ACQUIROR
---------------------
Acquiror hereby covenants and agrees as follows:
7.1 FURTHER EFFORTS. Acquiror agrees to use diligent efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the Merger and the other transactions contemplated
hereby in accordance with the terms of this Agreement. In case at any time any
further action is necessary or desirable to carry out the purposes of this
Agreement, Acquiror will use diligent efforts to effectuate all such action.
Page 23
7.2 CONFIDENTIALITY. In the event of the termination of this Agreement,
Acquiror and its representatives shall keep all information with respect to
Survivor which has been disclosed to Acquiror pursuant to this Agreement
confidential in accordance with the terms of the Letter Agreement and shall
promptly return to Survivor all written information provided to Acquiror.
7.3 PUBLIC ANNOUNCEMENT. So long as this Agreement is in effect,
Acquiror shall not, and shall cause its affiliates and representatives not to,
issue or cause the publication of any press release or any other public
announcement (including, without limitation, disclosure to employees) with
respect to the Merger or any other transaction contemplated by this Agreement
without the prior review, and consultation with, Survivor with respect to such
press release or other public announcement.
ARTICLE 8.
GENERAL CONDITIONS PRECEDENT
----------------------------
The obligations of each party hereto to consummate the Merger and the
other transactions contemplated by this Agreement shall be subject to
fulfillment on or prior to the Closing of each of the following conditions:
8.1 SHAREHOLDER APPROVAL. The shareholders of Survivor and the
shareholders of Acquiror shall have duly adopted and approved this Agreement and
the transactions contemplated hereby in accordance with the applicable
provisions of the NRS and the ARS, other applicable law and Survivor's
Certificate of Incorporation and Bylaws.
8.2 NO INJUNCTIONS. No injunction or restraining or other order issued
by a court of competent jurisdiction which prohibits the consummation of the
transactions contemplated by this Agreement shall be in effect (each party
agreeing to use diligent efforts to have any such injunction or order lifted),
and no governmental action or proceeding shall have been commenced or threatened
in writing seeking any injunction or restraining or other order that seeks to
prohibit, restrain, invalidate or set aside consummation of the transactions
contemplated by this Agreement.
8.3 NO GOVERNMENTAL PROCEEDINGS. No action will have been taken, and no
statute, rule or regulation will have been enacted, by any state or federal
government agency that would render the consummation of the Merger illegal.
8.4 GOVERNMENTAL APPROVALS. All governmental filings or approvals
required in connection with the consummation of the transactions contemplated by
this Agreement shall have been made or received.
8.5 DISSENTER'S RIGHTS OF SURVIVOR'S STOCKHOLDERS. Holders of no
greater than twenty percent (20%) of the outstanding shares of common stock of
Survivor shall elect to assert dissenter's rights under applicable provisions of
the ARS.
Page 24
8.6 DISSENTER'S RIGHTS OF ACQUIROR'S STOCKHOLDERS. Holders of no
greater than twenty percent (20%) of the outstanding shares of common stock of
Acquiror shall elect to assert dissenter's rights under applicable provisions of
the NRS.
ARTICLE 9.
CONDITIONS PRECEDENT TO ACQUIROR'S
OBLIGATION TO CLOSE
The obligation of Acquiror to consummate the transactions contemplated
by this Agreement is subject to the fulfillment at or prior to the Closing of
each of the following conditions (unless waived pursuant to Section 12.3
hereof):
9.1 DUE DILIGENCE. Acquiror shall have completed and approved its due
diligence review of the business affairs and operations of Survivor, as
determined in its sole and absolute discretion.
9.2 CERTIFICATE OF SURVIVOR. The representations and warranties of
Survivor under ARTICLE 4., shall have been true in all material respects when
made and shall be true in all material respects as of the Closing with the same
effect as though made at such time, except for changes occurring or arising
after the date of this Agreement (a) in carrying out the transactions
contemplated herein or (b) approved in writing by Acquiror. At the Closing,
Survivor shall have delivered a certificate in the forms attached hereto as
EXHIBITS "9.2(a)" AND EXHIBIT "9.2(b)", signed by Survivor's President and
Secretary dated as of the Effective Date, certifying that Survivor shall have
performed all obligations and complied with all covenants and conditions
required by this Agreement to be performed or complied with by it at or prior to
the Closing.
9.3 NO MATERIAL ADVERSE EFFECT. Since October 31, 1999, Survivor shall
not have experienced any Material Adverse Effect.
9.4 THIRD PARTY CONSENTS. All necessary consents of the third parties
shall have been obtained.
9.5 LEGAL OPINION OF SURVIVOR'S COUNSEL. Acquiror shall have received
an opinion, dated as of the Closing Date of Wenthur & Chachas, counsel for
Survivor, to the effect set forth on EXHIBIT "9.5" hereto.
9.6 CERTIFIED RESOLUTIONS. Survivor shall have delivered to Acquiror
true and complete copies of the resolutions of its respective Board of Directors
and the shareholders of Survivor pursuant to which the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby were
duly and validly authorized, adopted and approved, certified by Survivor's
Secretary to be in full force and effect as of the Closing Date.
Page 25
9.7 CERTIFICATE OF SHAREHOLDER APPROVAL. Survivor shall have delivered
to Acquiror a Certificate of Shareholder Approval in the form of EXHIBIT "9.7"
attached hereto, executed by Survivor's President and Secretary and certifying
to Acquiror (a) that shareholders of Survivor approved the Merger; (b) the date
of such shareholder vote regarding the Merger and the final tally for, against
and any abstentions; (c) that, to the best knowledge of Survivor's President and
Secretary, such vote of the shareholders of Survivor was conducted in
conformance with all of the requirements of the ARS.
9.8 LETTERS OF RESIGNATION. Acquiror shall have received letters of
resignation addressed to Survivor from all members of the Board of Directors of
Survivor and all executive officers of Survivor, which resignations shall be
effective as of the Closing.
9.9 PROCEEDINGS SATISFACTORY TO COUNSEL. All proceedings taken by
Survivor and all instruments executed and delivered by Survivor on or prior to
the Closing Date in connection with the transactions contemplated herein shall
be reasonably satisfactory in form and substance to counsel for Acquiror.
ARTICLE 10.
CONDITIONS PRECEDENT TO SURVIVOR'S
OBLIGATION TO CLOSE
The obligation of Survivor to consummate the Merger and the other
transactions contemplated by this Agreement is subject to the fulfillment at or
prior to the Closing of each of the following conditions (unless waived pursuant
to Section 12.3 hereof):
10.1 CERTIFICATE OF ACQUIROR. Acquiror shall have performed all
obligations and complied with all covenants and conditions required by this
Agreement to be performed or complied with by it at or prior to the Closing, and
Acquiror shall have delivered to the Company a certificate of Acquiror in the
form attached hereto as EXHIBIT "10.1", dated the date of the Closing and signed
by the President of Acquiror, to all such effects.
10.2 CERTIFIED RESOLUTIONS. Acquiror shall have delivered to Survivor
true and complete copies of the resolutions of its Board of Directors pursuant
to which the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby were duly and validly authorized, adopted
and approved, certified by Acquiror's Secretary to be in full force and effect
as of the Closing Date.
10.3 LEGAL OPINION OF ACQUIROR'S COUNSEL. Survivor shall have received
an opinion, dated as of the Closing Date of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
& ▇▇▇▇▇, counsel for Acquiror, to the effect set forth on EXHIBIT "10.3" hereto.
ARTICLE 11.
SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATIONS
11.1 SURVIVAL OF REPRESENTATIONS.
Page 26
(a) SURVIVOR'S REPRESENTATIONS. All representations and warranties
and all covenants of Survivor in this Agreement will remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the parties to this Agreement until the earlier of the termination of this
Agreement in accordance with its terms or the expiration of the relevant statute
of limitations, and, thereafter, to the extent a claim is made prior to the
expiration with respect to any breach of such representation, warranty or
covenant, until such claim is finally determined or settled, whereupon such
representations, warranties, and covenants will expire (except for covenants
that by their terms survive for a longer period).
(b) ACQUIROR'S REPRESENTATIONS. Acquiror's representations,
warranties and covenants contained in this Agreement will terminate as of the
earlier of the termination of this Agreement in accordance with its terms or the
Closing.
(c) AGREEMENT TO INDEMNIFY. Survivor will indemnify and hold
harmless Acquiror and its respective officers, directors, agents and employees,
and each person, if any, who controls or may control Acquiror within the meaning
of the Securities Act (hereinafter referred to individually as an "Indemnified
Person" and collectively as "Indemnified Persons"), from and against any and all
claims, demands, actions, causes of actions, losses, costs, damages, liabilities
and expenses including, without limitation, reasonable legal fees (hereinafter
referred to as "Damages"), arising out of any misrepresentation or breach of or
default or other action or omission in connection with either.
(i) any of the representations, warranties and covenants given
or made by Survivor in this Agreement, in any exhibit or schedule hereto or any
certificate, document or instrument delivered by or on behalf of Survivor
pursuant hereto;
(ii) any and all actions, suits, claims, or legal,
administrative, arbitration, governmental or other proceedings or investigations
against any Indemnified Person that relate to Survivor in which the principal
event giving rise thereto occurred prior to the Closing Date which result from
or arise out of any action or inaction prior to the Closing Date of Survivor or
any director, officer, employee, agent, representative or subcontractor of
Survivor, except for those that which the Surviving Corporation specifically
assumes in writing; or
(iii) the termination of any pension, stock option, bonus,
deferred pay; compensation, profit-sharing or other plan with respect to
Survivor's employees as referred to in Section 9.6 hereof; or
(iv) any and all actions of any officer or director of
Survivor prior to the Effective Date.
Page 27
ARTICLE 12.
TERMINATION
12.1 TERMINATION. This Agreement and the Merger contemplated hereby may
be terminated at any time prior to the Closing, whether before or after approval
of will this Agreement and the Merger by the shareholders of Survivor, as
follows, and in no other manner:
(a) by mutual written consent of the Board of Directors of
Survivor and Acquiror;
(b) by Acquiror or Survivor if any of the conditions set forth in
ARTICLE 8 shall not have been satisfied as of the date of the Closing;
(c) by Acquiror if any of the conditions set forth in ARTICLE 9
shall have not been satisfied as of the date of the Closing;
(d) by Survivor if any of the conditions set forth in ARTICLE 10
shall have not been satisfied as of the date of the Closing; or
(e) by either Acquiror or Survivor if the Closing shall have not
been consummated on or before January 30, 2000.
12.2 EFFECT OF TERMINATION. In the event that this Agreement is
terminated pursuant to Section 12.1 hereof and except as provided below, all
further obligations of the parties hereto under this Agreement shall terminate
without further liability of any party to another, and each party hereto will
pay all their own costs and expenses incident to its negotiation and preparation
of this Agreement and to its performance of and compliance with all agreements
and conditions contained herein or therein on its part to be performed or
complied with, including the fees, expenses and disbursements of its counsel;
provided, that the obligations of Survivor contained in Section 5.5 hereof and
the obligations of Acquiror contained in Section 7.2 hereof shall survive any
such termination; and provided, further, that nothing herein shall relieve any
party of any liability with respect to or arising out of any breach of its
obligations, covenants or agreements hereunder.
12.3 WAIVER OF CONDITIONS. If any of the conditions specified in
ARTICLE 8 hereof has not been satisfied, Acquiror and Survivor may nevertheless
mutually agree to proceed with the transactions contemplated hereby. If any of
the conditions specified in ARTICLE 9 hereof has not been satisfied, Acquiror
may nevertheless at its election proceed with the transactions contemplated
hereby. If any of the conditions specified in ARTICLE 10 hereof has not been
satisfied, Survivor may nevertheless at its election proceed with the
transactions contemplated hereby.
12.4 PAYMENT OF EXPENSES. Except as provided below, Survivor and
Acquiror will pay all of their respective costs and expenses (including fees and
expenses of legal counsel, accountants and financial advisors) incurred by such
party in connection with the transactions contemplated by this Agreement,
regardless of whether the Merger is consummated. All expenses of the proxy
statement and solicitation will be paid by Survivor.
Page 28
ARTICLE 13.
GENERAL
13.1 AMENDMENTS. Subject to applicable law, this Agreement, the
Articles of Merger and any exhibit attached hereto or thereto may be amended by
the parties hereto at any time prior to the Effective Date; PROVIDED, HOWEVER,
that any such amendment must be in writing and executed by all parties hereto.
13.2 ASSIGNMENT. The rights under this Agreement shall not be
assignable nor the duties delegable by any party without the written consent of
the other parties; and nothing contained in this Agreement, express or implied,
is intended to confer upon any person or entity, other than the parties hereto
and their successors in interest and permitted assignees, any rights or remedies
under or by reason of this Agreement unless so stated to the contrary.
13.3 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered personally or when mailed, by United States certified or registered
mail, prepaid, to the parties or their assignees at the following addresses (or
at such other address as shall be given in writing):
TO SURVIVOR: Kestrel Equity Corporation
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ "▇" ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
COPY TO: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Wenthur & Chachas
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
TO ACQUIROR: Stereo Vision Entertainment, Inc.
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
COPY TO: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
Seventeenth Floor
First national Bank Center
▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Page 29
13.4 FURTHER ASSURANCES. Acquiror, on the one hand, and Survivor, on
the other hand, agree that from time to time after the Closing, at the other's
request and without further consideration, each will execute and deliver such
additional instruments as the other may reasonably request to effectuate the
Merger.
13.5 REMEDIES NOT EXCLUSIVE. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise. The election of any one or more remedies by Acquiror,
by Survivor shall not constitute a waiver of the right to pursue other
applicable remedies.
13.6 ENTIRE AGREEMENT. This Agreement (including all schedules and
exhibits attached hereto and thereto and all documents delivered as provided for
herein and therein) contain the entire agreement among the parties hereto with
respect to the subject matter hereof and the transactions contemplated hereby
and supersedes all prior negotiations, discussions, agreements, and
undertakings, both written and oral, among the parties hereto, with respect to
the subject matter hereof.
13.7 COUNTERPARTS. This Agreement may be executed in one or more
Counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may be
executed by facsimile with original executed copies to be delivered by overnight
mail.
13.8 GOVERNING LAW. This Agreement shall be construed by and enforced
in accordance with the laws of the State of Arizona without giving effect to the
principles of the conflicts of laws.
13.9 RESOLUTION OF INDEMNIFICATION DISPUTES. Any controversy arising
out of the indemnification provisions of ARTICLE 11 of this Agreement or breach
thereof shall be settled by arbitration in San Diego, California, in accordance
with the rules of the American Arbitration Association, and judgment entered
upon the award rendered by arbitrator may be enforced by appropriate judicial
action pursuant to the California Code of Civil Procedure. The arbitration panel
shall consist of one member, which shall be a person agreed to by each party to
dispute within thirty (30) days following notice by one party that desires the
matter to be arbitrated. If the parties are unable within such thirty (30) day
period to agree upon an arbitrator, than the panel shall be one arbitrator
selected by the San Diego Office of the American Arbitration Association, which
arbitrator shall be experienced in commercial law and acquisition transactions
and knowledgeable with respect to the subject matter of the dispute. The losing
party shall bear any fees and expenses of the arbitrator, other tribunal fees
and expense and reasonable attorney's fees of both parties, and the cost of such
witness and other reasonable costs or expenses incurred by him or the prevailing
party. The arbitrator shall render a decision within thirty (30) days following
the close of presentation by the parties to their cases and any rebuttal. The
parties shall agree within thirty (30) days following the selection of the
arbitrator to any prehearing procedures or further procedures necessary for the
arbitration to proceed, including, interrogatories or other discovery, provided,
in any event, each party shall be entitled to discovery in accordance with
California Code of Civil Procedures Section 1283.05.
Page 30
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the date first written above
ACQUIROR:
---------
STEREO VISION ENTERTAINMENT, INC.
A NEVADA CORPORATION
/S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇
------------------------------
By: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇
Its: President
SURVIVOR:
---------
KESTREL EQUITY CORPORATION
AN ARIZONA CORPORATION
/S/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
By: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: President
Page 31
TABLE OF EXHIBITS
-----------------
EXHIBIT 1.6: Articles of Merger
EXHIBIT 2.4: Articles of Incorporation of Surviving Corporation
EXHIBIT 2.6: Amended and Restated Bylaws
EXHIBIT 2.7: Officers and Directors of Surviving Corporation
EXHIBIT 4.2(a): Articles of Incorporation - Survivor
EXHIBIT 4.2(b): Bylaws - Survivor
EXHIBIT 4.8: Authorization of Board of Directors - Survivor
EXHIBIT 4.9: Survivor Financial Statements
EXHIBIT 4.11: Absence of Certain Changes - Survivor
EXHIBIT 4.13: Intellectual Property
EXHIBIT 4.22: Banks and Brokerage Accounts
EXHIBIT 6.2(a): Articles of Incorporation - Acquiror
EXHIBIT 6.2(b): Bylaws - Acquiror
EXHIBIT 6.5: Acquiror's issued and outstanding Common Stock
EXHIBIT 6.8: Authorization of Board of Directors - Acquiror
EXHIBIT 9.2(a): Form of Officer's Certificate - Survivor
EXHIBIT 9.5: Opinion of Counsel - Wenthur & Chachas
EXHIBIT 9.7: Form of Certificate of Shareholder Approval - Survivor
EXHIBIT 10.1: Form of Officer's Certificate - Acquiror
EXHIBIT 10.3: Opinion of Counsel of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
EXHIBIT "1.6"
ARTICLES/CERTIFICATE OF MERGER
OF
STEREO VISION ENTERTAINMENT INC.
WITH AND INTO
KESTREL EQUITY CORPORATION
The undersigned corporations do hereby certify that:
1. The name and state of incorporation of each of the constituent
corporations to the merger are as follows:
NAME STATE OF INCORPORATION
---- ----------------------
Stereo Vision Entertainment Inc. Nevada
Kestrel Equity Corporation Arizona
2. An Acquisition Agreement and Plan of Reverse Merger (the "Merger
Agreement") between the parties to the merger has been approved, adopted,
certified, executed and acknowledged by each of the constituent corporations in
accordance with Section 78.458 of the Nevada Revised Statutes and Section
10-1105 of the Arizona Revised Statutes.
3. The number of outstanding shares of common stock of Stereo Vision
Entertainment Inc. was 25,000 and the number of such shares which were entitled
to vote on the Plan was 25,000. The total number of shares which voted for
adoption of the Plan was 25,000 and the total number of shares which voted
against the adoption of the Plan was 0. The number of votes cast for the Plan
was sufficient for approval of the Plan.
4. The number of outstanding shares of common stock of Kestrel Equity
Corporation was 5,200,000 and the number of such shares which were entitled to
vote on the Plan was 2,200,000. The total number of undisputed votes for
adoption of the Plan was _____________ and the total number of undisputed votes
against the adoption of the Plan was _________. The number of votes cast for the
Plan by the only voting group entitled to vote was sufficient for approval of
the Plan.
5. The surviving corporation of the merger is Kestrel Equity
Corporation which will be governed by the laws of the State of Arizona and will
change its name to Stereo Vision Entertainment Inc. pursuant to the Amended and
Restated Articles of Incorporation ATTACHED HERETO which will be filed with the
Arizona Secretary of State concurrently with the filing of these Articles of
Merger.
6. The surviving corporation agrees that it may be served with process
in the State of Nevada in any proceeding for enforcement of any obligations of
any constituent corporation of the State of Nevada, as well as for enforcement
of any obligation of the surviving corporation arising from the merger,
Page 1
including any suit or other proceeding to enforce the right of any stockholders
as determined in appraisal proceedings pursuant to the provisions of Section
78.481 of this title, and the surviving corporation hereby irrevocably appoints
the Nevada Secretary of State as its agent to accept service of process in any
such suit or other proceedings and the Nevada Secretary of State is authorized
to mail a copy of such process to the surviving corporation at the surviving
corporation's new principal place of business at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
7. The Plan is on file at the new principal place of business of the
surviving corporation, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
8. A copy of the Plan will be furnished by the surviving corporation,
on request and without cost, to any shareholder or stockholder of either
constituent corporation.
9. These Articles of Merger shall be effective on the date of filing.
STEREO VISION ENTERTAINMENT INC.
A NEVADA CORPORATION
-------------------------------------
By: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Its: President
-------------------------------------
By: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Its: Secretary
KESTREL EQUITY CORPORATION
AN ARIZONA CORPORATION
-------------------------------------
By: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: President
-------------------------------------
By: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Secretary
Page 2
EXHIBIT "2.4"
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
KESTREL EQUITY CORPORATION
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ hereby certifies that:
1. He is the president and the secretary of Kestrel Equity Corporation,
an Arizona corporation (the "Corporation").
2. The articles of incorporation of this Corporation are amended and
restated in their entirety to read as follows:
ARTICLE I
The name of the corporation is Stereo Vision Entertainment Inc.
ARTICLE II
The period of its duration is perpetual.
ARTICLE III
The purpose or purposes for which the Corporation is organized is to
engage in any lawful acts or activity that, presently or in the future, may
legally be performed by a Corporation organized under the laws of the State of
Arizona.
ARTICLE IV
The aggregate number of shares which the Corporation shall have
authority to issue shall be 100,000,000 common shares, par value $.001 per
share. The board of directors, without shareholder action, may amend the
Corporation's articles of incorporation, in accordance with the Arizona Revised
Statutes, (a) to designate in whole or in part, the preferences, limitations,
and relative rights, within the limits set forth in the Arizona Revised
Statutes, of any class of shares, before the issuance of any shares of that
class, (b) create one or more series within a class of shares, fix the number of
shares of each such series, and designate, in whole or part, the preferences,
limitations, and relative rights of the series, within the limits set forth in
the Arizona Revised Statutes, all before the issuance of any shares of that
series, (c) alter or revoke the preferences, limitations, and relative rights
granted to or imposed upon any wholly unissued class of shares or any wholly
unissued series of any class of shares; or (d) increase or decrease the number
of shares constituting any series, the number of shares of which was originally
fixed by the board of directors, either before or after the issuance of shares
of the series, provided that the number may not be decreased below the number of
shares of the series then outstanding, or increased above the total number of
authorized shares of the applicable class of shares available for designation as
part of the series.
Page 1
ARTICLE V
The Corporation shall have a minimum of one (1) and a maximum of seven
(7) directors as shall be set by the Bylaws of the corporation.
ARTICLE VI
A. The Corporation shall have the right to purchase its own shares to
the extent of its unreserved and unrestricted earned surplus and capital surplus
if its Board of Directors adopts a resolution to such effect.
B. The Board of Directors of the Corporation may designate such
committee or committees as it determines in accordance with law to exercise such
authority as the Board of Directors shall delegate in the resolution designating
such committee or committees.
ARTICLE VII
Each person who is or was a director, officer, employee or agent of the
Corporation (including the heirs, executors, administrators or estate of such
person) shall be indemnified by the Corporation against all expenses and
liabilities, including counsel fees reasonably incurred by or imposed upon and
in connection with any proceeding to which the director, officer, employee or
agent may be a party, or in which he or she may become involved by reason of
being or having been an officer, director, employee or agent of the Corporation
or any settlement thereof, regardless of whether a director, officer, employee
or agent, at the time such expenses are incurred, except in such cases wherein
the director, officer, employee or agent is judged guilty of willful misfeasance
or malfeasance, willful misconduct or gross negligence in the performance of any
duty; provided, however, in the event of a settlement, the indemnification
herein shall only apply when the Board of Directors approves such settlement and
reimbursement as being in the best interests of the Corporation. The foregoing
right of indemnification shall be in addition to and not exclusive of all other
rights to which such director, officer, agent or employee may be entitled.
Subject to the limitations set forth above, such indemnification shall be to the
fullest extent permitted by the Utah Revised Business Corporation Act or any
other applicable laws now in effect or as may hereafter be amended. No director
of the Corporation shall be personally liable to the Corporation or its
shareholders for monetary damages for any action taken or failure to take any
action in good faith as an officer, director, employee or agent. The Corporation
may, but shall be under no obligation to, maintain insurance at its expense, to
protect itself or any officer, director, employee or agent against any such
liability as may be covered by the above indemnification, including any costs or
expenses reasonably attributable thereto.
Page 2
ARTICLE VIII
No person shall be liable to the Corporation for any loss or damage
suffered by it on account of any action or act omitted to be taken by a
director, officer, employee or agent of the Corporation in good faith if such
person (i) exercised or used the same degree of care and skill as a prudent
person would have exercised or used under the same or similar circumstances in
the conduct of his or her own personal affairs, or (ii) took or omitted to take
such action in reliance upon the advice of counsel for the Corporation or other
statements made or information furnished by officers or employees of the
Corporation which he or she had reasonable grounds to believe or upon a
financial statement of the Corporation prepared by an accountant, officer of the
Corporation in charge of its accounting or employees of the Corporation in
charge of its accounts or certified by a public accountant or firm of public
accountants.
3. The foregoing amendment and restatement of the articles of
incorporation has been duly approved by the board of directors.
4. The foregoing amendment and restatement of articles of incorporation
has been duly approved by the required vote of shareholders in accordance with
Section 10-1020 of the Arizona Revised Statutes. Common stock is the only
outstanding stock of the corporation. The total number of outstanding shares of
Common stock of the corporation is __________. The number of votes entitled to
be cast on the amendment is _________ and the number of votes indisputably
represented at the meeting at which the foregoing amendment and restatement of
articles of incorporation was approved was _________________. The total number
of undisputed votes cast for the amendment and restatement was _______________,
which was sufficient for the approval of the amendment and restatement.
We further declare under penalty of perjury under the laws of the State
of Arizona that the matters set forth in this certificate are true and correct
of our own knowledge.
Date: ________________
---------------------------------
By: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: President
---------------------------------
By: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Secretary
Page 3
EXHIBIT "2.6"
AMENDED AND RESTATED BYLAWS OF THE SURVIVING CORPORATION
SEE ATTACHED
EXHIBIT "2.7"
OFFICERS AND DIRECTORS OF SURVIVING CORPORATION
DIRECTORS
---------
NAME POSITION
---- --------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Chairman of the Board, Director
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
OFFICERS
--------
NAME POSITION
---- --------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Secretary and Treasurer
--------------------------------------------------------------------------------
EXHIBIT "4.2(a)"
ARTICLES OF INCORPORATION OF
KESTREL EQUITY CORPORATION
SEE ATTACHED
EXHIBIT "4.2(b)"
BYLAWS OF
KESTREL EQUITY CORPORATION
SEE ATTACHED
EXHIBIT "4.4"
QUALIFICATION OF
KESTREL EQUITY CORPORATION
Arizona
EXHIBIT "4.5"
CAPITALIZATION OF
KESTREL EQUITY CORPORATION
1. Issued and Outstanding Stock Options: None
EXHIBIT "4.8"
AUTHORIZATION OF BOARD OF DIRECTORS
OF
KESTREL EQUITY CORPORATION
SEE ATTACHED
EXHIBIT "4.9"
CHANGES OR DISCREPANCIES TO
FINANCIAL STATEMENTS
OF KESTREL EQUITY CORPORATION
None
EXHIBIT "4.11"
CERTAIN CHANGES
OF KESTREL EQUITY CORPORATION
NONE
EXHIBIT "4.13"
ASSETS - INTELLECTUAL PROPERTY
OF KESTREL EQUITY CORPORATION
NONE
EXHIBIT "4.22"
BANKS AND BROKERAGE ACCOUNTS
OF KESTREL EQUITY CORPORATION
NONE
EXHIBIT "6.2(a)"
ARTICLES OF INCORPORATION
OF STEREO VISION ENTERTAINMENT, INC.
SEE ATTACHED
EXHIBIT "6.2(b)"
BYLAWS
OF STEREO VISION ENTERTAINMENT, INC.
SEE ATTACHED
EXHIBIT "6.5"
OUTSTANDING COMMON STOCK
OF STEREO VISION ENTERTAINMENT, INC.
SHAREHOLDER SHARES
----------- ------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 6000
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 6375
▇▇▇▇ HONOUR 6375
▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, HUSBAND AND WIFE 6250
EXHIBIT "6.8"
AUTHORIZATION OF BOARD OF DIRECTORS
OF STEREO VISION ENTERTAINMENT, INC.
SEE ATTACHED
EXHIBIT "9.7"
KESTREL EQUITY CORPORATION
FORM OF CERTIFICATE OF SHAREHOLDER APPROVAL
-------------------------------------------
This certificate is given by Kestrel Equity Corporation ("Kestrel") as
a condition required by Stereo Vision Entertainment, Inc., a Nevada
Corporation ("Stereo Vision") to the closing of that certain Acquisition
Agreement and Plan of Reverse Merger (the "Merger Agreement") entered into on
Deember 3, 1999, by and among Kestrel and Stereo Vision. The undersigned,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, acknowledges that he is the President and Secretary of
Kestrel Equity Corporation.
The undersigned hereby certifies, to the best of his knowledge, after
due inquiry, to Stereo Vision as follows:
1. The Shareholders of Kestrel approved the Merger as such term is
defined in the Merger Agreement;
2. The date of such shareholder vote regarding the Merger was
___________________, and the final tally for, against and any abstentions is as
follows:
______________ FOR
______________ AGAINST
______________ ABSTAIN
3. To the best knowledge of Survivor's President and Secretary, such
vote of the shareholders of Survivor was conducted in conformance with all of
the requirements of the Arizona Revised Statutes.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed this 3rd day of December, 1999.
KESTREL EQUITY CORPORATION
An Arizona Corporation
------------------------------
By: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: President and Secretary
EXHIBIT "9.2(a)"
KESTREL EQUITY CORPORATION
FORM OF OFFICER'S CERTIFICATE
This Certificate is given by ▇▇▇▇ ▇▇▇▇▇▇▇▇, the President and Secretary
of Kestrel Equity Corporation, an Arizona Corporation ("Kestrel") as a condition
required by Stereo Vision Entertainment, Inc., a Nevada Corporation ("Stereo
Vision"), prior to the closing of that certain Acquisition Agreement and Plan of
Reverse Merger (the "Merger Agreement") entered into on December 3, 1999, by and
between Kestrel and Stereo Vision. The undersigned certify that as of the date
hereof:
1. All of the representations and warranties of Kestrel set forth in
the Merger Agreement are true, correct and complete.
2. Kestrel has performed all obligations and has complied with all
covenants required to be performed or complied with by Kestrel to this date
under the Merger Agreement.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed this 3rd day of December 1999.
Kestrel Equity Corporation
An Arizona Corporation
----------------------------
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: President and Secretary
EXHIBIT "10.1"
STEREO VISION ENTERTAINMENT, INC.
FORM OF OFFICER'S CERTIFICATE
This Certificate is given by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, the President and
Secretary of Stereo Vision Entertainment, Inc., a Nevada Corporation ("Stereo
Vision") as a condition required by Kestrel Equity Corporation, an Arizona
Corporation ("Kestrel"), prior to the closing of that certain Acquisition
Agreement and Plan of Reverse Merger (the "Merger Agreement") entered into on
December 3, 1999, by and between Kestrel and Stereo Vision. The undersigned
certify that as of the date hereof:
1. All of the representations and warranties of Stereo Vision as set
forth in the Merger Agreement are true, correct and complete.
2. Stereo Vision has performed all obligations and has complied with
all covenants required to be performed or complied with by Stereo Vision to this
date under the Merger Agreement.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed this 3rd day of December 1999.
Stereo Vision Entertainment, Inc.
A Nevada Corporation
----------------------------------
By: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Its: President and Secretary