EXHIBIT 2.1
AGREEMENT AND PLAN OF SHARE EXCHANGE
AGREEMENT AND PLAN OF SHARE EXCHANGE (the "Agreement") dated this 6th day of
May, 1998, by and among STARLIGHT ENTERTAINMENT, INC., a Colorado corporation
("STARLIGHT"), CINEMA SAVER THEATRE CORPORATION, a Colorado corporation
("CINEMA"), and PITCHERS!, INC., a Colorado corporation ("PITCHERS!").
WHEREAS, the Boards of Directors of STARLIGHT, CINEMA, and PITCHERS! deem it
advisable and in the best interests of these corporations that STARLIGHT acquire
CINEMA and PITCHERS! by exchanging all of the issued and outstanding shares of
CINEMA and PITCHERS! for shares of STARLIGHT (the "Share Exchange"); and
WHEREAS, the Boards of Directors of STARLIGHT, CINEMA, and PITCHERS! have
approved and adopted this Agreement as a "plan of reorganization" within the
meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended;
NOW, THEREFORE, in consideration of the premises and the mutual agreements,
provisions and conditions contained herein, and for other goods and valuable
consideration, the adequacy and receipt of which are hereby acknowledged, the
parties hereto agree that CINEMA and PITCHERS! shall be acquired by STARLIGHT,
upon and subject to the following terms and conditions:
ARTICLE I
GENERAL TERMS AND PROVISIONS
SECTION 1.01. EFFECTIVENESS. Upon the filing of Articles of Share Exchange with
the Colorado Secretary of State, (the "Effective Date"), STARLIGHT shall issue
new STARLIGHT Common Stock in exchange for all of the issued and outstanding
CINEMA Stock and PITCHERS! Stock on the terms provided herein, and CINEMA and
PITCHERS! shall become wholly-owned subsidiaries of STARLIGHT.
SECTION 1.02. OPERATION OF SUBSIDIARIES. From and after the Effective Date,
CINEMA and PITCHERS! shall continue to operate as each has in the past,
retaining their respective officers and directors.
SECTION 1.03. TAKING OF NECESSARY ACTION. STARLIGHT, CINEMA, and PITCHERS! shall
take all such actions as may be necessary or appropriate in order to effectuate
the transactions contemplated by this Agreement. If, at any time after the
Effective Date, any further action is necessary or desirable to carry out the
purpose of this Agreement or to vest STARLIGHT with title to any or all of the
properties, assets, rights, approvals, immunities, of CINEMA or PITCHERS!, the
officers and directors of STARLIGHT and its subsidiaries, at the expense of
STARLIGHT, shall take such necessary or desirable action.
ARTICLE II
EXCHANGE OF SHARES
SECTION 2.01. EXCHANGE OF SHARES. On the Effective Date, STARLIGHT shall issue
650,617 shares of its STARLIGHT Common Stock to the shareholders of CINEMA and
583,738 shares to the shareholders of PITCHERS! in exchange for all of the
issued and outstanding CINEMA and PITCHERS! Common Stock, respectively. The
issuance of the STARLIGHT shares to the shareholders of CINEMA shall be on the
basis of 1 share of STARLIGHT Common Stock for every 5.05487 shares of CINEMA
Common Stock, rounding to the nearest whole share. The issuance of the STARLIGHT
shares to the shareholders of PITCHERS! shall be on the basis of 14.73119 shares
of STARLIGHT Common Stock for 1 share of PITCHERS! Common Stock, rounding to the
nearest whole share.
SECTION 2.02. STOCK LEGENDS. Certificates representing shares of STARLIGHT
Common Stock shall bear a legend restricting transfer of the shares of the
Common Stock represented by such certificate in substantially the form set forth
below:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") or
applicable state law, and are "restricted securities" as that term
is defined in Rule 144 under the Act. The securities may not be
offered for sale, sold, or otherwise transferred except pursuant to
an effective registration statement under the Act and applicable
state law, the availability of which is to be established to the
satisfaction of the Company."
STARLIGHT shall, from time to time, make stop transfer notations in its records
to ensure compliance in connection with any proposed transfer of the shares with
the Act, and all applicable state securities laws.
SECTION 2.03. RESERVATION OF SHARES. There are presently issued and outstanding
warrants to purchase up to 505,000 shares of CINEMA Common Stock. These warrants
shall be exercisable to purchase STARLIGHT Common Stock on the basis of one
share of STARLIGHT Common Stock for every 5.05487 shares of CINEMA Common Stock,
rounding to the nearest whole share. The exercise price of these warrants shall
be adjusted proportionately. STARLIGHT shall reserve 99,903 shares of its Common
Stock for the exercise of these warrants.
SECTION 2.04. DISSENTING SHAREHOLDERS. None of the shareholders of CINEMA or
PITCHERS! shall have exercised their right to dissent from the Share Exchange.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of STARLIGHT, CINEMA, and PITCHERS! represents to the others as follows:
SECTION 3.01. CAPITALIZATION. It has no obligation under any agreement with any
person to register any of its securities under the 1933 Act or any applicable
state securities laws and, during the three years preceding the date of this
Agreement, it has not sold or issued any of its securities in a transaction
which was not registered or exempt from registration under the 1933 Act or any
applicable state securities laws. There are no preemptive rights with respect to
any of its securities.
(a) STARLIGHT. STARLIGHT represents and warrants that its authorized
capital stock consists of 25,000,000 shares of Common Stock, no par
value, none of which are issued or outstanding, and 10,000,000
shares of Preferred Stock, no par value, none of which are issued or
outstanding.
(b) CINEMA. CINEMA represents and warrants that 3,288,781 shares of
Common Stock are issued and outstanding as of the date hereof and
that it has no shares of Preferred Stock issued or outstanding.
Attached to this Agreement is a list of all of its shareholders. All
of the issued and outstanding shares of CINEMA are validly issued,
fully paid, and nonassessable.
(c) PITCHERS!. PITCHERS! represents and warrants that 39,626 shares
of Common Stock are issued and outstanding as of the date hereof and
that it has no shares of Preferred Stock issued or outstanding.
Attached to this Agreement is a list of all of its shareholders. All
of the issued and outstanding shares of PITCHERS! are validly
issued, fully paid, and nonassessable.
SECTION 3.02. NO SUBSIDIARIES. It has no subsidiaries.
SECTION 3.03. OPTIONS AND OTHER RIGHTS. There are no outstanding options,
warrants, or rights to subscribe for, purchase, or receive shares of its common
stock or any other securities convertible into common stock, except for the
warrants described in Section 2.03 hereof.
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ARTICLE IV
CONDITIONS PRECEDENT TO THE MERGER
The obligations of the parties under this Agreement are subject to the
satisfaction of the following express conditions precedent at or before the
Effective Date:
SECTION 4.01. COMPLIANCE WITH LAWS. All statutory requirements for the valid
consummation by it of the transactions contemplated by this Agreement shall have
been fulfilled.
SECTION 4.02. BLUE SKY FILINGS. All Blue Sky filings and permits or orders
required to carry out the transactions contemplated by this Agreement shall have
been made and received containing no term or condition reasonably unacceptable
to it.
SECTION 4.03. ADEQUATE PROCEEDINGS. All corporate and other proceedings in
connection with the transactions contemplated herein and all documents incident
thereto shall be reasonably satisfactory in form and substance to it and its
counsel.
SECTION 4.04. NO ADVERSE CHANGE. Between the date of execution of this Agreement
and the Effective Date, STARLIGHT, CINEMA, and PITCHERS!
(a) except in the ordinary course of its business, shall not have
incurred any liabilities or obligations (direct or contingent) or
disposed of any of its assets, or entered into any material
transaction or suffered or experienced any materially adverse change
in its condition, financial or otherwise; and
(b) shall not have increased its issued and outstanding shares of
common stock or any other securities.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. ASSIGNMENT. This Agreement may not be assigned nor any of the
performances hereunder delegated by operation of law or otherwise by any party
hereto, and any purported assignment or delegation shall be void.
SECTION 5.02. HEADINGS. The article and section headings of this Agreement are
inserted for convenience of reference only and do not constitute a part of this
Agreement.
SECTION 5.03. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, successors, legal
representatives, assigns, and transferors.
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SECTION 5.04. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof. There are no
representations, warranties, conditions, or other obligations except as herein
specifically provided. Any waiver, amendment, or modification hereof must be in
writing. A waiver in one instance shall not be deemed to be a continuing waiver
or waiver in other instance.
SECTION 5.05. COUNTERPARTS. This Agreement may be executed in counterparts and
each counterpart hereof shall be deemed to be an original, but all such
counterparts together shall constitute but one agreement an original, but all
such counterparts together shall constitute but one agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.
STARLIGHT ENTERTAINMENT, INC.
By: /s/ R. Xxxxx Xxxxxxx
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R. Xxxxx Xxxxxxx, President
CINEMA SAVER THEATRE CORPORATION
By: /s/ R. Xxxxx Xxxxxxx
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R. Xxxxx Xxxxxxx, President
PITCHERS!, INC.
By: /s/ Xxxxxxx X. Xxx
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Xxxxxxx X. Xxx, President
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