AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") dated January 10, 2000,
is entered into between Kestrel Equity Corporation, an Arizona corporation
("Kestrel"), and SVE Merger, Inc., a Nevada corporation ("SVE"). Kestrel and SVE
are hereinafter collectively referred to as the "Constituent Corporations."
RECITALS
A. Kestrel is a corporation duly organized and existing under the laws
of the State of Arizona.
B. SVE is a corporation duly organized and existing under the laws of
the State of Nevada for the sole purpose of effecting the reincorporation of
Kestrel in Nevada in a tax-free reorganization pursuant to Section 368(a)(1)(F)
of the Internal Revenue Code;
C. On the date of this Agreement, Kestrel has authority to issue
100,000,000 shares of common stock, $.001 par value per share ("Kestrel Common
Stock"), of which 5,200,000 shares are issued and outstanding;
D. On the date of this Agreement, SVE has the authority to issue
100,000,000 shares of common stock, $.001 par value per share ("SVE Common
Stock"), of which 1 share is issued and outstanding and owned by Kestrel;
E. The Boards of Directors of Kestrel and SVE have determined that it
is advisable and in the best interest of their respective corporations that
Kestrel merge with and into SVE upon the terms and subject to the conditions set
forth in this Agreement for the purpose of effecting the change of the state of
incorporation of Kestrel from Arizona to Nevada;
F. The respective Boards of Directors of Kestrel and SVE have, by
resolutions duly adopted by Unanimous Written Consent, approved this Agreement;
and
G. Kestrel has approved this Agreement as the sole stockholder of SVE
and the majority of the shareholders of Kestrel have approved this Agreement at
the Kestrel annual meeting held on December 27, 1999.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, Kestrel and SVE hereby agree as follows:
1. MERGER. Kestrel shall be merged with and into SVE (the "Merger"),
and SVE shall be the surviving corporation (hereinafter sometimes referred to as
the "Surviving Corporation"). The Merger shall become effective upon the date
and at the time of filing of an appropriate certificate of merger, providing for
the Merger, with the Secretary of State of the State of Nevada (the "Effective
Time"). A Certificate of Merger shall also be filed with the Secretary of State
of the State of Arizona.
2. GOVERNING DOCUMENTS. The Articles of Incorporation of SVE, as in
effect immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Corporation as thereafter amended in accordance
with the provisions thereof and applicable laws. The bylaws of SVE, as in effect
immediately prior to the Effective Time, shall be the bylaws of the Surviving
Corporation, without change or amendment until thereafter amended in accordance
with the provisions thereof, the provisions of the Articles of Incorporation of
the Surviving Corporation and applicable laws.
3. SUCCESSION. At the Effective Time, the separate corporate existence
of Kestrel shall cease, and SVE shall possess all the rights, privileges, powers
and franchises both of a public as well as of a private nature, and shall be
subject to all the restrictions, liabilities and duties of each of the
Constituent Corporations; and all singular rights, privileges, powers and
franchises of each of the Constituent Corporations, shall be vested in the
Surviving Corporation and all property, rights, privileges, powers and
franchises, and all and every other interest, shall be transferred to and vested
in the Surviving Corporation, and the title to any real estate vested by deed or
otherwise in either of such Constituent Corporations shall not revert or be in
any way impaired by reason of the Merger, but all rights of creditors and all
liens upon any property of Kestrel shall be preserved unimpaired. To the extent
permitted by law, any claim existing or action or proceeding pending by or
against either of the Constituent Corporations may be prosecuted as if the
Merger had not taken place. All debts, liabilities and duties of the respective
Constituent Corporations shall thenceforth attach to the Surviving Corporation
and may be enforced against it to the same extent as if such debts, liabilities
and duties had been incurred or contracted by it. All corporate acts, plans,
policies, agreements, arrangements, approvals and authorizations of Kestrel, its
shareholders, Board of Directors and committees thereof, officers and agents
which were valid and effective immediately prior to the Effective Time, shall be
taken for all purposes as the acts, plans, policies, agreements, arrangements,
approvals and authorizations of the Surviving Corporation and shall be as
effective and binding thereon as the same were with respect to Kestrel. The
employees and agents of Kestrel shall become the employees and agents of the
Surviving Corporation and continue to be entitled to the same rights and
benefits which they enjoyed as employees and agents of Kestrel, subject to the
same limitations with respect thereto. The requirements of any plans or
agreements of Kestrel involving the issuance or purchase by Kestrel of certain
shares of its capital stock shall be satisfied by the issuance or purchase of a
like number of shares of the Surviving Corporation.
4. DIRECTORS AND OFFICERS. The directors and officers of Kestrel at the
Effective Time shall be and become directors and officers, holding the same
titles and positions, of the Surviving Corporation at the Effective Time, and
after the Effective Time shall serve in accordance with the bylaws of the
Surviving Corporation.
5. FURTHER ASSURANCES. From time to time, as and when required by the
Surviving Corporation or by its successors or assigns, there shall be executed
and delivered on behalf of Kestrel such deeds and other instruments, and there
shall be taken or caused to be taken by it all such further and other actions,
2
as shall be appropriate, advisable or necessary in order to vest, perfect or
confirm, of record or otherwise, in the Surviving Corporation the title to and
possession of all property, interests, assets, rights, privileges, immunities,
powers, franchises and authority of Kestrel, and otherwise to carry out the
purposes of this Agreement, and the officers and directors of the Surviving
Corporation are fully authorized in the name and on behalf of Kestrel or
otherwise, to take any and all such action and to execute and deliver any and
all such deeds and other instruments.
6. CONVERSION OF SHARES. At the Effective Time, by virtue of the Merger
and without any action on the part of the holder thereof:
(a) each share of Kestrel Common Stock outstanding
immediately prior to the Effective Time shall be
changed and converted into one (1) fully paid and
non-assessable share of SVE Common Stock; and
(b) the one (1) share of SVE Common Stock presently
issued and outstanding in the name of Kestrel shall
be canceled and retired and resume the status of
authorized and unissued shares of SVE Common Stock,
and no shares of SVE Common Stock or other securities
of SVE shall be issued in respect thereof.
7. WARRANTS. Each warrant to purchase shares of Kestrel Common Stock
which is outstanding at the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into and
become a warrant to purchase shares of SVE Common Stock upon the terms and
subject to the conditions and adjustments as set forth in such warrant and in
the resolutions authorizing such warrants, as in effect immediately prior to the
Effective Time. The same number of shares of SVE Common Stock shall be reserved
for purposes of the warrants as is equal to the number of shares of Kestrel
Common Stock so reserved as of the Effective Time.
8. OPTIONS. Each option to purchase shares of Kestrel Common Stock
which is outstanding at the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder hereof, be converted into and
become an option to purchase shares of SVE Common Stock upon the terms and
subject to the same conditions and adjustments as in effect in such option
immediately prior to the Effective Time. The same number of share of SVE Common
Stock shall be reserved for purposes of the options as is equal to the number of
shares of Kestrel Common Stock so reserved as of the Effective Time.
9. OTHER EMPLOYEE BENEFIT PLANS. At the Effective Time, the obligations
of Kestrel under or with respect to every plan, trust, program and benefit then
in effect or administered by Kestrel on behalf or for the benefit of the
officers and employees of Kestrel, including plans, trusts, programs and
benefits administered by Kestrel in which subsidiaries of Kestrel, their
officers and employees currently are permitted to participate (the "Employee
Benefit Plans"), shall become the lawful obligations of SVE and shall be
implemented and administered in the same manner and without interruption until
the same are amended or otherwise lawfully altered or terminated. Effective at
the Effective Time, SVE hereby expressly adopts and assumes all obligations of
Kestrel under and with respect to all Employee Benefit Plans.
3
10. STOCK CERTIFICATES. At and after the Effective Time, all of the
outstanding certificates which, immediately prior to the Effective Time,
represented shares of Kestrel Common Stock shall be deemed for all purposes to
evidence ownership of, and to represent, as the case may be, shares of SVE
Common Stock into which shares of Kestrel Common Stock, formerly represented by
such certificates, have been converted as herein provided.
11. NAME CHANGE. At the Effective Time, Surviving Corporation shall
file with the Nevada Secretary of State Articles of Amendment to its Articles of
Incorporation to change the name of the corporation to Stereo Vision
Entertainment, Inc.
12. AMENDMENT. Subject to applicable law, this Agreement may be
amended, modified or supplemented by written agreement of the parties hereto at
any time prior to the Effective Time with respect to any of the terms contained
herein; provided, however, that no such amendment, modification or supplement
not adopted and approved by the shareholders of Kestrel and SVE shall affect the
rights of the shareholders of either or both such corporations in a manner which
is materially adverse to the shareholders of either or both such corporations.
13. ABANDONMENT. At any time prior to the Effective Time, this
Agreement may be terminated and the Merger may be abandoned by the Boards of
Directors of either Kestrel or SVE , notwithstanding approval of this Agreement
by the sole stockholder of SVE or by the shareholders of Kestrel, or both, if in
the opinion of such Boards of Directors, the Merger is for any reason
inadvisable.
14. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors and assigns;
provided, however, that this Agreement may not be assigned to any party without
the prior written consent of the other party hereto.
IN WITNESS WHEREOF, Kestrel and SVE have caused this Agreement to be
signed by their respective duly authorized officers as of the date first above
written.
KESTREL EQUITY CORPORATION
an Arizona corporation
By:/S/ Xxxxx Xxxxxx
------------------------
Xxxxx Xxxxxx, President
SVE MERGER, INC.
a Nevada corporation
By:/S/ Xxxxx Xxxxxx
------------------------
Xxxxx Xxxxxx, President
4