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Agreement of Acquisition and Plan of Reorganization

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Title:

Agreement of Acquisition and Plan of Reorganization

Entities:

Sibling Entertainment Group, Inc.

Date:

2006

Size:

109KB total

Price:

$52

ID:

#2254376

► M&A ► Reorganization ► Plans ► Agreements of Acquisitions & Plans of Reorganizations

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AGREEMENT OF ACQUISITION AND

PLAN OF REORGANIZATION

between

SONA DEVELOPMENT CORP.

and

SIBLING ENTERTAINMENT GROUP, INC.

June 28, 2006

TABLE OF CONTENTS

			Page
1.	The Acquisition		1
	1.1	Acquisition	1
	1.2	Compliance with Schedule 14A and 14C of the Exchange Act	1
	1.3	Closing Date	2
	1.4	Articles of Incorporation, Bylaws, Directors and Officers	2
	1.5	Further Assurances	2
	1.6	Liquidation of Sibling	2
2.	Representations and Warranties of Sona		2
	2.1	Organization, Standing, Etc.	3
	2.2	Qualification	3
	2.3	Capitalization of Sona	3
	2.4	Indebtedness	3
	2.5	Sonas Stockholders	3
	2.6	Corporate Acts and Proceedings	4
	2.7	Compliance with Laws and Instruments	4
	2.8	Binding Obligations	4
	2.9	Brokers and Finders Fees	4
	2.10	Financial Statements	5
	2.11	Absence of Undisclosed Liabilities	5
	2.12	Changes	5
	2.13	Employees	6
	2.14	Tax Returns and Audits	6
	2.15	Patents and Other Intangible Assets	6
	2.16	Employee Benefit Plans; ERISA	7
	2.17	Title to Property and Encumbrances	7
	2.18	Condition of Properties	7
	2.19	Litigation	7
	2.20	Licenses	7
	2.21	Interested Party Transactions	7
	2.22	Environmental Matters	8
	2.23	Receivables	8
	2.24	Inventories	8
	2.25	Customers, Suppliers and Independent Contractors	9
	2.26	Duty to Make Inquiry..	9
	2.27	Disclosure..	9
	2.28	Questionable Payments	9
	2.29	Obligations to or by Stockholders	9
	2.30	Commission Reporting and Compliance	9
3.	Representations and Warranties of Sibling and Subsidiaries		10
	3.1	Organization, Standing, Subsidiaries, Etc.	10
	3.2	Corporate Authority	11
	3.3	Brokers and Finders Fees	11

	3.4	Capitalization of Sibling	11
	3.5	Commission Reporting and Compliance	11
	3.6	Financial Statements	12
	3.7	Governmental Consents	12
	3.8	Compliance with Laws and Other Instruments	13
	3.9	Binding Obligations	13
	3.10	Absence of Undisclosed Liabilities	13
	3.11	Changes	14
	3.12	Tax Returns and Audits	14
	3.13	Employee Benefit Plans; ERISA	15
	3.14	Litigation	15
	3.15	Interested Party Transactions	15
	3.16	Questionable Payments	16
	3.17	Obligations to or by Stockholders	16
	3.18	Schedule of Assets and Contracts	16
	3.19	Employees	17
	3.20	Disclosure	17
4.	Conduct of Businesses Pending the Acquisition.		17
	4.1	Conduct of Business by Sona Pending the Acquisition	17
	4.2	Conduct of Business by Sibling Pending the Acquisition	18
5.	Additional Agreements.		19
	5.1	Access and Information	19
	5.2	Additional Agreements	20
	5.3	Publicity	20
	5.4	Appointment of Directors	20
6.	Conditions of Parties Obligations.		20
	6.1	Siblings Obligations	20
	6.2	Sonas Obligations	22
7.	Non-Survival of Representations and Warranties		24
8.	Amendment of Agreement		24
9.	Definitions		24
10.	Closing		27
11.	Termination Prior to Closing.		27
	11.1	Termination of Agreement	27
	11.2	Termination of Obligations	28
12.	Miscellaneous.		28
	12.1	Notices	28
	12.2	Entire Agreement	29
	12.3	Expenses	29
	12.4	Time	29
	12.5	Severability	29
	12.6	Successors and Assigns	29
	12.7	No Third Parties Benefited	29
	12.8	Counterparts	29
	12.9	Recitals, Schedules and Exhibits	29
	12.10	Section Headings and Gender	29
	12.11	Governing Law	30

LIST OF EXHIBITS AND SCHEDULES

Exhibits

A	Subsidiaries of Sibling
B	Issuance of Shares and Warrants to Sibling
C	Articles of Incorporation of Sona
D	Bylaws of Sona
E	Officers and Directors
F	Form of Opinion of Siblings Counsel
G	RHS Debenture

Sonas Disclosure Schedules

2.1(b)	Sonas Direct or Indirect Interest
2.5	Sonas Stockholders
2.10	Financial Statements
2.11	Liabilities
2.12	Changes/Indebtedness
2.21	Interested Party Transactions
2.29	Obligations to or by Stockholders
2.30(c)	Recent filings on Form 8-K

Sibling Disclosure Schedules

3.5	Commission Reporting
3.6(i)	Siblings Financial Statements
3.6(ii)	Subsidiaries Financial Statements
3.10	Liabilities
3.11	Changes
3.13	Sibling Employee Benefit Plans
3.14	Litigation
3.15	Interested Party Transactions
3.17	Obligations to or by Stockholders
3.18(i)	Schedule of Assets and Contracts
3.18(ii)	Schedule of Sibling and Subsidiaries Bank Accounts
3.19(a)	Agreement with Mitchell Maxwell
3.19(b)	Agreement with Victoria Maxwell
3.19(c)	Agreement with James Cardwell
4.2(e)	LOI Agreement with Richard Bernstein
4.2(f)	Extension Agreement with Richard Bernstein

iii

AGREEMENT OF ACQUISITION AND PLAN OF REORGANIZATION

THIS AGREEMENT OF ACQUISITION AND PLAN OF REORGANIZATION (the Agreement) is made and entered into on June 28, 2006, by and between SONA DEVELOPMENT CORP., a Texas corporation (Sona), and SIBLING ENTERTAINMENT GROUP, INC., a New York corporation (Sibling).

WITNESSETH:

A. The respective Boards of Directors of Sona and Sibling have determined that it is fair to and in the best interests of their respective corporations and stockholders for Sona to purchase Siblings subsidiaries, as listed on Exhibit A attached hereto and made a part hereof (collectively, the Subsidiaries) upon the terms and subject to the conditions set forth herein (the Acquisition);

B. The respective Boards of Directors of Sona and Sibling have approved the Acquisition in accordance with the Texas Business Corporation Act and New York Business Corporation Law, respectively, upon the terms and subject to the conditions set forth herein;

C. The respective Board of Directors of Sona and Sibling shall present the terms of the Acquisition to their shareholders to obtain shareholder approval of the Acquisition, and shall take all appropriate action in accordance with this transaction; and

D. The parties hereto intend that the Acquisition contemplated herein shall qualify as a reorganization within the meaning of Section 368(a)(1)(C) of the Code.

NOW, THEREFORE, in consideration of the mutual agreements and covenants hereinafter set forth, the parties hereto agree as follows:

The Acquisition.

1.1 Acquisition. Subject to the terms and conditions of this Agreement, Sona shall acquire the Subsidiaries from Sibling in consideration for the issuance of shares of Sonas common stock and warrants equal to the amounts (and for the warrants the same terms) set forth on Exhibit B, attached hereto and made a part hereof (collectively, the Securities) and shall change its name to Sibling Entertainment Group Holdings, Inc. on the Closing Date.

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