Exhibit 10.9
AGREEMENT AND PLAN OF MERGER
----------------------------
This Agreement this 1st day of September 20, 2004 by and among
SONOMA COLLEGE ACQUISITION, Inc., a New York corporation, wholly owned
subsidiary of Parent and majority shareholders of the Company ("Buyer"); SONOMA
COLLEGE, INC., a California corporation ("PARENT"); and MW ASIA, INC. a Nevada
corporation (the "COMPANY").
RECITALS
A. The respective Boards of Directors of each of the Company,
Buyer and Parent have approved and declared advisable the merger of the Company
with and into Buyer (the "MERGER") and approved the Merger upon the terms and
subject to the conditions set forth in this Agreement, whereby each issued and
outstanding share of the common stock, $.001 par value, of the Company (a
"COMPANY SHARE" or, collectively, the "COMPANY SHARES"), will be converted into
one (1) share of common stock, $0.0001 par value, of Parent ("PARENT COMMON
STOCK"), and certain other consideration as provided herein.
B. The respective Boards of Directors of the Company, Buyer
and Parent have determined that the Merger is in furtherance of and consistent
with their respective long-term business strategies and is fair to and in the
best interests of their respective stockholders.
C. It is intended that, for federal income tax purposes, the
Merger shall qualify as a reorganization under the provisions of Section 368(a)
of the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the "CODE");
D. For financial accounting purposes, it is intended that the
Merger will be accounted for as a "PURCHASE";
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
The Merger; Closing; Effect of Merger
SECTION 1.1 THE MERGER. Upon the terms and subject to the
conditions set forth in this Agreement and in accordance with the New York
General Business Law, as amended (the "NYBCL") and the Nevada Private
Corporations Law ("NPCL") at the Effective Time, the Company shall be merged
with and into Buyer and the separate corporate existence of the Company shall
thereupon cease. Buyer shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "SURVIVING CORPORATION"), and the
separate corporate existence of Buyer with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the merger,
except as set forth herein. The Merger shall have the effects specified in the
NYBCL and NPCL.
SECTION 1.2 CLOSING. Subject to the terms and conditions of
this Agreement, the closing of the Merger and the consummation of the other
transactions contemplated hereby (the "Closing") shall take place at the offices
of Xxxxx & Xxxxxxx 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on______, 2004
at 10:00 a.m. local time (or at such other date, time and place as the parties
hereto may agree).
SECTION 1.3 EFFECTIVE TIME. On the date of Closing, the
Company and Buyer will cause a Certificate of Merger (the "NEW YORK CERTIFICATE
OF MERGER") to be executed, acknowledged and filed with the Secretary of State
of New York. On the date of Closing, the Company and Buyer will cause a
Certificate of Merger (the "NEVADA CERTIFICATE OF MERGER") to be executed,
acknowledged and filed with the Secretary of State of Nevada. The Merger shall
become effective at the time when the New York Certificate of Merger has been
filed with the Secretary of State of New York and when the Nevada Certificate of
Merger has been filed with the Secretary of State of Nevada, or, if otherwise
agreed by the Company and Buyer, such later date or time as is established by
the New York Certificate of Merger (the "EFFECTIVE TIME").
SECTION 1.4 CERTIFICATE OF INCORPORATION. The certificate of
incorporation of Buyer as in effect immediately prior to the Effective Time
shall be the certificate of incorporation of the Surviving Corporation (the
"CHARTER"), until duly amended as provided therein or by applicable law.
SECTION 1.5 BY-LAWS. The by-laws of Buyer in effect
immediately prior to the Effective Time shall be the by-laws of the Surviving
Corporation (the "BY-LAWS"), until thereafter amended as provided therein or by
applicable law.
SECTION 1.6 DIRECTORS. The directors of the Company
immediately prior to the Effective Time shall, from and after the Effective
Time, be directors of the Surviving Corporation until their successors have been
duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Charter and the By-Laws.
SECTION 1.7 OFFICERS. The officers of the Company immediately
prior to the Effective Time shall, from and after the Effective Time, be the
officers of Buyer until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Charter and the By-Laws.
SECTION 1.8 EFFECT ON CAPITAL STOCK. At the Effective Time, as
a result of the Merger and without any action on the part of the holder of any
capital stock of Buyer:
(i)MERGER CONSIDERATION. Each Company Share issued
and outstanding immediately prior to the Effective Time shall be converted into,
and become exchangeable for one (1) validly issued, fully paid and nonassessable
shares of Parent Common Stock (the "PARENT MERGER SHARES" and the "MERGER
PURCHASE PRICE");
2
(ii) At the Effective Time, all Company Shares shall
be canceled and the Company shall cease to exist, and each certificate (a
"CERTIFICATE") formerly representing any Company Shares shall thereafter
represent only the right to receive the shares of Parent Common Stock into which
such Company Shares have been converted.
SECTION 1.9 EXCHANGE OF CERTIFICATES FOR SHARES.
(a) EXCHANGE. At Closing, Parent shall deliver or
cause to be delivered to each respective owner of Company Shares and in each of
their respective names certificates representing Parent Common Stock into which
the Company Shares that such shareholders owns are to be converted as set forth
on SCHEDULE 1 attached hereto.
(b) FRACTIONAL SHARES. No certificates or scrip
representing fractional shares of Parent Common Stock shall be issued upon the
surrender for exchange of Certificates pursuant to this Article I; no dividend
or other distribution by Parent and no stock split, combination or
reclassification shall relate to any such factional share; and no such
fractional share shall entitle the record or beneficial owner thereof to vote or
to any other rights of a stockholder of Parent. In lieu of any such factional
share, each holder of Company Shares who would otherwise have been entitled
thereto upon the surrender of Certificate(s) for exchange pursuant to this
Article I will be paid an additional share of Parent Common Stock.
(c) ADJUSTMENTS OF CONVERSION NUMBER. In the event
that Parent changes the number of shares of Parent Common Stock, issued and
outstanding prior to the Effective Time as a result of a reclassification, stock
split (including a reverse split), dividend or distribution, recapitalization,
merger (other than the Merger, Stock Purchase or the cancellation of options
previously granted by the Company), subdivision, or other similar transaction
with a dilutive effect, or if a record date with respect to any of the foregoing
shall occur prior to the Effective Time, the conversion number shall be
equitably adjusted.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents, warrants and covenants to Buyer and
Parent as follows and acknowledges that Buyer and Parent are relying upon such
representations and warranties in connection with the Contemplated Transactions
(as hereinafter defined):
SECTION 2.1 CAPITALIZATION. The authorized capital stock of
the Company consists of 90,000,000 shares of common stock of which 5,000,000
shares of common stock are issued and outstanding and 10,000,000 shares of
preferred stock of which no preferred shares are issued and outstanding. The
Company has no shares of common stock in its treasury. SCHEDULE 1 sets forth the
name of each record and beneficial shareholder of the Company (each a
"SHAREHOLDER" and collectively the "SHAREHOLDERS") and the number of Company
Shares held by each such person. The Company does not and, at the Closing, the
Company will not, have outstanding any capital stock or other securities or any
rights, warrants or options to acquire
3
securities of the Company or any convertible or exchangeable securities and,
other than Buyer pursuant to this Agreement, no person has or, at Closing will
have, any right to purchase or otherwise acquire any securities of the Company.
There are, and at Closing there will be, no outstanding obligations of the
Company to repurchase, redeem or otherwise acquire any securities of the
Company. All of the Company Shares are, and at Closing will be, duly authorized,
duly and validly issued, fully paid and non-assessable, and none were issued in
violation of any preemptive rights, rights of first refusal or any other
contractual or legal restrictions of any kind except as set forth on SCHEDULE
2.1.
SECTION 2.2 TITLE TO THE SHARES. To the best of Company's
knowledge and information each Shareholder is the beneficial owner and holds
good and valid title to its Company Shares free and clear of any Lien. To the
best of Company's knowledge and information, upon consummation of the
Contemplated Transactions and the satisfaction of the conditions to Closing set
forth herein, Buyer will own all of the issued and outstanding shares of capital
stock of the Company, free and clear of any Lien. At the Closing, each
Shareholder will deliver the Company Shares to Buyer free and clear of any Lien,
other than restrictions imposed by the Securities Act of 1933, as amended, and
applicable securities Laws.
SECTION 2.3 AUTHORITY RELATIVE TO THIS AGREEMENT. Following
approval of the Shareholders of the Company, the Company will have full power,
capacity and authority to execute and deliver each Transaction Document to which
it is or, at Closing, will be, a party and to consummate the transactions
contemplated hereby and thereby (the "CONTEMPLATED TRANSACTIONS"). The
execution, delivery and performance by the Company of each Transaction Document
and the consummation of the Contemplated Transactions to which the Company is,
or at Closing, will be, a party will have been duly and validly authorized by
the Company and no other acts by or on behalf of the Company will be necessary
or required to authorize the execution, delivery and performance by the Company
of each Transaction Document and the consummation of the Contemplated
Transactions to which it is or, at Closing, will be, a party. This Agreement and
the other Transaction Documents to which the Company is a party have been duly
and validly executed and delivered by the Company and (assuming the valid
execution and delivery thereof by the other parties thereto) will constitute the
legal, valid and binding agreements of the Company enforceable against the
Company in accordance with their respective terms, except as such obligations
and their enforceability may be limited by applicable bankruptcy and other
similar Laws affecting the enforcement of creditors' rights generally and except
that the availability of equitable remedies is subject to the discretion of the
court before which any proceeding therefor may be brought (whether at law or in
equity).
SECTION 2.4 NO CONFLICTS; CONSENTS. The execution, delivery
and performance by the Company of each Transaction Document to which it is a
party and the consummation of the Contemplated Transactions to which the Company
is a party, upon approval of the Shareholders will not: (i) violate any
provision of the certificate of incorporation or by-laws of the Company; (ii)
require the Company to obtain any consent, approval or action of or waiver from,
or make any filing with, or give any notice to, any Governmental Body or any
other person, except as set forth on SCHEDULE 2.4 (the "COMPANY REQUIRED
CONSENTS"); (iii) violate, conflict with or result in a breach or default under
(with or without the giving of notice or the passage of time or both), or permit
the suspension or termination of, any material Contract
4
(including any Real Property Lease) to which the Company is a party or by which
it or any of its assets is bound or subject, or to the best of Company's
knowledge and information result in the creation of any Lien upon any of the
Company Shares or upon any of the Assets of the Company; (iv) violate any Order,
any Law, of any Governmental Body against, or binding upon, the Company or upon
any of their respective assets or the Business; or (v) violate or result in the
revocation or suspension of any Permit.
SECTION 2.5 CORPORATE EXISTENCE AND POWER. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada, and has all requisite powers, authority and all Permits
required to own and/or operate its Assets and to carry on the Business as
conducted as of the date hereof. The Company is duly qualified to do business
and is in good standing in each state of the United States and in each other
jurisdiction where the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary. The Company has no
Subsidiaries and does not directly or indirectly own any equity or other
interest or investment in any other person.
SECTION 2.6 CHARTER DOCUMENTS AND CORPORATE RECORDS. The
Company has heretofore delivered to Buyer true and complete copies of the
certificate of incorporation, by-laws and minute books, or comparable
instruments, of the Company as in effect on the date hereof. The stock transfer
books of the Company have been made available to Buyer for its inspection and
are true and complete in all respects in accordance with their tenor.
SECTION 2.7 LIABILITIES. The Company has not incurred any
Liabilities since its inception.
SECTION 2.8 COMPANY RECEIVABLES. The Company does not have any
Receivables.
SECTION 2.9 LEASED REAL PROPERTY. The Company has no fee
interest, purchase options or rights of first refusal in any real property and
the Company has no leasehold or other interest in any real property.
SECTION 2.10 PERSONAL PROPERTY; ASSETS. The Company has good
and valid title to (or valid leasehold interest in) all of its personal property
and Assets, free and clear of all Liens.
SECTION 2.11 CONTRACTS. The Company is not bound by any
Contracts.
SECTION 2.12 CLAIMS AND PROCEEDINGS. There are no outstanding
Orders of any Governmental Body against or involving the Company, its Assets,
the Business, the Company Shares. There are no actions, suits, claims or
counterclaims, examinations, audits or legal, administrative, governmental or
arbitral proceedings or investigations (collectively, "CLAIMS") (whether or not
the defense thereof or Liabilities in respect thereof are covered by insurance),
5
pending or, to the best of the Company's knowledge, threatened on the date
hereof, against or involving the Company, its Assets, the Business or the
Company Shares.
SECTION 2.13 TAXES. The Company has timely filed or, if not
yet due but due before Closing, will timely file all Tax Returns required to be
filed by it for all taxable periods ending on or before the date of Closing and
all such Tax Returns are or, if not yet filed, will be, upon filing, true,
correct and complete in all material respects. The Company is not liable for any
Tax.
SECTION 2.14 COMPLIANCE WITH LAWS. The Company is not in
violation of any order, judgment, injunction, award, citation, decree, consent
decree or writ (collectively, "ORDERS") and to the best of the Company's
knowledge, belief and information, any Laws of any Governmental Bodies affecting
the Company, the Company Shares or the Business.
SECTION 2.15 DISCLOSURE. Neither this Agreement, the Schedules
hereto, nor any reviewed or unaudited financial statements, documents or
certificates furnished or to be furnished to Buyer by or on behalf of the
Company pursuant to this Agreement contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary in
order to make the statements contained herein or therein not misleading. There
are no events, transactions or other facts, which, either individually or in the
aggregate, may give rise to circumstances or conditions which would have a
material adverse effect on the general affairs or Condition of the Business.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT
Buyer and Parent jointly and severally represent, warrant and
covenant to the Company as follows and acknowledge that the Company is relying
upon such representations and warranties in connection with the Contemplated
Transactions:
SECTION 3.1 AUTHORITY RELATIVE TO THIS AGREEMENT. Buyer and
Parent have full power and authority to execute and deliver each Transaction
Document to which they are or, at Closing, will be, a party and to consummate
the Contemplated Transactions. Following the approval of the shareholders of the
Parent with respect to the Contemplated Transactions, the execution, delivery
and performance by Buyer and Parent of each Transaction Document and the
consummation of the Contemplated Transactions to which they are or, at Closing,
will be, a party have been duly and validly authorized and approved by Buyer and
Parent and no other acts by or on behalf of Buyer or Parent are necessary or
required to authorize the execution, delivery and performance by Buyer and
Parent of each Transaction Document and the consummation of the Contemplated
Transactions to which they are or, at Closing, will be a party. This Agreement
and the other Transaction Documents to which Buyer and Parent are a party have
been, duly and validly executed and delivered by Buyer and Parent and (assuming
the valid execution and delivery thereof by the other parties thereto)
constitutes, or will, at the Closing, constitute, as the case may be, the legal,
valid and binding agreements of Buyer and Parent enforceable against
6
each of them in accordance with their respective terms, except as such
obligations and their enforceability may be limited by applicable bankruptcy and
other similar Laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies is subject to the discretion
of the court before which any proceeding therefor may be brought (whether at law
or in equity).
SECTION 3.2 NO CONFLICTS; CONSENTS. The execution, delivery
and performance by Buyer and Parent of each Transaction Document to which they
are a party and the consummation of the Contemplated Transactions to which Buyer
and Parent are a party does not and will not: (i) violate any provision of the
certificate of incorporation or by-laws of Buyer or Parent, as the case may be;
(ii) require Buyer or Parent to obtain any consent, approval or action of or
waiver from, or make any filing with, or give any notice to, any Governmental
Body or any other person, except as set forth on SCHEDULE 3.2 (the "BUYER
REQUIRED CONSENTS"); (iii) except as set forth in Schedule 3.2, violate,
conflict with or result in the breach or default under (with or without the
giving of notice or the passage of time), or permit the suspension or
termination of, any material Contract to which Buyer or Parent are a party or
any of them or any of their assets is bound or subject or result in the creation
or any Lien upon any of Parent Common Stock or upon any Assets of Buyer or
Parent; or (iv) violate any Order or, to Buyer's knowledge, any Law of any
Governmental Body against, or binding upon, Buyer or Parent, or upon any of
their respective assets or businesses.
SECTION 3.3 CORPORATE EXISTENCE AND POWER OF BUYER. Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York, and has all requisite corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted.
SECTION 3.4 CORPORATE EXISTENCE AND POWER OF PARENT. Parent is
a corporation duly organized, validly existing and in good standing under the
laws of the State of California, and has all requisite corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted.
SECTION 3.5 THE PARENT COMMON STOCK. The Parent Common Stock
has been duly authorized by Parent and, when issued to Shareholders pursuant to
this Agreement, will be duly issued, fully paid and non-assessable shares of
Parent Common Stock. The Parent Common Stock, when issued pursuant hereto: (i)
will not be issued in violation of or subject to any preemptive rights, rights
of first refusal or, other than as set forth in this Agreement, contractual
restrictions of any kind; and (ii) will vest in Shareholders, respectively, good
title to Parent Common Stock free and clear of all Liens.
SECTION 3.6 FINANCIAL STATEMENTS. The audited consolidated
financial statements and unaudited consolidated interim financial statements of
Parent that are set forth on SCHEDULE 3.8 (the "FINANCIAL STATEMENTS"); were
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as otherwise indicated in the notes to them) and fairly
present the consolidated financial position, results of operations, and cash
flows from operating, investing, and financing activities of Parent as of the
dates and for the periods
7
indicated, except that the unaudited consolidated interim financial statements
in the Financial Statements are subject to normal year-end adjustments and omit
or condense certain footnotes and other information normally included in
financial statements prepared in accordance with GAAP. The consolidated
financial statements of Parent that are included or incorporated in any
subsequent report or statement that Parent mails to its shareholders generally
during the period after the date of this Agreement and before the Closing Date
will be prepared in accordance with GAAP applied on a consistent basis during
the periods involved (except as otherwise indicated in them, the notes to them,
or any related report of Parent's independent accountants) and will fairly
present the financial information that they purport to present, except that the
unaudited, consolidated interim financial statements will be subject to normal
year-end adjustments and will omit or condense certain footnotes and other
information normally included in financial statements prepared in accordance
with GAAP.
SECTION 3.7 CAPITALIZATION. The authorized capital stock of
Parent consists of 250,000,000 shares of common stock $0.0001 par value. Parent
has [_____]shares of common stock issued and outstanding and at the Closing,
Parent will not, have outstanding any capital stock or other securities or any
rights, warrants or options to acquire securities of Parent or any convertible
or exchangeable securities and, other than Buyer pursuant to this Agreement, no
person has or, at Closing will have, any right to purchase or otherwise acquire
any securities of Parent. There are, and at Closing there will be, no
outstanding obligations of Parent to repurchase, redeem or otherwise acquire any
securities of Parent. All of Parent Common Stock is, and at Closing will be,
duly authorized, duly and validly issued, fully paid and non-assessable, and
none were issued in violation of any preemptive rights, rights of first refusal
or any other contractual or legal restrictions of any kind.
SECTION 3.8 CHARTER DOCUMENTS AND CORPORATE RECORDS. Each of
Parent and Buyer has heretofore delivered to the Company true and complete
copies of the certificate of incorporation, by-laws and minute books, or
comparable instruments, of Parent and Buyer as in effect on the date hereof. The
stock transfer books of Parent and Buyer have been made available to the Company
for its inspection and are true and complete in all respects.
ARTICLE IV
COVENANTS AND AGREEMENTS
The Company covenants to Buyer and Buyer and Parent, jointly
and severally, covenant to the Company that:
SECTION 4.1 FILINGS AND AUTHORIZATIONS. The parties hereto
shall cooperate and use their respective best efforts to make, or cause to be
made, all registrations, filings, applications and submissions, to give all
notices and to obtain all governmental or other third party consents, transfers,
approvals, Orders and waivers necessary or desirable for the consummation of the
Contemplated Transactions in accordance with the terms of this Agreement and
shall furnish copies thereof to each other party prior to such filing and shall
not make any such registration, filing, application or submission to which Buyer
or the Company, as the case
8
may be, reasonably objects in writing. All such filings shall comply in form and
content in all material respects with applicable Law. The parties hereto also
agree to furnish each other with copies of such filings and any correspondence
received from any Governmental Body in connection therewith.
SECTION 4.2 CONFIDENTIALITY. Each party hereto shall hold in
strict confidence, and shall use its best efforts to cause all of its officers,
employees, agents and professional counsel and accountants, (collectively,
"REPRESENTATIVES") to hold in strict confidence, unless compelled to disclose by
judicial or administrative process, or by other requirements of Law, all
information concerning any other party which it has obtained from such party
prior to, on, or after the date hereof in connection with the Contemplated
Transactions, and each party shall not use or disclose to others, or permit the
use of or disclosure of, any such information so obtained, and will not release
or disclose such information to any other person, except its Representatives who
need to know such information in connection with this Agreement and who shall be
advised of the provisions of this Section 4.2. The foregoing provision shall not
apply to any such information to the extent; (i) known by any party prior to the
date such information was provided to such party in connection with the
Contemplated Transactions; (ii) made known to such party from a third party not
in breach of any confidentiality requirement; or (iii) made public through no
fault of such party or any of its Representatives.
SECTION 4.3 EXPENSES. Buyer, Parent and the Company (for
itself and on behalf of each Shareholder) shall bear their respective expenses,
in each case, incurred in connection with the preparation, execution and
performance of the Transaction Documents and the Contemplated Transactions,
including, without limitation, all fees and expenses of their respective
Representatives, and the Company shall bear all the fees and expenses of any
Company's Representatives.
SECTION 4.4 TAX MATTERS. The Company and Buyer shall
reasonably cooperate, and shall cause their respective Representatives
reasonably to cooperate, in preparing and filing all Tax Returns, including
maintaining and making available to each other all records necessary in
connection with the preparation and filing of Tax Returns, the payment of Taxes
and the resolution of Tax Audits and Tax Deficiencies with respect to all
taxable periods. Refunds or credits of Taxes that were paid by the Company with
respect to any periods shall be for the account of the Company.
SECTION 4.5 FURTHER ASSURANCES. At any time and from time to
time after the date of Closing, upon the reasonable request of any party hereto,
the other party(ies), shall do, execute, acknowledge and deliver, or cause to be
done, executed, acknowledged or delivered, all such further documents,
instruments or assurances, as may be necessary, desirable or proper to carry out
the intent and accomplish the purposes of this Agreement.
SECTION 4.6 RESTRICTED SECURITIES. The parties acknowledge and
agree that the Company Shares and Parent Common Stock being issued or
transferred pursuant to the Contemplated Transactions are being issued or
transferred pursuant to the exemption from the registration requirements of the
Securities Act of 1933, as amended (the "SECURITIES ACT") and
9
constitute "restricted securities" within the meaning of the Securities Act.
Such securities may not be transferred absent compliance with the provisions of
the Securities Act, other than applicable Laws, and all stock certificates
evidencing such securities shall bear a legend to such effect and to the effect
that such shares are subject to the terms and provisions of this Agreement.
ARTICLE V
CONDITIONS TO CLOSING
SECTION 5.1 CONDITIONS TO THE OBLIGATIONS OF THE PARTIES. The
obligations of the Parties to consummate the Contemplated Transactions are
subject to the satisfaction of the following conditions:
(a) NO INJUNCTION. No provision of any applicable Law and
no Order shall prohibit the consummation of the Contemplated Transactions.
(b) NO PROCEEDINGS OR LITIGATION. No Claim instituted by
any person (other than Buyer, the Company, Shareholders or their respective
Affiliates) shall have been commenced or pending against any Shareholder, the
Company, Buyer or any of their respective Affiliates, officers or directors,
which Claim seeks to restrain, prevent, change or delay in any respect the
Contemplated Transactions or seeks to challenge any of the terms or provisions
of this Agreement or seeks damages in connection with any of such transactions.
SECTION 5.2 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company hereunder to consummate the Contemplated Transactions
are subject, at the option of the Company, to the fulfillment prior to or at the
Closing of each of the following further conditions:
(a) PERFORMANCE. Buyer and Parent shall have performed
and complied in all material respects with all agreements, obligations and
covenants required by this Agreement to be performed or complied with by it at
or prior to the Closing Date.
(b) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Buyer and Parent contained in this Agreement and in any
certificate or other writing delivered by Buyer and Parent pursuant hereto shall
be true in all material respects at and as of the Closing Date as if made at and
as of such time (except for those representations and warranties made as of a
specific date which shall be true in all material respects as of the date made).
(c) NO MATERIAL ADVERSE CHANGE. From the date hereof
through the Closing, there shall not have occurred any event or condition that
has had or could have a material adverse effect on Parent.
(d) DOCUMENTATION. There shall have been delivered to the
Company the following:
10
(i) A certificate, dated the Closing Date, of
the Chairman of the Board, the President or Chief Financial Officer of Buyer
confirming the matters set forth in Section 5.2(a) (b) and (c) hereof;
(ii) Parent Common Stock certificates, registered
in the name of each Shareholder as set forth on SCHEDULE 1 attached hereto,
(with the appropriate restrictive legends), evidencing satisfaction of the
Purchase Price in accordance with Section 1.8; and
(iii) New York Certificate of Merger.
SECTION 5.3 CONDITIONS TO THE OBLIGATIONS OF BUYER AND PARENT.
All obligations of Buyer and/or Parent to consummate the Contemplated
Transactions hereunder are subject, at the option of Buyer and/or Parent, to the
fulfillment prior to or at the Closing of each of the following further
conditions:
(a) PERFORMANCE. The Company shall have performed and
complied in all material respects with all agreements, obligations and covenants
required by this Agreement to be performed or complied with by them at or prior
to the Closing Date.
(b) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Company, contained in this Agreement and in any
certificate or other writing delivered by the Company pursuant hereto shall be
true in all material respects at and as of the Closing Date as if made at and as
of such time (except for those representations and warranties made as of a
specific date which shall be true in all material respects as of the date made).
(c) NO MATERIAL ADVERSE CHANGE. From the date hereof
through the Closing, there shall not have occurred any event or condition that
has had or could have a material adverse effect on the Company.
(d) DOCUMENTATION. There shall have been delivered to
Buyer the following:
(i) A certificate, dated the Closing Date, of
the Chairman of the Board, the President or Chief Financial Officer of the
Company confirming the matters set forth in Section 5.2(a) (b) and (c) hereof;
(ii) A certificate, dated the Closing Date, of
the Secretary of the Company certifying, among other things, that attached or
appended to such certificate: (i) is a true and correct copy of the Company's
certificate of incorporation and all amendments thereto, if any, as of the date
thereof certified by the Secretary of State of Nevada; and (ii) is a true and
correct copy of the Company's by-laws as of the date thereof;
11
(iii) Evidence of the good standing and corporate
existence of the Company issued by the Secretary of State of Nevada and evidence
that the Company is qualified to transact business as a foreign corporation and
is in good standing in each state of the United States and in each other
jurisdiction where the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary;
(iv) Nevada Certificate of Merger; and
(v) Company Share certificates representing the
number of Company Shares duly endorsed in blank or accompanied by stock powers
duly endorsed in blank and in suitable form for transfer to Buyer by delivery.
ARTICLE VI
INDEMNIFICATION
SECTION 6.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS. (a) Notwithstanding any right of Buyer and Parent fully to
investigate the affairs of the Company and the rights of the Shareholders and
the Company to fully investigate the affairs of Buyer and Parent, and
notwithstanding any knowledge of facts determined or determinable by Buyer,
Parent, the Company, pursuant to such investigation or right of investigation,
Buyer, Parent, the Company, and the Shareholders have the right to rely fully
upon the representations, warranties, covenants and agreements of the Company
and Shareholders, and Buyer and Parent respectively, contained in this
Agreement, or listed or disclosed on any Schedule hereto or in any instrument
delivered in connection with or pursuant to any of the foregoing. All such
representations, warranties, covenants and agreements shall survive the
execution and delivery of this Agreement and the Closing hereunder.
Notwithstanding the foregoing, all representations and warranties of the
Company, the Shareholders, and Buyer and Parent respectively, contained in this
Agreement, on any Schedule hereto or in any instrument delivered in connection
with or pursuant to this Agreement shall terminate and expire twenty four (24)
months after the date of Closing; PROVIDED, HOWEVER, that the liability of
Shareholders shall not terminate as to any specific claim or claims of the type
referred to in Section 6.2 hereof, whether or not fixed as to Liability or
liquidated as to amount, with respect to which Shareholders have been given
specific notice on or prior to the date on which such Liabilities would
otherwise terminate pursuant to the terms of this Section 6.1(a), or which arise
or result from or are related to a Claim for fraud. For purposes of this Article
VI, "fraud" means any untrue statement of a material fact known by the maker to
be false when made or the intentional or knowing omission of a material fact
required to be stated or necessary to make the applicable statement in question
not misleading.
(b) All representations and warranties of Buyer and
Parent shall terminate and expire twelve (12) months after the date of Closing;
PROVIDED, HOWEVER, that the liability of Buyer and Parent shall not terminate as
to any specific claim or claims of the type referred to in Section 6.3 hereof,
whether or not fixed as to Liability or liquidated as to amount, with respect to
which Buyer and/or Parent has been given specific notice on or prior to the date
on which such
12
Liability would otherwise terminate pursuant to the terms of this Section
6.1(b), or which arise or result from or are related to a Claim for fraud.
SECTION 6.2 OBLIGATION OF SHAREHOLDERS TO INDEMNIFY.
Shareholders agree to indemnify, defend and hold harmless Buyer and Parent (and
their respective directors, officers, employees, Affiliates, successors and
assigns) from and against all Claims, losses, Liabilities, Regulatory Actions,
damages, deficiencies, judgments, settlements, costs of investigation or other
expenses (including Taxes, interest, penalties and reasonable attorneys' fees
and fees of other experts and disbursements and expenses incurred in enforcing
this indemnification) (collectively, the "LOSSES") suffered or incurred by Buyer
and/or Parent, the Company, or any of the foregoing persons arising out of any
breach of the representations and warranties of the Company or Shareholders
contained in this Agreement, or of the covenants and agreements of Buyer or
Parent contained in this Agreement or in the Schedules or any other Transaction
Document.
SECTION 6.3 OBLIGATION OF BUYER AND PARENT TO INDEMNIFY. Buyer
and Parent, jointly and severally agree to indemnify, defend and hold harmless
the Company (and any heirs, successor or assignee thereof) from and against any
Losses suffered or incurred by the Company or any of the foregoing persons
arising out of any breach of the representations and warranties of Buyer or
Parent, or of the covenants and agreements of Buyer or Parent contained in this
Agreement or in the Schedules or any other Transaction Document.
SECTION 6.4 NOTICE AND OPPORTUNITY TO DEFEND THIRD PARTY
CLAIMS. (a) Within ten (10) days following receipt by any party hereto (the
"INDEMNITEE") of notice of any demand, claim, circumstance or Tax Audit which
would or might give rise to a claim, or the commencement (or threatened
commencement) of any action, proceeding or investigation that may result in a
Loss (an "ASSERTED LIABILITY"), the Indemnitee shall give notice thereof (the
"CLAIMS NOTICE") to the party or parties obligated to provide indemnification
pursuant to Sections 6.2, or 6.3 (collectively, the "INDEMNIFYING PARTY"). The
Claims Notice shall describe the Asserted Liability in reasonable detail and
shall indicate the amount (estimated, if necessary, and to the extent feasible)
of the Loss that has been or may be suffered by the Indemnitee.
(b) The Indemnifying Party may elect to defend, at its
own expense and with its own counsel, any Asserted Liability unless: (i) the
Asserted Liability includes a Claim seeking an Order for injunction or other
equitable or declaratory relief against the Indemnitee, in which case the
Indemnitee may at its own cost and expense and at its option defend the portion
of the Asserted Liability seeking equitable or declaratory relief against the
Indemnitee, or (ii) the Indemnitee shall have reasonably, and in good faith,
after consultation with the Indemnifying Party, concluded that: (x) there is a
conflict of interest between the Indemnitee and the Indemnifying Party which
could prevent or negatively influence the Indemnifying Party from impartially or
adequately conducting such defense; or (y) the Indemnitee shall have one or more
defenses not available to the Indemnifying Party but only to the extent such
defense cannot legally be asserted by the Indemnifying Party on behalf of the
Indemnitee. If the Indemnifying Party elects to defend such Asserted Liability,
it shall within ten (10) days (or sooner, if the nature of the Asserted
Liability so requires) notify the Indemnitee of its intent to do so, and the
13
Indemnitee shall cooperate, at the expense of the Indemnifying Party, in the
defense of such Asserted Liability. If the Indemnifying Party elects not to
defend the Asserted Liability, is not permitted to defend the Asserted Liability
by reason of the first sentence of this Section 6.4(b), fails to notify the
Indemnitee of its election as herein provided or contests its obligation to
indemnify under this Agreement with respect to such Asserted Liability, the
Indemnitee may pay, compromise or defend such Asserted Liability at the sole
cost and expense of the Indemnifying Party. Notwithstanding the foregoing,
neither the Indemnifying Party nor the Indemnitee may settle or compromise any
claim over the reasonable written objection of the other, provided that the
Indemnitee may settle or compromise any claim as to which the Indemnifying Party
has failed to notify the Indemnitee of its election under this Section 6.4(b) or
as to which the Indemnifying Party is contesting its indemnification obligations
hereunder. If the Indemnifying Party desires to accept a reasonable, final and
complete settlement of an Asserted Liability so that such Indemnitee's Loss is
paid in full and the Indemnitee refuses to consent to such settlement, then the
Indemnifying Party's liability to the Indemnitee shall be limited to the amount
offered in the settlement. The Indemnifying Party will exercise good faith in
accepting any reasonable, final and complete settlement of an Asserted
Liability. In the event the Indemnifying Party elects to defend any Asserted
Liability, the Indemnitee may participate, at its own expense, in the defense of
such Asserted Liability. In the event the Indemnifying Party is not permitted by
the Indemnitee to defend the Asserted Liability, it may nevertheless participate
at its own expense in the defense of such Asserted Liability. If the
Indemnifying Party chooses to defend any Asserted Liability, the Indemnitee
shall make available to the Indemnifying Party any books, records or other
documents within its control that are necessary or appropriate for such defense.
Any Losses of any Indemnitee for which an Indemnifying Party is liable for
indemnification hereunder shall be paid upon written demand therefor.
SECTION 6.5 LIMITS ON INDEMNIFICATION. (a) Notwithstanding the
foregoing or the limitations set forth in Section 6.5(b) below, in the event
such Losses arise out of any fraud related matter on the part of any
Indemnifying Party, then such Indemnifying Party shall be obligated to indemnify
the Indemnitee in respect of all such Losses. Buyer, Parent and the Company
agree that the Company's obligation to indemnify under this Article VI shall not
survive the Closing and the Company shall have no further liability to Buyer
after the Closing but that such obligations to indemnify shall be the sole
obligation of the Shareholders.
(b) The Company and the Shareholders shall not be liable
to indemnify Buyer pursuant to Section 6.2 above and Buyer and Parent shall not
be liable to indemnify the Company and the Shareholders pursuant to Section 6.3
above: (i) unless a Claims Notice describing the loss is delivered to the
Indemnifying Party within 12 months after the Closing (except for Losses arising
out of an Indemnifying Party); and; (ii) with respect to special, consequential
or punitive damages; or (iii) in respect of any individual Loss of less than
$10,000.
(c) Buyer's and Parent's sole remedy for indemnification
from Shareholders pursuant to Section 6.2 above shall be cancellation or
retirement of the Parent Common Stock.
14
SECTION 6.6 EXCLUSIVE REMEDY. The parties agree that the
indemnification provisions of this Article VI shall constitute the sole or
exclusive remedy of any party in seeking damages or other monetary relief with
respect to this Agreement and the Contemplated Transactions, provided that,
nothing herein shall be construed to limit the right of any party to seek: (i)
injunctive relief for a breach of this Agreement; or (ii) legal or equitable
relief for a Claim for fraud.
ARTICLE VII
SPECIFIC PERFORMANCE; TERMINATION
SECTION 7.1 SPECIFIC PERFORMANCE. The Company, Parent, and
Buyer acknowledges and agrees that, if any of the Company, Parent, or Buyer
fails to proceed with the Closing in any circumstance other than those described
in clauses (a), (b), (c) or (d) of Section 7.2 below, the others will not have
adequate remedies at law with respect to such breach. In such event, and in
addition to each party's right to terminate this Agreement, each party shall be
entitled, without the necessity or obligation of posting a bond or other
security, to seek injunctive relief, by commencing a suit in equity to obtain
specific performance of the obligations under this Agreement or to xxx for
damages, in each case, without first terminating this Agreement. The Company,
Parent or Buyer specifically affirms the appropriateness of such injunctive,
other equitable relief or damages in any such action.
SECTION 7.2 TERMINATION. This Agreement may be terminated and
the Contemplated Transactions may be abandoned at any time prior to the Closing:
(a) By mutual written consent of the Company and Buyer;
(b) By the Company if: (i) there has been a
misrepresentation or breach of warranty on the part of Buyer or Parent in the
representations and warranties contained herein and such misrepresentation or
breach of warranty, if curable, is not cured within thirty days after written
notice thereof from the Company; (ii) Buyer or Parent has committed a breach of
any covenant imposed upon it hereunder and fails to cure such breach within
thirty days after written notice thereof from the Company; or (iii) any
condition to the Company's obligations under Section 5.2 becomes incapable of
fulfillment through no fault of the Company and is not waived by the Company;
(c) By Buyer, if: (i) there has been a misrepresentation
or breach of warranty on the part of the Company in the representations and
warranties contained herein and such misrepresentation or breach of warranty, if
curable, is not cured within thirty days after written notice thereof from
Buyer; (ii) the Company has committed a breach of any covenant imposed upon it
hereunder and fails to cure such breach within thirty days after written notice
thereof from Buyer; or (iii) any condition to Buyer's obligations under Section
5.3 becomes incapable of fulfillment through no fault of Buyer and is not waived
by Buyer; and
15
(d) By the Company or by Buyer, if any condition under
Section 5.1 becomes incapable of fulfillment through no fault of the party
seeking termination and is not waived by the party seeking termination.
SECTION 7.3 EFFECT OF TERMINATION; RIGHT TO PROCEED. Subject
to the provisions of Section 7.1 hereof, in the event that this Agreement shall
be terminated pursuant to Section 7.2, all further obligations of the parties
under this Agreement shall terminate without further liability of any party
hereunder except that: (i) the agreements contained in Section 4.2 shall survive
the termination hereof; and (ii) termination shall not preclude any party from
seeking relief against any other party for breach of Section 4.2. In the event
that a condition precedent to its obligation is not met, nothing contained
herein shall be deemed to require any party to terminate this Agreement, rather
than to waive such condition precedent and proceed with the Contemplated
Transactions.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 NOTICES. (a) Any notice or other communication
required or permitted hereunder shall be in writing and shall be delivered
personally by hand or by recognized overnight courier, or mailed (by registered
or certified mail, postage prepaid return receipt requested) as follows:
If to Buyer or Parent, one copy to:
Sonoma College, Inc.
Pier 92 Office 000
00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxx, President
If to the Company, one copy to:
MW Asia, Inc.
c/o Pier 92 Office 000
00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxx, President
(b) Each such notice or other communication shall be
effective when delivered at the address specified in Section 8.1(a). Any party
by notice given in accordance with this Section 8.1 to the other parties may
designate another address or person for receipt of notices hereunder. Notices by
a party may be given by counsel to such party.
SECTION 8.2 ENTIRE AGREEMENT. This Agreement (including the
Schedules and Exhibits hereto) and the collateral agreements executed in
connection with the consummation of
16
the Contemplated Transactions contain the entire agreement among the parties
with respect to the subject matter hereof and related transactions and supersede
all prior agreements, written or oral, with respect thereto.
SECTION 8.3 WAIVERS AND AMENDMENTS; NON-CONTRACTUAL REMEDIES;
PRESERVATION OF REMEDIES. This Agreement may be amended, superseded, cancelled,
renewed or extended only by a written instrument signed by the Company, Parent
and Buyer. The provisions hereof may be waived in writing by the Company Parent
or Buyer, as the case may be. Any such waiver shall be effective only to the
extent specifically set forth in such writing. No failure or delay on the part
of any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof. Nor shall any waiver on the part of any party of any such
right, power or privilege, nor any single or partial exercise of any such right,
power or privilege, preclude any other or further exercise thereof or the
exercise of any other such right, power or privilege. Except as otherwise
provided herein, the rights and remedies herein provided are cumulative and are
not exclusive of any rights or remedies that any party may otherwise have at law
or in equity.
SECTION 8.4 GOVERNING LAW. This Agreement shall be governed
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such State without regard to
the conflict of laws rules thereof.
SECTION 8.5 CONSENT TO JURISDICTION. Each of the parties
hereto irrevocably and voluntarily submits to personal jurisdiction in the State
of New York and in the Federal courts in such state in any action or proceeding
arising out of or relating to this Agreement and agrees that all claims in
respect of such action or proceeding may be heard and determined in any such
court. If for any reason the Federal courts in such state will not entertain
such action or proceeding, then the parties hereto irrevocably and voluntarily
submit to personal jurisdiction in the state courts located in the State of New
York in any action or proceeding arising out of or relating to this Agreement
and agree that all claims in respect of any action or proceeding may be heard
and determined in any such court. Each of the parties further consents and
agrees that such party may be served with process in the same manner as a notice
may be given under Section 8.1. The parties hereto agree that any action or
proceeding instituted by any of them against any other party with respect to
this Agreement will be instituted exclusively in the United States District
Court for the District of New York, or alternatively, in the State courts
located therein. The Company, Buyer and Parent irrevocably and unconditionally
waive and agree not to plead, to the fullest extent permitted by law, any
objection that they may now or hereafter have to the laying of venue or the
convenience of the forum of any action or proceeding with respect to this
Agreement in any such courts.
SECTION 8.6 BINDING EFFECT; NO ASSIGNMENT. This Agreement and
all of its provisions, rights and obligations shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors,
heirs and legal representatives. This Agreement may not be assigned (including
by operation of Law) by any party hereto without the express written consent of
Buyer (in the case of assignment by the Company) or the Company (in the
17
case of assignment by Buyer or Parent) and any purported assignment, unless so
consented to, shall be void and without effect.
SECTION 8.7 EXHIBITS. All Exhibits and Schedules attached
hereto are hereby incorporated by reference into, and made a part of, this
Agreement.
SECTION 8.8 SEVERABILITY. If any provision of this Agreement
for any reason shall be held to be illegal, invalid or unenforceable, such
illegality shall not affect any other provision of this Agreement, this
Agreement shall be amended so as to enforce the illegal, invalid or
unenforceable provision to the maximum extent permitted by applicable law, and
the parties shall cooperate in good faith to further modify this Agreement so as
to preserve to the maximum extent possible the intended benefits to be received
by the parties.
SECTION 8.9 COUNTERPARTS. The Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
SECTION 8.10 THIRD PARTIES. Except as specifically set forth
or referred to herein, nothing herein express or implied is intended or shall be
construed to confer upon or give to any person other than the parties hereto and
their permitted heirs, successors, assigns and legal representatives, any rights
or remedies under or by reason of this Agreement or the Contemplated
Transactions.
ARTICLE IX
DEFINITIONS
SECTION 9.1 DEFINITIONS. The following terms, as used herein,
have the following meanings:
"AFFILIATE" of any person means any other person directly or
indirectly through one or more intermediary persons, controlling, controlled by
or under common control with such person.
"AGREEMENT" or "THIS AGREEMENT" shall mean, and the words
"HEREIN", "HEREOF" and "HEREUNDER" and words of similar import shall refer to,
this agreement as it from time to time may be amended.
"ASSETS" shall mean all cash, instruments, properties, rights,
interests and assets of every kind, real, personal or mixed, tangible and
intangible, used or usable in the Business.
The term "AUDIT" or "AUDITED" when used in regard to financial
statements shall mean an examination of the financial statements by a firm of
independent certified public
18
accountants in accordance with generally accepted auditing standards for the
purpose of expressing an opinion thereon.
"BUSINESS" shall mean the ownership and operation of the
business of the Company.
"CONDITION OF THE BUSINESS" shall mean the financial
condition, prospects or the results of operations of the Business, the Assets or
the Company.
"CONTRACT" shall mean any contract, agreement, indenture,
note, bond, lease, conditional sale contract, mortgage, license, franchise,
instrument, commitment or other binding arrangement, whether written or oral.
The term "CONTROL", with respect to any person, shall mean the
power to direct the management and policies of such person, directly or
indirectly, by or through stock ownership, agency or otherwise, or pursuant to
or in connection with an agreement, arrangement or understanding (written or
oral) with one or more other persons by or through stock ownership, agency or
otherwise; and the terms "CONTROLLING" and "CONTROLLED" shall have meanings
correlative to the foregoing.
"GAAP" shall mean generally accepted accounting principles in
effect on the date hereof (or, in the case of any opinion rendered in connection
with an audit, as of the date of the opinion) as set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession of the
United States.
"GOVERNMENTAL BODIES" shall mean any government, municipality
or political subdivision thereof, whether federal, state, local or foreign, or
any governmental or quasi-governmental agency, authority, board, bureau,
commission, department, instrumentality or public body, or any court,
arbitrator, administrative tribunal or public utility.
"KNOWLEDGE" with respect to: (a) any individual shall mean
actual knowledge of such individual; and (b) any corporation shall mean the
actual knowledge of the directors and executive officers of such corporation;
and "KNOWS" has a correlative meaning. The terms "any Shareholder's knowledge,"
and "Shareholder's knowledge," including any correlative meanings, shall mean
the knowledge of any Shareholder.
"LAWS" shall mean any law, statute, code, ordinance, rule,
regulation or other requirement of any Governmental Bodies.
"LIABILITY" shall mean any direct or indirect indebtedness,
liability, assessment, claim, loss, damage, deficiency, obligation or
responsibility, fixed or unfixed, xxxxxx or inchoate, liquidated or
unliquidated, secured or unsecured, accrued, absolute, actual or potential,
contingent or otherwise (including any liability under any guaranties, letters
of credit, performance credits or with respect to insurance loss accruals).
19
"LIEN" shall mean any mortgage, lien (including mechanics,
warehousemen, laborers and landlords liens), claim, pledge, charge, security
interest, preemptive right, right of first refusal, option, judgment, title
defect, covenant, restriction, easement or encumbrance of any kind.
"PERSON" shall mean an individual, corporation, partnership,
joint venture, limited liability company, association, trust, unincorporated
organization or other entity, including a government or political subdivision or
an agency or instrumentality thereof.
"RECEIVABLES" shall mean as of any date any trade accounts
receivable, notes receivable, sales representative advances and other
miscellaneous receivables of the Company.
"SUBSIDIARY" shall mean any entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are owned
directly or indirectly through one or more intermediaries, or both, by any other
entity.
"TAX" (including, with correlative meaning, the terms "TAXES"
and "TAXABLE") shall mean: (i)(A) any net income, gross income, gross receipts,
sales, use, ad valorem, transfer, transfer gains, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, rent, recording,
occupation, premium, real or personal property, intangibles, environmental or
windfall profits tax, alternative or add-on minimum tax, customs duty or other
tax, fee, duty, levy, impost, assessment or charge of any kind whatsoever
(including but not limited to taxes assessed to real property and water and
sewer rents relating thereto), together with; (B) any interest and any penalty,
addition to tax or additional amount imposed by any Governmental Body (domestic
or foreign) (a "TAX AUTHORITY") responsible for the imposition of any such tax
and interest on such penalties, additions to tax, fines or additional amounts,
in each case, with respect to any party hereto, the Business or the Assets (or
the transfer thereof); (ii) any liability for the payment of any amount of the
type described in the immediately preceding clause (i) as a result of a party
hereto being a member of an affiliated or combined group with any other person
at any time on or prior to the date of Closing; and (iii) any liability of a
party hereto for the payment of any amounts of the type described in the
immediately preceding clause (i) as a result of a contractual obligation to
indemnify any other person.
"TAX RETURN" shall mean any return or report (including
elections, declarations, disclosures, schedules, estimates and information
returns) required to be supplied to any Tax Authority.
"TRANSACTION DOCUMENTS" shall mean, collectively, this
Agreement, and each of the other agreements and instruments to be executed and
delivered by all or some of the parties hereto in connection with the
consummation of the transactions contemplated hereby.
SECTION 9.2 INTERPRETATION. Unless the context otherwise
requires, the terms defined in this Agreement shall be applicable to both the
singular and plural forms of any of the terms defined herein. All accounting
terms defined in this Agreement, and those accounting terms used in this
Agreement except as otherwise expressly provided herein, shall have the meanings
customarily given thereto in accordance with GAAP as of the date of the item in
20
question. When a reference is made in this Agreement to Sections, such reference
shall be to a Section of this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. The use of the
neuter gender herein shall be deemed to include the masculine and feminine
genders wherever necessary or appropriate, the use of the masculine gender shall
be deemed to include the neuter and feminine genders and the use of the feminine
gender shall be deemed to include the neuter and masculine genders wherever
necessary or appropriate. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
21
IN WITNESS WHEREOF, the undersigned have executed this
Agreement and Plan of Merger as of the date set forth above.
BUYER:
SONOMA COLLEGE ACQUISITION, INC.
By: /s/
-----------------
Xxxxxxx X. Xxxxxx
President
PARENT:
SONOMA COLLEGE, INC.
By: /s/
-----------------
Xxxxxxx X. Xxxxxx
President
THE COMPANY:
MW ASIA, INC
By: /s/
-----------------
Xxxxxxx X. Xxxxxx
Chief Executive Officer
22
