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ACQUISITION AGREEMENT
Agreement dated as of the 28th day of July, 2005 by and among, MFC
Development Corp., a Delaware corporation, with an address at 000 Xxxxx Xxxxxx,
Xxxxx 000, Xxx Xxxxxxxx, XX 00000 ("MFC"), Worldwide Excellence, Inc., a
Delaware corporation, with an address at 00000 Xx Xxxxxx Xxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000 ("WWE") and the stockholders of WWE (the "WWE Stockholders") as
set forth on Schedule "A" annexed hereto and made a part hereof (the
"Stockholders Schedule") which stockholders hold all of the issued and
outstanding shares of common stock of WWE, par value $.01 (the "WWE Common
Stock") as of the date of this Agreement.
WITNESSETH
WHEREAS, MFC is a reporting company registered with the Securities and
Exchange Commission (the "SEC") and is current with all of its filings with the
SEC, whose stock is quoted on the OTC Bulletin Board under the symbol MFCD.OB;
WHEREAS, the Board of Directors of MFC and WWE deem it advisable and in
the best interests of each corporation and their respective stockholders that
MFC purchase one hundred (100%) percent of the capital stock of WWE in exchange
for shares of capital stock of MFC;
WHEREAS, for Federal income tax purposes it is intended that the
transactions which are contemplated in this Agreement qualify as a tax-free
reorganization pursuant to the Internal Revenue Code of 1986, as amended (the
"Code");
WHEREAS, WWE, prior to the Closing Date, intends to raise at least two
million two hundred fifty thousand ($2,250,000) dollars (with an over-allotment
of at least an additional five hundred thousand ($500,000) dollars) pursuant to
a private offering of WWE Convertible Preferred Stock and Warrants (the
"Offering") and to raise at least two hundred fifty thousand ($250,000) dollars
and up to six hundred thousand ($600,000) dollars pursuant to a private offering
of WWE Convertible Debentures and Warrants (the "Bridge");
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WHEREAS, on the Closing Date (hereinafter defined in Article "5" of this
Agreement), MFC shall acquire one hundred (100%) percent of the capital stock of
WWE;
WHEREAS, the Boards of Directors of MFC and WWE have approved this
Agreement;
and
WHEREAS, the WWE Stockholders have approved this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants of the parties
hereinafter set forth, and for good and valuable consideration, receipt of which
is hereby acknowledged,
IT IS AGREED:
1. Recitals. The parties hereby adopt as part of this Agreement each of
the recitals which is contained in the WHEREAS clauses, and agree that such
recitals shall be binding upon the parties hereto by way of contract and not
merely by way of recital of inducement; and such clauses are hereby confirmed
and ratified as being true and accurate by each party as to itself.
2. Acquisition.
A. Subject to, and consistent with, the provisions of this Agreement, and
in accordance with the relevant provisions of the Delaware General Corporation
Law, MFC shall on the Closing Date acquire one hundred (100%) percent of the
capital stock of WWE.
B.i. Upon the Closing Date, the Board of Directors of MFC shall appoint
the directors designated by WWE to serve as the directors of MFC and WWE, with
each to hold office in accordance with the certificate of incorporation and
by-laws of the respective entity, in each case until their respective successors
are duly elected or appointed and qualified, and thereafter the directors of MFC
serving immediately prior to the Closing Date who have not been appointed to
serve on the Board of Directors of MFC and the directors of WWE serving
immediately prior to the Closing Date who have not been appointed to serve on
the Board of Directors of WWE shall resign.
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ii. Upon the Closing Date, the Board of Directors of MFC shall appoint the
officers designated by WWE to serve as the officers of MFC and WWE, each to hold
office in accordance with the certificate of incorporation and by-laws of the
respective entity, in each case until their respective successors are duly
elected or appointed and qualified, and thereafter the officers of MFC serving
immediately prior to the Closing Date who have not been appointed to serve as
officers of MFC and the officers of WWE serving immediately prior to the Closing
Date who have not been appointed to serve as officers of WWE shall resign.
3. Exchange of Securities.
A. On the Closing Date, subject to and pursuant to the terms and
conditions of this Agreement, MFC shall issue an aggregate of eleven million
five hundred thousand (11,500,000) shares of common stock of MFC, par value
$.001 (the "MFC Common Stock") to the WWE Stockholders for the WWE Common Stock
set forth on the Stockholder Schedule.
B. On the Closing Date, subject to and pursuant to the terms and
conditions of this Agreement,
i. MFC shall deliver an aggregate of three million shares of the MFC
Common Stock (the "WWE Earn-Out Shares") to be held in escrow pursuant to the
terms and subject to the conditions of an escrow agreement (the "WWE Escrow
Agreement"), substantially in the form annexed hereto and made a part hereof as
Exhibit A-1, to be entered into among MFC, GS, and certain WWE Stockholders.
Subject to Article 19 of this Agreement, all, or a portion of such shares of MFC
Common Stock shall be released under the WWE Escrow Agreement to the WWE
Stockholders who are signatories to the WWE Escrow Agreement, if, and only if,
WWE's Cumulative Net Income, as such term is defined in the Escrow Agreement,
equals or exceeds the specified target by December 31, 2006.
ii. MFC shall deliver an aggregate of six hundred thousand (600,000)
shares of the MFC Common Stock (the "MFC Earn-Out Shares") to be held in escrow
pursuant to the
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terms and subject to the conditions of an escrow agreement (the "MFC Escrow
Agreement"), substantially in the form annexed hereto and made a part hereof as
Exhibit A-2, to be entered into among MFC, GS, and XxXxxxxx Xxxxx, P.C. as the
Representative of the MFC Stockholders. Subject to Article 19 of this Agreement,
all, or a portion of such MFC Common Stock shall be released under MFC Escrow
Agreement to the Representative of the MFC Stockholders, if, and only if, WWE's
Cumulative Net Income, as such term is defined in the Escrow Agreement, equals
or exceeds the specified target by December 31, 2006.
C. WWE entered into a Retainer Agreement dated as of June 17, 2005 with
Xxxxxxx Savage LLP ("GS") pursuant to which WWE agreed to issue such number of
shares of WWE Common Stock to GS as shall upon the Closing (as defined in
Article "5" of this Agreement) be equal to fifteen thousand (15,000) shares of
MFC Common Stock based upon the number of shares of MFC Common Stock being
reserved for issuance or issued and outstanding in accordance with this
Agreement. On the Closing Date, subject to and pursuant to the terms and
conditions of this Agreement, WWE shall cause MFC to issue to GS fifteen
thousand (15,000) shares of MFC Common Stock with the same powers, preferences,
rights, qualifications, limitations and restrictions as the shares of WWE Common
Stock to which GS is entitled in exchange for GS's right to receive WWE Common
Stock.
4. Issuance of Other MFC Securities. WWE entered into an agreement as of
May 19, 2005 with Diversified Investors Capital Services of North America, Inc.
("Diversified") pursuant to which WWE agreed to issue such number of shares of
WWE Common Stock to Diversified or its designees as shall upon the Closing be
equal to seven hundred ten thousand (710,000) shares of MFC Common Stock based
upon the number of shares of MFC Common Stock being reserved for issuance or
issued and outstanding in accordance with this Agreement. On the Closing Date,
subject to and pursuant to the terms and conditions of this Agreement, WWE shall
cause MFC to issue to Diversified or its designees seven hundred ten thousand
(710,000) shares
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of MFC Common Stock with the same powers, preferences, rights, qualifications,
limitations and restrictions as the shares of WWE Common Stock to which
Diversified or its designees is entitled in exchange for Diversified's or its
designees' right to receive WWE Common Stock. At or prior to the Closing Date,
Diversified and its designees shall deliver to MFC lock-up agreements signed by
each of them (collectively, the "Diversified Lock-Up Agreements") providing,
among other things, that each of them agrees only to sell or otherwise dispose
of its MFC Common Stock in accordance with the restrictions agreed to by the
investors in the Offering.
5. Closing Date. The closing of this transaction (the "Closing") shall
take place by the delivery of all required executed documents by the parties at
the offices of Xxxxxxx Xxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, at 11:00 A.M on or prior to August 31, 2005 (the "Closing Date")
provided that this Agreement has not been terminated pursuant to Article "15" of
this Agreement by either party.
6. MFC's Representations, Warranties and Covenants. MFC represents,
warrants and covenants to WWE as follows:
A. Corporate Status,
i. (a) MFC is a corporation duly organized, validly existing and except as
set forth on the disclosure schedule which is annexed hereto and made a part
hereof (the "MFC Disclosure Schedule"), in good standing pursuant to the laws of
the State of Delaware, with all requisite power and authority to carry on its
business as presently conducted in all jurisdictions where presently conducted,
to enter into this Agreement and to consummate the transactions set forth in
this Agreement and (b) Yolo Equities Corp. ("Yolo") is a corporation duly
organized, validly existing and except as set forth on the MFC Disclosure
Schedule, in good standing pursuant to the laws of the State of New York, with
all requisite power and authority to carry on its business as presently
conducted in all jurisdictions where presently conducted, to enter into this
Agreement and to consummate the transactions set forth in this Agreement; and
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ii. Copies of (a)(1) the Certificate of Incorporation of MFC, and all
amendments thereto, certified by the Secretary of State of the State of Delaware
and (2) the Certificate of Incorporation of Yolo, and all amendments thereto,
certified by the Secretary of State of the State of New York, (b) the By-Laws of
MFC, as amended, certified by the Secretary of MFC and the By-Laws of Yolo, as
amended, certified by the Secretary of Yolo, and (c) a good standing certificate
for MFC and a good standing certificate for Yolo, each issued by the applicable
Secretary of State as of a date not more than thirty (30) days prior to the date
of this Agreement, are annexed hereto and made a part hereof as the following
Exhibits: "B" (Article "6.A.ii."), "C" (Article "6.A.ii.") and "D" (Article
"6.A.ii.") respectively, and are complete and correct as of the date of this
Agreement.
B. Capitalization. MFC's authorized capital stock consists of (i) forty
million (40,000,000) shares of MFC Common Stock of which, (after giving effect
to the stock dividend described below and after giving effect to the
consummation of the MFC Private Sale), approximately two million seven hundred
thousand (2,700,000) shares are issued and outstanding, all of which are, or
will be prior to the Closing Date validly issued, fully paid and non-assessable
and twenty-eight thousand three hundred fifty (28,350) shares are reserved for
issuance pursuant to stock options and (ii) two million (2,000,000) shares of
Preferred Stock, par value $.001 per share, in one or more series as determined
by the Board of Directors. As of the date of this Agreement, there are no shares
of Preferred Stock issued and outstanding. Except as set forth on (i) MFC's last
annual report on Form 10-K for the fiscal year ended February 28, 2005 (the
"Form 10-K"), (ii) MFC's quarterly report on Form 10-Q for the three months
ended May 31, 2005 (the "Form 10-Q"), (iii) the MFC Disclosure Schedule, (iv)
the Recitals, and (v) Articles "3" and "4" of this Agreement, MFC has no option
plans and there are no subscriptions, options, warrants, rights or other
agreements outstanding to acquire shares of stock of MFC or
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any other equity security or security convertible into an equity security.
Except for MFC's contemplated stock dividend whereby the holder of each share of
the MFC Common Stock will receive an additional .35 shares of the MFC Common
Stock for each share of the MFC Common Stock owned by the holder on the record
date of the stock dividend, which stock dividend will take place immediately
prior to the Closing Date, there are no agreements or commitments to increase,
decrease or otherwise alter the authorized capital stock of MFC. Except as set
forth on the MFC Disclosure Schedule, MFC has not granted any registration
rights with respect to any series of MFC stock outstanding. Upon issuance in
accordance with the terms of this Agreement, the MFC Common Stock will be
validly issued, fully paid and non-assessable.
MFC represents that it has raised at least two hundred twenty-four
thousand ($224,000) dollars pursuant to private sales of MFC Common Stock (the
"MFC Private Sale").
C. Authority of MFC. MFC has the full corporate power and authority to
execute, deliver, and perform this Agreement and has taken all corporate action
required by law and its organizational documents to authorize the execution and
delivery of this Agreement and the consummation of the transactions set forth in
this Agreement. This Agreement and the consummation by MFC of the transactions
set forth in this Agreement have been duly and validly authorized, executed, and
delivered by the Board of Directors of MFC, and this Agreement is valid and
binding upon MFC and enforceable against MFC in accordance with their terms
(except as the enforceability thereof may be limited by bankruptcy, bank
moratorium or similar laws affecting creditors' rights generally and laws
restricting the availability of equitable remedies and may be subject to general
principles of equity whether or not such enforceability is considered in a
proceeding at law or in equity). A certified resolution of the Board of
Directors of MFC is annexed hereto and made a part hereof as Exhibit "E"
(Article "6.C."). No other corporate approvals are required for MFC to execute,
deliver and perform this Agreement.
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D. Ownership. Annexed hereto and made a part hereof as Exhibit "F"
(Article "6.D."), is a schedule of the share ownership of the officers and
directors of the MFC Common Stock (collectively, the "MFC Insiders"). At or
prior to the Closing Date, MFC shall deliver to WWE lock-up agreements
(collectively, the "MFC Lock-Up Agreements") signed by each such MFC Insider,
providing for, among other things, that each such MFC Insider shall not sell or
otherwise dispose of any MFC Common Stock owned by it for a period of 90 days
after the Closing Date. Thereafter, each such MFC Insider may sell or otherwise
dispose of its MFC Common Stock as follows: 1/3 of its MFC Common Stock between
the 91st and 180th day after the Closing Date; 1/2 of its remaining MFC Common
Stock between the 181st and 270th day after the Closing Date; and its remaining
MFC Common Stock after the 271st day after the Closing Date.
E. Compliance with the Law and Other Instruments. Except as otherwise
provided in this Agreement and in the Exhibits annexed hereto, the business and
operations of MFC have been and are being conducted in all material respects in
accordance with all applicable laws, rules and regulations of all authorities
which affect MFC or its properties, assets, businesses or prospects.
F. Absence of Conflicts. The execution and delivery of this Agreement and
the issuance of the securities of MFC, and the consummation by MFC of the
transactions set forth in this Agreement: (i) do not and shall not conflict with
or result in a breach of any provision of MFC's Certificate of Incorporation or
By-Laws, (ii) do not and shall not result in any breach of, or constitute a
default or cause an acceleration under any arrangement, agreement or other
instrument to which MFC is a party to or by which any of its assets are bound,
(iii) do not and shall not cause MFC to violate or contravene any provision of
law or any governmental rule or regulation, and (iv) will not and shall not
result in the imposition of any lien, or encumbrance upon, any property of MFC.
MFC has performed in all material respects all of its obligations which are, as
of the date of this Agreement, required to be performed, pursuant to the terms
of any such agreement, contract or commitment.
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G. Environmental Compliance. There are no Phase I environmental reports
with respect to any of the properties owned or leased by MFC or any of its
subsidiaries. To MFC's knowledge, it is in compliance with all applicable
environmental laws (the "Environmental Laws"). MFC is presently authorized, if
required, to generate, transport through third parties, store, use, treat,
dispose of, release, and conduct other handling of, as required, those hazardous
substances used in MFC's business, which consist of, hazardous waste, hazardous
material, hazardous constituents, toxic substances, pollutants, contaminants,
asbestos, radon, polychlorinated biphenyls, petroleum product or waste
(including crude oil or any fraction thereof), natural gas, liquefied gas,
synthetic gas and other material defined, regulated, controlled or subject to
any remediation requirement under any Environmental Law.
H. OSHA Compliance; Employment Matters. To MFC's knowledge, it is in
compliance with all applicable federal, state and local laws, rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder and other governmental requirements relating to occupational
health and safety, including but not limited to the Occupational Safety and
Health Act of 1970, as amended, and the rules and regulations promulgated
thereunder.
Except as set forth on the MFC Disclosure Schedule, MFC does not owe any
accrued but unpaid salary or other compensation or benefits to any officer,
director, employee or consultant of MFC. Except as set forth on the MFC
Disclosure Schedule, MFC has no deferred compensation, incentive, pension,
vacation, health, disability, severance, or any other any benefit plans
(collectively, the "Benefit Plans). Upon the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and
assuming all officers, directors, employees and consultants of MFC except for
Xxxxxx Xxxxxxx either have resigned or have been
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terminated at or prior to the Closing Date, MFC, from and after the Closing Date
will have no obligation to any officer, director, employee or consultant of MFC
for any claim, including, without limitation, any claim for wages, fees,
benefits, deferred compensation, severance pay, incentive pay, or pension,
arising under any of the Benefit Plans or arising out of such officer's,
director's, employee's, or consultant's engagement or employment by MFC, except
as set forth on the MFC Disclosure Schedule. The MFC Disclosure Schedule
contains for each or its officers, directors, employees and consultants his
compensation and benefits for the last two years.
I. Financial Statements. MFC's financial statements contained in MFC's
Form 10-K and 10-Q (collectively, the "MFC Financial Statements") have been
prepared using generally accepted accounting principles ("GAAP") applied on a
consistent basis. The MFC Financial Statements fairly present the financial
condition and results of operations for MFC. Except as indicated in the MFC
Financial Statements, or in any Exhibit to this Agreement, MFC did not have as
of May 31, 2005 any outstanding indebtedness or other liabilities or obligations
of any nature (whether absolute, accrued, contingent or otherwise, and whether
due or to become due). Except as set forth on the MFC Disclosure Schedule, since
the date of the Form 10-Q, there has not been any material adverse change in
MFC's financial condition, assets, liabilities or business, or any damage,
destruction or loss, whether or not covered by insurance, materially affecting
MFC's properties, assets or business, and MFC has not incurred any indebtedness,
liability or other obligation of any nature whatsoever except in the ordinary
course of business and MFC has not made any change in its accounting methods or
practices. On the Closing Date, MFC's shareholders' equity shall be at least two
million six hundred thousand ($2,600,000) dollars (after giving effect to (i)
the deduction of any accrued but unpaid back salary and benefits; (ii) the
deduction of any co-investor participation interests in the amounts set forth in
the Financial Statements; (iii) the consummation of the sale of Yolo for net
proceeds to MFC of
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one million dollars ($1,000,000); (iv) the conversion to MFC Common Stock of
seven hundred fifty thousand ($750,000) dollars of the outstanding principal
amount of the debt represented by the MFC Bonds); and (v) the omissions of
accruals for the annual audit and shareholders meeting payable in June and July,
2006 and the current compensation of Xxxxxx Xxxxxxx from July 15, 2005 through
the Closing Date. Subsequent to the Closing Date, MFC shall change its fiscal
year presently ending February 28th, to a fiscal year ending December 31st.
The accounts receivable set forth on the Financial statements arise out of
bona fide transactions in the ordinary course of MFC's business. These accounts
receivable are collectible in the aggregate amount of at least eight hundred
four thousand three hundred three ($804,303) dollars as of May 31, 2005, subject
to deduction for actual collections and the direct costs of collections after
May 31, 2005 and subject to increase for interest received in respect of these
accounts receivable. To the knowledge of MFC, there are no setoffs, claims or
other defenses to the collection of these accounts receivable.
J. Taxes. Except as set forth on the MFC Disclosure Schedule, MFC has
timely filed all required federal, state, city and local tax returns for income,
franchise, social security, withholding, sales, excise, unemployment insurance,
real estate and other taxes, and has paid or made adequate provision for the
payment of all such taxes shown to be due on said returns.
K. Contracts. Annexed hereto and made a part hereof as Exhibit "G"
(Article "6.K.") is a true and complete schedule of all of MFC's material
contracts, including, without limitation, MFC's contracts for leased equipment.
Except as set forth on the MFC Disclosure Schedule, all of the contracts so
listed have been entered into in the ordinary course of business and neither MFC
nor any other party to any such contract is in default under any such contract.
L. Litigation. Except as set forth on the Form 10-K, the Form 10-Q, and
the MFC Disclosure Schedule, there are no legal, administrative, arbitration, or
other proceeding or governmental investigations adversely affecting MFC or its
properties, assets or businesses, or
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with respect to any matter arising out of the conduct of MFC's business pending
or to its knowledge threatened, by or against, any officer or director of MFC in
connection with its affairs, whether or not covered by insurance. Except as set
forth on the Form 10-K, the Form 10-Q, and the MFC Disclosure Schedule, neither
MFC nor its officers or directors are subject to any order, writ, injunction, or
decree of any court, department, agency, or instrumentality, affecting MFC.
Except as set forth on the Form 10-K, the Form 10-Q, and the MFC Disclosure
Schedule, MFC is not presently engaged in any legal action. The reserves for
litigation set forth on the MFC Financial Statements are adequate to cover the
cost of any adverse judgment in any pending litigation and, except as set forth
on the MFC Disclosure Schedule, MFC will not be obligated to pay the costs,
including, without limitation, attorney's fees, of any pending litigation after
the Closing Date.
M. Reporting Company Status. MFC is a reporting company registered with
the SEC whose common stock is quoted on the OTC Bulletin Board under the symbol
MFCD.OB. MFC has not received any notice with respect to non-compliance with any
rules or regulations that would affect the eligibility of the Common Stock to be
quoted on the OTC Bulletin Board.
N. SEC Filings. Except as set forth on the MFC Disclosure Schedule, MFC
has timely filed and will continue to timely file all forms, reports and
documents required to be filed by MFC with the SEC since November 30, 2000
(collectively, the "SEC Reports") and the SEC Reports (i) at the time filed,
complied in all material respects with the applicable requirements of the
Securities Act of 1933, as amended, (the "Act") and the Securities Exchange Act
of 1934, as amended, as the case may be, (ii) did not, to MFC 's knowledge, at
the time they were filed (or if amended or superseded by a filing prior to the
date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a fact required to be stated in
such SEC Reports or necessary in order to make the statements in such SEC
Reports, in the light of the circumstances under which they were made, not
materially misleading and (iii) adequately described all material transactions,
which transactions were consummated on commercially reasonable terms and were in
the best interests of MFC's stockholders.
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O. Absence of Changes. Except as set forth on the MFC Disclosure Schedule
and this Agreement and except for transactions consummated on commercially
reasonable terms and in the best interests of MFC's stockholders, subsequent to
the date of the Form 10-Q and through the date of this Agreement, and except as
in the ordinary course of business and with respect to any items reserved by MFC
and reflected in the MFC Financial Statements, there has not been any material
adverse change in, or any event or condition (financial or otherwise) affecting
the business, properties, assets, liabilities, historical operations or
prospects of MFC, there are no liabilities or obligations of any nature, whether
absolute, contingent or otherwise, whether due or to become due (including,
without limitation, liabilities for taxes with respect to or measured by income
of MFC for any period prior to, and/or subsequent to, the date of the Form 10-Q
or arising out of any transaction of MFC prior to, and/or subsequent to, such
date). Subsequent to the date of the Form 10-Q, except for the previously
described stock dividend and the MFC Earn-Out Shares, there has not been any
declaration, or setting aside, or payment of any dividend or other distribution
with respect to MFC securities, or any direct or indirect redemption, purchase,
or other acquisition of any of MFC securities. To MFC's knowledge, there has not
been an assertion against MFC of any liability of any nature or in any amount
not fully reflected or reserved against in the Form 10-K or Form 10-Q.
P. No Approvals. No approval of any governmental authority is required in
connection with the consummation of the transactions set forth in this
Agreement.
Q. Broker. Except as set forth on the MFC Disclosure Schedule, MFC
represents that it has not had any dealing with respect to this transaction with
any business broker, firm or salesman, or any person or corporation, investment
banker or financial advisor who is or shall be entitled to any broker's or
finder's fee or any other commission or similar fee with respect to the
transactions set forth in this Agreement. MFC agrees to indemnify and hold
harmless WWE from and against any and all claims for brokerage commissions or
finder's fees by any person, firm or corporation on the basis of any act or
statement alleged to have been made by MFC or its affiliates or agents.
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R. Complete Disclosure. No representation or warranty of MFC which is
contained in this Agreement, or in a writing furnished or to be furnished
pursuant to this Agreement, to MFC's knowledge contains or shall contain any
untrue statement of a material fact, omits or shall omit to state any fact which
is required to make the statements which are contained herein or therein, in
light of the circumstances under which they were made, not materially
misleading. There is no fact relating to the business, affairs, operations,
conditions (financial or otherwise) or prospects of MFC which would materially
adversely affect same which has not been disclosed to WWE in this Agreement.
S. No Defense. It shall not be a defense to a suit for damages for any
misrepresentation or breach of covenant or warranty that WWE knew or had reason
to know that any covenant, representation or warranty in this Agreement
furnished or to be furnished to WWE contained untrue statements.
7. WWE's Representations, Warranties and Covenants. WWE represents,
warrants and covenants to MFC as follows:
A. Corporate Status.
i. WWE is a corporation duly organized, validly existing and in good
standing pursuant to the laws of the State of Delaware, with all requisite power
and authority to carry on its business as presently conducted in all
jurisdictions where presently conducted, to enter into this Agreement and to
consummate the transactions set forth in this Agreement; and
ii. Copies of (a) the Certificate of Incorporation of WWE, and all
amendments thereto, certified by the Secretary of State of the State of
Delaware, (b) the By-Laws
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of WWE, as amended, certified by the Secretary of WWE, and (c) a good standing
certificate for WWE issued by the Secretary of the State of the State of
Delaware as of a date not more than thirty (30) days prior to the date of this
Agreement, are annexed hereto and made a part hereof as the following Exhibits:
"H" (Article "7.A.ii."), "I" (Article "7.A.ii.") and "J" (Article "7.A.ii.")
respectively, and are complete and correct as of the date of this Agreement.
B. Capitalization. WWE's authorized capital stock consists of one hundred
thousand (100,000) shares of WWE Common Stock of which fifteen thousand seven
hundred (15,700) shares are issued and outstanding, or reserved for issuance,
all of which are, or will be prior to the Closing Date validly issued, fully
paid and non-assessable. As of the date hereof no shares of Preferred Stock are
authorized, issued or outstanding. Except as set forth in (i) Article "3" of
this Agreement, (ii) the Financial Statements (as defined in Paragraph "I" of
this Article "7" of this Agreement) and (iii) the WWE Disclosure Schedule,
herein defined, there are no subscriptions, options, warrants, rights or other
agreements outstanding to acquire shares of stock of WWE or any other equity
security or security convertible into an equity security. There are no
agreements or commitments to increase, decrease or otherwise alter the
authorized capital stock of WWE. Except as set forth on the disclosure schedule
which is annexed hereto and made a part hereof (the "WWE Disclosure Schedule"),
WWE has not granted any registration rights with respect to any series of WWE
stock outstanding.
C. Authority of WWE. WWE has the full corporate power and authority to
execute, deliver, and perform this Agreement and has taken all corporate action
required by law and its organizational documents to authorize the execution and
delivery of this Agreement and the consummation of the transactions set forth in
this Agreement. This Agreement and the consummation by WWE of the transactions
set forth in this Agreement have been duly and validly authorized, executed, and
delivered by the Board of Directors and the WWE Stockholders, and this Agreement
are valid and binding upon WWE and enforceable against
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WWE in accordance with their terms (except as the enforceability thereof may be
limited by bankruptcy, bank moratorium or similar laws affecting creditors'
rights generally and laws restricting the availability of equitable remedies and
may be subject to general principles of equity whether or not such
enforceability is considered in a proceeding at law or in equity). Certified
resolutions of the Board of Directors of WWE and the WWE Stockholders are
annexed hereto and made a part hereof as Exhibit "K" (Article "7.C.") and
Exhibit "L" (Article "7.C."), respectively.
D. Ownership. The WWE Stockholders set forth on the Stockholder Schedule
annexed hereto and made a part hereof as Schedule A are the record, beneficial
and equitable owners of the WWE Common Stock set forth on such Stockholder
Schedule. To WWE's knowledge, each stockholder has the full right and authority
to exchange their WWE Common Stock for shares of MFC Common Stock. At or prior
to the Closing Date, Xxxxxxx X. Xxxxx and Xxxxx Xxxxxx shall deliver to MFC
lock-up agreements (collectively, the "WWE Lock-Up Agreements") signed by each
of them, providing for, among other things, that neither of them shall sell or
otherwise dispose of any MFC Common Stock owned by him for a period of one year
after the Closing Date.
E. Compliance with the Law and Other Instruments. Except as otherwise
provided in this Agreement and in the Exhibits annexed hereto, the business and
operations of WWE have been and are being conducted in all material respects in
accordance with all applicable laws, rules and regulations of all authorities
which affect WWE or its properties, assets, businesses or prospects.
F. Absence of Conflicts. The execution and delivery of this Agreement, the
transfer of the securities of WWE, and the consummation by WWE of the
transactions set forth in this Agreement: (i) do not and shall not conflict with
or result in a breach of any provision of WWE's Certificate of Incorporation or
By-Laws, (ii) do not and shall not result breach of, or
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constitute a default or cause an acceleration under any arrangement, agreement
or other instrument to which WWE is a party to or by which any of its assets are
bound, (iii) do not and shall not cause WWE to violate or contravene any
provision of law or any governmental rule or regulation, and (iv) will not and
shall not result in the imposition of any lien, or encumbrance upon, any
property of WWE. WWE has performed in all material respects all of its
obligations which are, as of the date of this Agreement, required to be
performed, pursuant to the terms of any such agreement, contract or commitment.
G. Environmental Compliance. To WWE's knowledge, it is in compliance with
all applicable environmental laws (the "Environmental Laws"). WWE is presently
authorized, if required, to generate, transport through third parties, store,
use, treat, dispose of, release, and conduct other handling of, as required,
those hazardous substances used in WWE's business, which consist of, hazardous
waste, hazardous material, hazardous constituents, toxic substances, pollutants,
contaminants, asbestos, radon, polychlorinated biphenyls, petroleum product or
waste (including crude oil or any fraction thereof), natural gas, liquefied gas,
synthetic gas and other material defined, regulated, controlled or subject to
any remediation requirement under any Environmental Law.
H. OSHA Compliance; Employment Matters. To WWE's knowledge, it is in
compliance with all applicable federal, state and local laws, rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder and other governmental requirements relating to occupational
health and safety, including but not limited to the Occupational Safety and
Health Act of 1970, as amended, and the rules and regulations promulgated
thereunder.
Except as set forth on the WWE Disclosure Schedule, WWE does not owe any
accrued but unpaid salary or other compensation or benefits to any officer,
director, employee or consultant of WWE. Except as set forth on the WWE
Disclosure Schedule, WWE has no
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deferred compensation, incentive, pension, vacation, health, disability,
severance, or any other any benefit plans (collectively, the "Benefit Plans).
The WWE Disclosure Schedule contains for each or its officers, directors,
employees and consultants his compensation and benefits for the last two years.
I. Financial Statements, WWE's unaudited financial statements for the five
month period ended May 31, 2005 (the "Unaudited Financial Statements"), a true
copy of which has been provided to MFC, have been prepared using generally
accepted accounting principles ("GAAP") applied on a consistent basis.
Subsequent to the date of this Agreement, WWE shall cause to be completed an
examination of its financial results for the fiscal year ended December 31, 2004
by its independent certified public accountants and WWE shall annex hereto and
make a part hereof as Exhibit "M" (Article "7.I") true copies of WWE's audited
statements of profit and loss for the fiscal year ended December 31, 2004 and a
balance sheet as of December 31, 2004 (the "Audited Financial Statements"
together with the Unaudited Financial Statements collectively referred to as the
"Financial Statements"), which shall have been prepared using GAAP applied on a
consistent basis. The Audited Financial Statements shall include an unqualified
opinion of its independent certified public accountants which is necessary for
inclusion in a Form 8-K and Form 10-K. Except as set forth on the WWE Disclosure
Schedule, the Financial Statements shall fairly present the financial condition
and results of operations for WWE. Except as indicated in the Financial
Statements, or as set forth on the WWE Disclosure Schedule or in any Exhibit to
this Agreement, WWE does not have any outstanding indebtedness or other
liabilities or obligations of any nature (whether absolute, accrued, contingent
or otherwise, and whether due or to become due). Except as set forth on the WWE
Disclosure Schedule, since the date of the Financial Statements, there has not
been any material adverse change in WWE's financial condition, assets,
liabilities or business, or any damage, destruction or loss, whether or not
covered by insurance, materially affecting WWE's properties, assets or business,
and WWE has not incurred any indebtedness, liability or other obligation of any
nature whatsoever except in the ordinary course of business and WWE has not made
any change in its accounting methods or practices. The Audited Financial
Statements shall indicate that WWE had net income of approximately $1,500,000
for fiscal year 2004 before interest and taxes.
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The accounts receivable set forth on the Financial statements arise out of
bona fide transactions in the ordinary course of WWE's business. These accounts
receivable, subject to the reserves set forth on the Financial Statements, are
fully collectible in accordance with their terms and the aging schedule
delivered to MFC. To the knowledge of WWE, there are no setoffs, claims or other
defenses to the collection of these accounts receivable.
J. Taxes. WWE has timely filed all required federal, state, city and local
tax returns for income, franchise, social security, withholding, sales, excise,
unemployment insurance, real estate and other taxes, and has paid or made
adequate provision for the payment of all such taxes shown to be due on said
returns.
K. Contracts. Annexed hereto and made apart hereof as Exhibit "N" (Article
"7.K ") is a true and complete schedule of all of WWE's material contracts
including, but not limited to, license agreements. All of the contracts so
listed have been entered into in the ordinary course of business and neither WWE
nor any other party to any such contract is in default under any such contract.
L. Litigation. Except as set forth on the WWE Disclosure Schedule, there
are no legal, administrative, arbitration, or other proceeding or governmental
investigations adversely affecting WWE or its properties, assets or businesses,
or with respect to any matter arising out of the conduct of the WWE's business
pending or to its knowledge threatened, by or against, any officer or director
of WWE in connection with its affairs, whether or not covered by insurance.
Except as set forth on the WWE Disclosure Schedule, neither WWE nor its officers
or directors are subject to any order, writ, injunction, or decree of any court,
department, agency, or instrumentality, affecting WWE. Except asset forth on the
WWE Disclosure Schedule, WWE is not presently engaged in any legal action.
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M. Absence of Changes. Except as set forth on the WWE Disclosure Schedule
and this Agreement, subsequent to the date of the Financial Statements and
through the date of this Agreement, there has not been any material adverse
change in, or any event or condition (financial or otherwise) affecting the
business, properties, assets, liabilities, historical operations or prospects of
WWE, and except as in the ordinary course of business and with respect to any
items reserved by WWE and reflected in its Financial Statements, there are no
liabilities or obligations of any nature, whether absolute, contingent or
otherwise, whether due or to become due (including, without limitation,
liabilities for taxes with respect to or measured by income of WWE for any
period prior to, and/or subsequent to, the date of the Financial Statements or
arising out of any transaction of WWE prior to, and/or subsequent to, such
date). Subsequent to the date of the Financial Statements except as set forth on
the WWE Disclosure Schedule, there has not been any declaration, or setting
aside, or payment of any dividend or other distribution with respect to WWE's
securities, or any direct or indirect redemption, purchase, or other acquisition
of any of WWE's securities. To WWE's knowledge, there has not been an assertion
against WWE of any liability of any nature or in any amount not fully reflected
or reserved against in the Financial Statements.
N. No Approvals. No approval of any governmental authority is required in
connection with the consummation of the transactions set forth in this
Agreement.
0. Broker. Except as set forth on the WWE Disclosure Schedule, WWE
represents that it has not had any dealing with respect to this transaction with
any business broker, firm or salesman, or any person or corporation, investment
banker or financial advisor who is or shall be entitled to any broker's or
finder's fee or any other commission or similar fee with respect to the
transactions set forth in this Agreement. WWE agrees to indemnify and hold
harmless MFC from and against any and all claims for brokerage commissions or
finder's fees by any person, firm or corporation on the basis of any act or
statement alleged to have been made by WWE or its affiliates or agents.
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P. Complete Disclosure. No representation or warranty of WWE which is
contained in this Agreement, or in a writing furnished or to be furnished
pursuant to this Agreement, to WWE's knowledge contains or shall contain any
untrue statement of a material fact, omits or shall omit to state any fact which
is required to make the statements which are contained herein or therein, in
light of the circumstances under which they were made, not materially
misleading. There is no fact relating to the business, affairs, operations,
conditions (financial or otherwise) or prospects of WWE which would materially
adversely affect same which has not been disclosed to MFC in this Agreement.
Q. No Defense. It shall not be a defense to a suit for damages for any
misrepresentation or breach of covenant or warranty that MFC knew or had reason
to know that any covenant, representation or warranty in this Agreement
furnished or to be furnished to MFC contained untrue statements.
8. The WWE Stockholders' Representations, Warranties and Covenants. The
WWE Stockholders represent, warrant and covenant to MFC as follows:
A. Ownership. Each is the record, beneficial and equitable owner of the
WWE Common Stock set forth next to his name on the Stockholders Schedule. Each
holds his respective shares of WWE Common Stock free and clear of all liens,
claims or encumbrances and each has the full right and authority to exchange his
shares of WWE Common Stock for shares of MFC Common Stock.
B. MFC Shares. The receipt by each of the WWE Stockholders of the MFC
Common Stock is for his own account, is for investment purposes only, and is not
with a view to, nor for offer or sale in connection with, the distribution of
the MFC Common Stock. Each
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WWE Stockholder understands that the MFC Common Stock has not been registered
under the Securities Act of 1933, as amended (the "Act") or the securities laws
of any state and, therefore, cannot be sold unless it is subsequently registered
under the Act and any applicable state securities laws or exemptions from
registration thereunder are available. Each WWE Stockholder further understands
that only MFC can take action to register the MFC Common Stock.
C. Restrictive Legend. Each WWE Stockholder understands the MFC Common
Stock shall bear the following restrictive legend:
"The Common Stock which is represented by this Certificate has
not been registered under the Securities Act of 1933, as
amended (the "Act'). These securities have been acquired for
investment purposes only and not with a view to distribution
or resale, and may not be sold, transferred, made subject to a
security interest, pledged, hypothecated or otherwise disposed
of unless and until registered under the Act, or on an opinion
of counsel for the Company, that registration is not required
under such Act."
9. Mutual Covenants of MFC and WWE.
A. Best Efforts. Each of the parties shall use its best efforts to perform
or satisfy each covenant or condition to be performed or satisfied by each of
them before and after the Closing Date.
B. Notice of Developments and Updates. Each of the parties shall give
prompt written notice pursuant to Paragraph "C" of Article "20" of this
Agreement to the other parties hereto to of any act, event or occurrence which
may cause or constitute a breach of any of its own representations and
warranties or failure to fulfill any of its covenants, as applicable, in Article
"6" and Article "7" of this Agreement.
C. No Public Announcement. None of the parties hereto shall, without the
prior written approval of the other party, except with respect to the Offering,
make any press release or other public announcement or communicate with any
customer, competitor or supplier of the other party concerning the transactions
contemplated by this Agreement, except as and to the
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extent that such party shall determine is required by law (which determination
shall be made by such party based upon the advice of its counsel), in which
event the other party shall be advised and the parties shall use their best
efforts to cause a mutually agreeable release or announcement to be issued.
10. Conduct of WWE's Business Prior to the Closing Date. Between the date
of this Agreement and the Closing Date, WWE shall carry on its business in the
ordinary course and in the same manner as heretofore conducted and shall
preserve intact the existing business organization of WWE, and use its best
efforts to (i) keep available to WWE the services of WWE's present officers and
employees, (ii) maintain all of WWE's properties in their present condition
(ordinary wear and tear excepted), (iii) maintain insurance policies with
respect to WWE's business and properties consistent with current practice, and
(iv) maintain WWE's rights and franchises. Except as set forth in the WWE
Disclosure Schedule or as provided for in this Agreement, WWE shall not, without
the prior written consent of MFC:
A. make any change in the Certificate of Incorporation or By-Laws of WWE;
B. authorize or issue any capital stock or any rights, warrants, options
or convertible securities to acquire such stock;
C. conduct the business of WWE in any manner other than in the ordinary
course;
D. take any action or omit to do any act which would cause the
representations or warranties of WWE contained herein to be untrue or incorrect
in any material respect;
E. hire any employee other than in the ordinary course of business;
F. except for liabilities incurred and obligations under contracts entered
into in the ordinary course of business, incur any obligation or liability
(absolute or contingent), including, but not limited to, any debt or guarantee
any such debt or issue or sell any debt securities or guarantee any debt
securities of others;
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G. declare or make any payment or distribution to its stockholders (other
than payment of compensation for services rendered, if applicable) or purchase
or redeem any shares of capital stock;
H. mortgage, pledge or subject to lien, charge or any other encumbrance,
any asset, whether tangible or intangible, of WWE;
I. sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets except in the ordinary course of
business unless any such successor assumes any and all outstanding liabilities;
J. commit any act or omit to do any act which would cause a material
breach of any agreement, contract or commitment which is listed in an Exhibit
annexed to this Agreement; or
K. commit any other act or omit to do any other act which would have a
material adverse effect upon the business, or financial condition of WWE.
11. Conduct of MFC Business Prior to the Closing Date. Between the date of
this Agreement and the Closing Date, MFC shall carry on its business in the
ordinary course and in the same manner as heretofore conducted and shall
preserve intact the existing business organization of MFC, and use its best
efforts to (i) keep available to MFC the services of MFC's present officers, and
(ii) preserve MFC relationships, if any, with customers, suppliers and others
having business dealings with MFC, to the end that its goodwill and ongoing
business shall not be materially impaired on the Closing Date. Except as set
forth in the MFC Disclosure Schedule or as provided for in this Agreement, MFC
shall not, without the prior written consent of WWE:
A. make any change in the Certificate of Incorporation or By-Laws of MFC;
B. conduct the business of MFC in any manner other than in the ordinary
course;
C. authorize or issue any capital stock or any rights, warrants, options
or convertible securities to acquire such stock;
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D. pay any accrued and unpaid compensation, nor increase the compensation
payable to, or to become payable by MFC to any officer, director or employee or
make any bonus, insurance, pension, or other benefit plan, payment or
arrangement to or with any officer, director or employee;
E. hire any employee other than in the ordinary course of business;
F. except for liabilities incurred and obligations under contracts entered
into in the ordinary course of business, incur any obligation or liability
(absolute or contingent), including, but not limited to, any debt or guarantee
any such debt or issue or sell any debt securities or guarantee any debt
securities of others;
G. declare or make any payment or distribution to its stockholders (other
than payment of compensation for services rendered, if applicable) or purchase
or redeem any shares of capital stock;
H. mortgage, pledge or subject to lien, charge or any other encumbrance,
any asset, whether tangible or intangible, of MFC;
I. except for the sale of the stock of Yolo, the corporation owning
certain real estate located in Hunter, New York , to Diversified Investors
Capital Services of North America, Inc. or its assigns, for net proceeds to MFC
of one million ($1,000,000) dollars (the "Yolo Sale"), in accordance with the
terms of a certain agreement between MFC and Diversified Investors Capital
Services of North America, Inc. dated July __, 2005, which sale will have been
consummated on commercially reasonably terms, including a covenant by the
principal of Yolo to pass on promptly to MFC (1) savings negotiated with respect
to the compromise of certain of Yolo's liabilities and (2) the proceeds from the
liquidation of certain of Yolo's assets, and in the best interests of MFC's
stockholders, sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets except in the ordinary course of
business unless any such successor assumes any and all outstanding liabilities;
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J. take any action or omit to do any act which would cause the
representations or warranties of MFC contained herein to be untrue or incorrect
in any material respect;
K. commit any act or omit to do any act which would cause a material
breach of any agreement, contract or commitment which is listed in an Exhibit
annexed to this Agreement; or
L. commit any other act or omit to do any other act which would have a
material adverse effect upon the business, financial condition or earnings of
MFC.
12. Conditions of Closing.
A. Conditions to MFC Obligation to Close. The obligation of MFC to close
the transactions set forth in this Agreement shall be subject to the following
conditions:
i. Representations and Warranties of WWE to be True. To WWE's knowledge,
the representations and warranties of WWE set forth in this Agreement shall be
true in all material respects on the Closing Date with the same effect as though
made at such time, except to the extent waived or affected by the transactions
set forth in this Agreement; and WWE shall have delivered to MFC a certificate
of WWE in the form annexed hereto and made a part hereof as Exhibit "O" (Article
"l2.A.i."), signed by the President of WWE and dated the Closing Date to such
effect;
ii. Performance of Obligations of WWE. WWE shall have performed all
obligations and complied with all covenants set forth in this Agreement to be
performed or complied with in all material respects by it prior to the Closing
Date, and WWE shall have delivered to MFC a certificate of WWE in the form
annexed hereto as Exhibit "O" (Article "12.A.i.") signed by the President of WWE
and dated the Closing Date to such effect;
iii. No Adverse Change. Except as set forth on the WWE Schedule, there
shall not have occurred any material adverse change since the date of the
Financial Statement and through the date of the Closing Date in the business,
properties, results of operations or business or financial condition of WWE and
WWE shall have delivered to MFC a certificate of WWE in the form annexed hereto
as Exhibit "O" (Article "12.A.i."), signed by the President of WWE and dated the
Closing Date to such effect;
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iv. Statutory Requirements. Any statutory requirement for the valid
consummation by WWE of the transactions set forth in this Agreement shall have
been fulfilled; any authorizations, consents and approvals of all federal, state
and local governmental agencies and authorities required to be obtained, in
order to permit consummation by WWE of the transactions set forth in this
Agreement and to permit the business presently carried on by WWE to continue
unimpaired following the Closing Date, shall have been obtained, and WWE shall
have delivered to MFC a certificate of WWE in the form annexed hereto as Exhibit
"O" (Article "12.A.i."), signed by the President of WWE and dated the Closing
Date to such effect;
v. No Governmental Proceedings. No action or proceeding shall have been
instituted before a court or other governmental body by any governmental agency
or public authority to restrain or prohibit the transactions set forth in this
Agreement and WWE shall have delivered to MFC a certificate of WWE in the form
annexed hereto as Exhibit "O" (Article "12.A. i."), signed by the President of
WWE and dated the Closing Date to such effect;
vi. Consents Under Agreements. WWE shall have obtained the consent or
approval of each person whose consent or approval shall be required in
connection with the transactions set forth in this Agreement, and WWE shall have
delivered to MFC a certificate of WWE in the form annexed hereto as Exhibit "O"
(Article "12.A.i.") signed by the President of WWE and dated the Closing Date to
such effect;
vii. Good Standing Certificate. On the Closing Date, WWE shall provide a
good standing certificate for WWE issued by the Secretary of State of the State
of Delaware complete and correct as of five (5) business days prior to the
Closing Date;
viii. Shareholder Approval. The approval of the transactions set forth in
this Agreement by the current holders of a majority of the issued and
outstanding shares of the WWE Common Stock; and
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ix. Consummation of the Offering and the Bridge. The Offering and the
Bridge or other equity infusion(s) have been successfully completed in
accordance with their respective terms.
x. The Yolo Sale. The Yolo Sale has been consummated in accordance with
its terms.
B. Conditions to WWE Obligation to Close. The obligation of WWE to close
the transactions set forth in this Agreement shall be subject to the following
conditions:
i. Representations and Warranties of MFC to be True. To MFC's knowledge,
the representations and warranties of MFC set forth in this Agreement shall be
true in all material respects on the Closing Date with the same effect as though
made at such time, except to the extent waived or affected by the transactions
set forth in this Agreement; and MFC shall have delivered to WWE a certificate
of MFC in the form annexed hereto and made a part hereof as Exhibit "P" (Article
"12.A.i"), signed by the President of MFC and dated the Closing Date to such
effect;
ii. Performance of Obligations of MFC. MFC shall have performed all
obligations and complied with all covenants set forth in this Agreement to be
performed or complied with in all material respects by it prior to the Closing
Date, and MFC shall have delivered to WWE a certificate of MFC in the form
annexed hereto as Exhibit "P" (Article "12.A.i."), signed by the President of
MFC and dated the Closing Date to such effect;
iii. No Adverse Change. There shall not have occurred any material adverse
change since the date of the Form 10-Q and through the date of the Closing Date
in the business, properties, results of operations or business or financial
condition of MFC and MFC shall have delivered to WWE a certificate of MFC in the
form annexed hereto as Exhibit "P" (Article "12.A.i.") signed by the President
of MFC and dated the Closing Date to such effect;
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iv. Statutory Requirements. Any statutory requirement for the valid
consummation by MFC of the transactions set forth in this Agreement shall have
been fulfilled; any authorizations, consents and approvals of all federal, state
and local governmental agencies and authorities required to be obtained, in
order to permit consummation by MFC of the transactions set forth in this
Agreement and to permit the business presently carried on by MFC to continue
unimpaired following the Closing Date, shall have been obtained and MFC shall
have delivered to WWE a certificate of MFC in the form annexed hereto as Exhibit
"P" (Article "12.A.i.") signed by the President of MFC and dated the Closing
Date to such effect;
v. No Governmental Proceedings. No action or proceeding shall have been
instituted before a court or other governmental body by any governmental agency
or public authority to restrain or prohibit the transactions set forth in this
Agreement and MFC shall have delivered to WWE a certificate of MFC in the form
annexed hereto as Exhibit "P" (Article "12.A.i."), signed by the President of
MFC and dated the Closing Date to such effect;
vi. Consents Under Agreements. MFC shall have obtained the consent or
approval of each person whose consent or approval shall be required in
connection with the transactions set forth in this Agreement and MFC shall have
delivered to WWE a certificate of MFC in the form annexed as Exhibit "P"
(Article "12.A.i."), signed by the President of MFC and dated the Closing Date
to such effect;
vii. Good Standing Certificate. On the Closing Date, MFC shall provide a
good standing certificate for MFC and a good standing certificate for Yolo each
issued by the applicable Secretary of State complete and correct as of five (5)
business days prior to the Closing Date;
viii. Conversion of Debt. Persons or entities holding at least five
hundred thousand ($500,000) dollars of the outstanding principal amount of the
debt represented by the MFC Bonds shall have agreed in writing to convert to MFC
Common Stock of MFC, subject to the Closing (the "MFC Bond Conversion");
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ix. Consummation of the Offering and the Bridge. The Offering and the
Bridge or other equity infusion(s) have been successfully completed in
accordance with their respective terms; and
x. The Yolo Sale. The Yolo Sale has been consummated in accordance with
its terms.
13. Documents, Certificates, etc. to be Delivered at Closing.
A. At the Closing, WWE shall deliver the following items:
i. the WWE Certificate of Representations and Warranties signed by the
President of WWE in the form annexed hereto and made a part hereof as Exhibit
"O" (Article "12.A.i."),
ii. the legal opinion of Xxxxxxx Xxxxxx LLP relative to due organization
of WWE and authority of WWE to enter into this Agreement, in a form reasonably
satisfactory to MFC;
iii. the WWE Escrow Agreement signed by Xxxxxxx X. Xxxxx and Xxxxx Xxxxxx;
and
iv. the WWE Lock-Up Agreements signed by Xxxxxxx X. Xxxxx and Xxxxx
Xxxxxx.
B. At the Closing, MFC shall deliver the following items:
i. stock certificates for the WWE Stockholders evidencing the MFC shares
to be issued to such stockholders;
ii. stock certificates for the WWE Stockholders who are signatories to the
WWE Escrow Agreement to the escrow agent under the WWE Escrow Agreement,
evidencing the WWE Earn-Out Shares to be released to certain WWE Stockholders in
accordance with the terms of the WWE Escrow Agreement;
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iii. stock certificates for GS evidencing the MFC shares to be issued to
GS;
iv. stock certificates for Diversified, evidencing the MFC shares to be
issued to Diversified or its designees;
v. the Escrow Agreements signed by MFC;
vi. the MFC Lock-Up Agreements signed by the MFC Insiders;
vii. the legal opinion of XxXxxxxx Xxxxx, P.C. relative to due
organization of MFC, authority of MFC to enter into this Agreement, validity of
the MFC Earn-Out, and valid issuance of the MFC Common Stock in accordance with
the terms of this Agreement, in a form reasonably satisfactory to WWE;
viii. the MFC Certificate of Representations and Warranties signed by the
President of MFC in the form annexed hereto and made a part hereof as Exhibit
"P" (Article "I2.B.i.");
ix. stock certificates for the MFC Stockholders to the escrow agent under
the MFC Escrow Agreement, evidencing the MFC Earn-Out Shares to be released to
the MFC Stockholders in accordance with the terms of the MFC Escrow Agreement;
(x) the resignations of two-thirds of the Representatives of the Board of
Representatives of Gateway Granby LLC, (designated to be Xxxxxx Xxxxxx and Xxxxx
Xxxxx) the resignation of two-thirds of the Managers of Gateway Granby LLC,
(designated to be Xxxxxx Xxxxxx and Xxxxx Xxxxx) and a proxy or other instrument
or agreement with Xxxxxx Xxxxxx and Xxxxx Xxxxx, as WWE may reasonably request
insuring that WWE has operational and voting control of the affairs of Gateway
Granby LLC and a certificate to the effect that the Operating Agreement has not
been amended since May 19, 2005; and
(xi) modification and extension agreements relative to the Series A Bonds
and the Series B Bonds that have not been converted into MFC Common Stock in
such form as WWE may reasonable request.
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C. At the Closing, the WWE Stockholders shall deliver the certificates
representing their respective shares of WWE Common Stock.
D. At the Closing, GS shall deliver to MFC, the Representative of the MFC
Stockholders, and the WWE Stockholders who are signatories to the WWE Escrow
Agreement, as applicable, the signed Escrow Agreement(s).
E. At the Closing, the Representative of the MFC Stockholders shall
deliver the signed MFC Escrow Agreement.
F. At the Closing, Diversified or its designees, as applicable, shall
deliver the Diversified Lock-Up Agreements signed by each of them.
14. Equitable Relief.
A. WWE acknowledges that MFC shall be irreparably damaged if this
Agreement is not consummated. Therefore, in the event of any breach by WWE of
this Agreement, MFC shall have the right, at its election, to obtain equitable
relief including, but not limited to, an order for specific performance of this
Agreement or an injunction, without the need to: (i) post a bond or other
security, (ii) to prove any actual damage or (iii) to prove that money damages
would not provide an adequate remedy. Resort to such equitable relief, however,
shall not be construed to be a waiver of any other rights or remedies which MFC
may have for damages or otherwise.
B. MFC acknowledges that WWE shall be irreparably damaged if this
Agreement is not consummated. Therefore, in the event of any breach by MFC of
this Agreement, WWE shall have the right, at its election, to obtain equitable
relief including, but not limited to, an order for specific performance of this
Agreement or an injunction, without the need to: (i) post a bond or other
security, (ii) to prove any actual damage or (iii) to prove that money damages
would not provide an adequate remedy. Resort to such equitable relief, however,
shall not be construed to be a waiver of any other rights or remedies which WWE
may have for damages or otherwise.
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15. Method of Termination. This Agreement may be terminated prior to the
Closing Date, by any of the following methods:
A. mutual consent of the parties;
B. by written notice from either party (i) if within ten (10) business
days after receipt of written notice that the Closing Date has passed, the
Closing has not occurred; provided, however, that if the Closing shall not have
occurred on, or prior to, the Closing Date as a result of any action taken, or
failure to act, by any governmental or regulatory authority including, but not
limited to, the withholding of, or a delay in, any approval in connection with
any aspect of the transactions contemplated hereby, then the Closing Date shall
automatically be extended until a date which is a reasonable time subsequent to
the date upon which such governmental or regulatory action is resolved which
will allow the parties to complete the procedures required to consummate the
transactions contemplated hereby; provided, further, however, that the right to
terminate this Agreement pursuant to this Paragraph "B" of this Article "15" of
this Agreement shall not be available to any party whose failure to fulfill any
obligation pursuant to this Agreement has been the cause of or resulted in the
failure of the Closing to occur on or before such date;
C. by WWE if there is a material breach of any representation or warranty
set forth in Article "6" of this Agreement or any covenant or agreement to be
complied with or performed by MFC pursuant to the terms of this Agreement,
including, but not limited to, the covenants set forth in Article "9" of this
Agreement, or the failure of a condition set forth in Article "12" of this
Agreement to be satisfied (and such condition is not waived in writing by WWE)
on or prior to the Closing Date, or the occurrence of any event which results in
the failure of a condition set forth in Article "12" of this Agreement to be
satisfied on or prior to the Closing
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Date; provided however, that, WWE may not terminate this Agreement prior to the
Closing Date if MFC has not had an adequate opportunity to cure such failure,
pursuant to Article "17" of this Agreement; or
D. by MFC if there is a material breach of any representation or warranty
set forth in Article "7" of this Agreement or any covenant or agreement to be
complied with or performed by WWE pursuant to the terms of this Agreement,
including, but not limited to, the covenants set forth in Article "9" of this
Agreement, or the failure of a condition set forth in Article "12" of this
Agreement to be satisfied (and such condition is not waived in writing by MFC)
on or prior to the Closing Date, or the occurrence of any event which results in
the failure of a condition set forth in Article "12" of this Agreement to be
satisfied on or prior to the Closing Date; provided however, that, MFC may not
terminate this Agreement prior to Closing if WWE has not had an adequate
opportunity to cure such failure, pursuant to Article "17" of this Agreement.
16. Effect of Termination. If this Agreement is terminated pursuant to the
provisions set forth in Article "l5" A or B of this Agreement, this Agreement
shall become null and void and shall have no further effect, and no party shall
have any liability with respect to this Agreement. If this Agreement is
terminated pursuant to the provisions set forth in Article "15" C or D, then the
non-breaching party shall be entitled to exercise all the rights and remedies
provided in this Agreement and all rights and remedies available under
applicable law or at equity.
17. Cooperation; Notice; Cure. Subject to compliance with applicable law,
from the date of this Agreement until the Closing Date, each of the parties
shall confer on a regular and frequent basis with one or more representatives of
the other party to report on the general status of ongoing operations. MFC shall
promptly provide WWE or its counsel with copies of all of its filings made with
the SEC or with any governmental entity in connection with this Agreement, the
transactions contemplated hereby and thereby. In this regard, Each of MFC and
WWE shall
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promptly comply with the other's reasonable requests for documents, information
and access to the other's facilities, personnel, and representatives. Each of
the parties shall notify the other of, and will use all commercially reasonable
efforts to cure before the Closing Date, any event, transaction or circumstance,
as soon as practical after it becomes known to such party, that causes or will
cause any covenant or agreement of the parties pursuant to this Agreement to be
breached or that renders or will render untrue any representation or warranty of
the parties contained in this Agreement. Each of the parties shall also notify
the other in writing of, and will use all commercially reasonable efforts to
cure, before the Closing Date, any violation or breach, as soon as practical
after it becomes known to such party, of any representation, warranty, covenant
or agreement made by the parties. No notice given pursuant to this paragraph
shall have any effect on the representations, warranties, covenants or
agreements contained in this Agreement for purposes of determining satisfaction
of any condition contained herein.
18. Survival of Representations, Warranties and Covenants. All covenants,
agreements, representations and warranties made in or in connection with this
Agreement shall survive the Closing Date hereof, and shall continue in full
force and effect for two (2) years after the Closing Date, it being understood
and agreed that each of such covenants, agreements, representations and
warranties is of the essence of this Agreement and the same shall be binding
upon and shall inure to the benefit of the parties hereto, its successors and
assigns.
19. Indemnification.
A. Indemnification by WWE. In order to induce MFC to enter into and
perform this Agreement, WWE does hereby indemnify, protect, defend and save and
hold harmless MFC and each of its shareholders, affiliates, officers, directors,
control persons, employees, attorneys, agents, partners and trustees and
personal representatives of any of the foregoing ("Indemnified Parties"), from
and against any loss resulting to any of them from any material loss, liability,
cost, damage, or expense in excess of $150,000 (the "Bucket"), where applicable,
which the
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Indemnified Parties may suffer, sustain or incur arising out of or due to a
breach by WWE of the representations, warranties and covenants set forth in
Article "7" of this Agreement or in any documents delivered pursuant hereto or
of a breach by WWE of any of its obligations pursuant to this Agreement or in
any documents delivered pursuant hereto.
B. Indemnification by MFC. In order to induce WWE to enter into and
perform this Agreement, MFC hereby indemnifies, protects, defends and saves and
holds harmless WWE and each of its shareholders, affiliates, officers,
directors, control persons, employees, attorneys, agents, partners and trustees
and personal representatives of any of the foregoing ("Indemnified Parties"),
from and against any loss resulting to any of them from any material loss,
liability, cost, damage, or expense in excess of $150,000 (the "Bucket") which
the Indemnified Parties may suffer, sustain or incur arising out of or due to a
breach by MFC of the representations, warranties and covenants set forth in
Article "6" of this Agreement or in any documents delivered pursuant hereto or
of a breach by MFC of any of its obligations pursuant to this Agreement or in
any documents delivered pursuant hereto.
C. Reasonable Costs, Etc. The indemnification, which is set forth in this
Article "19" of this Agreement shall be deemed to include not only the specific
liabilities or obligation with respect to which such indemnity is provided, but
also all counsel fees, reasonable costs, expenses and expenses of settlement
relating thereto, whether or not any such liability or obligation shall have
been reduced to judgment; provided, however that, there shall be a Bucket of
$150,000 in the aggregate which must be exceeded before MFC or WWE, as the case
may be, may recover any damages or costs pursuant to paragraphs A, B, C or D of
this Article 19. Once the Bucket has been exceeded, however, the party seeking
indemnity is entitled to recover all damages suffered or costs incurred, and not
just those damages suffered or costs incurred in excess of the Bucket WWE shall
satisfy any obligation to pay any damages and costs payable hereunder by having
the WWE Stockholders who are signatories to the WWE Escrow Agreement
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transfer and surrender to MFC, pro-rata, such number of shares of MFC Common
Stock which at Market Value (as hereafter defined) shall be equal to said
obligation. Said surrender shall first be made from the shares of MFC Common
Stock held under the WWE Escrow Agreement and if unavailable or insufficient,
then from the shares issued to the WWE Stockholders who are signatories to the
WWE Escrow Agreement under this Agreement. MFC shall satisfy any obligation to
pay any damages and costs payable hereunder by transferring and surrendering to
MFC such number of shares from the MFC Escrow Agreement which at Market Value
shall be equal to the amount of any such obligation (the "MFC Article 19
Obligation"). If said shares are unavailable or insufficient then MFC shall
issue to the WWE Stockholders additional shares of MFC Common Stock which at
Market Value shall equal any unsatisfied portion of the MFC Article 19
Obligation. "Market Value" as used herein shall be the average of the closing
price in the trading of MFC Common Stock as reported by NASDAQ.OB on the 20
trading days immediately prior to the surrender or issuance of the MFC Common
Stock hereunder.
D. Third Party Claims. If any demand, claim, action or cause of action,
suit, proceeding or investigation (collectively, the "Claim") is brought against
an Indemnified Party for which the Indemnified Party intends to seek indemnity
from the other party hereto (the "Indemnifying Party"), then the Indemnified
Party within twenty-one (21) days after such Indemnified Party's receipt of the
Claim, shall notify the Indemnifying Party pursuant to Paragraph "C" of Article
"19" of this Agreement which notice shall contain a reasonably thorough
description of the nature and amount of the Claim (the "Claim Notice"). The
Indemnifying Party shall have the option to undertake, conduct and control the
defense of such claim or demand. Such option to undertake, conduct and control
the defense of such claim or demand shall be exercised by notifying the
Indemnified Party within ten (10) days after receipt of the Claim Notice
pursuant to Paragraph "C" of Article "19" of this Agreement (such notice to
control the defense is hereinafter referred to as the "Defense Notice"). The
failure of the
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Indemnified Party to notify the Indemnifying Party of the Claim shall not
relieve the Indemnifying Party from any liability which the Indemnifying Party
may have pursuant to this Article "19" of this Agreement except to the extent
that such failure to notify the Indemnifying Party prejudices the Indemnifying
Party. The Indemnified Party shall use all reasonable efforts to assist the
Indemnifying Party in the vigorous defense of the Claim. All costs and expenses
incurred by the Indemnified Party in defending the Claim shall be paid by the
Indemnifying Party. If, however, the Indemnified Party desires to participate in
any such defense or settlement, it may do so at its sole cost and expense (it
being understood that the Indemnifying Party shall be entitled to control the
defense). The Indemnified Party shall not settle the Claim. If the Indemnifying
Party does not elect to control the defense of the Claim, within the aforesaid
ten (10) day period by proper notice pursuant to Paragraph "C" of Article "19"
of this Agreement, then the Indemnified Party shall be entitled to undertake,
conduct and control the defense of the Claim (a failure by the Indemnifying
Party to send the Defense Notice to the Indemnified Party within the aforesaid
ten (10) day period by proper notice pursuant to Paragraph "C" of Article "19"
of this Agreement shall be deemed to be an election by the Indemnifying Party
not to control the defense of the Claim); provided, however, that the
Indemnifying Party shall be entitled, if it so desires, to participate therein
(it being understood that in such circumstances, the Indemnified Party shall be
entitled to control the defense). Regardless of which party has undertaken to
defend any claim, the Indemnifying Party may, without the prior written consent
of the Indemnified Party, settle, compromise or offer to settle or compromise
any such claim or demand; provided however, that if any settlement would result
in the imposition of a consent order, injunction or decree which would restrict
the future activity or conduct of the Indemnified Party, the consent of the
Indemnified Party shall be a condition to any such settlement. Notwithstanding
the foregoing provisions of this Article "19" of this Agreement, as a condition
to the Indemnifying Party either having the right to defend the Claim, or having
control over settlement as indicated in this Article "19" of this Agreement, the
Indemnifying Party shall execute an agreement, in the form annexed hereto and
made a part hereof as Exhibit "Q", acknowledging its liability for
indemnification pursuant to this Article "19" of this Agreement. Whether the
Indemnifying Party shall control and assume the defense of the Claim or only
participate in the defense or settlement of the Claim, the Indemnified Party
shall give the Indemnifying Party and its counsel access, during normal business
hours, to all relevant business records and other documents, and shall permit
them to consult with its employees and counsel.
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20. Miscellaneous.
A. Headings. Headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
B. Enforceability. If any provision which is contained in this Agreement,
should, for any reason, be held to be invalid or unenforceable in any respect
under the laws of any State of the United States, such invalidity or
unenforceability shall not affect any other provision of this Agreement and in
this Agreement shall be construed as if such invalid or unenforceable provision
had not been contained herein.
C. Notices. Any notice or other communication required or permitted
hereunder shall be sufficiently given if sent by (i) mail by (a) certified mail,
postage prepaid, return receipt requested and (b) first class mail, (ii)
overnight delivery with confirmation of delivery or (iii) facsimile transmission
with an original mailed by first class mail, postage prepaid, addressed as
follows:
If to WWE: Worldwide Excellence, Inc.
00000 Xx Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxx, President/CEO
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxxx Savage LLP
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
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If to MFC: MFC Development Corp.
000 Xxxxx Xxxxxx
Xxx Xxxxxxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxx, President/CEO
Facsimile No.: (000) 000-0000
with a copy to: XxXxxxxx Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx, Esq.
Facsimile No.: (000) 000-0000
or in each case to such other address and facsimile number as shall have last
been furnished by like notice. If all of the methods of notice set forth in this
Paragraph "C" of this Article "20" of this Agreement are impossible for any
reason, notice shall be in writing and personally delivered to the aforesaid
addresses. Each notice or communication shall be deemed to have been given as of
the date so mailed or delivered as the case may be; provided, however, that any
notice sent by facsimile shall be deemed to have been given as of the date so
sent if a copy thereof is also mailed by first class mail on the date sent by
facsimile. If the date of mailing is not the same as the date of sending by
facsimile, then the date of mailing by first class mail shall be deemed to be
the date upon which notice is given; provided further, however, that any notice
sent by overnight delivery shall be deemed to have been given as of the date of
delivery.
D. Governing Law: Disputes. This Agreement shall in all respects be
construed, governed, applied and enforced under the internal laws of the State
of Delaware without giving effect to the principles of conflicts of laws and be
deemed to be an agreement entered into in the State of Delaware and made
pursuant to the laws of the State of Delaware. Except as otherwise provided in
Article "14" of this Agreement, the parties agree that they shall be deemed to
have agreed to binding arbitration in Los Angeles, California, with respect to
the entire subject matter of any and all disputes relating to or arising under
this Agreement including, but not limited to, the specific matters or disputes
as to which arbitration has been expressly provided for by other
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provisions of this Agreement. Any such arbitration shall be by a panel of three
arbitrators and pursuant to the commercial rules then existing of the American
Arbitration Association in the State of California, County of Orange. In all
arbitrations, judgment upon the arbitration award may be entered in any court
having jurisdiction. The parties agree, further, that the prevailing party in
any such arbitration as determined by the arbitrators shall be entitled to such
costs and attorney's fees, if any, in connection with such arbitration as may be
awarded by the arbitrators. In connection with the arbitrators' determination
for the purpose of which party, if any, is the prevailing party, they shall take
into account all of the factors and circumstances including, without limitation,
the relief sought, and by whom, and the relief, if any, awarded, and to whom. In
addition, and notwithstanding the foregoing sentence, a party shall not be
deemed to be the prevailing party in a claim seeking monetary damages, unless
the amount of the arbitration award exceeds the amount offered in a legally
binding writing by the other party by fifteen percent (15%) or more. For
example, if the party initiating arbitration ("A") seeks an award of $100,000
plus costs and expenses, the other party ("B") has offered A $50,000 in a
legally binding written offer prior to the commencement of the arbitration
proceeding, and the arbitration panel awards any amount less than $57,500 to A,
the panel should determine that B has "prevailed". The parties specifically
designate the Courts in the City of Los Angeles, State of California as properly
having, jurisdiction for any proceeding to confirm and enter judgment upon any
such arbitration award. The parties hereby consent to and submit to personal
..jurisdiction over each of them by the Courts of the State of California in any
action or proceeding, waive personal service of any and all process and
specifically consent that in any such action or proceeding, any service of
process may be effectuated upon any of them by certified mail, return receipt
requested, in accordance with Paragraph "C" of this Article "20" of this
Agreement.
The arbitration panel shall have no power to award non-monetary or
equitable relief of any sort, It shall also have no power to award (a) damages
inconsistent with any applicable
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agreement between the parties or (b) punitive damages or any other damages not
measured by the prevailing party's actual damages; and the parties expressly
waive their right to obtain such damages in arbitration or in any other forum.
In no event, even if any other portion of these provisions is held invalid or
unenforceable, shall the arbitration panel have power to make an award or impose
a remedy which could not be made or imposed by a court deciding the matter in
the same, jurisdiction.
Discovery shall be permitted in connection with the arbitration only to
the extent, if any, expressly authorized by the arbitration panel upon a showing
of substantial need by the party seeking discovery.
All aspects of the arbitration shall be treated as confidential. The
parties and the arbitration panel may disclose the existence, content or results
of the arbitration only as provided in the rules of the American Arbitration
Association in Los Angeles, California. Before making any such disclosure, a
party shall give written notice to all other parties and shall afford such
parties a reasonable opportunity to protect their interest.
E. Expenses. Each party to this Agreement shall bear and pay its own costs
and expenses incurred in connection with the preparation, execution, and
delivery of this Agreement and the transactions set forth in this Agreement.
F. Construction. Each of the parties hereto hereby further acknowledges
and agrees that each has been advised by counsel during the course of
negotiations and had significant input in the development of this Agreement and
this Agreement shall not, therefore, be construed more strictly against any
party responsible for its drafting regardless of any presumption or rule
requiring construction against the party whose attorney drafted this agreement.
G. Entire Agreement. This Agreement and all documents and instruments
refereed to herein (a) constitute the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof
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and thereof, and (b) except as provided in Paragraph "K" of this Article "20" of
this Agreement, are not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder. Each party hereto agrees that,
except for the representations and warranties contained in this Agreement,
neither MFC or WWE makes any other representations or warranties, and each
hereby disclaims any other representations and warranties made by itself or any
of its officers, directors, employees, agents, financial and legal advisors or
other representatives, with respect to the execution and delivery of this
Agreement or the transactions contemplated hereby, notwithstanding the delivery
or disclosure to the other or the other's representatives of any documentation
or other with respect to any one or more of the foregoing.
H. Further Assurances. The parties agree to execute any and all such other
further instruments and documents, and to take any and all such further actions
which are reasonably required to effectuate this Agreement and the intents and
purposes hereof.
I. Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their heirs, executors, administrators,
personal representatives, successors and assigns.
J. Non-Waiver. Except as otherwise expressly provided herein, no waiver of
any covenant, condition, or provision of this Agreement shall be deemed to have
been made unless expressly in writing and signed by the party against whom such
waiver is charged; and (i) the failure of any party to insist in any one or more
cases upon the performance of any of the provisions, covenants or conditions of
this Agreement or to exercise any option herein contained shall not be construed
as a waiver or relinquishment for the future of any such provisions, covenants
or conditions, (ii) the acceptance of performance of anything required by this
Agreement to be performed with knowledge of the breach or failure of a covenant,
condition or provision hereof shall not be deemed a waiver of such breach or
failure, and (iii) no waiver by any party of one breach by another party shall
be construed as a waiver of any other or subsequent breach.
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K. Third Party Beneficiaries. This Agreement and all documents and
instruments referred to herein, except as provided in Article "3" of this
Agreement, are not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
L. Confidentiality.
i. MFC, on its own behalf or on behalf of its directors, officers,
employees, stockholders and/or other representatives and/or agents, recognize
and acknowledge that they had in the past and currently have access to certain
confidential information of WWE which is valuable, special and unique to WWE.
MFC agrees that, it will not use any of the confidential information for any
purpose other than as contemplated by and in accordance with the terms of this
Agreement and will not disclose such confidential information to any person,
firm, corporation, association or other entity for any purpose or reason
whatsoever, except (a) to WWE and to authorized representatives of WWE, and (b)
to counsel and other advisers and representatives of MFC, provided that such
advisors or representatives (other than counsel) agree in writing to the
confidentiality provisions of this Paragraph "L" of this Article "20" of this
Agreement, unless (1) such information becomes known to the public generally
through no fault of MFC, (2) disclosure is required by law or the order of any
governmental authority under color of law, provided, that prior to disclosing
any information pursuant to this Paragraph "L" of this Article "20" of this
Agreement, MFC shall, if possible, give prior written notice thereof to WWE and
provide WWE with the opportunity to contest such disclosure, or (3) the
disclosing party reasonably believes that such disclosure is required in
connection with the defense of a lawsuit against the disclosing party. In the
event of a breach or threatened breach by MFC of the provisions of this
Paragraph "L" of this Article "20" of this Agreement, WWE shall be entitled to
an injunction restraining MFC from disclosing or using, in whole or in part,
such confidential information. Nothing herein shall be construed as prohibiting
WWE from pursuing any other available remedy for such breach or threatened
breach, including the recovery of damages.
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ii. WWE on its own behalf' or on behalf of its respective directors,
officers, employees, stockholders and/or other representatives and/or agents,
recognizes and acknowledges that it had in the past and currently has access to
certain confidential information of MFC. which is valuable, special and unique
to MFC. WWE agrees that, prior to the Closing Date, or if the transactions
contemplated by this Agreement are not consummated, it will not use any of the
confidential information for any purpose other than as contemplated by and in
accordance with the terms of this Agreement and will not disclose such
confidential information to any person, firm, corporation, association or other
entity for any purpose or reason whatsoever, except (a) to MFC and to authorized
representatives of MFC, and (b) to counsel and other advisers and
representatives of WWE, provided that such advisors or representatives (other
than counsel) agree to the confidentiality provisions of this Paragraph "L" of
this Article "20" of this Agreement, unless (1) such information becomes known
to the public generally through no fault of WWE, (2) disclosure is required by
law or the order of any governmental authority under color of law, provided,
that prior to disclosing any information pursuant to this Paragraph "L" of this
Article "20" of this Agreement, WWE shall, if possible, give prior written
notice thereof to MFC and provide MFC with the opportunity to contest such
disclosure, or (3) the disclosing party reasonably believes that such disclosure
is required in connection with the defense of a lawsuit against the disclosing
party.. In the event of a breach or threatened breach by WWE of the provisions
of this Paragraph "L" of this Article "20" of this Agreement, MFC shall be
entitled to an injunction restraining WWE from disclosing or using, in whole or
in part, such confidential information. Nothing herein shall be construed as
prohibiting MFC from pursuing any other available remedy for such breach or
threatened breach, including the recovery of damages.
M. Counterparts. This Agreement may be executed simultaneously 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.
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N. Exhibits. All Exhibits and schedules annexed or attached to this
Agreement are incorporated into this Agreement by reference thereto and
constitute an integral part of this Agreement.
0. Severability. The provisions of this Agreement shall be deemed
separable. Therefore, if any part of this Agreement is rendered void, invalid or
unenforceable, such rendering shall not affect the validity or enforceability of
the remainder of this Agreement; provided, however, that if the part or parts
which are void, invalid or unenforceable as aforesaid shall substantially impair
the value of this whole Agreement to any party, that party may cancel and
terminate this Agreement by giving written notice to the other party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
MFC Development Corp.
By:____________________________
Xxxxxx Xxxxxx, President and CEO
Worldwide Excellence, Inc.
By:______________________________
Xxxxxxx X. Xxxxx, President and CEO
By:______________________________
Xxxxx Xxxxxx, CEO
WWE Stockholders:
Xxxxxx Family Trust
By: ______________________________
Xxxxx Xxxxxx, Trustee
Xxxxx Family Trust
By: ______________________________
Xxxxxxx X. Xxxxx, Trustee
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