Document:

EXHIBIT 10.1

 

Sona to Acquire Sibling Entertainment Group Assets

Ticker Symbol: U:SDVC 

VANCOUVER, British Columbia -- (Business Wire) -- May 22, 2006

 

Sona Development Corp. (“Sona”) (OTCBB:SDVC) today announced that it has executed a letter of intent to purchase 100% of the assets of Sibling Entertainment Group, Inc. (“Sibling”), an entertainment development and production company based in New York City by acquiring certain wholly owned subsidiaries to be formed by Sibling for the purpose of this transaction. Founded in 1995, Sibling is engaged in the finance, development and production of entertainment projects including plays and musicals for the live stage, independent feature films, and other entertainment projects, as well as the management of entertainment based real estate properties. Sibling’s strategy includes the coordination of synergetic elements between its divisions to provide optimal development for each project or property. One of Sibling’s most important properties under development includes a musical scheduled
to open this fall which is licensed from and in association with the Red Hat Society, Inc. Sibling also owns Sibling Pictures, Inc., a film division formed and organized to finance two or three independent films each year. 

 

Sibling’s Board of Directors is headed by the brother and sister team of Mitchell Maxwell (President) and Victoria Maxwell (Vice President) and also includes James Cardwell (Chief Financial Officer) and Richard Bernstein (Vice President). Prior to joining Sibling, each officer and director has an extensive career within the entertainment industry.

 

Mitchell Maxwell’s career of twenty-five years includes seven Broadway shows, twenty-seven Off-Broadway shows, four national tours, three West End shows and five independent films. He also owns and

operates three Off-Broadway theatres. His productions have been honored with nominations for 10 Tony Awards, 6 Olivier Awards, 15  Outer Critics Circle Awards, 9 Drama Desk Awards and 3 Obie Awards,

and have won Tony, Drama Desk, Outer Critics Circle, and Obie Awards, as well as the 2000 Pulitzer Prize for Drama.

 

Victoria Maxwell has been the producer for over 20 years with numerous theatre and film projects in collaboration with Mitchell Maxwell. She has worked with an elite roster of talent including Matthew Arkin, Christine Baranski, Ellen Barkin, Betty Comden, Dana Delany, Olympia Dukakis, Ron Eldard, Lisa Emery, Corey Feldman, James Gandolfini, Victor Garber, Adolph Green, Robert Klein, Nathan Lane, Anthony LaPaglia, Jerry Lewis, Donald Margulies, Penny Marshall, Rob Marshall, Jerry Mitchell, Rob Morrow, Kevin Nealon, Bebe Neuwirth, Jack O’Brien, Sarah Jessica Parker, Faith Prince, Paul Rudnick, Budd Schulberg, Patrick Stewart, Daniel Sullivan, Steven Weber and Sigourney Weaver.

 

James “Jay” Cardwell has been involved in the entertainment business for over twenty years, beginning his theatrical career in 1985 as the Associate Producer of the original production of the Off-Broadway musical Nunsense that ran over 14 years in New York and countless productions around the world. Prior to joining Sibling, Mr. Cardwell was the Deputy Director (1999-2001) of the National Jazz Museum in Harlem (a new Smithsonian Institution Affiliate), a theatrical consultant to Dentsu, Inc., and a senior tax consultant and

CPA (1981-1984) with Arthur Andersen & Co. in St. Louis.

 

Richard Bernstein is a veteran of the entertainment industry for over 20 years as a successful artist manager, booking agent, record producer, and a theatrical stage producer. He is the owner of several night clubs working with star talent including Linda Ronstadt, Steve Martin, Englebert Humperdinck, Dolly Parton, Joan Rivers, Don Rickles, Sam Harris, Willie Nelson, James Brown, Elliot Gould, Sister Sledge, Cliff Richard, Roy Clark, and Tim Weisberg. Mr. Bernstein has received numerous Grammy Awards nominations for his productions of national recording artists.

 

The letter of intent anticipates a share exchange pursuant to which Sona will issue up to 29,717,470 shares of common stock to Sibling for all the issued and outstanding shares of the Sibling subsidiaries to be acquired. Sona will further grant 12,189,970 purchase warrants with terms ranging from 3 to 5 years at 

 

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exercise prices ranging from $0.275 a share to $1.00 per share to Sibling. The closing of the transaction remains subject to the execution of a definitive agreement and shareholder approval. Sona and Sibling are

currently in the process of expediting the completion of these requirements.

 

A number of statements contained in this press release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. These forward looking statements involve a number of risks and uncertainties, including a timely closing of the contemplated

acquisition, market acceptance of Sibling’s entertainment projects and the management services, competitive market conditions, successful integration of the companies, and the ability to secure additional

sources of financing. The actual results that Sona may achieve could differ materially from any forward-looking statements due to such risks and uncertainties, including but not limited to, the fact that no assurance can be given that the proposed acquisition of the Sibling assets described above will be consummated on the above terms, or at all. Sona encourages the public to read the information provided here in conjunction with its most recent filings on Form 10KSB and Form 10QSB. Sona’s public filings may be viewed at www.sec.gov.

Contacts:

Sona Development Corp.

Nora Coccaro, 604-602-1717

noracoccaro@attglobal.net

 

or

 

Sibling Entertainment Group, Inc.

Mitchell Maxwell, 212-414-9600

www.siblingentertainment.biz

 

 

  Page
    6 of 10EXHIBIT 10.2

 

SONA DEVELOPMENT CORP.

2610-1066 West Hastings Street

Vancouver, British Columbia, Canada V6E 3X2 

(561) 347-9220

 

May 18, 2006

 

Sibling Entertainment Group, Inc.

511 West 25th Street, Suite 503

New York, NY 10001

	
            Attn.:
 	
            Mitchell Maxwell
 

President and Chief Executive Officer

 

	
             
 	
            Re:
 	
            Letter of Intent between Sona Development Corp. and Sibling Entertainment Group, Inc.
 

 

Dear Mr. Maxwell:

 

This letter hereby states the non-binding intent with respect to the purchase by the undersigned, Sona Development Corp. (“Company” or “Sona”), of all of the issued and outstanding stock (the “Stock”) of certain Sibling Entertainment Group, Inc. (“SEGI”) subsidiaries set forth hereinafter (the “Transaction”), subject to the terms of a definitive agreement to be negotiated and executed by the parties (the “Stock Purchase Agreement”).

 

The proposed terms of the Transaction are as follows:  

 

1.            Definitive Agreement. Consummation of the Transaction as contemplated hereby will be subject to the negotiation and execution of a mutually satisfactory definitive stock purchase agreement (the “Definitive Agreement”), setting forth the specific terms and conditions of the stock purchase transaction proposed hereby. The execution of the Definitive Agreement by both parties is subject to approval by each party’s Board of Directors and a majority of the issued and outstanding shares of each party, and the completion by each party of a satisfactory review of the legal, financial and business condition and prospects of the other party. The parties will use their best efforts to negotiate in good faith the Stock Purchase Agreement, which will contain, among other
standard terms and conditions, the following provisions:  

 

	
             
 	
            (a)
 	
            In consideration for the transfer of all of the issued and outstanding shares of the following subsidiaries of SEGI to the Company, the Company will issue Sona shares to SEGI on a one for one (1:1) basis based on the number of SEGI shares issued and outstanding as of the date of closing, an amount not to exceed the total fully diluted shares amount(s) provided on the attached Schedule A including the completion of any active or planned offerings. The subsidiaries are as follows: Sibling Pictures, Inc.; Sibling Theatricals, Inc. (to be formed); and Sibling Real Estate/Theatrical Management (to be formed). In addition, Sibling Theatricals, Inc. shall form a subsidiary called HATS! (Red hat Musical), Inc. 
 

	
             
 	
            (b)
 	
            At the Closing Date, the Company will issue warrants to SEGI in the same amounts and terms previously issued by SEGI through the date of closing not to exceed the amount(s) provided on Schedule A including the completion of any active or planned offerings.
 

 

 

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            (c)
 	
            At the Closing Date, the Company will have authorized capital stock consisting of 100,000,000 shares of common stock at a par value of $0.0001 per share and no shares of preferred stock. At the Closing Date, the Company will have a total of common stock issued and outstanding not to exceed 12,500,000 shares. 
 

 

	
             
 	
            (d)
 	
            Prior to the Closing Date, both parties shall have completed due diligence acceptable to each party in its sole satisfaction. 
 

 

	
             
 	
            (e)
 	
            It is hereby acknowledged that both parties agree to complete information statements (a 14A Information Statement for Sona and a 14C Information Statement for SEGI) to obtain shareholder approval prior to closing the transaction. 
 

 

2.            Conduct of Business. Prior to the closing of the Transaction, the Company and SEGI will conduct their operations in the ordinary course consistent with past practice and will not issue any capital stock or grant any options with respect to its capital stock, nor will the Parties make any distributions, dividends or other payments to any affiliate or shareholders other than those shares already committed to outstanding options, preferred stock, debt to employees or consultants, S8 share issuances and shares issuance based on financing(s). 

 

3.            Public Announcements. Neither party will make any public disclosure concerning the matters set forth in this letter of intent or the negotiation of the proposed Transaction without the prior written consent of the other party. If and when either party desires to make such public disclosure, after receiving such prior written consent, the disclosing party will give the other party an opportunity to review and comment on any such disclosure in advance of public release. Notwithstanding the above, to the extent that either party is advised by counsel that disclosure of the matters set forth in this letter of intent is required by applicable securities laws or to the extent that such disclosure is ordered by a court of competent jurisdiction or is
otherwise required by law, then such disclosing party will provide the other party, if reasonably possible under the circumstances, prior notice of such disclosure as well as an opportunity to review and comment on such disclosure in advance of the public release. 

 

4.            Due Diligence. Each party and its representatives, officers, employees and advisors, including accountants and legal advisors, will provide the other party and its representatives, officers, employees and advisors, including accountants and legal advisors, with all information, books, records and property (collectively, “Transaction Information”) that such other party reasonably considers necessary or appropriate in connection with its due diligence inquiry. Each party agrees to make available to the other party such officers, employees, consultants, advisors and others as reasonably requested by the other party for meetings, visits, questions and discussions concerning each other and the Transaction. Each of the parties will use its
reasonable best efforts to maintain the confidentiality of the Transaction Information, unless all or part of the Transaction Information is required to be disclosed by applicable securities laws or to the extent that such disclosure is ordered by a court of competent jurisdiction. Each party will have twenty (20) days to complete their due diligence review of the respective documents.

 

5.            Exclusivity. In consideration for the mutual covenants and agreements contained herein, until the earlier of the closing of the Transaction or termination of this letter of intent in accordance with its terms, Sona, its officers, directors, employees, shareholders and other representatives will not, and will not permit any of their respective affiliates to, directly or indirectly, solicit, discuss, accept, approve, respond to or encourage (including by way of furnishing information) any inquiries or proposals relating to, or engage in any negotiations with any third party with respect to any transaction similar to the Transaction or any transaction involving the transfer of a significant or controlling interest in the assets or capital stock of the
Company, including, but not limited to, a merger, acquisition, strategic investment or similar transaction (“Acquisition Proposal”). The Company and its officers or their respective affiliates will immediately notify SEGI of the receipt of any third party inquiry or proposal relating to an Acquisition Proposal and will provide SEGI with copies of any such notice inquiry or proposal. Notwithstanding the foregoing, nothing in 

 

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this Section 5 will be construed as prohibiting the board of directors of the Company from (a) making any disclosure required by applicable law to its shareholders; or (b) responding to any unsolicited proposal or inquiry to the Company (other than an Acquisition Proposal by a third party) by advising the person making such proposal or inquiry of the terms of this Section 5. 

 

6.            Termination. This letter of intent and the Definitive Agreement may be terminated (a) by mutual written consent of the parties hereto, (b) by either party (i) by September 4, 2006 or as mutually agreed if the Definitive Agreement is not consummated, (ii) is enjoined by a court or a governmental body, (iii) cannot be consummated due to a material breach of any representation, warranty, covenant or agreement on the part of the other party, which breach cannot be cured within 30 days of written notice of such breach;  and (c) by either party if a party is not reasonably satisfied with the results of its due diligence investigation of the other party.  

 

7.            No Brokers.  Each party represents and warrants to the other that there are no brokers or finders entitled to any compensation with respect to the Transaction, and each agrees to indemnify and hold the other harmless from and against any expenses or damages incurred as a result of a breach of this representation and warranty. 

 

8.            Expenses. Each of the parties will be responsible for its own expenses in connection with the Transaction. 

 

9.            Choice of Law. This Letter of Intent shall be governed by and construed in accordance with the internal substantive laws of the State of New York.

 

10.          Compliance with the Securities Laws. The parties acknowledges that each of it and its officers, directors, shareholders and employees and other representatives may, in connection with their consideration of the proposed Transaction, come into possession of material non-public information about each other. Accordingly, each party will use its best efforts to ensure that none of its officers, directors, shareholders and employees or other representatives will trade (or cause or encourage any third party to trade) in any of the securities which they will receive as a result of the Transaction while in possession of any such material, non-public information. 

 

11.          Effect. Except for the Exclusivity, Expenses, Choice of Law, Conduct of Business and this section of the Letter of Intent, each of which shall be legally binding on the parties hereto, this Letter of Intent is not intended to, and will not be deemed to, create a binding contract or agreement among the parties hereto, or impose upon any party any legally binding and enforceable obligation to the other party, including without limitation any obligation to enter into the Definitive Agreement or to consummate the Transaction. This Letter of Intent supersedes any earlier letters and agreements on this matter between the parties.

 

This letter of intent will terminate at 5:00 p.m. Eastern time on May 19, 2006 unless it has been duly executed by or on behalf of the Parties prior to such time. 

 

	
             
 	
             
 	
            Very truly yours,
 
	
             
 	
             
 	
            SONA DEVELOPMENT CORP.
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
            By: /s/ Nora Coccaro
 
	
             
 	
             
 	
            Name: Nora Coccaro
 
	
             
 	
            Title:
 	
            Chief Executive Officer
 

 

Agreed and Accepted:

SIBLING ENTERTAINMENT GROUP, INC

 

 

By:        /s/ James Cardwell          

	
            Name:
 	
            James Cardwell
 	
             

	
            Title:
 	
            Chief Financial Officer
 
				

 

 

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SCHEDULE “A”

 

SIBLING ENTERTAINMENT GROUP, INC

 

 

	
             
 	
             
 	
            Outstanding
 	
             
 	
            Reserved
 	
             
 	
            Open & 
 Planned 
 Offerings
 	
             
 	
            Fully Diluted
 	
             
 
	
            Current Shares Outstanding
 	
             
 	
            26,499,286 
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            26,499,286 
 	
             
 
	
            Reserved Shares
 	
             
 	
             
 	
             
 	
            98,184 
 	
             
 	
             
 	
             
 	
            98,184 
 	
             
 
	
            Shares Available for Sale - Series E
  (Current Open Offering)
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            1,120,000 
 	
             
 	
            1,120,000 
 	
             
 
	
            Shares Available for Sale - Series F
  (Planned Offering)
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            2,000,000 
 	
             
 	
            2,000,000 
 	
             
 
	
              
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            Total Shares
 	
             
 	
            26,499,286 
 	
             
 	
            98,184 
 	
             
 	
            3,120,000 
 	
             
 	
            29,717,470 
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            $0.275/ share Warrants (5 Year)
 	
             
 	
            6,000,000 
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            6,000,000 
 	
             
 
	
            $0.50/ share Warrants (3 Year)
 	
             
 	
            992,500 
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            992,500 
 	
             
 
	
            $0.55/ share Warrants (5 Year)
 	
             
 	
            989,643 
 	
             
 	
            49,092 
 	
             
 	
            560,000 
 	
             
 	
            1,598,735 
 	
             
 
	
            $0.75/ share Warrants (5 Year)
 	
             
 	
            989,643 
 	
             
 	
            49,092 
 	
             
 	
            1,560,000 
 	
             
 	
            2,598,735 
 	
             
 
	
            $1.00/ share Warrants (5 Year)
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            1,000,000 
 	
             
 	
            1,000,000 
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            Total Warrants
 	
             
 	
            8,971,786 
 	
             
 	
            98,184 
 	
             
 	
            3,120,000 
 	
             
 	
            12,189,970 
 	
             
 
	
              
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            Total Fully Diluted
 	
               
 	
            35,471,072 
 	
             
 	
            196,368 
 	
             
 	
            6,240,000 
 	
             
 	
            41,907,440 
 	
             
 

 

 

 

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