AGREEMENT AND PLAN OF MERGER
Exhibit 10.1
AGREEMENT
AND PLAN OF MERGER (this
“Agreement”),
dated
as of December 30, 2005, by and among China Media Networks International,
Inc., a Nevada corporation (“CMNW”),
CMNW
Acquisition Corporation, a Nevada corporation and a wholly-owned subsidiary
of
CMNW (“Acquisition
Corp.”),
OrthoSupply Management, Inc., a Delaware corporation (“OrthoSupply”),
Thunderbird Global Corporation, a Panamanian corporation (“Thunderbird”),
for
the sole purpose of the transactions contemplated under Section 7 hereof, the
representations and warranties set forth in Sections 8 and 14 hereof, and the
indemnification obligations set forth in Section 13(a) hereof, and Xxxx X.
Xxxx
(“Xxxx”),
for
the sole purpose of the representations and warranties set forth in Sections
10
and 14 hereof and the indemnification obligations set forth in Section 13(b)
hereof.
WITNESSETH:
WHEREAS,
CMNW
is a
public company with 509,709 shares of its common stock, $0.0001 par value per
share (the “CMNW
Common Stock”),
issued and outstanding as of the date hereof;
WHEREAS,
Thunderbird is the holder of record of 465,241 shares (the “Thunderbird
Shares”)
of the
509,709 issued and outstanding shares of CMNW Common Stock;
WHEREAS,
OrthoSupply is a private company with (a) 17,736,619 shares of its common stock,
$0.001 par value per share (“OrthoSupply
Common Stock”),
(b)
1,700,000 shares of its Series A Convertible Preferred Stock, $0.001 par value
per share (“OrthoSupply
Series A Preferred Stock”),
(c)
warrants to purchase an aggregate of 5,177,335 shares of OrthoSupply Common
Stock (“OrthoSupply
Warrants”),
and
(d) options to purchase 600,000 shares of OrthoSupply Common Stock
(“OrthoSupply
Options”),
issued and outstanding as of the date hereof;
WHEREAS,
the
Board of Directors of CMNW has designated 1,700,000 shares of its authorized
but
unissued preferred stock as a new series of preferred stock, $0.0001 par value
per share, designated “Series A Convertible Preferred Stock” (the “CMNW
Series A Preferred Stock”),
having virtually identical rights, preferences and privileges as the OrthoSupply
Series A Preferred Stock, which CMNW Series A Preferred Stock has been created
by the filing of a Statement of Designations (the “Statement
of Designations”)
with
the Secretary of State of the State of Nevada;
WHEREAS,
the
respective Boards of Directors of each of CMNW, Acquisition Corp. and
OrthoSupply, and the shareholders of Acquisition Corp. and OrthoSupply, have
approved and authorized the execution and delivery of this Agreement so as
to
implement the Merger (as defined in Section 1 hereof) in compliance with the
provisions of the Delaware General Corporation Law of the State of Delaware
(the
“DGCL”),
and
the Nevada Revised Statues of the State of Nevada (the “NRS”),
with
the result that OrthoSupply shall continue as the surviving corporation and
the
separate existence of Acquisition Corp. (except as it may be continued by
operation of law) shall cease;
WHEREAS,
CMNW,
Acquisition Corp., and OrthoSupply intend that the Merger will qualify as a
tax-free reorganization pursuant to Section 368(a) of the Internal Revenue
Code
of 1986, as amended (the “Code”);
WHEREAS,
immediately after the consummation and effectiveness of the Merger, OrthoSupply,
which shall then be a wholly-owned subsidiary of CMNW, shall distribute $500,000
in cash to CMNW to be used in part to redeem from Thunderbird the Thunderbird
Shares (such redemption being referred to herein as the “Thunderbird
Redemption”);
and
WHEREAS,
the
parties desire to make certain representations, warranties and agreements in
connection with the Merger on the terms and conditions set forth herein.
NOW
THEREFORE,
in
consideration of the premises and the mutual representations, warranties,
covenants and agreements herein contained, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as
follows:
1. The
Merger.
Subject
to the terms and conditions hereinbelow set forth, on the Effective Date (as
defined in Section 6(a) hereof), in accordance with the DGCL and the NRS,
Acquisition Corp. shall be merged with and into OrthoSupply with OrthoSupply
being the surviving entity (the “Merger”)
and,
in connection therewith:
(a) except
to
the extent provided or permitted by the DGCL and the NRS, the separate existence
of Acquisition Corp. shall cease and terminate and OrthoSupply shall continue
as
the surviving corporation and as a wholly-owned subsidiary of CMNW (OrthoSupply
as the surviving corporation after the Merger is hereinafter sometimes referred
to as the “Surviving
Corporation”);
(b) all
of
the rights, privileges, immunities, powers, franchises and authority (both
public and private) of OrthoSupply and Acquisition Corp. shall vest in the
Surviving Corporation;
(c) all
of
the assets and property of OrthoSupply and Acquisition Corp. of every kind,
nature and description (real, personal and mixed and both tangible and
intangible) and every interest therein, wheresoever located, including, without
limitation, all debts or other obligations belonging or due to OrthoSupply
or
Acquisition Corp., all claims and all causes of action, shall be, and be deemed
to be, vested, absolutely and unconditionally, in the Surviving Corporation;
and
(d) all
debts
and obligations of OrthoSupply or Acquisition Corp., all rights of creditors
of
OrthoSupply or Acquisition Corp., and all liens or security interests
encumbering any of the property of OrthoSupply or Acquisition Corp., shall
be
vested in the Surviving Corporation and shall remain in full force and effect
without modification or impairment and shall be, and be deemed to be,
enforceable against the Surviving Corporation and its assets and properties
with
the same full force and effect as if such debts, obligations, liens or security
interests had been originally incurred or created by the Surviving Corporation
in its own name and for its own behalf. Without limiting the generality of
the
foregoing, Surviving Corporation specifically assumes all continuing obligations
which OrthoSupply or Acquisition Corp. would otherwise have to indemnify its
officers and directors, to the fullest extent currently provided in the
Surviving Corporation’s Amended and Restated Certificate of Incorporation,
By-Laws and pursuant to the DGCL, with respect to any and all claims arising
out
of actions taken or omitted by such officers and directors prior to the
Effective Date.
2. Instruments
of Conveyance.
Without
limiting the generality of the provisions of Section 1 hereof and/or the
succession provisions of applicable law, the officers and directors of
Acquisition Corp. last in office shall (to the extent they, or any of them,
possess and/or may exercise the power to do so) execute, deliver and/or record
such deeds and/or other instruments of transfer and/or conveyance, and take
or
cause to be taken, such other and further actions, as the case may be, as shall
be reasonably requested by OrthoSupply or its legal counsel, to vest, perfect,
confirm, implement the transfer of, or establish in the name, on behalf or
for
the account or the benefit of OrthoSupply, title to, and/or possession of,
any
or all of the assets, property, property interests, rights, privileges,
immunities, powers and franchises owned and/or exercisable by Acquisition Corp.
(or in which Acquisition Corp. had an interest and/or the power to exercise
immediately prior to the Effective Date) and which was vested, or intended
to be
vested, in OrthoSupply pursuant to the provisions of this Agreement and the
Merger.
3. Constitutional
Documents, Directors, and Officers.
On and
as of the Effective Date:
(a) the
Amended and Restated Certificate of Incorporation of OrthoSupply, as further
amended on such date in full force and effect, shall be the Certificate of
Incorporation of the Surviving Corporation, until the same shall be altered,
amended, modified, terminated or rescinded in the manner provided by the DGCL,
which rights of alteration, amendment, modification, termination and/or
rescission are hereby expressly reserved by OrthoSupply.
(b) the
By-Laws of OrthoSupply on such date in full force and effect shall be the
By-Laws of the Surviving Corporation, until the same shall be altered, amended,
modified, terminated or rescinded in the manner provided in the Amended and
Restated Certificate of Incorporation of OrthoSupply and/or the DGCL, which
rights of alteration, amendment, modification, termination and/or rescission
are
hereby expressly reserved by OrthoSupply; and
(c) the
members of the Board of Directors of the Surviving Corporation shall be the
directors of OrthoSupply immediately prior to the Effective Date, who shall
hold
such office as provided in the By-Laws of OrthoSupply and/or the DGCL. The
officers of the Surviving Corporation shall be the former officers of
OrthoSupply, who shall hold office as provided in the By-Laws of
OrthoSupply.
4. Conversion.
On and
as of the Effective Date, by virtue of the Merger and without any action on
the
part of the holder of any shares of capital stock of OrthoSupply or capital
stock of Acquisition Corp.:
(a) subject
to the provisions of Section 5 hereof, all of the outstanding shares of
OrthoSupply Common Stock shall be converted and exchanged into shares of CMNW
Common Stock in the following manner: each issued and outstanding share of
OrthoSupply Common Stock shall, by virtue of the Merger and without any action
on the part of the holder thereof, be converted and exchanged into one (1)
duly
authorized, validly issued, fully paid and non-assessable share of CMNW Common
Stock.
(b) subject
to the provisions of Section 5 hereof, all of the outstanding shares of
OrthoSupply Series A Preferred Stock shall be converted and exchanged into
shares of CMNW Series A Preferred Stock in the following manner: each issued
and
outstanding share of OrthoSupply Series A Convertible Preferred Stock shall,
by
virtue of the Merger and without any action on the part of the holder thereof,
be converted and exchanged into one (1) duly authorized, validly issued, fully
paid and nonassessable share of CMNW Series A Preferred Stock.
(c) subject
to the provisions of Section 11 hereof, the OrthoSupply Options and OrthoSupply
Warrants shall be converted and exchanged into new options for shares of CMNW
Common Stock (“CMNW
Options”)
and
new warrants for shares of CMNW Common Stock (“CMNW
Warrants”),
as
the case may be, in the following manner: each issued and outstanding
OrthoSupply Option and OrthoSupply Warrant shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted and exchanged
into a CMNW Option and a CMNW Warrant, as the case may be, exercisable for
the
same number of shares of CMNW Common Stock as equals the number of shares of
OrthoSupply Common Stock which were issuable upon the exercise of the
OrthoSupply Option and OrthoSupply Warrant, as the case may be, for which it
is
being exchanged, and containing substantially similar other terms and
conditions.
(d) Each
issued and outstanding share of the capital stock of Acquisition Corp. shall
be
converted into and become one (1) fully paid and nonassessable share of common
stock of the Surviving Corporation.
(e) The
shares of CMNW Common Stock and CMNW Series A Preferred Stock to be issued
to
the holders of OrthoSupply Common Stock and OrthoSupply Series A Preferred
Stock, the CMNW Warrants to be issued to the holders of OrthoSupply Warrants,
and the shares of CMNW Common Stock to be issued to the holders of the
OrthoSupply Options and OrthoSupply Warrants upon the exercise thereof, shall
be
deemed to be “restricted securities” as defined by Rule 144(a)(3) under the
Securities Act of 1933, as amended (the “Securities
Act”).
The
certificates evidencing such shares shall bear substantially the following
restrictive legend:
“THE
SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THE SECURITIES ACT OR THERE
IS
AN OPINION FROM COUNSEL TO THE COMPANY THAT SUCH SALE OR OTHER TRANSFER MAY
BE
MADE PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENT OF THE
SECURITIES ACT.”
5. Certificate
Exchange.
Subsequent to the Effective Date, the issuance and distribution of New
Certificates (as defined in Section 5(a) hereof) in exchange for Old
Certificates (as defined in Section 5(a) hereof) shall be implemented as
follows:
(a) As
promptly after the Effective Date as shall be reasonably possible, CMNW shall
deposit with a bank, trust company or attorney designated by CMNW and
OrthoSupply (the “Representative”),
for
the benefit of the former holders of shares of OrthoSupply Common Stock and
OrthoSupply Series A Preferred Stock, for exchange through the Representative
in
accordance with this Section 5, stock certificates representing the shares
of
the CMNW Common Stock and CMNW Series A Preferred Stock (the “New
Certificates”)
issuable pursuant to Section 4 hereof in exchange for such holders’ stock
certificates representing the OrthoSupply Common Stock and OrthoSupply Series
A
Preferred Stock (the “Old
Certificates”).
(b) As
promptly after the Effective Date as shall be reasonably possible, the
Representative shall be directed to, and shall, send written notification (each,
a “Stock
Notification”)
to
each holder of the OrthoSupply Common Stock and OrthoSupply Series A Preferred
Stock of the consummation of the Merger, the availability of the New
Certificates and provide (i) a description of the procedure to be followed
in
connection with the surrender of the Old Certificates and the issuance of the
New Certificates, and (ii) a letter of transmittal (which shall be in customary
form and have such provisions as CMNW and OrthoSupply may reasonably specify).
Upon compliance by a holder thereof with the requirements for the certificate
surrender and issuance specified in the Stock Notification, the Representative
shall be directed to, and shall, issue and transmit to such holder New
Certificates representing that number of shares of the CMNW Common Stock and/or
CMNW Series A Preferred Stock, as the case may be, to which such holder shall
be
entitled as herein provided.
(c) Upon
delivery of the New Certificates, the Old Certificates shall be deemed
surrendered and cancelled. Notwithstanding anything to the contrary set forth
herein, the representations, warranties, indemnities, agreements and other
statements of OrthoSupply or its officers, directors, employees and agents,
and
of each purchaser of OrthoSupply Series A Preferred Stock or its officers,
directors, employees, and agents, made in connection with the original issuance
and purchase of the OrthoSupply Series A Preferred Stock, shall remain operative
and in full force and effect regardless of the exchange under this
Section 5 and Section 11 hereof.
(d) On
the
Effective Date, CMNW shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of CMNW Common Stock for delivery upon
conversion of the CMNW Series A Preferred Stock exchanged in accordance with
this Section 5.
6. The
Effective Date.
(a) Subject
to the provisions of this Agreement, (i) articles of merger (“Articles
of Merger”)
in
such form as is required by the NRS, and (ii) a certificate of merger
(“Certificate
of Merger”)
in
such form as is required by the DGCL, shall be duly prepared, executed and
acknowledged by OrthoSupply and Acquisition Corp. and thereafter delivered
to
the Secretary of State of the State of Nevada and the Secretary of State of
the
State of Delaware, as applicable, for filing, as provided in the NRS and the
DGCL, as applicable, as early as practicable on the date of the execution and
delivery of this Agreement. The Merger shall become effective as at the close
of
business on the date of filing the Articles of Merger and the Certificate of
Merger (the “Effective
Date”).
(b) The
closing of the Merger (the “Closing”)
shall
take place as of the Effective Date.
(c) On
the
Effective Date, CMNW shall fix the number of members of the Board of Directors
at not less then one (1) and not more than thirteen (13), effective with the
Effective Date. The Board of Directors of CMNW shall consist of the following
individuals:
Xxxx
X.
Xxxx
Xxxxx
Xxxxxxxxxx
(d) On
the
Effective Date, the officers of CMNW shall be as follows, each to serve until
the first meeting of the Board of Directors immediately following the next
Annual Meeting of Stockholders of CMNW or until the Board otherwise
directs.:
Name Position
Xxxxx
Xxxxxxxxxx President,
Chief Executive Officer, Treasurer and Secretary
7. Thunderbird Redemption.
Immediately following the consummation of the Merger on the Effective Date,
OrthoSupply shall distribute $500,000 in cash to CMNW (the “Cash
Distribution”).
Immediately following its receipt of the Cash Distribution, CMNW shall effect
the Thunderbird Redemption by redeeming from Thunderbird the Thunderbird Shares
for a redemption price equal to the aggregate of (a) the amount of the Cash
Distribution (the “Cash Portion”),
(b)
600,000 shares of CMNW Common Stock, and (c) a warrant to purchase an additional
600,000 shares of CMNW Common Stock in form and substance mutually agreeable
to
CMNW and Thunderbird. The Cash Portion shall be wire transferred by CMNW to
Thunderbird in accordance with the following wire transfer
instructions:
Bank: Xxxxx
Fargo Bank N.A.
0000
Xxxxxxxxxx Xxxxxx
Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
(000)
000-0000
ABA
Routing: 000-000-000
Account
No: 201-817-485-4
Account
Name: The
Xxxx
Law Firm PC
Client
Trust Account
The
Xxxx
Law Firm
000
0xx
Xxxxxx,
Xxxxx 000
Xxxxxxxxx,
Xxxxxxxxxx 00000
Tel:
(000) 000-0000 x000
Fax:
(000) 000-0000
Notes: FBO
Thunderbird Global Corporation;
8. Thunderbird
Representations and Warranties.
In
order to induce OrthoSupply to execute this Agreement and perform its
obligations under this Agreement, Thunderbird does hereby represent and warrant
(which representations and warranties shall be, and be deemed to be, continuing
and survive the execution and delivery of this Agreement and the Effective
Date)
as follows:
(a) Each
of
CMNW
and
Acquisition Corp. is a corporation duly organized and validly existing under
the
laws of the State of Nevada, Thunderbird is a corporation duly organized and
validly existing under the laws of Panama, and each such corporation has all
requisite power and authority to own, lease, and operate its respective
properties and assets and to conduct its respective business as now conducted
and as proposed to be conducted. A true, complete and correct copy of the
Articles of Incorporation and By-laws of CMNW as in effect on the date of this
Agreement, including all amendments thereto, have heretofore been delivered
to
OrthoSupply.
(b) CMNW
is
duly qualified to do business as a foreign corporation, and is in good standing,
in all jurisdictions, if any, wherein such qualification is necessary and
wherein the failure so to qualify would have a material adverse effect on the
business, properties, liabilities, assets, operations, results of operations,
condition (financial or otherwise) or affairs of CMNW.
(c) Except
for Acquisition Corp., CMNW does not currently own any capital stock or other
proprietary interest, directly or indirectly, in any corporation, association,
trust, partnership, joint venture or other entity.
(d) Each
of
CMNW and Acquisition Corp. has the requisite power to enter into this Agreement,
to consummate the Merger, and to carry out and perform its obligations under
the
terms of this Agreement. Thunderbird has the requisite power to enter into
this
Agreement, to transfer the Thunderbird Shares to CMNW pursuant to the
Thunderbird Redemption, and to carry out and perform its obligations under
the
terms of this Agreement.
(e) This
Agreement has been duly executed and delivered by each of Thunderbird, CMNW
and
Acquisition Corp., and, upon due execution and delivery by OrthoSupply, this
Agreement will be a valid and binding agreement of each of Thunderbird, CMNW
and
Acquisition Corp., enforceable against each such party in accordance with its
terms.
(f) There
are
no claims, actions, suits, proceedings, arbitrations, investigations or
inquiries before any court or governmental agency, court or tribunal, domestic
or foreign, or before any private arbitration tribunal, pending or, to the
knowledge of Thunderbird, threatened, against CMNW or involving its assets
which, if determined adversely to CMNW, would, individually or in the aggregate,
result in a material adverse change in the financial position, shareholders’
equity, results of operations, properties, business, management or affairs
of
CMNW, or which question the validity of this Agreement or of any action taken,
or to be taken, by CMNW pursuant to, or in connection with, this Agreement.
There are no outstanding orders, judgments or decrees of any court, governmental
agency or other tribunal specifically naming CMNW and/or enjoining CMNW from
taking, or requiring CMNW to take, any action, and/or by which CMNW is, and/or
its assets are, bound or subject.
(g) The
financial statements of CMNW (the “September
2005 Financial Statements”)
included in CMNW’s Form 10-Q filed with the Securities and Exchange Commission
(the “Commission”)
under
the Securities Exchange Act of 1934, as amended ( the “Exchange
Act”),
are
true, complete and correct in all material respects and fairly present the
financial condition of CMNW in accordance with generally accepted accounting
principles consistently applied. Except as set forth in the balance sheet of
CMNW as of September 30, 2005 (the “September
2005 Balance Sheet”)
included in the September 2005 Financial Statements, CMNW has no debt, liability
or obligations of any nature, whether accrued, absolute, contingent or
otherwise, whether due or to become due and whether or not the amount hereof
is
readily ascertainable, that is not properly reflected as a liability in the
September 2005 Balance Sheet. Acquisition Corp. was incorporated on December
22,
2005, has no assets and has incurred no liabilities, debts or obligations of
any
nature whatsoever, whether accrued, absolute contingent or otherwise, whether
due or to become due and whether or not the amount thereof is readily
ascertainable, other than its incorporation costs. Prior to the date of this
Agreement, Acquisition Corp. has conducted no business operations, and its
sole
activities will be in connection with the consummation of the Merger and the
transactions contemplated by this Agreement.
(h) CMNW
has
filed all federal, state, municipal and local tax returns (whether relating
to
income, sales, franchise, withholding, real, or personal property or otherwise)
required to be filed under the laws of the United States and all applicable
states and has paid in full all taxes which are due pursuant to such returns
or
claimed to be due by any taxing authority or otherwise due and owing. No
penalties or other charges are, or will become, due with respect to the late
filing of any such return. All such tax returns heretofore filed by CMNW
correctly and accurately reflect the amounts of its tax liabilities due
thereunder. CMNW has withheld, collected, and paid all other levies,
assessments, license fees and taxes to the extent required and, with respect
to
payments, to the extent that the same have become due and payable.
(i) The
authorized and outstanding capitalization of CMNW is as set forth on
Schedule
8(i)
attached
hereto. Thunderbird owns of record and beneficially 91.2758% of the issued
and
outstanding capital stock of CMNW, free and clear of all liens and encumbrances
of any nature whatsoever. As of the date hereof, except as set forth on
Schedule
8(i)
attached
hereto, there is not authorized and/or issued and outstanding any shares of
capital stock of CMNW, and there is not outstanding any rights to purchase
any
shares of capital stock of CMNW, or securities convertible into or exchangeable
for shares of capital stock of CMNW. All of the issued and outstanding shares
of
CMNW Common Stock have been duly authorized and validly issued, and are fully
paid and nonassessable. There are no outstanding warrants, options or similar
rights to purchase or convert into shares of CMNW capital stock. There are
no
outstanding rights of first refusal, preemptive rights or other restrictions
on
transfer with respect to the redemption of the Thunderbird Shares by CMNW from
Thunderbird. The offers and sales of the outstanding shares of capital stock
of
CMNW were, at all relevant times, exempt from the registration or prospectus
delivery requirements of the Securities Act, and any applicable state securities
laws pursuant to an exemption for which CMNW and/or such offering or sale fully
qualified. The shares of CMNW Common Stock have been registered under
Section 12(g) of the Exchange Act. The list of current CMNW stockholders
of
record heretofore delivered by CMNW to OrthoSupply is true, complete and correct
in all respects as of the date so delivered.
(j) Except
with respect to the filing and approval of the Articles of Merger and the
Certificate of Merger, and except with respect to the creation of the CMNW
Series A Preferred Stock pursuant to the Statement of Designations, no consent,
approval, authorization or order of, or any filing with, any court, governmental
agency, authority or body, or any other third party is required by Thunderbird,
CMNW or Acquisition Corp. in connection with the execution, delivery and
performance of this Agreement and/or the consummation by Thunderbird, CMNW
or
Acquisition Corp. of the transactions contemplated by this
Agreement.
(k) At
the
Effective Date, all of the shares of the CMNW Common Stock to be issued by
CMNW
pursuant to this Agreement shall be, and be deemed to be, duly and validly
authorized and, when issued to the holders of OrthoSupply Common Stock in
exchange for their shares of the OrthoSupply Common Stock, duly and validly
issued, fully paid and nonassessable and free and clear of all federal and
state
issuance, stock and/or company taxes, liens, security interests, claims,
encumbrances and charges.
(l) At
the
Effective Date, all of the shares of the CMNW Series A Preferred Stock to be
issued by CMNW pursuant to this Agreement shall be, and be deemed to be, duly
and validly authorized and, when issued to the holders of OrthoSupply Series
A
Preferred Stock in exchange for their shares of the OrthoSupply Series A
Preferred Stock, duly and validly issued, fully paid and nonassessable and
free
and clear of all federal and state issuance, stock and/or company taxes, liens,
security interests, claims, encumbrances and charges.
9. OrthoSupply
Representations and Warranties.
In
order to induce Thunderbird and CMNW to execute this Agreement and perform
their
obligations under this Agreement, OrthoSupply does hereby represent and warrant
(which representations and warranties shall be, and be deemed to be, continuing
and survive the execution and delivery of this Agreement and the Effective
Date)
as follows:
(a) OrthoSupply
is a
corporation duly organized and validly existing under the laws of the State
of
Delaware and has all requisite power and authority to own, lease, and operate
its properties and assets and to conduct the business as now conducted and
as
proposed to be conducted. A true, complete and correct copy of the Amended
and
Restated Certificate of Incorporation and By-laws of the Purchaser as in effect
on the date of this Agreement, including all amendments thereto, have heretofore
been delivered to the Seller.
(e) Except
with respect to the filing and approval of the Articles of Merger and the
Certificate of Merger, no consent, approval, authorization or order of, or
any
filing with, any court, governmental agency, authority or body, or any other
third party is required by the OrthoSupply in connection with the execution,
delivery and performance of this Agreement and/or the consummation by
OrthoSupply of the transactions contemplated by this Agreement.
10. Xxxx
Representations and Warranties.
In
order to induce OrthoSupply to execute this Agreement and perform its
obligations under, this Agreement, Xxxx does hereby represent and warrant (which
representations and warranties shall be, and be deemed to be, continuing and
survive the execution and delivery of this Agreement and the Effective Date)
as
follows:
(a) Since
January 15, 2003, CMNW has not incurred any liability or obligation of any
nature whatsoever, whether accrued, absolute, contingent or otherwise, that
has
not been fully discharged as of the date of this Agreement, or is not currently
reflected in the September 2005 Balance Sheet. Acquisition Corp. was
incorporated on December 22, 2005, has no assets and has incurred no
liabilities, debts or obligations of any nature whatsoever, whether accrued,
absolute contingent or otherwise, whether due or to become due and whether
or
not the amount thereof is readily ascertainable, other than its incorporation
costs. Prior to the date of this Agreement, Acquisition Corp. has conducted
no
business operations, and its sole activities will be in connection with the
consummation of the Merger and the transactions contemplated by this
Agreement.
(b) The
authorized and outstanding capitalization of CMNW is as set forth on
Schedule
8(i)
attached
hereto. Thunderbird owns of record and beneficially 91.2758% of the issued
and
outstanding capital stock of CMNW, free and clear of all liens and encumbrances
of any nature whatsoever. As of the date hereof, except as set forth on
Schedule
8(i)
attached
hereto, there is not authorized and/or issued and outstanding any shares of
capital stock of CMNW, and there is not outstanding any rights to purchase
any
shares of capital stock of CMNW, or securities convertible into or exchangeable
for shares of capital stock of CMNW. All of the issued and outstanding shares
of
CMNW Common Stock have been duly authorized and validly issued, and are fully
paid and nonassessable. There are no outstanding warrants, options or similar
rights to purchase or convert into shares of CMNW capital stock. There are
no
outstanding rights of first refusal, preemptive rights or other restrictions
on
transfer with respect to the redemption of the Thunderbird Shares by CMNW from
Thunderbird. The offers and sales of the outstanding shares of capital stock
of
CMNW were, at all relevant times, exempt from the registration or prospectus
delivery requirements of the Securities Act, and any applicable state securities
laws pursuant to an exemption for which CMNW and/or such offering or sale fully
qualified. The shares of CMNW Common Stock have been registered under
Section 12(g) of the Exchange Act. The list of current CMNW stockholders
of
record heretofore delivered by CMNW to OrthoSupply is true, complete and correct
in all respects as of the date so delivered.
11. Options
and Warrants.
(a) On
the
Effective Date, each outstanding OrthoSupply Option under the OrthoSupply 2005
Stock Option Plan (the “Old
OrthoSupply Option Plan”),
whether vested or unvested, shall be assumed by CMNW and shall constitute an
option to acquire, on the same terms and conditions as were applicable under
such OrthoSupply Option, the same number of shares of CMNW Common Stock as
the
holder of such OrthoSupply Option would have been entitled to receive pursuant
to the Merger had such holder exercised such warrant or option (including any
unvested portion thereof) in full (disregarding any limitation on exercisability
thereof) immediately before the Effective Date, at a price per share (rounded
upward to the nearest whole cent) equal to (i) the aggregate exercise price
for
the shares of OrthoSupply Common Stock purchasable pursuant to such OrthoSupply
Option immediately before the Effective Date divided by (ii) the number of
full
shares of CMNW Common Stock deemed purchasable pursuant to such OrthoSupply
Option in accordance with the foregoing. As of the Effective Date, the Old
OrthoSupply Option Plan shall be terminated.
(b) The
consummation of the Merger shall not result in the termination or acceleration
of any outstanding OrthoSupply Options under the Old OrthoSupply Option Plan
that are so assumed by CMNW. It is the intention of the parties that the
OrthoSupply Options so assumed by CMNW qualify following the Effective Date
as
incentive stock options as defined in Section 422 of the Code to the extent
such
OrthoSupply Options qualified thereunder as incentive stock options before
the
Effective Date. As promptly as reasonably practicable after the approval and
adoption of a new 2006 China Media Networks equity incentive plan
(the “New
CMNW Option Plan”)
and
the receipt of all documentation CMNW reasonably requires relating to the
exchange of the outstanding OrthoSupply Options, CMNW will issue to each person
who, immediately prior to the Effective Date, is a holder of an outstanding
OrthoSupply Option under the Old OrthoSupply Option Plan that is to be assumed
by CMNW and exchanged hereunder, a new CMNW Option under the New CMNW Option
Plan. As of the Effective Date, all then existing CMNW option and other equity
incentive plans shall be terminated.
(c) On
the
Effective Date, CMNW shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of CMNW Common Stock for delivery under
the OrthoSupply Options assumed and exchanged in accordance with this Section
11.
(d) On
the
Effective Date, each outstanding OrthoSupply Warrant to purchase shares of
OrthoSupply Common Stock shall be assumed by CMNW and shall constitute a warrant
to acquire, on the same terms and conditions as were applicable under such
OrthoSupply Warrant, the same number of shares of CMNW Common Stock as the
holder of such OrthoSupply Warrant would have been entitled to receive pursuant
to the Merger had such holder exercised such option (including any unvested
portion thereof) in full (disregarding any limitation on exercisability thereof)
immediately before the Effective Date, at a price per share (rounded upward
to
the nearest whole cent) equal to (i) the aggregate exercise price for the shares
of OrthoSupply Common Stock purchasable pursuant to such OrthoSupply Warrant
immediately before the Effective Date divided by (ii) the number of full shares
of CMNW Common Stock deemed purchasable pursuant to such OrthoSupply Warrant
in
accordance with the foregoing.
(e) The
consummation of the Merger shall not result in the termination or acceleration
of any outstanding OrthoSupply Warrants that are so assumed by CMNW. As promptly
as reasonably practicable and in any event within five (5) business days after
receipt of each outstanding OrthoSupply Warrant (or, if misplaced, a lost
warrant affidavit in such form as CMNW reasonably requires), CMNW will issue
to
each person who, immediately prior to the Effective Date, is a holder of each
such outstanding OrthoSupply Warrant that is to be assumed by CMNW and exchanged
hereunder, a new CMNW Warrant.
(f) On
the
Effective Date, CMNW shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of CMNW Common Stock for delivery under
the OrthoSupply Warrants assumed and exchanged in accordance with this Section
11.
12. Further
Assurances and Cooperation; Restrictive Covenant.
(a) Each
party hereto will, before, at, and after the Closing and the Effective Time,
execute and deliver such instruments and take such other actions as the other
party or parties, as the case may be, may reasonably require in order to carry
out the intent of this Agreement. Without limiting the generality of the
foregoing, at any time after the Closing and the Effective Time, at the request
of Thunderbird or OrthoSupply, and without further consideration, each party
will execute and deliver such instruments of sale, transfer, conveyance,
assignment and confirmation and take such action as Thunderbird or OrthoSupply
may reasonably deem necessary or desirable in order to confirm CMNW’s title to
the Thunderbird Shares and to effectuate the transactions contemplated by this
Agreement.
(b) CMNW
covenants and agrees that, for a period of twenty four (24) months after the
Closing, CMNW shall not consent to, vote for, or request any structural change
in the CMNW Common Stock which would disproportionately reduce the ownership
percentage of Thunderbird in CMNW or which is not to be made for a bona fide
legitimate business purpose. Notwithstanding the foregoing, the parties to
this
Agreement hereby agree that this Section 12(b) shall not apply to any issuance
of CMNW Common Stock to any third party for good, valuable and lawful
consideration, to any other increase or decease in the total number of shares
of
CMNW Common Stock authorized, or to any authorization or issuance of any class
of equity in CMW that has preferences and rights superior to the CMNW Common
Stock.
13. Indemnification.
(a) Thunderbird
agrees to indemnify and hold harmless CMNW, OrthoSupply and their respective
successors and assigns (collectively, the “OrthoSupply Indemnitees”) against and
in respect of any and all claims, suits, actions, proceedings (formal and
informal), investigations, judgments, deficiencies, damages, settlements,
liabilities, losses, costs and legal and other expenses arising out of or based
upon any breach of any representation or warranty, covenant or agreement of
Thunderbird contained in this Agreement or in any other agreement executed
and
delivered by Thunderbird hereunder or in connection herewith.
(b) Xxxx
agrees to indemnify and hold harmless the OrthoSupply Indemnitees against and
in
respect of any and all claims, suits, actions, proceedings (formal and
informal), investigations, judgments, deficiencies, damages, settlements,
liabilities, losses, costs and legal and other expenses arising out of or based
upon any breach of the representations and warranties set forth in Sections
10
and 14 hereof.
(c) OrthoSupply
agrees to indemnify and to hold harmless Thunderbird and its successors and
assigns (collectively, the “Thunderbird Indemnitees”) against and in respect of
any and all claims, suits, actions, proceedings (formal and informal),
investigations, judgments, deficiencies, damages, settle-ments, liabilities,
losses, costs and legal and other expenses arising out of or based upon any
breach of any representation, warranty, covenant or agreement of OrthoSupply
contained in this Agreement or in any other agreement executed and delivered
by
OrthoSupply hereunder or in connection herewith.
(d) Any
OrthoSupply Indemnitee or Thunderbird Indemnitee (in any such case, the
“Indemnified
Party”)
seeking indemnification under this Agreement shall give to the party obligated
to provide indemnification to such Indemnified Party (in any such case, the
“Indemnitor”)
a
notice (a “Claim
Notice”)
describing in reasonable detail the facts giving rise to any claim for
indemnification hereunder promptly upon learning of the existence of such claim.
Upon receipt by the Indemnitor of a Claim Notice from an Indemnified Party
with
respect to any claim of a third party, such Indemnitor may assume the defense
thereof with counsel reasonably satisfactory to the Indemnified Party and,
in
such event, shall agree to pay and otherwise discharge with the Indemnitor’s own
assets all judgments, deficiencies, damages, settlements, liabilities, losses,
costs and legal and other expenses related thereto; and the Indemnified Party
shall cooperate in the defense or prosecution thereof and shall furnish such
records, information and testimony and attend all such conferences, discovery
proceedings, hearings, trials and appeals as may be reasonably requested in
connection therewith. If the Indemnitor does not assume the defense thereof
within ten days of its receipt of the Claim Notice, the Indemnitor shall
similarly cooperate with the Indemnified Party in such defense or prosecution.
The Indemnified Party shall have the right to participate in the defense or
prosecution of any lawsuit with respect to which the Indemnitor has assumed
the
defense and to employ its own counsel therein, but the fees and expenses of
such
counsel shall be at the expense of the Indemnified Party unless (i) the
Indemnitor shall not have promptly employed counsel reasonably satisfactory
to
such Indemnified Party to take charge of the defense of such action, (ii) such
Indemnified Party shall have reasonably concluded that there exists a
significant conflict of interest with respect to the conduct of such Indemnified
Party’s defense by the Indemnitor, or (iii) the Indemnitor fails to provide
reasonable insurance to the Indemnified Party of its financial capacity to
defend such action and provide indemnification with respect to such action,
in
any of which events such reasonable fees and expenses shall be borne by the
Indemnitor and the Indemnitor shall not have the right to direct the defense
of
any such action on behalf of the Indemnified Party. The Indemnitor shall have
the right, in its sole discretion, to settle any claim (a) which is solely
for
monetary damages for which indemnification has been sought and is available
hereunder, and (b) where there is no finding or admission of any violation
of
any legal requirements or any violation of the rights of any Person and no
effect on any other claims that may be made against the indemnified party,
provided that the Indemnitor shall not agree to the settlement of any claim
which constitutes the subject of a Claim Notice which settlement in the
reasonable opinion of the Indemnified Party would have a material adverse
continuing effect on the business of the Indemnified Party without the prior
written consent of the Indemnified Party. The Indemnified Party shall give
written notice to the Indemnitor of any proposed settlement of any suit, which
settlement the Indemnitor may, if it shall have assumed the defense of the
suit,
reject in its reasonable judgment within 10 days of receipt of such notice.
Notwithstanding the foregoing, the Indemnified Party shall have the right to
pay
or settle any suit for which indemnification has been sought and is available
hereunder, provided that, if the defense of such claim shall have been assumed
by the Indemnitor, the Indemnified Party shall automatically be deemed to have
waived any right to indemnification hereunder.
14. Brokers
and Finders.
Each of
Thunderbird, CMNW, Acquisition Corp. and Xxxx, on the one hand, and OrthoSupply,
on the other hand, represents and warrants to the other(s) that, except for
Midtown Partners & Co., LLC and The Mayflower Group, they or it have not
employed any broker, financial advisor or finder or incurred any liability
for
any broker, financial advisory or finders’ fees in connection with this
Agreement and the consummation of the Merger.
15. Costs
and Expenses.
Each of
Thunderbird and Xxxx, on behalf of themselves, CMNW and Acquisition Corp.,
on
the one hand, and OrthoSupply, on the one hand, shall pay their own respective
costs and expenses relating to the Merger and the transactions contemplated
by
this Agreement, including, without limitation, the costs and expenses relating
to the preparation of this Agreement, such as attorneys’ fees, accounting fees,
printing expenses and consent solicitation expenses. OrthoSupply shall pay
all
of the expenses and filing fees in connection with the filing of the Articles
of
Merger and the Certificate of Merger, as well as all public filings in
connection with the Merger to be made with the Commission and any state
securities authorities.
16. Notices.
Any and
all notices, requests or instructions desired to be given by any party hereto
to
any other party hereto shall be in writing and shall be either be hand
delivered, delivered by express courier or overnight delivery or mailed to
the
recipient first class, postage prepaid, certified, return receipt requested
at
the following respective addresses:
To: OrthoSupply
or CMNW:
Xxxxx
Xxxxxxxxxx
OrthoSupply
Management, Inc.
000
Xxxxx
Xxxx Xxxxxx, Xxxxx 0
Xxxxxxxx,
XX 00000
With
a
copy to:
Xxxxxx
Xxxxx, Esq.
Xxxxxxx
XxXxxxxxx LLP
000
Xxxxxxx Xxxxxx
Xxxxxx,
XX 00000
To: Thunderbird,
Acquisition Corp. or Xxxx
c/o
Xxxx
X. Xxxx, Esq.
The
Xxxx
Law Firm
000
0xx
Xxxxxx,
Xxxxx 000
Xxxxxxxxx,
XX 00000
or
to
such other address as any party hereto shall designate in a writing complying
with the provisions of this Section 20.
17. Waiver.
Thunderbird and Xxxx on the one hand, and OrthoSupply and CMNW on the other
hand, may, by written instrument, (a) extend the time for the performance of
any
of the obligations or other acts of the other(s) under this Agreement; (b)
waive
any inaccuracies of such other party(ies) in the representations and warranties
contained in this Agreement or in any document delivered pursuant to this
Agreement; (c) waive compliance with any of the covenants of such other
party(ies) contained in this Agreement; and (d) waive the performance of any
of
the obligations of such other party(ies) contained in this Agreement.
18. Governing
Law; Waiver of Jury Trial.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Delaware, without regard to any principles of conflicts of laws.
Each party waives the right to a jury trial.
19. Effectiveness.
This
Agreement shall inure to the benefit of, and be binding upon, the parties hereto
and their respective successors, transferees, heirs, assigns and
beneficiaries.
20. Counterparts.
This
Agreement may be executed in multiple copies, each of which shall constitute
an
original, but all of which shall constitute one and the same
agreement.
21. Partial
Invalidity.
If any
term, covenant or condition in this Agreement, or the application thereof to
any
person or circumstance, shall be invalid or unenforceable, the remainder of
this
Agreement or the application of such term, covenant or condition to persons
or
circumstances, other than those as to which it is held invalid, shall be
unaffected thereby and each term, covenant or condition of this Agreement shall
be enforced to fullest extent permitted by law.
22. Integration.
This
Agreement (including the Schedules hereto, the documents and instruments
delivered by the parties hereto and any other documents executed and delivered
and/or to be executed and delivered pursuant to the provisions of this Agreement
as herein provided or in connection herewith) sets forth the entire agreement
among the parties hereto with respect to the subject matter herein contained.
There are no covenants, promises, agreements, conditions or understandings,
either oral or written, between or among the parties hereto with respect to
the
subject matter hereof except as herein and in such ancillary documents
provided.
[Signatures
on Following Page]
18
BUSDOCS/1524482.3
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement and Plan of Merger as of the date
first above written.
CHINA
MEDIA NETWORKS INTERNATIONAL, INC.
By: Xxxx
X.
Xxxx
Its: President
CMNW
ACQUISITION CORPORATION
By: Xxxx
X.
Xxxx
Its: President
ORTHOSUPPLY
MANAGEMENT, INC.
By: Xxxxx
Xxxxxxxxxx
Its: President
THUNDERBIRD
GLOBAL CORPORATION
By:
Its: President
Xxxx
X.
Xxxx, Individually
18
BUSDOCS/1524482.3
SCHEDULE
8(i)
Xxxxxxxxxxxxxx
xx XXXX
0. XXXX
has
authorized 100,000,000 shares of CMNW Common Stock, $0.001 par value, of which
509,709 shares are issued an outstanding, and 10,000,000 shares of preferred
stock, $0.001 par value (the “Preferred Stock”), of which no shares are issued
and outstanding. 1,700,000 shares of Preferred Stock have been designated
“Series A Convertible Preferred Stock.”
2. CMNW
has
does not have an outstanding warrants or options to purchase its common stock
or
any other CMNW capital stock, or any securities convertible into or exchangeable
for any shares of CMNW capital stock.
